USAGOLD Discussion - February 2000

SteveH

(02/01/2000; 01:34:19 MDT - Msg ID: 24003)

ESOP and ORO

ORO,

You said recently, "...So, essentially, the current global dollar debt demand is being met by the rise in equity prices forcing the delta hedging arbitrageurs to buy more stock with non-broker margin from the stock markets. The purchase of more stock dictates the rise in prices and forces the arbitrageurs to borrow more funds to buy more stock.
The higher stock prices allow more cashing in of ESOP stock options, a greater tax kickback to the corporations, and therefore, higher higher earnings. Higher earnings then attract further equity buying, forcing up the stock price.

The following was from a CPA friend. I tried to get a handle on how ESOPs increase earnings. From the explanation it would seem to decrease earnings, therefore taxable liabilities, and increase cash. Simply, how are ESOPs contributing to increased stock prices through increased earnings if the net affect is decreased earnings, less taxes, and more cash? Or, what am I missing?

from my friend:

An employer deducts the value of a nonqualified stock option as a business
expense for the tax year in which the option is included in the gross income
of the employee (deduction at employer's corporate tax rate)- decreases
profit. When exercised, employer gets cash - no taxable income.

H-2703 Tax consequences of compensatory options to the employer.
Employers are entitled to compensation expense deductions in connection with
nonstatutory options, see � H-2883, but not in the case of statutory
options.
If stock is transferred to an employee in a transaction which is subject to
the rules that apply to statutory stock options, no deduction is allowable
to the employer at any time. 3

3 Code Sec. 421(a)(2).
RIA observation: An employee is taxable on the compensatory benefit
realized through a statutory option because he is required to include in
income the difference between the amount he receives from the sale of option
stock bought through exercise of the statutory option, and the amount he
paid for the stock. But the employer is not entitled to a deduction for the
compensatory benefit provided to the employee through a statutory stock
option.
The employer does get a deduction if and when an employee makes a
disqualifying disposition of statutory option stock (see � H-2883).
For the employer's deduction with regard to a statutory option where the
optionee doesn't satisfy the holding requirements, see � H-2800 and �
H-2960.
If an employee has compensation income through the grant or exercise of a
nonstatutory option, the employer is entitled to a deduction under the rules
that apply to the transfer of property for the performance of services. The
employer's deduction is allowable for the tax year in which the employee
includes in income the compensation attributable to the compensatory
property (see � H-3651). 4

4 Code Sec. 83(h).
RIA observation: The timing of the employee's inclusion in income, and the
corresponding deduction by the employer, of the compensation attributable to
a nonstatutory stock option, is determined by whether the option had, or
lacked, a readily ascertainable fair market value at grant.
Nonstatutory options granted before July '69 are taxed under Reg � 1.421-6,
rather than Code Sec. 83, see � H-2870.
For the written statement that corporations are required to furnish to
persons to whom stock was transferred on exercise of statutory stock
options, see � S-3179 et seq.

� H-2704 "Statutory option" defined.
"Statutory options" are options governed by specific code sections that
impose restrictions on both the employer and employee. They include: (a)
incentive stock options (ISOs) (see � H-2750 et seq.), and (b) options
issued under an employee stock purchase plan (see � H-2950 et seq.). 5

5 Reg � 1.421-7(b)(1).
An option may qualify as a statutory option only if the option is:
(1) not transferable (other than by will or by inheritance laws) by the
individual to whom the option is granted, and
(2) exercisable only by the individual to whom it was granted during the
grantee's lifetime. Therefore, an option which is transferable by the
individual to whom it was granted during his lifetime, or is exercisable
during the grantee's lifetime by another person, is not a statutory option.
However, if the option, or the plan under which the option was granted,
contains a provision that permits the grantee of the option to designate a
person who may exercise the option after the grantee's death, this will not
disqualify the option as a statutory option. 6

6 Reg � 1.421-7(b)(2).
The determination of whether an option is a statutory option is made as of
the date the option is granted. An option which is a statutory option when
granted does not lose its character as a statutory option as a result of
later events. Nor can an option which is not a statutory option when granted
become a statutory option due to later events. 7

7 Reg � 1.421-7(b)(3).
Illustration: A parent corporation gives an employee an option that
qualifies as a statutory option to buy stock of its subsidiary. The
subsidiary is no longer a subsidiary before the employee exercises the
option. The option is still treated as a statutory option when it is
exercised. 8

8 Reg � 1.421-7(b)(3)(ii), Ex (1).

� H-2705 "Nonstatutory option" defined.
Options that don't meet the requirements for statutory options (see �
H-2704) or that are granted under a plan (or offering) that does not
qualify, are treated as "nonstatutory options." 9

9 Reg � 1.83-7(a).
Compensatory stock options which do not qualify for statutory stock option
treatment under Code Sec. 421 are referred to as "nonqualified" options 10
or "nonstatutory" options.

10 Reg � 1.83-7(a).
RIA observation: Reg � 1.83-7(a) (footnotes 9 and 10) does not actually
define "nonstatutory options." Rather, it describes the tax treatment of
options that don't satisfy the statutory option requirements. The term
"nonstatutory option" thus is a "catch-all" designation for those other
options.
For discussion of the meaning of "nonstatutory option," see � H-2853 et seq.

� H-2750 Incentive Stock Options (ISOs).
"Incentive stock options" (ISOs) are options granted to employees by their
employer corporation (or the employer's parent, or its subsidiary) to buy
stock in those corporations. ISOs are subject to grant period requirements
and exercise period requirements. The option price may be no less than the
fair market value at grant. ISOs can be issued on a selective and
discriminatory basis. However, if an employee who receives an ISO owns more
than 10% of the employer (or its parent or subsidiary), the option price
must be at least 110% of the fair market value of the ISO stock, and the
option is not exercisable after five years from the date of grant.
Neither the receipt nor the exercise of an ISO is a taxable event. The
employee is not taxed until he sells the underlying stock. He may have
capital gain at that time. But, if the ISO stock is disposed of before the
required holding period has run, the gain is includible in income, and a
portion of that gain may be ordinary income.
The employer is not entitled to a deduction with respect to an ISO. However,
if an ISO is disposed of before the holding period has run, the amount of
the ordinary income includible in the employee's income is deductible by the
employer.
The term "incentive stock option" refers to an option that is granted to an
individual, for any reason connected with his employment, by his employer
corporation (or by a parent or subsidiary of the employer corporation), to
buy stock in the employer corporation (or in the employer's parent or
subsidiary corporation), and that satisfies the ISO qualification
requirements, see � H-2753.
"Incentive stock options" (ISOs) are "statutory options," which status
determines the timing of the income consequences to the employee receiving
the ISO, and the nondeductibility of the ISO by the employer, see � H-2704.
Thus, the employee has no regular income tax liability when he receives or
exercises the ISO. However, an ISO is a tax preference item for purposes of
the alternative minimum tax (see � A-8313 et seq.). Aside from alternative
minimum tax consequences, the employee is taxed when he sells the stock
acquired with the ISO. That income may be treated as capital gain, see �
H-2764.
The employer has no deduction at any time (unless there is a disqualifying
disposition of the stock), see � H-2761.
For the "statutory option" treatment to apply, the individual receiving the
ISO also must satisfy certain employment (see � H-2809 et seq.) and holding
period requirements (see � H-2795 et seq.).
The employee's failure to hold the stock for the required period makes the
ISO's exercise taxable to him upon premature disposition. The employee may
realize ordinary income, and the employer have a corresponding deduction, in
the year of that premature disposition, see � H-2799.
For the applicable statutory rules governing ISOs, see � H-2751. For the
incorporation in the ISO rules of interpretations under corresponding prior
law provisions, which applied to those earlier options, see � H-2752.
For the basis of stock acquired through incentive stock options, see �
P-5002 et seq.
For rules that deal exclusively with employee stock purchase plans, see �
H-2950 et seq.
For nonstatutory options, see � H-2850 et seq.
For noncompensatory options, see � I-6500 et seq.
For required information statements related to ISOs, see � S-3179 et seq.

� H-2751 Statutory rules governing the taxation of incentive stock options.
The tax consequences of an incentive stock option (ISO) are determined not
only under the Code Sec. 422 rules whose application is limited to ISOs but
also under the statutory stock option rules of Code Sec. 421, 1 and the
stock option rules of Code Sec. 424. 2

1 Code Sec. 421(a).
2 Code Sec. 424.
The statutory option rules under Code Sec. 421 and Code Sec. 424 that apply
to both ISOs and options granted under an employee stock purchase plan are
covered in the paragraphs which follow. The statutory option rules under
Code Sec. 421 and Code Sec. 424 that are specifically limited to options
granted under employee stock purchase plans are covered in the discussion of
those options at � H-2950 et seq.

PERMAFROST

(02/01/2000; 01:46:37 MDT - Msg ID: 24004)

Law...

I have read your message. Thanks for your comments, sir. I am not in disagreement with you.

Frosty

Usul

(02/01/2000; 01:48:24 MDT - Msg ID: 24005)

Chat forums

They all tend to go the same way. I have seen this in all kinds of chat rooms, Usenet news groups, web chats.

Some have the fortitude to ignore the irrelevant and seek out the valuable postings, which remain like gold flakes
in a bedrock of junk quartz.

Despite all their difficulties, chats remain popular because of their interactivity. Those who find their difficulties too much might be better off setting up their own dedicated web site. Customised discussion groups can even be set up...

Black Blade

(02/01/2000; 01:53:24 MDT - Msg ID: 24006)

Throwin' a bone to Nickel62 :-)

Nickel prices are on the rise and are taking Canadian nickel producers along for the ride. A recent boom in the demand for stainless steel, in which nickel is a big component, brought the base metal's value up to around $3.95/pound in London Friday for a 46-month high. Analysts from Montreal to Australia are bullish on nickel, with some forecasting prices of $4.54/pound by the end of March, before moving
higher. Shares of Inco (N:TSE,ME), the western world's largest producer, jumped by $1.45 on Bay Street to reach mid-day trading at $27.35/share, while rival Falconbridge (FL:TSE,ME) hit mid-day at $24.75/share after gaining $0.40. (Jan 28/00)

PERMAFROST

(02/01/2000; 01:54:21 MDT - Msg ID: 24007)

Golden Truth, ALL...

I solemnly swear that I will abide by the wishes of the Knights of the round table.

From the son of the Ancient Ones...

TEX

(02/01/2000; 02:00:11 MDT - Msg ID: 24008)

Now repeat after me........

Jeez Everybody.........get a grip......now, repeat after me.......it's only a GOLD Forum......it's only a GOLD Forum.....it's only a GOLD Forum.........

PERMAFROST

(02/01/2000; 05:27:04 MDT - Msg ID: 24009)

People are strange when you're a stranger; On closer reading...

FOA;

Apparently you challenge me [among other things] to prove my assertion that the dollar is not backed by oil. I suggest you take your dollar bill to your local bank and try redeeming it in oil.
Now that I had time to read most of what you wrote yesterday; and digest the reaction of those who commented; I'm appalled.

But I know why you acted so, even if the others don't understand. So it seems we shall meet soon.

ORO

(02/01/2000; 05:29:02 MDT - Msg ID: 24010)

SteveH - CPA - tax accounting and SEC rules

The CPA is exactly correct regarding accounting rules for tax purposes. Trouble is, these are different from the GAAP rules which are used to do the SEC filings and public accounting.

Normally, the option is issued at the time of the stock being somewhat below the strike price, S. At the time of excercise, usually the 5th year from issue, but often before that, the option would be excercised if the stock price, P, is much greater than S.

On the tax accounts of the employee the sum
P - S
appears at the time of excercise. The employee pays the sum S to the employer and pays tax at his marginal tax rate, normally 28%-35%.

The corporation has a tax book and a GAAP book, a cash flow book and a few other accountings of the business.

In the Tax book, the sum
P - S
appears as an expense under the limitations you posted.

Therefore, the corporation gets a tax credit of 35% of that sum. The corporation also receives from the employee the strike price - S in the option contract granted.

By the magic of GAAP standards, the corporation records the tax benefit (35% of P - S) in the operating income line, and consolidated there one also finds the sum S received from the employee. The sum P - S is never charged to the corporate books. The future liability of buying back the shares issued never appears, only the expense of buying back previously issued shares is listed.

The GAAP then makes the corporation list the cash flow elements in the reconcilliation cash flow report, where both the tax credit and the employee contribution appear separately.

As an example, let's use DELL, who do not abuse this accounting gimmick too badly:

The Financial data table:
FISCAL YEAR ENDED
------------
JANUARY 29,
1999
-----------

Results of Operations Data:
Net revenue........................ $18,243
Gross margin....................... 4,106
Operating income................... 2,046
Income before extraordinary loss... 1,460
Net income......................... 1,460
Income before extraordinary loss
per common share(a)(b):
Basic......................... $0.58
Diluted....................... $0.53
Number of weighted average shares
outstanding(a):
Basic......................... 2,531
Diluted....................... 2,772
Difference 241
Balance Sheet Data:
Working capital.................... $2,644
Total assets....................... 6,877
Long-term debt..................... 512
Total stockholders' equity......... 2,321

===> As you see, the only mention of the stock options outstanding is in the difference (my addition) between the outstanding diluted and undiluted shares.

The dirt is dished out in the cash flow statement:

CONSOLIDATED STATEMENT OF CASH FLOWS
(IN MILLIONS)

FISCAL YEAR ENDED
------------
JANUARY 29,
1999
-----------

Cash flows from operating activities:
Net income.............................................. $1,460
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization...................... 103
===>Tax benefits of employee stock plans............... 444
Other.............................................. 11
Changes in:
Operating working capital............................... 367
Non-current assets and liabilities...................... 51
--------
Net cash provided by operating activities....... 2,436
--------
Cash flows from investing activities:
Marketable securities:
Purchases............................................ -16,459
Maturities and sales................................. 15,341
Capital expenditures.................................... -296
--------
Net cash used in investing activities........... -1,414
--------
Cash flows from financing activities:
Purchase of common stock................................ -1,518
===>Issuance of common stock under employee plans........... 212
Proceeds from issuance of long-term debt, net of
issuance costs....................................... 494
Cash received from sale of equity options and other..... --
Repurchase of 11% senior notes.......................... --
--------
Net cash used in financing activities........... -812
--------
Effect of exchange rate changes on cash................... -10
--------
Net increase in cash...................................... 200
Cash at beginning of period............................... 320
--------
Cash at end of period..................................... $520
========

===> Stock options issued come in with the lines marked above, the 35% of P - S is $444 million, The sum S is the $212 million. The total addition to cash flow and operating earnings is $656 million. Quite a substantial sum out of the $1460 million income - some 40% of it, in fact. That, however, pales in comparison to 1998 when the young company's employees were vested in a large chunk of their options:

COMMON STOCK AND
CAPITAL IN EXCESS
OF PAR VALUE
------- ----------- RETAINED
SHARES AMOUNT EARNINGS OTHER TOTAL
------- ------- -------- ----- -------

Balances at February 1, 1998................
2,575 747 607 -61 1,293
Net income................................
-- -- 1,460 -- 1,460
===>Stock issuance under employee plans, including tax benefits.................
117 1,092 -- -7 1,085
Purchase and retirement of 149 million shares .................................
-149 -60 -1,458 -- -1,518
Other.....................................
-- 2 -3 2 1
Balances at January 29, 1999................
2,543 $1,781 $606 ($66) $2,321

===>The total cash from the ESOP was $1096 million of the $1460 million reported, 65%.

Mr Gresham

(02/01/2000; 05:34:47 MDT - Msg ID: 24011)

FOA -- What about the rest of us?

FOA �

You went from asking for a jury decision, to walking out on the case? I don't believe that of you. Wait � I think the jury is returning to give its verdict � just a few remarks while we wait, OK?

(By the way, in civil court a "preponderance of the evidence" is all that is required, and a judgment in some value clears the case � there is no requirement of "guilt beyond a reasonable doubt" or a unanimous jury vote.)

Here I am trying to pack the night before for a solo vacation to a Caribbean island � my first getaway in four years (three of it working two jobs -- businesses) since our daughter was born. I am tired, very tired. Now I check in here and find my other "family" being torn up by an offense given and taken, and I feel helpless and cheated in the conflict between you.

If someone like Permafrost, here sporadically for a month, could drive you away, ("But, no amount of camaraderie is worth being associated on stage with this other nut.") then I wish you would have made that clear to Michael, to decide or to put to all of us to decide what kind of forum "firewalls" we need to have. He IS the host, and it is his right to choose which of his guests he wishes to stay. I think he had warned PF before and could have followed through quite easily with no arguments from the rest of us.

To not-quite-coin a phrase: "Aren't you being a little bit hasty?"

I'd hate to see "Gresham's Law" come true, about bad posters driving out the good. How can we ever progress if the path to wisdom is so fragile as this?

We all didn't go through the Kitco experience with you, and we assumed that all was in a healthy state here with a moderated forum. You must have been pretty burned there, but USAGold is a pretty mild environment, wouldn't you agree? I helped fight the Troll Wars over on the TimeBomb 2000 forum, and it was vicious last spring. But why would you withdraw from everyone else here?

About false accusations, and how they can shake up even the best of us:

I went back to my old college a couple years ago, and ran into my math professor. A guy who welcomed me into his home and helped me through a bad time when I was a student. He was just coming out of a two-year "period from hell" after he had been accused of sexually harassing a female student (NO way he did it!), after the suicide of another student they had both known well. After she insinuated herself into his company "for consolation", she accused him. Stab in the back, seems to me. Imagine what it did to his work life and family.

I myself was totally burned on false accusation last summer by a woman with a neighboring suite in my office building (one that I was fortunately already moving out of) who had apparently had some break-ins to her office through a door she later admitted in court she had always left unlocked to a back hallway. Never a word to me in months of apparently "suspecting" me. Just a whole thing building up in her imagination. So I come back in to work one evening and find the building's exterior door left wide open, not just unlocked. She comes in an hour later and I go out on the landing to tell her I found the building open. Then she calls the police on me! For being at my office, and for being kind enough to tell her about a potential danger! The whole Miranda reading and all � I was in total shock! They didn't believe her after interviewing me, so she put an anti-harassment court case in by surprise and I was "restrained" away from my office for a week, until the judge figured out that she was a nutcase. ("He put a tape recorder in my closet, your honor." Paranoid.) This was just last August, and you can probably tell how pissed off I still can feel about it. Out of there now, totally.

Something about people's opinions and their anatomical parts is occurring to me here, but you probably know it already ("Opinions are like ***** -- everyone's got one!)

FOA � PF is a person on a religious-type crusade. (He's also caught up with all the attention he's able to get that he probably can't get anywhere else.) He seems to be somewhat unstable, mentally or emotionally. I've known quite a few dozen on that particular pathway, so I don't think you can converse with him in any meaningful way on a gold/finance forum. He just latches onto you (like that women did to me, or that student did to my professor) to scratch his own itch, and then disappears. He's a bit above your common Internet "Troll", but the effect is the same when you're trying for a level much above the usual.

You went to a surprising lot of effort to answer his posts � and wrote some of your good stuff there, too ("Yet, as a lion, I know my place on earth while as the wind, you will never know yours!"), but I felt you knew the rest of us were listening too, and so you kept up the quality. We mostly ignored his writing once we saw its quality level, and then we read your responses. I don't think too many of us went back into his to see just what you were answering; there wasn't much, and you usually include the take-off points you want to talk from anyway. We are trying to learn, not waste our lives checking out arguments.

This guy got to you tonight, and honestly, I just don't get why.

Well, I gave my two examples above to suggest how we may hit our boiling point when we encounter a crazy person, when we try to be reasonable fair-minded people like most of the people we choose to associate with, and this person just won't get off our case. So what do the other normal people at the convention do when someone raises a ruckus? You suggested it in another post about PF: You get together with the other people there and see just what you still want to accomplish together. You don't let one person barrel on in and break up your good work. Clear up the problem and get on with it.

It ain't about the PEOPLE we're walking the trail with � it's the trail we've found ourselves on that's new; we may get to know each other along the way (and we do), but the trail is what's brought us here. Let's stay on it. You ARE allowed to ignore things that don't help us move along on our way.

Jury's back:

"Mr Gresham, your vote?"

"Sir FOA has presented a consistent window into a world future we all want to learn more about. He has not betrayed or misled anyone by his words here, which are freely given and generously explained.

"Mr Permafrost has failed any standard of proof in his accusations, and recites what he has heard only from others ("NWO", "Illuminati") by hearsay. He has failed to make his case.

"Find for the defendant, Sir FOA, we award costs, and award on his counterclaim that he be made secure from the badgering of Mr Permafrost on the forum premises by such means as he or the host may deem necessary and effective."

Mr Gresham

(02/01/2000; 05:43:30 MDT - Msg ID: 24012)

Oro - early hours

Good morning, Oro --

Did the cat wake you, too?

Turbulent night, eh? Posting wasn't working for a couple hours after I wrote the previous, so I was stuck on Solitaire, ruminating about the forum, my attachment to it, financial futures, and conflicts between people. Also the ability of people who've never met or even seen one another to communicate so well!

Wondering if you or maybe Journeyman can recall the film or comedian who gave us: "I refuse to have a battle of wits with an unarmed person." 'Twould be my advice to Sir FOA.

Have a good day, week, and I hope to find all in good repair upon my return to this land of fable and fortune.

ORO

(02/01/2000; 05:51:46 MDT - Msg ID: 24013)

Lord Gresham of the Exchequer

Fare you well this morning?

The quote is a keeper. Showed it to the wife - she plans on using it.

The thing keeping me up was a dog who would not budge out of the car for over 2 hours after keeping me company while I cleaned up, and another who would not clam up unless I was there. House has separate kitty and doggy floors.

Goldfly

(02/01/2000; 05:53:02 MDT - Msg ID: 24014)

FOA, I'm with you buddy....

Permafrost, I used to read your stuff when you started posting. You have some good points to make, but the combative style and derogatory nature of you posts are a big put-off.

FOA, just do what most of us do- Ignore him.

GF

Mr Gresham

(02/01/2000; 06:02:05 MDT - Msg ID: 24015)

Oro & the animals

My good Sir Oro �

We need such doors as you have in your castle. Raising and lowering the drawbridge for each canine or feline request is indeed tiresome. Since I have been working mostly at home, I have come to learn who it is I really serve.

When the cat leads you downstairs to his dish, and you find it's still mostly full from the last time, you share a moment of interspecific surprise, and then move on, I guess. We are locked in a duet of habit now.

It was probably a Woody Allen movie, but it was a long time ago.

Well, one more importuning of Sir FOA, hoping he's quieted after an evening's rest and still reads us, and then, back to bed. Perchance to sleep.

Cavan Man

(02/01/2000; 06:16:12 MDT - Msg ID: 24016)

Dear FOA

Your sensitivity is very admirable. Please accept that compliment from one who knows! :) (smile)

One of the greatest intellects the world has ever known, Thomas Jefferson, was also a VERY sensitive person. He was also a very kind and generous individual.

While I do not know you well enough to remark upon your intellect though I suspect it is considerable, I will say that your kindness and generosity rivals Jefferson's from what I have read of you both.

Still with you (always was from the beginning), CM

Mr Gresham

(02/01/2000; 06:19:32 MDT - Msg ID: 24017)

FOA -- One more thing (well, maybe a couple...)

You are a reasonable man, and it's not a reasonable thing to do it this way, over this.

You are "on stage" only by how many of us read and interact with you in the privacy of our own individual thinking and wish to know and grow. You are "on stage" only by having earned our respect. Each of us decides who is "on our stage." And you are "on stage" only with those others we read and respect.

Someone may post and not be read. Someone may post and not be respected. That person is not "on stage" for many of us.

Pace yourself. Discern which conversations will carry the most listeners the farthest. Wait, if you wish, for outside events that we can look at together, and spend less "classroom time" answering questions, if that wears you down. (It would me!)

Many will be able to tell you years from now in ways they can't now how your shared understandings helped them in their lives.

Think long term, not just have it turn out "oh yeah, USAGold. Didn't there use to be this guy FOA there... I don't know, how DID it turn out? like he said? or was that somebody else? I dunno... what's on CNBC?"

nickel62

(02/01/2000; 06:41:01 MDT - Msg ID: 24018)

I've been away and missed all the fireworks.

I have greatly appreciated and learned from the comments of FOA and would be saddened to lose the ability to read his posts in the future. Like the many other readers who have responded I would like to ask you to continue to share your significant intelligence.

ORO Someone suggested that they couldn't read all of your posts because of their length be assurred that many of us ,myself included, not only take the time to read your posts but save them and reread them to further our own understandin.Thanks to ORO and FOA and many others for finaly allowing me to begin to understand the monetary secrets that have been obscured from my view for so many years.

nickel62

(02/01/2000; 06:43:16 MDT - Msg ID: 24019)

Black Blade

Thanks for the bone I appreciate it. I think the nickel market is a harbringer of things to come in the commodity markets in general. Unfortunately I invested my nickel money in Voisey Bay and we have a while longer to wait on that particular deposit I'm afraid. Thanks for the information.

Cavan Man

(02/01/2000; 07:15:16 MDT - Msg ID: 24020)

Dear FOA

RE: Cavan Man 23948Before entering Cooperstown or Canton, one must be in the retirement mode. Around here (USAGOLD), when you go, "in the hall", you still must keep working (another smile). Please reconsider. I'm in your cult (bigger smile).

Hipplebeck

(02/01/2000; 07:44:33 MDT - Msg ID: 24021)

to Sam Adams

Concerning leasing gold and the Washington agreement;
The European CBs never said they would stop leasing. They said it would not be expanded.
I have seen lots of people miss this.

Twice Discipled

(02/01/2000; 07:48:03 MDT - Msg ID: 24022)

FOA: Your Impact

Dear Sir,
I would like to let you know that your words do not fall on deaf ears. I have taken your many insights and words of wisdom and combined that with other sources to come to one conclusion. The US will suffer greatly in the transition to whatever monetary system is establish after the dollar falls. In my opinion we will experience devastation far greater than anything which occurred in the early 1930's.
In preparation for this event, whether this year or in 5 years, I have decided to take the tax hit (believe me this was gut wrenching since I did my taxes last night) and taken 45% of my IRA and converted it to physical gold holdings in my hand, NOT STOCKS, NOT CALLS, NOT PUTS, just PHYSICAL and mainly because of your informed and provocative words. I may take the other and invest in physical in the IRA or the Central Fund of Canada which has physical gold and silver. WHY? Because I have read and researched other sources in conjunction with your words, and I feel this may be the only way to protect my family in what lies ahead.
Without your words I might have known about this, but would not have had the slightest idea of how to prepare. But with YOUR ENCOURAGEMENT I have taken those steps which I feel are best for my future.
My most humble thanks,
TD

Please do not deprive those who have just arrived at this Round Table the privilege to achieve the level of understanding and wisdom which you have given to me.

The Invisible Hand

(02/01/2000; 07:48:31 MDT - Msg ID: 24023)

Dear Sir FOA

Dear Sir FOA,

This is the first time I am addressing you directly at this Forum. I want you to stay here.

Here's why: I started investing in the early nineties. As a good Harry Browne freak, I should have had one quarter of my portfolio in gold. I did not have that until 1998.

In December 1998, when I did not yet know you, I thought I had found two technological and two economic arguments for selling all my shares and T-bills and have 75 % in gold and 25 % in zerobonds.

My two technological arguments were that Wall Street was high because of internet shares which I thought to be threatened by Y2k and that euro-conversion, also threatened by Y2k, would make sharetrading difficult.

My two economic arguments were that there was a shortage of gold supply because the central banks had lent gold and that AG had in a speech in late 1998 said that inflation was coming (after having coined irrational exuberance three years earlier).

I found you and this Forum in March 1999. You have opened such a universe to me.

I am a lawyer who is 37 years old. During my undergraduate law studies and postgraduate European law studies, I criticised many aspects of EU law in my dissertations, mainly competition law and harmonisation of company law. After my studies, I criticised in my pamphlets the agricultural, trade and immigration policies of the EU. In late 1998, I criticised the euro.

Sir FOA, you have made me LOVE the euro. I, who got a postgraduate degree in European law in a foreign (for me) country, England, have found thanks to you an aspect of EU law to like.

Sir FOA, you have introduced me to the world of manipulation and government intrigue. You have reinforced my hope that justice, the act of acknowledging the truth, will one day prevail.

Sir FOA, even SteveH did have to quote from you in his letter to congress. If even Steve did have to do it, how do you expect a commoner like me to find the gold fire. Sir FOA, please don't misunderstand me, I am not asking you to be altruistic. You like to teach and you put a lot of work in teaching. Some pupils are afraid of the truth coming out.
Some pupils are afraid that the revelation of the truth will destabilise their little lives. Yes and some pupils are harsh, but why worry about them. Let them continue their imagination. We're on an express train, they want a free ride, let them have it, we shouldn't notice them (like the bumper sticker "I'm not deaf, I'm ignoring you"), the victory will be ours.

Let me stop those ramblings.

Please Sir FOA don't go.

If you can't stay please send me your posts to migrator@www.cz.

Elwood

(02/01/2000; 08:02:27 MDT - Msg ID: 24024)

To FOA:

FOA,
You will agree, my friend, that this technology that will bring us our digital currency will also allow any crackpot with a computer to make himself known, yes?

Come, life is too short to allow such a person to become the means by which your immensely fruitful and reasoned discussions are ended. Ignore them.

My grandmother once told me never to argue with a fool. He will drag you to his level, then beat you with experience.

Elwood

JCTex

(02/01/2000; 08:06:55 MDT - Msg ID: 24025)

Mr Gresham (02/01/00; 05:34:47MDT - Msg ID:24011)

FOAThank you, you have spoken for me quite well as have many others this morning. I had to log off last night because I was getting angrier by the minute and about to let it get away from me.

Until last night, I had been wanting to suggest to Permafrost that he sit quietly with me on the park bench ["better to be thought a fool, than to open one's mouth and remove all doubt"]. However, I would now prefer that he sit somewhere else.

Usul

(02/01/2000; 08:42:39 MDT - Msg ID: 24026)

Thoughts

FOAI certainly hope to once again read your thoughts.
I converted some small stock-related funds to
physical in 1997... the kind of contigency I have in mind
to justify holding this barbarous relic has a lot in common with what you have discussed. The risk has not gone
away... everything points to it getting more serious.

Cavan Man

(02/01/2000; 09:12:59 MDT - Msg ID: 24027)

Dear FOA

I would like to post just one more quick pleading on my behalf and perhaps for others who share my sentiments. I have a sick mommy this morning and am doing double duty.

I do not have the intellectual or academic pedigree of many and I suspect most who read this forum. Although I have a college degree, most of my education has come from the school of hard knocks. In fact, although I come from a good and kind family, I don't have any pedigree at all; nada, zilch.

Realizing my deficiencies long ago, I have had to work harde than most just to stay even. Staying "even" in every respect is even more important now with three small children. Consequently I am an inveterate seeker of information, knowledge and wisdom. Gads! I have so very much to learn. I am so far behind.

Before arriving at this venerable forum, I asked many questions, made many inquiries, sought many opinions, spoke with many different people concerning financial affairs etc. Although many I spoke with offered good "advice" and timely information, I had no peace. I continued stumbling along; continuing to search for a perspective, more importantly the wisdom and knowledge I knew intuitively was on the mark.

Here at this forum, I have found many kindred spirits. Here I found you and your friend (Where has he been?). Your words and thoughts and those of your friend; shared I believe in good measure by our very wise and knowledgable host, are the foundation of my strategic planning for the future of my family. Some might have a laugh (it's on me) at this last sentence but, as I have already admitted I am not even as smart "as the average bear" so perhaps they will understand.

FOA,I am a very cautious person (too much so I think). I weigh everything very carefully and analyze as best I can with the tool God has given me. I listen to and observe all that I encounter on this trail of life. Possessing a fiercely independent nature though (the Irish in me), I go my own way damning the torpedoes and full speed ahead. However, in your words and thoughts I see tremendous understanding, knowledge and wisdom. I eagerly await each new THOUGHT. They help me navigate and I depend on them.

FOA, your words: ".......we have a private commission...."

Your commission is not yet fulfilled. Do your duty and, for goodness sakes, toughen up would ya! Average, boring midwestern guys (and their families) like me are depending on you. Good day.........CM

Galearis

(02/01/2000; 09:17:55 MDT - Msg ID: 24028)

Acid Rain a HOAX? NOT!

For yearsI used to work as a professional naturalist doing wildlife surveys/interpretive
work, mostly botanical, in Ontario, Canada. But I also spent some quality time interfacing
with the public in speaking forums and observing the behaviors of modern man in a natural
settings. My background is in geology and botany.

I used to watch those of an affluent persuasion, the grey-haired set, driving through the
most beautiful parks in the world in their travelling homes and pulling into campgrounds in
the evening - only to pack up and exit in the early hours for who knows where. While they
were temporarily stationary and enjoying the campground setting, it was rare for these
people to spend much time outside around the campfire, or even more significant, to go
for interpretive walks with the park naturalist. (Statistically 80% of all park visitors were
transitory ones.) The most common pose for these types was one of sedentary disinterest.
One was seldom under the impression that this temporary travelling lifestyle was
enjoyable, as much as it was aimless; it always seemed to me a process of killing time and
"using up their retirement" in the currently fashionable way of travel.

And what is the point of my ramble? Most of these people had spent all of their lives in
some office in some city accumulating wealth in order to retire and "acquire" this lifestyle.
The black irony of their plans versus the reality is that in accumulating the wealth, they
had also negated the experience base they needed in order to enjoy that which they had
worked so long to achieve. In short what had happened was a process of estrangement, a
nature/culture shock that is always the result of people who have no experience with the
natural landscape. One has to be aware in order to enjoy. They had sold out to the system
and one could sense that at least some of them knew it....

And what does this have to do with declining air quality, acid rain, ecological collapse.
Everything! Those that would say acid rain, for example, is a hoax simply do not have the
opservation skills to see its effects. I do and I have seen. I am also old enough to have an
A/B perspective on it.

Why would one believe a paper that sheds such disinformation on this area that is
undoubtably sponsored by some right-wing exploitive agenda aimed at passifying the
masses? I remember seeing the 60 Minutes piece on acid rain as being a hoax. And just
that week they had measured the pH of rain coming down on London, Ontario. It was the
pH of lemon juice.

So we who deplore the disinformation ploys of the anti-gold people should surely hesitate
to rush out to believe another myth about the ecological area that is absolutely more
important than the fiscal. These disinformation ploys, one MUST remember, are ALL
from the business/exploitation area of human activity. Our ecological landscape upon
which sits our economic one, is incomparably murky to all those who read this forum and
you all should be aware of this and be suspicious of all aniti-tree-hugging propagandists.

The tree-huggers ARE right. It is simply unprofitable for most of us/you to believe
them..... If more people would get out of the office and spend some quality time in the
REAL world, this would be much more apparent.

Skip

(02/01/2000; 09:21:20 MDT - Msg ID: 24029)

FOA

Your presence will be missed here. It is truly tragic that a good person can be driven away by a few thoughtless posts from people who have not yet learned to debate an opinion without attacking the person.

A professional whom I know quite well once posted regularly on another forum (having nothing to do with investments). This person was very experienced and knew much about the theme of that forum, and gave freely of his time and wisdom. However, there were two selfish and rude critics whose fingers could not resist incessants attacks. The two critics had no professional experience in my friend's field, yet they criticized even those who defended my friend. He certainly did not expect everyone to agree with all of his opinions all the time. But when he asked others to debate options rather than attacking the person, that also resulted in personal attacks of "not being thick-skinned" -- and then he left that forum.

Nobody likes to be attacked for giving professional time or advice freely. My friend said that private e-mails actually "demanded" that he give free professional advice both on that forum and in private e-mail. He felt that his time could be better spent elsewhere. In short, his gift of time and experience was appreciated by most, but hotly criticized by a few who caused him great stress. It's a shame that he left that forum, but I understand his reasons for doing so.

FOA, this is my way of saying that I understand your feelings; but this is a MODERATED forum. So perhaps you might consider the vote of the majority: stay.

None of us will agree with everything others say all the time, even if they have professional experience. But your wisdom is appreciated.

Your postings have been very insightful, thought-provoking messages, obviously written by someone with professional experience in the financial world. My own few postings represent only personal feelings and personal experience; they do NOT represent professional experience in gold or financial investments. Thus, my postings should not carry nearly as much weight as those from posters like you who have professional experience in the world of gold, money and investments.

I would encourage ALL on this forum to remember that we can disagree with a person in an agreeable manner...and remain civil. Personally, I'd rather see those who cannot disagree in a civil manner leave this forum instead of seeing people like you leave. This is my opinion, or my "verdict" if you prefer to call it that.

To those who would disagree with others, perhaps they should refer to the guidelines that state:
"PROHIBITIONS: 1. Personal attacks; slanderous or derogatory remarks...."

When people ignore that guideline, a good forum can quickly turn sour. I spend more time lurking here than in any other forum on the internet...not only because I'm a goldbug, but also because it USUALLY is the most civil of those that I visit.

--Skip

TownCrier

(02/01/2000; 09:36:15 MDT - Msg ID: 24030)

Today's Market Report

Market Report (2/01/00): Gold continues to trade sideways in a narrow range following Friday's action that returned the yellow metal to the low $280's. Standard Bank indicated that the level of physical buying interest at this time is expected to underpin the price at $280. As we send this report to the server, spot gold is trading at the lower end of its range at $282.60. Most markets are expected to remain subdued while the FOMC meets over these next two days to decide the fate of our interest rates.

In New York there were 7,036 February gold contracts in open interest to begin the week, and yesterday's first notice day for delivery on the COMEX February gold futures saw an impressive amount, 4,073 contracts, getting the nod for delivery. While we don't have the breakdown for yesterday's figures, of the additional 748 contracts held up for delivery intentions today, Deutsche Bank and The Bank of Nova Scotia were each in line for a third of those, with HSBC Securities taking a fifth. If the past is a reliable guide, that breakdown may be indicative of the major recipients for the previous day. So far, the two day total for COMEX gold delivery to be completed by month's end is 482,100 ounces (15 tonnes.)

On the topic of gold by the tonne, the weekly balance sheets out of euroland today revealed that last week the Dutch central bank moved yet another tonne of gold through the BIS (leaving them with only 35 tonnes in their program to move 100 tonnes prior to September 26th of this year.) The balance sheet of the European Central bank reflected this sale as a decline in its gold assets of 9 million euros, and by doing so, it settled our personal speculation regarding a possible change in ECB policy to bi-weekly (rather than quarterly) gold revaluations. Elsewhere, Japan's Finance Ministry announced that the level of foreign exchange and gold reserves held in January reached $293.154 billion, gaining over the nation's record figure set just one earlier by $5.074 billion. We can't help but wonder how much of that addition might be monetary gold, hearkening back to last week's discussion of Japan's 25% increase in non-monetary gold imports and the U.S.'s stunning 250% increase in non-monetary gold exports. (Might the Dutch movement of official monetary gold be flowing to Japan?) At any rate, Bridge News tells us that the seemingly familiar days of central bank sales, notably in Europe, acting as a depressant on prices is "over." That was the opinion expressed by South African President Thabo Mbeki on Monday at a World Economic Forum press conference. And to round out our look at the world, after picking up 16 tonnes of gold in 1999 from domestic producers, Gokhran (Russia's State Depository of Precious Metals and Stones) has plans to purchase 60 tonnes this year. With domestic production in the vicinity of 125 tonnes, it looks like they will be competing with the Central Bank of Russia, who recently indicated their own plans to acquire an amount greater, done through the domestic banks that buy directly from the miners. Ahhhh...there's nothing like a little competition for a scarce resource to get your blood flowing early in the day.

That will do it for today, goldmeisters. We'll see you here tomorrow.

TownCrier

(02/01/2000; 09:56:11 MDT - Msg ID: 24031)

The Fed adds $2.95 billion

http://biz.yahoo.com/rf/000201/v0.htmlFederal funds were trading at 5-13/16 percent, above the Fed's target rate of 5-1/2 percent (will probably be changing tomorrow, though) at the time of this temporary addition to banking reserves through overnight system repurchase agreements.

Galearis

(02/01/2000; 09:56:17 MDT - Msg ID: 24032)

Dear FOA

My previous post was a paste (in haste) without a prior perusal of this web site. Apart from it being off topic, it was untimely too.

I have experienced my share of dismisses from individuals out there, both in public and on forums. I suspect we all have. For the politician I suspect it is even stimulating on some level, but I would ask you to reconsider your decision to leave. You are better than a politician; you are a gentleman, not a taker. But I would humbly ask you to continue to share your wisdom with us.

Barbarians may be pounding at the gates, but they only win if you let them in.....

ORO

(02/01/2000; 10:03:46 MDT - Msg ID: 24033)

The Stranger - excess consumption

The basis of an economy is consumption demand the "aggregate" of our prioritized wish lists and needs. Second is resources for exchange; what we have to give in return for the items on our list usually in terms of money. Then comes the supply of that demand; what is available in the market in terms of other goods/services.

The important item here is to see that property/assets, goods and services trade for each other, money facillitates the exchange. Money neither causes nor initiates demand, neither does it provide supply. Income is the going rate of exchange for one's production/service.

A pretty good summary is demand limited by income induces supply.

Artificial demand is that demand which is induced by untimely debt and by currency depreciation. In short, stuff we buy because "inflation" fears induce us to spend funds we would rather keep on hand had its depreciation not been a threat. Debt which we took upon ourselves because "real" interest rates were lower than the market preference.

Demand at its source is strongly dependent on age, and therefore on age demographics. The young child has many wants that only grow greater as he matures. His parents meet these as best they can with a balance of temperance and indulgence. The young adult has a new set of needs as soon as the support of parents is not needed, that is, once preparation for work is done. Then comes the need for work clothes, transportation, lodging. The young worker, however, has less income than his older and more experienced co-workers. Often, the young worker is much less effective at his work than the latter and has a lower income to show for it. The new technologies and way of thinking of the young worker's generation are still developing, as are their skills.
The young worker then starts on the road to middle age, a familly is created and a true home becomes necessary. Debts are undertaken and consumption roars ahead with obligations taken on for the next three decades. The worker becomes capable in his work and moves forward in positions and responsibilities. The technologies and mindset of the maturing generation come to dominate the operations of leading and new corporations specializing in the new tastes and technologies.
The next phase is that of the aging mature consumer and worker who's familly obligations are mostly done as the children leave the home and are ready to fend for themselves. New debt is no longer accumulated, retirement looms and it is time to collect savings and investments for the long term. At work, a dynamic stability is found. Prosperous businesses are nurtured for the next generation, while failed experiments in business lay far behind. Debt is paid down, furniture and fixtures go unchanged for a decade at a time, clothes don't wear out as quickly as they used to. Entertainment, qulity, and travel are the main expenditures. The growth industries of the past decades are mature and the mindset has moved past the worker, advancement is no longer offered and no longer sought. Often, work is downsized to afford more time for hobbies, fun and rest.
Finally, old age creeps up on the retiree and expenses once thought essential for happiness are set aside with disinterest. Work is done either for fun for the well off, or due to necessity for those less fortunate. Debts are long gone, assets are spent down rather than accumulated. Consumption is far lower.

The US, and with it many other industrialized nations, have a baby boom and a baby bust generation much larger than the previous demographic humps. The Boomers and X-ers are at the point of the peak hump going through the peak "experience" (productivity) and spending years. The pattern, however, is ahead of itself on spending relative to prior examples. Spending is some 4 years ahead, while savings and investment are at the average in terms of level. The stock market correlation is also ahead.
The main reason is that of the debt spree. While incomes (as "total compensation") are growing at 5-6% in "real" terms, debt growth has mushroomed in real terms as well, but at a greater pace. This means that more of the wish lists of people in this age group are filled - and at an earlier time than ever. That early satisfaction and high debt load puts in danger the driving force of consumption if the economy were to stumble. Furthermore, as was partially inevitable, given the demand boost due to the population pop, the US had specialized in the great industry of marketing, moving about and assembling to order imported products for local consumption. These three items, when put together, dictate both a greater displacement "when the music stops" and make sure that this disaster will occur. Furthermore, this occurrence will have come some years earlier than it had in Japan 1990, or in the US of 1929 - or in the US of 1959 and 1966, when personal leverage was not as great relative to income as it is today.

The US elected class had attracted this generation with currency support, subsidized interest rates for housing, and a decline in government's take from the economy so that these people can have a greater share of it. In the meantime, the government had continued with great expansionary forces and the use of debt traps and such to extract more from poorer countries, the better to satisfy this generation's needs.

The structure built by this dense concentration of demographically driven demand and exacerbated by government policies and their support by trading allies, is teetering on the brink of deflationary collapse. The mechanics of the markets and the interests of the powerful financial players in the Anglo bank realm are squarely on the side of monetizing the debt that has accumulated. This will turn a deflationary collapse into an inflationary one.

Perhaps more on this later.

Journeyman

(02/01/2000; 10:23:31 MDT - Msg ID: 24034)

Defending Gold: Chapter 2

Defending Gold: Chapter 2 @FOA, Peter Asher Mr. Gresham,
Farfel, Aristotle, TownCrier, Canamami, ORO, PERMAFROST, ALL

Awhile back, culminating with a post headed "The Crime of
1873" -- an indirect indictment of gold," posted January 9,
2000, and based on a link posted by CavanMan, to whit,

http://www.micheloud.com/FXM/MH/Crime/carricat.htm,

I was seeking specific indictments of the old gold standard,
the one of which Alan Greenspan remarked, "The reason why
there is very little support for gold standard, you know as
well as I in the current context, is the consequences of
those types of market adjustments are not considered to be
appropriate in the 20th and 21st century." -to US House
Banking Committee, July 22, 1998

It occurs to me that a very articulate and genuinely felt
extension of Greenspan's comment was just recently posted by
FOA:

"Indeed, a free world economy needs and demands a
currency that can expand and contract with changing
conditions. The curse of the old gold standard was that
it didn't allow this latitude and always created a
crisis when needs required this flexible money supply.
Only a separate gold market can offer a means to truly
measure the success of the money creating treasuries.
This is the direction we are heading, for better or
worse.
-http://www.usagold.com/cpmforum/archives/3120001/defau
lt.html FOA (01/31/00; 20:34:19MDT - Msg ID:23965)

I would suggest that any of us hard-core gold bugs who wish
to defend a return to some form of gold standard, need to
address the objection stated so well by FOA above.

Am I the only one left standing?? PERMAFROST? ORO? Mr.
Gresham?

Regards,
Journeyman

Journeyman

(02/01/2000; 10:27:54 MDT - Msg ID: 24035)

Free advice @FOA & PERMAFROST (& you know what that's worth)

FOA I'm with you all the way -- I just think you may get off
"the road" before it arrives at it's final destination, a
defacto electronic REDEEMABLE gold derivative. I'd surely
like to talk that over with you (and apparently with Another
in the background.) I wish you guys would just ignore
PERMAFROST'S ranting and raving. It's good you respond to
his substantive points. Don't waste your time or emotional
energy on the rest.

This forum isn't like a stage --- writing vs. a live
performance allows the audience to completely pick and
choose what they spend their time on. A better analogy
would be a three ring circus, where everyone gets to pick
and choose what they "watch." Which "ring" do you think
most people will watch more closely, you or PERMAFROST?

You and Another don't need to be so sensitive -- your
information is very strong and useful; to withdraw from the
contest under such conditions will make some believe this is
a sign of information weakness!! Sort of like Ross Perot
withdrawing in his first presidential race.

One more try: Sir, you do us here a disservice. Your action
implies that we are not able do discern true value when we
see it. I personally would feel insulted were that truly
what your withdrawl signaled.

Why did you cease posting?? You only said Another demanded
it?? Why??

PERMAFROST, cool it! Just make your points unemotionally.
The rest really does detract and it wastes my time!

Regards,
Journeyman

18KARAT

(02/01/2000; 10:28:27 MDT - Msg ID: 24036)

goldfan, follow up on Fannie Mae, mortgages

I've had a good read of that paper you referred to,
by prudentbear.com.
My immediate reaction
is that there are some parts of it I do agree with.
I mentioned in one of my previous postings:
It's a characteristic of bubbles
that they suck in all available capital.
And I gave as an example,
that people mobilise their collateral,
by means of mortgages and home equity loans
to plunge on the bubble market.

I'm not sure that the mortgage provider
can actually be 'blamed' for this though.
It seems to me that it is very much demand driven.
Bubbles cause buyers� panics,
where people are desperate not to miss out.
The mortgage provider borrows on the money markets
to meet the surging demand for loans.
I believe that the non-bank mortgage provider
would still be functioning as a broker though.
Provided it is selling suitable term paper
to match the liquidity requirement of its customers.

Where the mortgagees require long-term, fixed interest-rate mortgages,
this demand can be met by aggregating and securitizing the loans,
and selling the resulting bond instruments.
The people buying such bonds,
either directly or through a mutual fund,
would be committing their money long-term.
Thus there is no increase in money supply.

Where the mortgagee requires a floating-rate mortgage,
or a home-equity backed, revolving line of credit,
the mortgage provider should only sell short-term paper,
even committing some of its assets to establish a line of credit in the cash market
so as to be able to meet demands for liquidity.

As a general rule:
Prudent practice requires that a mortgage provider, acting as a broker,
should always try to match up the term-preferences of borrowers and lenders.
Where a mismatch is unavoidable,
due to constraints imposed by supply and demand,
a prudent broker can use the debt-swap market
to lay off the risk onto someone who is more willing to accept it.
Since swaps can be expensive,
this cost would be passed on to the borrower
as part of the cost of setting up and operating the facility.

Private sector mortgage-brokers would be well advised
to be very prudent in how they operate.
They do not have access to a line of credit from a central bank,
which has its own printing press for dollar bills,
Or else they will crash.
The S&L crisis in the US a few years ago
shows how real the risk can be.

The final issue relates to Fannie Mae,
and whether it is creating credit,
as opposed to merely broking mortgages.
I am not really familiar enough with Fannie Mae's modus operandi to judge this properly.
If it is the case, that it is absorbing term-disparity risk itself,
while relying on its government backing to protect it.
Particularly if it is borrowing short-term and lending long,
like banks do.
Then it is indeed creating money backed by nothing but credit,
i.e. promises and thin air.
And it should be treated as a bank.

Remember though, that the borrowing of money is not inflationary in itself,
provided that the debt instrument (IOU)
finds a buyer (lender) willing to back it with his own cash.
The money is merely transferred from the lender to the borrower,
for an agreed term, for an agreed fee (interest).
Both parties are consenting adults.

Of course, if one is borrowing against the family home
and then "investing" in bubble.com,
then the real issue is the loss of asset quality (to put it mildly).
Perhaps we also have a margin loan on top of the mortgage
just to add a certain extra frisson of excitement and leverage.

The danger to the borrower is that the market will crater.
And the home will be lost, or encumbered by huge debts.
The danger to the lender is that a lot of bad debts,
backed by collateral that is worth a fraction of what it was yesterday,
will drag down the lender.
The danger to the system is that a lot of failing lenders will create a massive deflation.
As fiat money vanishes back into the mist from whence it came.
Like Japan. - A deflation that the central bank & government
cannot reverse even with zero interest and massive deficit spending.
Because the banks and the consumers are on strike,
and all the capital is being sent overseas.

Banks really are different.
Depositors are persuaded to put their money into demand deposits
where they are led to believe their money is merely warehoused,
and available on demand.
However, apart from the minimum reserve requirement,
and the bank's shareholders' capital,
IN REALITY the short-term bank depositor has nothing to back his funds,
other than the collateral-backed promises
of the long-term borrowers to repay...eventually.
This is a very illiquid asset.
Furthermore, in a bubble, collateral can often be priced "optimistically".
Borrowers have even been known to default!!!
Hence the short-term bank depositor may find
that a large part of the money in his demand account is notional, even fictional.

If too many people were to try to draw on their short-term deposits at the same time,
only the Fed or the US Treasury could rescue them.
Bank account money is true fiat currency � held up only by faith.
"In debtors we trust" - the biggest potential debtor being the government.

Otherwise in a crisis:
A bank can try to sell its loans at a discount to other banks, if it can find a buyer.
It can try to raise new capital, if it has friends with deep pockets.
Or it can even call in its loans, if its contracts allow it to do that.
In a general crisis, this is like throwing gasoline on a fire.
And only causes the conflagration and panic to spread.
Banking panics like this used to be common in the 19th century,
before central banking was invented.

The fundamental contradiction in the banking system
is this belief that you can have your cake and eat it too.
That money can be lent out long term, and yet still be available to be withdrawn on demand.
You can only do that my friend, if you have two cakes.

And so that is what the bank does.
To sustain the illusion, it creates the myth of two cakes.
But in reality only one of those cakes is real enough to eat.
Only one of those accounts is real enough to be spent.
The other one must stay unseen in the cupboard.
It can be referred to as if it were a cake � a fiat cake.
But if anyone asks for his cake�
Well, we'll just juggle the few cakes that we keep as an emergency reserve,
So that no-one will actually notice that any cakes are missing.
And hope to heaven that they don't all ask for cake at the same time.
You see? This is how fiat debt-backed currency is created.
We lend out most of the real cakes, long term,
and ask for an "IOU cake" in its place.
The IOU's we carefully place in the cupboard,
And pretend they are still just as good as real cakes.
But of course, you can't eat IOUs until the cake is repaid.
But, if you really have faith, you can live your whole life accepting
that a cake can be in two places at once.

- 18K

Peter Asher

(02/01/2000; 10:47:15 MDT - Msg ID: 24037)

Journeyman, All

We're on the road for 2 days going back to Oregon after a 2 month stint in So. Cal. Lot's of partial posts written recently, all the way back to Steve's classic case ambulance driver. Need to catch up ---

Mr. G -- good speach!

Permafrost: -----Oh, never mind!

The Earthlink E-mail is history in ten minutes. We'll be back at peter@peterasher.com (No space this time)permanently.

Mr Gresham

(02/01/2000; 11:24:37 MDT - Msg ID: 24038)

Journeyman --Defending Gold #24034

Here is where my knowledge of financial history shows its lack of depth. Most of what I've heard about the operations of the gold standard in the 19th century and early 20th echo the anti-gold propaganda line about it being "inflexible" and exacerbating the Great Depression. (And of course Roosevelt "rescuing" us from it.)

Imagining an alternative economic history, with gold standard continuing throughout the 20th century would be a giant intellectual exercise -- but one that is probably fit for an Oro, and all the rest of us thrown together.

In any event, money is defined as "the most marketable commodity", and the world economies and governments of the electronic age have created a "market share" for fiat currency. People WILL use it, and what FOA is basically asking us is: Why should any power elite just eliminate one of its major successful-so-far holdings of value and tools of power -- fiat -- unless forced to? As long as people will believe in it and use it, they'll keep it alive. They just have to manage it better than the competitors, and use gold as the scorecard among them, perhaps.

If the gold is in Ft. Knox or elsewhere held safely, the US has its Plan B ready. But Plan A is working pretty well for them so far, eh? What was Oro's estimate of what percentage of World GDP the bankers are able to siphon off annually?

Back in a week or so...

lamprey_65

(02/01/2000; 11:34:58 MDT - Msg ID: 24039)

Galearis

Enjoyed your post on acid rain. Many don't see the common thread of which you speak - that's unfortunate. Hidden agendas are not solely the purview of the liberal media/politicians.

Lamprey

PH in LA

(02/01/2000; 11:42:17 MDT - Msg ID: 24040)

Behind the scenes at USAGold

ALL & especially FOA:

I plead to being behind the curve on the Permafrost situation (which I have noticed developing for some time) due to other committments...(my website is under construction and will be coming online soon. Watch here for announcement of the grand opening!)

Even though I have little more to offer to the many testaments of appreciation and admiration directed at FOA, I can offer a little bit of behind-the-scenes explanation as to how the present situation came about.

Permafrost is not Tzdeak*.

He is Chris.

Yes, that intellectually sloppy, fuzzy-thinking, intellectually lazy, unimaginative entertainer... (need I go on?) disrupter has been kicked out of Kitco just as she was kicked out here. Some may have noticed that she had conceived a campaign of disinformation and defamation against Michael Kosares and USAGold, accusing them of being a CIA front, in her last weeks before her sudden disappearance at Kitco. I brought her stupid garbage (yes, FOA, your inescapably appropriate description of their thought processes makes that word usefull here, too) to Michael's attention because I have always found her stupidity to be insufferable. He replied privately that his legal people felt that USAGold would have an actionable case against both her and Kitco. There was a time lag during which he made this known to Bart. Suddenly, Chris disappeared from the radar screen at Kitco. At the same time, Permafrost intensified his/her presence here. FOA was absent for a time and when he began to catch up with the forum, he started to reply to Frosty's old posts. The effort of doing so gradually became herculean (as the struggle against stupidity so often is). In reading his posts, Parts I through IV, we can see exhaustion set in for FOA. And especially because he has done it all before. Remember how patiently he tried to deal with Chris the first time?

Did anyone notice FOA's reference in his post, Part 3:

"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...Etc" (Upper case by PH in LA)

When did FOA ever refer to Illuminati? Never!! This is Chris' pathetic understanding of how the universe works. Not FOA's. Never has been. Never will be! There are many other clues that I refuse to ferret out now. But please compare how perfectly the tactics and thought processes of both Chris and Permafrost co-incide. Note their language similarities. Note the similar gramatical constructions. Note the similarities of their emotional reactions... the same posturing of a weak idea and the abandonment of it when it is challenged. The same pointless anamosity towards FOA. They are the same person!

Chris/Permafrost is looking for attention.

There is no need for us (or FOA) to give her any at all. FOA has demonstrated to the judge and jury and it is obvious to any thinking person: She simply has nothing to offer here. No good thoughts that will remain after we, "faceless fools" have disappeared. Therefore, we should not grant her the attention she craves. Period!

Stradmaster is right. There is too much else in the world that merits our attention, to pay any whatsoever to intellectual lightweights, mentally ill, pathetic disrupters looking for notoriety to bolster their underlying and well-deserved lack of self-esteem.

Last time I commented on Permafrost, I concluded that he should be allowed to stay.. that maybe s/he would learn something. At that time, FOA seemed to understand how childish and laughable he was. Now FOA grows weary. I didn't imagine that could happen, but I was wrong. Permafrost's password should be withdrawn now. The loss of FOA would be irrepairable. The loss of Perma would be unnoticed.

Chris and Perma will be back, with alternative IDs. Believe it! It will take time for us to notice it; they can hide behind other passwords, but they cannot hide their stupidity and intellectual laziness. We will spot them. And we will keep weeding them out. This is an on-going process. It is an unfortunate side-effect to the anonimnity of the internet that protects FOA and Another at the same time.

But it is no reason for FOA to withdraw. Stay friend! Many understand your frustration. Don't let it tarnish your accomplishments and good thoughts posted here over such a long time. The journey beckons. It will be so much richer with you at our side, than without you.

TheStranger

(02/01/2000; 11:47:34 MDT - Msg ID: 24041)

ORO

Thanks, ORO. I hope you do continue your tutorial.

I look at the squeeze taking place in profit margins and just wonder at the inertia of managers who persist in holding the line on prices. This, and recent productivity gains, may be delaying what I consider to be the inevitable proliferation of prices increases. It may also be giving the Fed a false sense of security. In any event, no one seems to really want to take away the punch bowl this time. They hope instead to achieve their means by merely charging a thirsting public a few pennies more at a time to take a drink. In short, I agree that the inflation part of your message is imminent.

Debt, on the other hand, both public and private, is at levels which do not meet some of the extremes of the past. I suspect this has a lot to do with your baby boom demographic and their present day penchant for savings. At any rate, this consideration causes me to doubt your collapse scenario. I would, however, like to read your further thoughts on this subject.

(02/01/2000; 11:49:17 MDT - Msg ID: 24042)

Dear Sir FOA

http://www.usagold.com/
With great dismay I have read the latest turmoil
here (again).

In the meanwhile, so many and valuable messages have
been posted here asking you t o r e m a i n on
this forum, that there is nothing left I could contribute, except my support for any one of them.

So, I'm not going to repeat my #22845 as one of the
many lurkers, but if I may quote Sir Gresham(#24011):

"FOA - what about the rest of us....?"

lamprey_65

(02/01/2000; 11:58:17 MDT - Msg ID: 24043)

Stranger

Notice that computer prices have begun to rise? I believe you are correct, the landscape is beginning to change as these companies are finding it more difficult to hide behind the accounting tricks allowed by the SEC/politicians. The cat is riggling out of the bag.

Lamprey

(02/01/2000; 12:14:43 MDT - Msg ID: 24044)

ORO

I was recently talking to our Controller about some of your writings on Stock Options and how the way they are treated from a tax standpoint seems to distort the earnings picture. He mentioned that there have been some accounting rule changes that are to go into effect this summer. I got the impression that these rule changes would change how companies deal with stock options. I would be interested in your thoughts or comments.

Golden Truth

(02/01/2000; 12:30:35 MDT - Msg ID: 24045)

To PHinLA

ABOUT CHRISHello PHinLA you know i've been very suspicious also about CHRIS being Permafrost. It's so very evident in the childish replies and absolutely insane comments at the end of a reply, Example, her replie to me in her closing statement about being the "Son of the old ones" or something stupid like that, and i mean STUPID. Dear Michael this "impostor" must be KICKED OFF this site forever,period, no questions asked! Chris is causing mental anguish for us all, and i want her out of here right now!

She has driven out of the finest minds i have ever read, off of this forum and i,am really mad because of it.
She is a very sick person who needs mental help, anyone who plays with peoples minds and enjoys it, has got to go!

Dear F.O.A please do not let this person upset you, they are not dealing from a full deck, their elevator doesn't go all the way to the top floor, their one brick short of a load, or one french fry short of a "happy meal" :-) Please reconsider!

Also Michael i submit that if permafrost is allowed to stay it will start to disrupt other posters also, if F.O.A doesn't come back and GOD, i hope he does. Chris will start to focus in on her next victim, you? me? Oro? just wait and see. This person has done enough damage and i say enough is enough. Forum members its time to FIGHT and defend F.O.A's honour. Who do you want to read and learn about GOLD from F.O.A or permafrost(a.k.a chris) to me the choice is very clear and that is F.O.A! "United we stand divided we fall"

Let M.K know were you stand so we can move forward and hop back onto the GOLDtrail with F.O.A as our Guide.
G.T

ORO

(02/01/2000; 12:35:04 MDT - Msg ID: 24046)

goldfan - custodian roles

The custodian role is a need that is filled only under conditions in which "traders" recognize that need. Government as we know it in the past 200-300 years, is a new form, particularly that of the post US and Napoleonic revolutions. Though it may be headed by great of depraved personalities, government is largely a headless monster with conflicting motives. Largely, it is an organization intent on self preservation and part of the "trader" world in that its members seek to profit from government's overwhelming power of violence over the rest of a country's citizenry.

The custodian role in most cases is better filled by widely accepted charitable organizations. Government tends to quickly move away from the custodial chores that served as an excuse to gain fresh power, and subverts them into a method for the promotion of themselves and of extortion from industry and citizenry.

Thus, the (innocent?) error of the constitution's authors in allowing regulation of interstate commerce and of putting the mint in government hands. These allowed the Federal government to exact tolls on all and to explode the money in order to fight needless wars that impoverished the country.

It should be remembered that the basis of modern forms of sovereignty and government are outgrowths of the mass production technologies of the industrial world before the information age. The great leap of efficiency from the railroad, the powered factory, and the energy of coal and oil could only be utilized with large scale facilities run by monstrous bureacratic organizations. The sensitivity of these facillities to sabotage and attack, and the fact that they could be run by serfs as well as freemen were the balancing forces.
Nations and their governments were formed as a result of either of two things, the opportunity to profit from plunder and enslavement of the unprotected, or from the need to protect against the plunderer. The plunderer could be the labor union or the army of the empire next door.

The laws and the governmental structures were a function of the simple fact that if a toll were not exacted from the citizenry in one geographical area to support a large military, a military force would be funded outside of that area in order to invade it and take it over. This way, a toll would be exacted by the government of the locality in order to fund defense against foreign intrusion and subsequent exaction of tolls and issuance of exclusive monopoly charters in the event of a failed defense.

As long as there was more to get from attacking and capturing a territory than the expenditure necessary to accomplish it, there was no way to avoid the expense of war. Governments were given to the democratic or dictatorial political form and the socialist economic structure in order to exact the maximum tolls necessary to fund defense or to repay war debt.
In short, war was funded because it was sufficiently profitable for someone to fund one or more of the sides in the war. It should be noted that war debt had to be repaid, otherwise the resources to fund warfare would be provided to another, most likely an enemy.

Unions and democracy were necessary in order to avoid mass sabotage and to put social pressure on people to join the military as cannon fodder, which was not possible under anything but the two extremes of controlled democracy and radical dictatorship.

Thus Bolsheviks received funding to take over Russia and leave WWI. The charters for coal, gold and grain exports and the repayment of revolutionary debt provided a handsome return. That over 50 million would perish and four generations live in terror could not interest anyone with the means to fund a revolution or a war.

The Civil War was not fought because of the secession of the Confederacy, nor over the freedom of slaves. It was fought for a number of reasons: (1) in order to force the Union to accept the transition of power over the issue of money to the large banks who would receive national charters and buy the debt of the nearly insolvent Union. (2) in order for the manufacturers of the military equipment to sell their wares at great profit and in large volume to both sides. (3) in order to buy southern plantations at great discounts after the war. (4) in order to avoid paying the plantation owners the full value of the labor of the slaves - once freed, the former slave labored in the North for a wage of 1/4 to 1/2 that of a white man, often less. (5) in order to create a national debt to be paid at high interest (at the time of issue).

The reality of the great wars, revolutions and economic calamities are told in terms of cash flows and return on investment. The stories of heroics, of fending off tyrants, of securing freedom and protecting "interests" are often true. Nevertheless, they are either reaction to an attack funded by those enticed with the prospect of plunder, or are such attacks in themselves. Most likely they are both.

Like the IMF funding structure being based on the estimates of the resources it is possible to tax out of the member countries, so are the debt restructuring programs of the IMF to its "clients" (read victims) subject to "austerity" (i.e. plunder and taxation) measures designed to limit economic choices of the citizenry and to force "fire sales" by small and even large businesses.

As they say, "they get you coming in, and they get you coming out."

koan

(02/01/2000; 12:46:57 MDT - Msg ID: 24047)

palladium up up and away?

up $8.30 to $493 - hit a high of $499.50. Seems to me this is a pretty big story for the precious metals !

onlychild

(02/01/2000; 12:54:53 MDT - Msg ID: 24048)

Permafrost, FOA

A little competition is healthy in any environment, as long as the competition is fair. However, when one Knight is wearing armour (though thin it may be) and wielding a mace while mounted on horseback, and the other stands in the open with no weapon except his intellect, then blood will flow. In the long run intellect may prevail if the onlookers can distract the mounted Knight long enough for him to be pulled from his horse. Once on the ground a kight in armour is helpless and can be dealt quite easily. I believe the people have pulled the mounted Knight from his horse. Now, FOA, it is up to you to deal with him. We will watch in great anticipation to see if Permafrost can deal with you in a non-confrontational way. Otherwise I vote for mob rule, we can draw and quarter the offender and cast him/ her out.

ORO

(02/01/2000; 12:55:54 MDT - Msg ID: 24049)

JA - ESOP

The last round of SEC regulations on the subject were on the table for years. They are always "pending" and are struck down at the last minute. Last year, the year 2000 GAAP was supposed to include a fair accounting. A day or so before the meeting that was to approve the changes, they were dropped from the draft.

When will it happen? when the ESOPs no longer serve a purpose, i.e. during the depths of a bear market, when caution urges people to be looking carefully at balance sheets.

SMU

(02/01/2000; 13:19:09 MDT - Msg ID: 24050)

Probing the Soft Underbelly

Let me be firm and frank.
My first posting to this esteemed gathering of the wise and the thoughtfull...so many ideas...so little space. I am amazed at how you could cram all that long winded verbage into such a small posting box.

poke, poke

As the saying goes..."size doesn't matter, it's how you use it."

So, how have you used it my Lords and Maidens? Have you talked your way down the Information Highway of endless riches. Or, have you festered in the enless yada, yada of verbal gold labyrinths? Twisty little passages, all alike, that promise that pot of riches....BUT always around the next corner. There comes a time for everyman to examine his path and to admit that he made a wrong turn twenty years ago. You had a destination once. It may now be time to lay down your pride, admit that the path was wrong, and go forward into a new direction.

Journeyman

(02/01/2000; 13:35:59 MDT - Msg ID: 24051)

Re: ORO (02/01/00; 12:35:04MDT - Msg ID:24046) etc.

ORO, well, just incredible! One of these days, you're going to have to tell me how you do it. There was a science fiction short about Issac Asimov based on the protagonist's efforts to find out how one writer could be so prolific. The "punch line" was that Azimov wasn't one man -- there were nine of him. Hmm?? We do know about Dolly, -- and now the Japanese bulls - - -

I really appreciate the work that goes into your posts --- and the time and effort it took you to acquire the knowledge that lies behind them. If I fail to acknowledge each one, it's probably because I'm busy trying to keep up and attempting to make a few contributions of my own.

While I'm at it, your post MId#23891 on Jan. 30 was also a classic. I'm referring to the part of it that explains the establishment's motivations to keep fiat as "The Engine That Runs The Machine." I hope you won't mind me quoting it?

High regards,
Journeyman

Cavan Man

(02/01/2000; 13:50:19 MDT - Msg ID: 24052)

FOA 23974

Just read your last post. Now, my Irish is UP. I didn't quite understand the depth of your anger.

FOA, screw that dumb b------/b----!!!!!!!

One rotten apple doesn't spoil the whole barrel. You have a huge audience of faithful admirers and believers here.

Stand and fight. Stand and deliver.

ORO

(02/01/2000; 14:22:10 MDT - Msg ID: 24053)

The Stranger - Inflation and the dollar

The breakup I see has to do with something that is widely ignored in the US.

There is a dollar economy and there is a US economy. They are not identical.

The dollar economy includes the whole globe and contains at least a double dose of debt. The global dollar debt is at least as large as that within the US. There lies the problem. Dollars are held in private and in government (CB) reserves. Dollar debt is owed by the US to EU and Japan, and by many LDCs. The latter have been trying their best to put their hands on enough dollars to repay dollar debt - both sovereign and private. These attempts have caused the prices of imported goods to fall and have distorted currency valuations across the globe. The dollar, being the reserve currency, is the most distorted considering the volume of goods and services it trades internally and externally.

As in the pre 1970 days, the dollar has two prices, one a "golden" price outside the country, and one a paper price within the country at about 45% of the external value. Free trade under these conditions result in extreme pressure on both production and services. If one takes the portion of production and services within the US that constitute retailing of foreign source items and services then one finds the productive US economy to be (conservatively) 20-25% smaller than the GDP figures suggest. That leaves the US with an overvalued currency both within and without the US. In the global arena, the dollar comes out as having a value of 1/3 its traded exchange rate against the other currencies.

Obviously, the US can only maintain these discrepancies because of support by the other G7 or G10. Foreign dollar debtors are forced to sell to the US in order to get the dollars they need in order to survive outside bankruptcy. The flow of dollars into these hands is used to roll over and pay down debt. This debt is recast in Euro. The numbers are amazing, as I had shown in prior posts.

Both the success of dollar debtors and their failure to repay dollar debt cause hardship in the dollar arena, because they both destroy dollar supply. Repayment destroys far more than default.

The banks looking for the dollars for repayment of dollar debt come to US banks and debt markets in order to obtain them, they sell US securities (bonds) or absorb dollars from the US banking system through the BOP dollar flow, and by borrowing from US banks/credit markets. In both cases dollars must be created within the US and used to settle dollar debt abroad. This leaves the Fed with the need to lend and buy back securities to the extent that funds are missing because of extinguishment of dollars that flow outside the US.

The Fed operation is monetization and it is the easier alternative to letting even foreign bankers fail. That is the source of the collapse I expect. Not from too few dollars alone, but from the combination of too few in foreign hands and too many inside the US, where the replacement dollars are created. These are the most effective dollars in translation into price levels.

Is this a better presentation?

(02/01/2000; 14:25:38 MDT - Msg ID: 24054)

FOA

I have read "In the Footsteps of Giants" and have been reading your posts on this site for about a year and one half . As I have said to you in the past, I haven't decided in my mind what to make of them. I do find them interesting reading. The posts do tend to contain some mystery, possibly because of the writing style of Another and the certainty of the words you use to present your scenario. Your posts and those of Another give one the sense that you are privy to inside information regarding world financial matters. And if in fact you are, then people would be wise to take note of such information. I found your post FOA (1/19/00; 8:53:32MDT - Msg ID:23197) to be very straightforward in outlining events as you see them with even some general timeframes. You have also been good to attempt to answer questions I have had of you and I thank you for that. I have basically decided to take you at your word and wait and watch events to see if they transpire as you suggest. I think it would be unfortunate if you should quit now, since your potential reward may be as simple as experiencing the joy of being able to say "I told you so, aren't you glad you heeded my advice". I think you stated "Our sole reason for writing is a private commission to share official directions and perceptions with the average citizen of the world." So you are basically doing this as a public service. Those throughout history who have done the most to serve their fellowman have been ridiculed and made fun of, at times, it just goes with the territory.

Yes, I like others are asking you to reconsider and come back.

However, unlike others I do not think Permafrost should be banned. I agree that name calling and gutter language are not appropriate and considered bad form. Good ideas can sometimes come from unexpected places and well intended people can have bad ideas. I have also observed that this forum does a pretty good job of policing itself. This forum for the most part attracts bright articulate people and in cases where it hasn't members stand up and ask for justice as they have in your situation. In summary I thought I might share a story I heard years ago when I attended a business retreat while in graduate school. A number of the department heads were not working well together to make a point the facilitator told this story.

It seems there was this little sparrow that put off flying south for the winter. Well, after all his sparrow friends had left it started turning very cold and he decided he must begin his flight. As he was flying south it began to rain and the rain formed on his wings and turned to ice making the flight very difficult. The sparrow became very fatigued and fell to the earth landing right in the middle of a barnyard. The little sparrow thought to himself, I am about freeze to death, what a horrible way to die. Just then a cow walks out of the barn and proceeds to drop cow manure on this little sparrow. He then says this is really a awful way to die. However the fresh manure warmed him up and he started to feel pretty good so he commences singing and chirping for all he is worth. At this point a cat walks into the barnyard, hears the sparrow chirping, digs in the manure finds the sparrow and eats him.

Now there are three morals to this story. (1) Not everyone that dumps on you is your enemy. (2) Not everyone that takes crap off you is your friend. (3) When you are warm and comfortable be thankful, but don't get boastful about it, as it may only be temporary.

And so lets go forward and each commit to use this forum to better our knowledge of Gold and how it relates to personal and world financial matters.

Aristotle

(02/01/2000; 14:42:52 MDT - Msg ID: 24055)

Journeyman and FOA

After dropping in for a quick review of things before getting back to my other activities, I discover I should have done something else with my extra moment. My, what a disaster. I'm confident that the spirit of the abundance of intelligent men and women gathered at this site will prevail over the vexing but unavoidable interruptions that are inevitable in any public gathering place. Even the best-tended garden gets a weed or two. Fortunately, we have a good gardener here, so I don't fear for the quality of the site over time. From his absence, it seems clear that MK has many rows to hoe, and it is only a matter of time before this area falls once again under the gardener's eye. So take note, all of you dandelion seeds drifting by on the cyber wind--this is not the place for you to attempt to take root. Our soil is too fertile, and the crop too unique to be put at risk by willfully noxious elements. But that is just my view as an outsider looking in.

Personally, I come from a long line of knuckle-draggers, and enjoy the distinction of being the first member in my family to walk erect. As it is, I mash upon the keyboard with hands that want for opposable thumbs, and owing to my youth I've not yet mastered the art of throwing stones. So it comes as no surprise that when Permafrost had an early post that referred to me as a "pagan" held up against assorted "gurus," I lacked the mental faculties to decipher his meaning. I shrugged my hunched shoulders, furrowed my neanderthal brow, grunted, scratched, and wandered off at my slow pace, looking for a bone to gnaw on.

Journeyman, in response to these words by FOA:
-------"a free world economy needs and demands a
currency that can expand and contract with changing
conditions. The curse of the old gold standard was that
it didn't allow this latitude and always created a
crisis when needs required this flexible money supply.
Only a separate gold market can offer a means to truly
measure the success of the money creating treasuries.
This is the direction we are heading, for better or
worse."------you, then, offered this challenge:
"I would suggest that any of us hard-core gold bugs who wish
to defend a return to some form of gold standard, need to
address the objection stated so well by FOA above."

The particular bone I have been gnawing on since the new year began has been an attempt to lay out the nature of a natural currency system in terms that don't overwhelm my own overtaxed brain cells--all three of them. It is very nearly ready for submission, and I can tell you now that the world as we know it needs, I repeat, NEEDS fiat currencies. At first blush, that my seem to run counter to everything that we stand for, but I assure you, it is the only way for Gold to truly have its day, as it should--as it will. The various failings in the past were due to a flaw in the architecture of the monetary system. If I have succeeded in my effort, the truth of the matter will be a source of extreme comfort to Goldhearts, and will strike everybody else as quite natural and, in fact, desired. The good news is that all signs point to the euro system as ushering in the repairman for the flaws in the old architecture. If they follow through with it, and get the support as needed, current Gold owners will reap the benefit of their foresight and wisdom--or else they will simply be basking as the beneficiary of plain ol' dumb luck. If these repairs are brought to completion, as I am inclinded to believe they will be, then we will never see Gold so cheaply obtainable--whether you choose to measure its price in dollars or by such means as loaves of bread.

Dammit, FOA. After I post this longer work in the next day, if you don't respond with your usual brief pleasantry, then I will very likely go back to my knuckle-dragging ways. I would certainly appreciate any feedback from the unique view that you share with ANOTHER on these matters.

Gold. You don't have it unless you HAVE it. ---Aristotle

Usul

(02/01/2000; 14:58:35 MDT - Msg ID: 24056)

Time

Diem adimere aegritudinem hominibus
Time heals all wounds

Tempus omnia revelat
Time reveals all things

Journeyman

(02/01/2000; 15:06:01 MDT - Msg ID: 24057)

Perverted Law Causes Conflict

http://www.lexrex.com/informed/otherdocuments/thelaw/main.htm
TO ALL: I was looking for a quote for Aristotle in a little
booklet called "The Law." Then ORO's really fine post,
(02/01/00; 12:35:04MDT - Msg ID:24046) further reminded me
of that little gem. I had forgotten just how good Bastiat,
the author, was. He nails the "legal plunder" aspect of
government to the wall. This "legal plunder" has become so
prevalent, we all think of it as normal. If you want to
escape the chains and memes of our current western culture,
and see the government-business-political-ideology axis and
the mess it's caused clearly from the crystal perspective
available to a 19th Century French statesman, read Frederick
Bastiat's "The Law." It's quite short, elegant and to the
point -- and it's free on-line from various sources. The
posted link above is one source.

One ironic out-take from "The Law:"

Perverted Law Causes Conflict

As long as it is admitted that the law may be diverted from
its true purpose---that it may violate property instead of
protecting it---then everyone will want to participate in
making the law, either to protect himself against plunder or
to use it for plunder. Political questions will always be
prejudicial, dominant, and all-absorbing. There will be
fighting at the door of the Legislative Palace, and the
struggle within will be no less furious. To know this, it is
hardly necessary to examine what transpires in the French
and English legislatures; merely to understand the issue is
to know the answer.

Is there any need to offer proof that this odious perversion
of the law is a perpetual source of hatred and discord; that
it tends to destroy society itself? If such proof is needed,
look at the United States [in 1850]. There is no country in
the world where the law is kept more within its proper
domain: the protection of every person's liberty and
property. As a consequence of this, there appears to be no
country in the world where the social order rests on a
firmer foundation. But even in the United States, there are
two issues---and only two---that have always endangered the
public peace.

What are these "two issues" in 1850s U.S "that have always
endangered the public peace?" You'll just have to read to
find out!! ;>

Regards,
Journeyman

Usul

(02/01/2000; 15:14:45 MDT - Msg ID: 24058)

Time

"Time reveals all things, and you will see that what I say is correct, namely that:

The entire march of time reveals what is hidden,
yet also does it hide what is revealed."

The Consideratio Brevis of Philip � Gabella, 1615

Journeyman

(02/01/2000; 15:29:53 MDT - Msg ID: 24059)

Comic relief (and serious stuff too!) @Aristotle

A master of comic relief as well!! Thanx, I needed that. AND your much anticipated "perfect practical financial system" post as well.

By the way, I would not argue we don't need gold derivatives of various sorts, just that we don't need, and indeed in the long-run won't have independent fiat currencies. Well, maybe. Waiting for your post!!

Regards, J.

Galearis

(02/01/2000; 15:42:17 MDT - Msg ID: 24060)

@lamprey_65: acid rain as myth/disinformation by liberals......

Only works if the vast majority of the lay public is so estranged from reality by the processes and machinations of living in a modern "civilized" (read urban) envirnoment that they are incapable of seeing what is obvious to those of us who view the natural world with educated eyes from training AND inclination.

I used to travel our northern (Ontario highways) and could predict the bedrock geology by how badly the trees were or were not impacted by acid rain. The granitic (low-lime) areas showed considerable insult revealed as top die-offs (trees do not die from the top down); whereas lime-rich areas (whether it was due to glacial overburden or bedrock type) showed lesser affects (but it was usually there).

I would also say that one does not have to be a liberal or socialist, or christian, or any group oriented mindset to have concerns without an agenda in this area. If the majority buys into the myth that the eco-buffs are tree-hugging, wimpy, bubbleheads seeking attention then we are ALL in a world of trouble. Pun intended.

I would like to see some of these people try to keep up with this particular wimp out there where nothing exists but trees for hundreds of miles. Then again, if more actually cared enough to look around them, would we even have such an envirnomental crisis. Values, values, it all comes down to values. Our culture is unwell with those it chooses. This is reflected in how we use the world.

And the (so called) environment really is in crisis!

My apologies to the group for this off-topic discussion.

Camel

(02/01/2000; 15:43:48 MDT - Msg ID: 24061)

Mr. Snowflake

In trying to summarize the position of FOA,Mr. Snowflake( Permafrost) said FOA believes:

" buy gold if you have dollars as opposed to Euros ( though
to the best of my knowledge you only said this first last week and not before)."

How pathetic!I have probably read all of FOA's posts over the last year and he has allways said "buy gold". Once when very seriously challenged by a number of people he grudgingly allowed that it might be acceptable, under certain circumstance, to buy a few gold stocks. About half a dozen people over the last year have requested information on how to buy Euros or Euro demoninated investments, and he has allways refused and encouraged them to buy Gold.

Snowflakes understanding of this basic issue is so false and miusguided and delivered in such an insulting manner that he should be removed from the list and NEVER allowed to return.

His is just another example of ruthless, mediocrity displacing, virtrue and talent.His thoughts will melt as soon as they hit the ground, especially in this heat.

Also,along with global warming, another example of the liteny of misguided science foisted on the general public we might add that of cigarette smoking.Who can forget all the years that the tobacco industry insisted and assured us that smoking was not harmful to your health. Even today that are a few top management people that won't admit the truth.

Correlation does not prove causallity they tell us.

This seems to me to be one very possible discription as to what may be happening with the debate on global warming. Don't forget that the main opposition to precieving global warming as a reality is led and funded by the oil industry, which is distubingly similar to the efforts of the cigarette industy on the smoking issue in times past.

Golden Truth

(02/01/2000; 15:44:00 MDT - Msg ID: 24062)

Aristotle

You are a true Gentleman and i can't wait to read your next installment, thanks for all your wonderful work also!
G.T

Cavan Man

(02/01/2000; 16:20:17 MDT - Msg ID: 24063)

Aristotle 24055

Sir Aristotle:

Good wit; you may be a knuckle dragger but you are higher up (or is it lower down) on the food chain than me, a mere box salesman (and empty ones at that!). I look forward to your reasoning as to the fiat standard and continuing enlightenment. Thanks in advance....

Cavan Man

(02/01/2000; 16:30:24 MDT - Msg ID: 24064)

FOA (one more time)

Sir JA is right. Your commission is a public service. You are looking out for the welfare of every common man.

The FOA/Another THOUGHTS are very important to thoughtfully consider and as I believe, accept, because, while any fool like me can conjure a convincing argument to buy and hold gold, the real value to be found in your words is; when POG hits $1000.00, do I sell out in exchange for Pokemon cards or hang in there and wait everybody out. For my kids and others like me, that might be the difference between a classical education in Europe or a BS from East Japip U.

Come now, let's be reasonable. Do you want to carry that sort of guilt around the rest of your life? (Note: The Irish are quite adept at dishing our guilt and making in stick.)

On another subject (no pun intended), someone posted a link to another post at another forum where it was suggested the FED has a plan to begin issuing 5 and 10 year Treasuries redeemable in gold. This could be "plan B" that Mr. Gresham spoke of? What do you think? I think the dollar as we know it tanks either way. Thank you for (re) considering.

JCTex

(02/01/2000; 16:36:13 MDT - Msg ID: 24065)

Reginald Howe / february 1st

http://www.goldensextant.com"...The Fed and the ESF are the only arms of the U.S. government with broad statutory authority "to deal in gold" and thus by reasonable extension in gold futures and derivatives. Were the Fed to engage in such activities, it would of necessity have to do so subject to all the institutional safeguards that govern its more important functions. Unlike the Fed, the ESF is virtually without institutional structure or safeguards. It is under the exclusive control of the Secretary of the Treasury, subject only to the approval of the President. Indeed, direct control and custody of the ESF must rest at all times with the President and the Secretary. The statute further provides (31 U.S.C. s. 5302(a)(2)): "Decisions of the Secretary are final and may not be reviewed by another officer or employee of the Government."

Originally funded out of the profits from the 1934 gold confiscation, the little known ESF is available for intervention in the foreign exchange markets. In the absence of a Congressional appropriation, the Clinton administration used funds from the ESF to finance the 1995 U.S. bailout of Mexico. However,..."

This one is too long to post, but worth the read.

Aristotle

(02/01/2000; 16:55:43 MDT - Msg ID: 24066)

Journeyman, my good man--

"we don't need, and indeed in the long-run won't have independent fiat currencies."

You know, that was my original thinking, also, but boy was I surprised as I delved deeper into this. And just as you can be sure that I wouldn't suggest the odd notion that use of fiat currencies are vital to the viability of monetary Gold, you can perhaps gain some confidence that I am also not spewing pro-Gold propaganda without equally having seen the compelling reason behind Gold ownership. Believe it or not, Gold will be the savior of fiat currencies, and will in turn be bouyed by them. Strange but true. And very encouraging for those who hold Gold near and dear--the world will embrace the precious yellow metal. And with that, I'm back at the grindstone.

(By the way, thanks for that great link you provided!)

Gold. Get you some. ---Aristotle

Canuck

(02/01/2000; 17:25:55 MDT - Msg ID: 24067)

@ SMU (24050)

Interesting message.

I have been very quiet in the last month; unwinding my long
position (Y2K). I have contemplating my long position in gold. As you put it, I have stopped to look behind myself and check the path forward.

Is it possible for you to elaborate on your message?

TheStranger

(02/01/2000; 18:44:01 MDT - Msg ID: 24068)

What a Place

Thanks, ORO, for taking the time to help me with this. Thanks also to Lamprey for addressing his comments to me. Reading your words along with Aristotle's, Journeyman's, JA's etc., I am reminded what a great group of intellects we have here. Amazing.

Al Fulchino

(02/01/2000; 18:44:05 MDT - Msg ID: 24069)

From an email a friend sent, re :Comments by Ed Yardeni

An inflation scare on Friday pummeled stock prices. A global
synchronized boom and tight labor markets could put some upward pressure on
costs and prices. But, I expect offsetting deflationary pressures from
productivity, technology, and lower oil prices. Investors are starting to
worry about a series of rate hikes this year. I still expect just two 25-bp
rate hikes during the first half of the year. My range for the Dow is
10000-13000 this year, with the bottom end likely to be tested in the next
few months. The top end is my target for yearend. A flight to quality and
talk of paying off the federal debt pushed bond yields lower notwithstanding
renewed inflation jitters. My range this year is 6%-7% and 5%-6% in 2001.

ESSAY: The Longest Expansion & Economic Democracy

The US economy is experiencing the longest expansion in our history. The
forces driving our prosperity remain very powerful suggesting that the
prospects are good that the expansion will continue. If I had to explain in
15 words or less why the US economy is performing so well, I'd say: Since
the late 1970s, the individual has enjoyed more and more Economic Democracy.
To put it in terms of Adam Smith's "The Wealth of Nations," the individual
has more opportunities to pursue his and her self-interests and is less
constrained by special interests. "Power to the People"--the mantra of the
1960s radicals--has become the established modus operandi.

Here are some of the sources of our new Economic Democracy:

1) DEMOCRATIC MARKETS. In the United States, and increasingly around the
world, markets have been deregulated and opened to global competition by the
elimination of Iron Curtains, Berlin Walls, and other trade barriers. Often,
these barriers and regulations protected special interest groups at the
expense of consumers. Power has shifted away from politically well-connected
producers to consumers. In competitive markets, producers have lost their
power to raise prices. Instead, to be profitable, they must find ways to
offer consumers better and better products and services at lower prices.
This forces them to cut costs, increase productivity, and to innovate.
Increasingly, the individual has the power to choose the best products and
services at the lowest prices from any producer in the world.

2) DEMOCRATIC CAPITAL. In the past, would-be entrepreneurs were unable to
bring their ideas to the market for lack of financing. The deregulation of
the US capital markets during the 1980s brought greater democracy to
finance. Innovations such as high-yield bonds permitted much greater access
to capital for entrepreneurs. The proliferation of Populist Capitalism means
that the distinction between workers and capitalists is disappearing. More
and more employees are getting a stake in their companies through profit
sharing and stock incentives.

3) DEMOCRATIC TECHNOLOGY. Technology is empowering more and more people, and
liberating us from the constraints of space and time. The PC and the
Internet are "capitalist tools" that everyone can own and use. They level
the playing field by giving everyone the same access to a seemingly infinite
source of information, knowledge, and opportunities. Anyone can communicate
and transact with anyone else on the planet any time. As broadband
technologies become widespread, we will all have a 24x7 open line to the
world.

Here are the probable consequences of greater Economic Democracy:

1) Inflation is dead. Of course, there can be brief spasms of inflation and
plenty of inflation scares. But competition, productivity, and technology
are all powerful inflation suppressors. So policy-engineered recessions to
beat down inflation are less likely.

2) The tradeoff between economic growth and inflation is dead. There
probably never was a tradeoff anyway. In the past, it was uncompetitive
markets that caused higher inflation, which led to higher unemployment.
Competition has lowered inflation, which has led to lower joblessness. As
labor markets have become more competitive, we have all lost our job
security. Instead, we have more job opportunities and record real incomes.

3) Productivity is alive and well. There is no reason why the rebound in
productivity growth during the second half of the 1990s can't continue and
even gain momentum. The technology revolution is in its early stages.
Broadband, Internet appliances, B2C, and B2B all have the potential to boost
productivity dramatically.

4) The forces of Economic Democracy are self-propagating. As they create
more prosperity for more people, they spread around the world. Nothing
succeeds like success. More and more people and their governments around the
world are recognizing that the true meaning of life is SHOPPING! The
well-being of the consumer is increasingly at the top of most economic
agendas. The best means to achieve this goal is Economic Democracy.

The risk is that success breeds excess. In other words, we have nothing to
fear but greed itself. In the past, economic recessions and even depressions
followed the bursting of speculative bubbles. The bubbles burst when tight
credit replaced easy credit. This happened in 1998 in Asia when capital
poured out of the region. But Asians responded quickly by accepting greater
Economic Democracy, and capital poured back, thus reviving economic growth.
Some of the air is coming out of the speculative bubble in the US stock
market right now. I doubt that this will be enough to derail the longest
expansion as long as Economic Democracy continues to gain ground around the
world.

Ed Yardeni

Al Fulchino

(02/01/2000; 18:45:18 MDT - Msg ID: 24070)

Clarification

The preceding was commentary by Ed Yardeni, not me or my friend.

SMU

(02/01/2000; 19:05:00 MDT - Msg ID: 24071)

Paths to Riches

@Canuck
Thanks for your reply. I'm glad that the post caught your interest. It was worded to garner attention. You seem to have your destiny well in hand.

Napoleon Hill's classic work "Think And Grow Rich" proposes that the power of thought engenders action. Thoughts are things which, when pursued with desire and persistence, can lead down concrete paths. Depending on the original thought, this path may blossom to fruition and productivity or wilt in despair and hopelessness.

May I humbly suggest, that based on observation and past results, that our THOUGHTS have brought us to a dead end. Investing in PMs has washed us down the stream of despair and poverty.

It is time to go forward.

andrew

(02/01/2000; 19:37:49 MDT - Msg ID: 24072)

FOA

This is a word of support for FOA. I believe that the amount I learnt from him has been invaluable. Thank you.

andrew

(02/01/2000; 19:52:37 MDT - Msg ID: 24073)

aussie interest rates

Six minutes before the announcement of the Reserve Bank's 0.5 % lift in official interest rates an email message slipped out of the Reserve Bank of Australia. It was meant to be officially released at 9.30 EST. It was sent to 64 recipients by "accident". There was a flurry of activity and the Aussie rose about 0.8 US cents before the official announcement. A lot of people made a lot of money in those six minutes. Just another example of manipulation. This comes after the Aussie fell 3 US cents on Friday.

Canuck

(02/01/2000; 19:53:34 MDT - Msg ID: 24074)

@ SMU

I am at the crossroads of hell. My buddies boast of riches
while I hold just enough 'equities' to prop up the gold and end up about even. I swing from bullish to bearish on the half-hour; I've lost my objectivity.

I plain and simple missed the late '98 and '99 run-up. I can live with that but missing the run-up while simultaneously catching the gold downdraft is disheartening.

I read a most interesting article late last week, perhaps Saturday, in the National Post. It is/was entitled the "The
Implosion Of The Internet". The general slant of the story is that internet users have been doubling every year or so and presently 139 million Americans and 12 million Canadians
use the 'net'. This represents approximately half of the population of the respective countries. The author, claims that saturation is nearly upon us; very close in the USA, followed by Canada, England, Japan, etc., etc.

This raises a flag in my mind. The internet, arguably, is the genesis of the economic expansion in the last 2,3,4,5 years. When internet user GROWTH reaches equilibrium, what happens next? No wonder the AOL-Time/Warner merger; we have 'em on the net now, now we have to entertain 'em or lose them. I perceive when saturation occurs, that is to say, when growth stops, many a buck will leave and find a new home. This leaves the money 'sloshing' about, chasing too few goods/services (supply) and we have learned from our friends (ORO, ARI, Stranger, FOA, etc., etc.)(not Perma-dickhead I believe is the name) what that means.

Another, (I like the word ANOTHER) concept I wrestle with is the massive computer/network/hardware/software expenditures pre-Y2K. Corporations have spent oodles of dough upgrading their systems to the latest and greatest and where will new sales be? (Lucent, Dell etc.) These companies, IHMO, will have 2/3/4/... bad quarters, yes?

That's my gold bull thought this half-hour.

If gold drops one red nickel tommorrow I'm dumping it all.

That's my gold bear thought for the next half-hour.

Talk to you in an hour!!

Julia

(02/01/2000; 19:54:27 MDT - Msg ID: 24075)

Permafrost

I take you to be a speaker about several ancient religions. So you undoubtably have heard of the initiates of the great religions. And surely you would have heard that the sources of the teachings of initiation were never revealed to the public. I'm sure you know already that there were reasons for that and purity of the message was one of them. The real meaning was preserved through the ages because they did not try to explain the ineffable to those who don't get it. My point is that there are reasons that people deliver their messages in veiled ways.....to protect the message from being adulterated by those who don't get it.

The thoughts offered here are gifts to those who receive them. Gifts hold no bars infront of anyone preventing them from stepping away upon the desire to do so. Even evil thoughts, like evil gifts, meant to harm, do not hold anyone captive who upon seeing the evil in them refuses to let them build a nest in their mind. For a thought is like a pigeon who when set free finds no place to rest and build its nest, returns home to roost and lays its eggs in the one who sent them.

Thoughts of contempt and chaos and confusion and ill will are not welcomed. Your posts are as a blank screen for me as I look for truth and kindness and goodwill in their message.

Now it's time for you to move on and don't come back. Your attitude has been no less than abusive. I am saddened that you chose this way to present yourself. People the world over have witnessed your performance. I give no applause nor do I want an encore.

andrew

(02/01/2000; 20:14:16 MDT - Msg ID: 24076)

Aussie Interest rates up

Six minutes before the official release of a 0.5 % rate rise the Reserve Bank of Australia "accidently" emailed 64 people of the announcement. There was a flurry of movement in the currency rooms and the Aussie rose 0.8 US cents before 9.30 EST the time of the "official" announcement. Some people obviously made a lot of money in those few short minutes. this come on the back of the Aussie's 3 US cent tumble on Friday. Just another case of market MANIPULATION?

Cassius

(02/01/2000; 20:48:19 MDT - Msg ID: 24077)

How Clinton and Rubin used the ESF to cap the Gold market.

http://www.goldensextant.com/Ladies and Gentlemen:
I just read an incredible article by Reg Howe at the Golden Sextant website. This is such an astonishing story and revelation that all who participate of this forum should be aware of its contents.
A lead in paragraph follows and I think it will be the grabber for all to complete the read:

Evidence is accumulating that the administration of Bill Clinton may have turned the Exchange Stabilization Fund (the "ESF") into a political slush fund to make itself look good and simultaneously profit some of its closest Wall Street friends and supporters. Specifically, the known facts support credible allegations that the Clinton administration has effectively capped the gold price by using the ESF to backstop the selling of gold futures and other gold derivative products by politically well-connected bullion banks. Such interference in the free market price of gold would undermine its traditional role as a leading indicator of inflation. And it would do so at the same time that the administration's many adjustments to the CPI have rendered that lagging indicator of inflation also suspect. Among the bullion banks most heavily involved in selling gold futures and purveying gold loans, forward sales and other derivatives that undercut its price is Goldman Sachs, former Treasury Secretary Robert Rubin's old firm.

Now I understand......and, so should you.

lamprey_65

(02/01/2000; 21:15:06 MDT - Msg ID: 24078)

Cassius

Just finished reading it myself...WOW!!!

IF this is true and gets out -- I don't know how the president can survive another scandal.

L.

chan

(02/01/2000; 21:22:36 MDT - Msg ID: 24079)

Julia

your msg (02/01/00; 19:54:27MDT - Msg ID:24075)

ditto

canamami

(02/01/2000; 22:04:33 MDT - Msg ID: 24080)

Reply to Cassius - #24077

An awesome piece. A clear and tightly reasoned synthesis of the outstanding theories, supported by reference to publicly known events leading to Howe's ESF hypothesis. It's unfortunate that FOA was not cited as a source, as much of the argument appears to be based on the FOA/Another thesis.

Bonedaddy

(02/01/2000; 22:06:53 MDT - Msg ID: 24081)

Cassius, thanks for the link.

I wouldn't put anything past Slick Willy. But, there is one thing that we all need to realize. The price of gold isn't going up on this news. GOLD's time has not yet come.

Right now, NOBODY CARES!

Nobody cares that Willy is a coke head, a sex offender, a con artist, or a real estate swindler. America is fat, stupid, and lazy. Our enemies grow stronger by the day. China buys missle technology by buying Clinton the '96 election.
Credit has never been so easy. America has never been so blind. The shipwreck that is comming will be grand indeed. I am not eagerly awaiting the days that will see GOLD rising to thousands of dollars per ounce. Those will be very dark days. But still, I buy my GOLD. What else am I going to buy? A new sport utility vehicle? A jet ski?
I happen to like GOLD. I know other people who happen to like GOLD too. This is all we need to make a market. If you doubt my reasoning, simply take a look at Pokemon, Beany Babies, Pet Rocks and any other "currency" of doubious origin.
Someday, maybe tomorrow, the world takes a hit. Hurricane, volcano, war, revolution, death of a leader, you name it. Something, like a shot, snaps all the nations attention onto the "crisis". (Selfish people don't do well in crisis mode.) The stock market stumbles. The "smarter class of investors" panic. Trillions of dollars are wiped from mutual funds overnight. Then, and only then, will people seek real money in the form of GOLD. Having GOLD is a lot like having a gun. You pray that people will play nice and stay honest so you'll never need it. If you have ever needed it, you know what I mean. If you haven't, I really can't explain it. It's just something you have to learn on your own.

Chris Powell

(02/01/2000; 22:10:40 MDT - Msg ID: 24082)

FOA and the gold cause

I spend several hours each night working
as best I can as a volunteer in what I
understand as the gold cause, represented
in part by the Gold Anti-Trust Action
Committee Inc. I have had the privilege
of using this fine forum -- the best I've
seen on the subject -- both as a poster
for my group and as a student. Like most
of the rest of us here, I have most looked
forward to the posts by FOA, because he
doesn't just believe certain things; he
KNOWS things too and he has made an enormous
effort to explain them. I have assumed that
he has done so because he too sees himself
as working as a volunteer in the gold cause.
So his ceasing to post would be a disaster
not only to this wonderful forum but to the
gold cause. In the name of that cause I beg
him to return. We all are going to suffer
some blows but he can bear them proudly.

Sippin

(02/01/2000; 22:11:31 MDT - Msg ID: 24083)

SMU & What the future holds

SMU, your post seems very sensible and prudent, but there are some major bullish people getting the jitters and have turned very bearish of late as far as the stock market goes. This is my problem with riding my investments into a stock market that seems to be a great risk. Personally, I want to be in something that I can count on at least not diving into oblivion at any moment. I don't have a great vast quanity of wealth and I was fully invested in the stock market until early 99. I thought mutual funds was like a savings account. I was of the belief that the market would only go up or be neutral at worst over a length of 5 years or so.

I don't believe that these statements made continuosly by investment gurus is true. The logic is on the side of a major market correction in my humble opinion. I firmly believe that TIME is on my side and not of those playing the market like a neverending cash cow.

That's what I am looking for. Long term security, not a few years of good times and a sickening feeling in my stomach when I and all the " investment experts" are proven wrong.

I have no problem with diversification into markets of all types. I just wonder how longterm PM holders would feel if they dump at the wrong time after holding so long. I imagine it would not be very good. Pareing down ones holdings and still being in the game if a bull market in gold hits, would be safer and more mentally healthful than a full dump. You can be right about your convictions and still profit.

But if I was in the predicting business, I would guess we are in the earliest stages of a bear market in equities, maybe a very long one.

Solomon Weaver

(02/01/2000; 22:11:34 MDT - Msg ID: 24084)

(No Subject)

FOA

I certainly hope you have had the chance to read through all of the many posts today�.the strong consensus seems to be that you should stay among us�..

Perhaps you are a busy man and your many worries were already taking you away from us�at least in body�..perhaps we as your 'GOLDEN FAMILY� at the CYBER ROUND TABLE will always hold your heart. You Sir, will suffer no less than we will, for surely you found a place here where many serious minds gave intent consideration to your views�what better way to pay respects to a fellowman.

There are such lovely respectful letters in the Archives which document the way MK and Another and you started out here�.there is the common thread of gold, dollar, oil and Euro which seems to run like a wine through all our discussions...as if to almost make us drunk and forgetful of the smaller details in life�.there is the constant spirit of surprise as the spirit of the forum on each day emerges�one day mired in numbers games, another watching the great escapades of the commodities markets.

Your worlds could certainly be recorded and refined and "posted" on a web site as individual documents, a one way street without answer or perhaps rebuttal�.but what of all the great thoughts that we help stimulate when you are here with us�discussing these things�.as they say�.walking the path.

Poor old Solomon

Sippin

(02/01/2000; 22:32:26 MDT - Msg ID: 24085)

FOA is very good at analysis

FOA to me, seems like a professor of theories and facts and has a great way of formulating it into readable and understandable viewpoints. Now Permafrost is not very impressionable or convincing with rants and raving that seem to come from delusion or mind altering drugs.

Permafrost has a distaste for the unfairness of the money world and wants to vent his anger on all those that don't believe his every word on how "unfair the world is". Well here's a little tidbit of fact for you, "The world has always not been perfect and never will be". Get over it. Place your bets and quit the whining. ITS ONLY MONEY AFTERALL.

I have a feeling this issue over gold is more of a pride thing than monetary with most posters anyway.

goldfan

(02/01/2000; 22:46:46 MDT - Msg ID: 24086)

ORO (02/01/00; 12:35:04MDT - Msg ID:24046)

ORO

thanks very much for your long reply....Ouch! Well, I know you're right, it's mostly about power and greed. Even Quaker meetings blow up over such issues. But I resist believing it's inevitable. I don't want to fall into the despair that overtook so many intelligent and honest people, in Ancient Greece, the later Roman Empire, even Russia today, driving them to suicide, not wanting to live longer among such people. I have had such moments, feeling I've lived enough, not wanting to experience the mess I fear will come, watching my kids struggle. Even on this Forum, we get a small taste of it, in FOA's entirely justified sensitivity to the stupid attacks of a psychopathic personality. ( I hope for all our sakes he has not indeed gone, but particularly for yours, maybe you will find a way to communicate with him off stage?)

I have myself been "in the room" when a captain of industry, of one of our largest multi-national oil giants, tipped off a young friend of his to a buyout being proposed by his company. The two got financing after hours from one of our big banks, and bought megashares in the buyout target the next morning, before the news became public. And they cleaned up. And the young man, having stolen his stake, is now one of our largest and most successful real estate developers. So it goes in the world of "senior" management. Now, everything is done to gun stock prices, and profit option holders.

Well. the stuff you're describing is on a much bigger stage.
Nonetheless, the power brokers must at least give the appearance of civility. Or we will be back in the days of warlords, border wars, and assassinations.

I am getting too old to fight, but, I will muster a killing rage against anyone who openly tries to take away the freedoms I want my children to enjoy.

I salute your efforts to discover what would cause the collapse of the present set of financial "epicycles� and what would be a simple, elegant and quality archetype to put in their place.

I wonder if you could spare a moment to consider the questions I asked in post
# 23776 as follows;

goldfan (01/28/00; 18:17:17MDT - Msg ID:23776)
ORO (01/28/00; 14:56:18MDT - Msg ID:23769)
Sir ORO Thanks for your quick reply. I'm starting to get it, but the terminology defeats me at times, like swimming in wet sand...

You said

Total US dollar debt outside the US is likely larger than the $23 trillion figure.

Total dollar debt market size within the US is about $25 trillion (without $7 trillion in financial debt) over an $8.7 trillion economy.

>>> What is the difference between "total dollar debt market size within the US", and M3? Is Financial debt, M3? What else is there?

I would also greatly appreciate help with understanding some terms I found in an article by David W. Tice at Prudentbear.com. He
said:

"But if our trading partners resist running a large current account deficit with the US, our monetary officials are left to finance the country's growing mountain of debt through a sharp devaluation of the currency"

and further on he says"

"all will be ultimately faced with the dilemma of havng to respond to the inevitable devaluation of the dollar, as the US seeks to reflate
its economy."

My question is, How exactly does a monetary offical, or other government agent, devalue the dollar? Do they just announce it? ( I know that seems like a dumb question). And also, how does devaluation "finance a mountain of debt"? I thought that debt was already financed, that is what it is, a means of finance? When the bond is signed it is financed. Or does it mean "pay the interest on" and if so, why not say so? What am I missing here?

Thanks again for your help, with sufficient education, we may yet save our democracy.

Goldfan

goldfan

(02/01/2000; 22:52:01 MDT - Msg ID: 24087)

FOA, civil discourse in the agora

Sir FOA I too would very much miss your voice on this stage.
In my experience, persistent heckling so disrupts a meeting, that there can be only one solution. Throw out the heckler.

FWIW
Goldfan

goldfan

(02/01/2000; 23:06:49 MDT - Msg ID: 24088)

Canuck (02/01/00; 19:53:34MDT - Msg ID:24074) Canuck (02/01/00; 19:53:34MDT - Msg ID:24074)

Canuck I wonder if you would consider your gold as an insurance policy, not as an investment? I've bought gold at all prices and just watch with bemusement as it dips and rises. Gold is not popular right now. Neither are iodine pills. But if we had a nuclear reactor explosion around here, watch the price of iodine pills take off! Anyhow, I have a bottle of iodine pills for insurance, not for investment.

FWIW
Nothing is good as gold

Goldfan (another canuck!)

she-gold

(02/01/2000; 23:09:05 MDT - Msg ID: 24089)

Cassius

http://minerals.usgs.gov/minerals/pubs/commodity/gold/300399.pdfThe Goldsextant.com article accusing the ECF is amazing. By trading gold through the ECF, both the Treasury (as an organization) and the Fed can honestly say they don't deal with gold or gold derivatives, since the ECF is an independent organization. So, much like the bailout of Mexico (and bankers like Goldman Sachs), the ECF bails out bullion bankers (like .. uh.. Goldman Sachs). This is the mandate of the ECF as they see it, especially given the amount of gold they appear to be short.

The ECF has $40 billion to play with and is accountable only to the Secretary of Treasury.. and the President. What I find interesting is the fact that a PORTION of the official gold held by the USA (8,140 tons) is allocated to the ECF. (look at the footnotes to the Treasury Stocks in the above link: "Includes gold in Exchange Stabilization Fund") So how much of the USA gold is in this fund? Who knows? Is there flux between the Treasury and the ECF?

The bottom line: the ECF is mandated to deal in gold and gold derivatives for the sake of "stabilization". This is how and why they manipulate gold.

They don't call it a slush fund for nothing...

Aristotle

(02/01/2000; 23:35:18 MDT - Msg ID: 24090)

Was doing some research in the Archives--found this old reminder of what could happen at any time

Aristotle (06/27/99; 00:10:01MDT - Msg ID:8099)
ET and CoBra(too)
"CoBra, you are right that much of the petrodollars were recycled in the form of loans to many of the poorer countries that have certainly not been very successful paying them back. The Third World debt crisis can probably be chalked up to the wave of borrowing prompted by the Oil Crises more than any other single cause. As for your comments on the hedge funds, I simply don't know about their role as a means to patch a hemorrhaging system. It may be just as you say. My take has been that have sprung to life and exist because there are opportunities to be exploited on the fringes of the regulated financial sector occupied by typical finacial institutions. Motivated by greed and arrogance, patronized by those too desperate, reckless, or greedy not to. So while I haven't viewed them historically as part of the cure, I do see them today as contributing to the problem. An element of that is in Part 5.

"ET, I'm glad you brought up the issue of moving metal into the market. It reminded me of the reason an important element had to be folded into Part 4 of my commentary. I'm sure that up to this stage some people are asking themselves what is the point of a lot of this stuff. I can't promise that I will remember to make all the the necessary connections, so whereas I might fail by degree, at least the info has been presented so that others can see the connections for themselves.

"The reason Aragorn spoke about Rotterdam specifically was to demonstrate an important point. The price for oil on May 14, 1979 was as posted by OPEC at $13.34 per barrel of oil to be delivered under arrangements of contracts. When these contracts fell into disarray by the unexpected shortage casued by the revolution in Iran, the oil was sought on the Rotterdam market, and the price one day later was more than double...$28. Two days later it was $34.

"Let me rephrase (translate) that into terms that not only describe this oil market development, but that might allow for a new perspective to be gained on the Bank of England Gold auction. (Interestingly, Rotterdam is only 200 miles east of London, a stone's throw across the Straight of Dover.) Rephrase:
When these contracts for delivery of the product fell into disarray by a shortage casued by unanticipated events, the product was sought on the spot market, and the price became overnight more than double the posted contract price..."

I think COMEX open interest is probing multiyear lows. While this arena isn't the typical contracting mechanism to facilitate Gold acquisitions, it does dictate the price. Is the dwindling volume a sign that it is failing to be seen as a viable market? Hedge funds could sell into it and give us dirt cheap metal while it lasts. Once the supply dries up and the fiction is revealed, it's all over! I think that very very few who are playing a timing game will derive any benefit from that approach. Remember how the paper Gold markets fell into disarray on the heels of the Washington Agreement? And that was only a political trigger. Just imagine one that finds no metal in the market.

Gold. Zing! ---Aristotle

Jason Happy

(02/01/2000; 23:35:45 MDT - Msg ID: 24091)

Multiple topic

FOA, you said,

"I said I would walk off this stage if there kind were allowed here."

I take this to mean that since 9/10 people have opted to hear the wisdom of FOA above and beyond Permafrost, you will continue to post here?
-----------

Regarding the several sudden and unexpected "anti-gold" posts made in the last 24 hours...

Imagine... the U.S. stock market(s?) are 15 Trillion strong. If 1% of stock investors made a move to gold, (or 1/1000 people made a 10% move), that would be 150 Billion Purchasing Power, or 15% of all the world's gold.

At $300 an ounce, that's 500 million ounces. Which, I believe, is about double the entire U.S. hoard. Or, about equal to the U.S. hoard and European Hoard combined. And people said that they could anticipate such a move? Foolishness, in my humble opinion. How many people rode the wave of $20 to $35 back in 1933-4? Wasn't this re-valuation too rapid of a wave to ride? Hello?!!

Some may point out that the numbers of people currently invested/enamoured in/with gold in the U.S. is 1/1000. However, I just demonstrated the effects of this figure going to 2/1000. And the facts of history, past gold bulls show that 50/2000 (1/20) people become interested in gold during typical/historical gold bull runs.

Thus, I think we will see more than 1% of the stock market move when the time comes. Keep the faith!!! The next gold bull run will make the past runs look like less than a meandor.
=========

Regarding "Media Manipulation"... we all know that they must be in on the game in order to continue to keep over 99% of the people in the U.S. in line... after all, a 1% slip = 150 Billion in Gold purchasing power.

Recently, either on this forum or elsewhere, I read how the U.S. Government persuaded anti-drug messages to air on sitcomes.

The reason I write this week, besides the facts above, is the following:

1. Sabrina, the Teenage Witch, this week, showcased the principle of the high school buying a "gold bar" in preparation for y2k, and against "tha aliens"... yuk yuk... wasn't he a fool!

2. Sportsnight, on this evening, show-cased an "anti-gun" message by having the constitutionalist & history oriented gun-enamoured man win the girl by showing that he had an "anti hand gun coalition" card.

It just made me sick. Too many people just watch TV and absorb the feelings presented. This last week I picked up a hitch hiker in my rural town, and he was saying how guns that were not good for hunting should be banned. I told him that hunting was not the reason why we had the second amendment.... and he was shocked silly--but agreed with me...

Enough of my rant.

Gold will rock, don't worry. Keep the faith!

elevator guy

(02/01/2000; 23:38:45 MDT - Msg ID: 24092)

@MK , the FOA / Permaflake thing

Dear MK, you are a gracious host. And an even tempered man, if I read you right. However slow to anger a saint may be, there comes a time to cut off the cancerous noise known as Permaflake, or Chris, or whoever. It does not matter who it is. Too much time has been spent on someone who has a vindictive, cruel posting habit, and that with little to contribute, to boot. FOA may place too much weight on Permaflake's posts, and FOA may be "pulling rank", in getting us to ask for Perma's dismissal by withdrawing from the Forum. Maybe FOA has a thin skin. And sometimes I dont agree with FOA. (Not that I would know when to disagree, or agree, about macro economics! But thats another subject.)
FOA has spent much time and effort to share a very unusual and precious perspective, that we may otherwise not get through standard spin media. Its rare when someone goes WAY out of their way to help someone. FOA doesnt have to do this for us, its just unmerrited favor. FOA has put so much heart into answering posts, and taking time with peanut gallery questions, and trying to clue us in to the big picture. When a poster like FOA has put that much into this Forum, it has advanced the intellectual envelope of the net at large, he deserves a break.
What I'm trying to say is that after all FOA has done, he deserves some respect. Its not thin skin, as much as it is exhaustion with the mud-slinging. In my opinion, what Perma offers is not debate, but mere gainsaying, and outright attemps to dis-credit FOA with all sorts of off-the-wall attacks. (That Son of the Ancient Ones!!!!)(or Son of something)
I think we speak for all of us, except a very few, when I humbly ask you to remove the posting priviledges of Permafrost. This is your Forum, which means it is not a democracy, so of course the decision is yours, so this is not a vote. But its a really good place, and I'd like to see it stay that way.

goldfan

(02/01/2000; 23:42:50 MDT - Msg ID: 24093)

18KARAT (02/01/00; 10:28:27MDT - Msg ID:24036)

18KARAT Thanks much for your effort on money creation. A really entertaining and informative read. I enjoyed it. and, for the most part, understand it, except maybe for some terminology.
Some thoughts...
Maybe the mortgage provider can be "blamed" if for instance, they make loans too easy, and so encourage sellers to raise prices. The higher price for one house on the block, causes a revaluation of all the other houses. Their owners rush out to the bank, find yes indeed, the bank will increase their mortgage. So one sale creates 10 mortgages, the proceeds go into stocks, where one sale creates 10x the valuation in the stocks not on sale, increasing margin available for their owners, and generating yet more sales. Is this not money creation? It is certainly, the "illusion of wealth" creation! Maybe it's only money if we can spend it. Well, then, we draw some cash out of our margin account, cash that was put there because someone else bought stock and put the price up, using money they got from a mortgage, which was the result of an increased valuation caused by someone else selling a house! (that Jack built).

Maybe I'm wrong, but I understand that the job of Fannie Mae is somehow to place billions of dollars returning from the current account deficit, which can't be sucked up by Treasuries since the government is no longer running a deficit ( in the open anyhow). This ready availability of funds is pushing up the real estate market big time. maybe someone here with more knowledge could comment on this.

Concerning mortgage-backed securities, packages of mortgages... presumably the seller of these has to put the cash to work, and so seeks another loan to make. ( This loan might will be of lower quality, higher risk, since all the good stuff available has been sold in the mortgage package). Well, isn't this a loan that wouldn't have been made, if they hadn't securitized the mortgages? And so, just the act of creating the package and selling it, has created more money? I get your point that unless there is bank in the background, providing backing, there is no new money, but I wonder if that's always true? Maybe some one else could comment on this...

Goldfan

Jason Happy

(02/01/2000; 23:42:51 MDT - Msg ID: 24094)

oops

oops, proofing my last post, it should be "50/1000" not "50/2000" become enamored with gold during the previous gold bull runs....

Chris Powell

(02/01/2000; 23:47:59 MDT - Msg ID: 24095)

U.S. Treasury is now gold's hostage

http://www.egroups.com/group/gata/355.html?Reg Howe summarizes the case GATA
and its chairman, Bill "Midas"
Murphy, have been making dispatch
by dispatch for months now.

Jason Happy

(02/02/2000; 00:36:44 MDT - Msg ID: 24096)

1/1000?

Regarding the 1/1000 people in the Stock Market turning 10% towards gold...

Direct mail respone rates are 2% on average. My father, in the 80's, made his money by creating a direct mail piece that elicited a 50% response. How?

It was a life insurance piece that was sent to people on behalf of their banks, promising a "free accidental death insurance" policy of $5000.00. Well, excluding car deaths, suicides and murders (gun deaths), there are relatively few accidental deaths, so the cost of the free insurance was little. However, 50% of people sent for their bank's free insurance, and 10% ended up becoming customers for the term life insurance ultimately offered. Why? It's a lot easier to get people to answer mail that comes from their bank, and it's a lot easier to get people to open mail for free stuff that they already sent away for.

The point? 10% bought the insurance. Which set a new standard for the "junk mail" industry.

Read yesterday's post regarding a 1% move in investment sentiment.

15 Trillion U.S. Stock markets, a 1% move is 150 Billion, or 500 million ounces, or 15,551 tons of gold. Keeping in mind the 2500 tons per year mine supply....

After all, isn't gold the ultimate insurance?

Jason Happy

(02/02/2000; 00:58:04 MDT - Msg ID: 24097)

Don't underestimate the power of marketing...

In case anyone missed the implications of the facts of my last two posts...

The reality of the price of gold going to the moon in the price of dollars is a mere marketing campaign away.

Marketing isn't a powerful force? You don't think it can change public opinion?

Take the entire concept of insurance. It began with door to door salesmen... selling the idea that upon your DEATH, you would want to leave something behind. Not a pleasant picture to paint; however, it became a cultural phenomenon in the good ol' USA, this idea of "life insurance" after World War II...

Relatively recent, encompasing the entire nation's conciousness in a short time, all thanks to marketing.

When will gold be effectively marketed? That's what I wonder...

Already, one ounce Gold Eagles are being sold for $400 each on the "home shopping network"...

If they can sell 'em out (SOLD OUT!!!) at that price, why isn't the price higher?

Isn't it just a matter of effective marketing?

To get the 1% to move all to gold?

or 1/1000 to move 10%?

Same difference.

Any day now....

Gold: The Ultimate Insurance

Jason Happy

(02/02/2000; 01:16:20 MDT - Msg ID: 24098)

Marketing implications continued...

Assume you were only 1/10 as effective at selling "insurance" as my father... thus, a 1% return.

Assume you are smart enough to mail out only to the top 50 million households in the U.S., because the lower 50% doen't even have $1000 to invest anyway, and therefore is irrelavant.

Assume you are an idiot, and spend a whopping $1 per piece of mail, or $50 million.

Assume the 1% investment response, 1% invest 100% in gold, or 1/1000 invest 10%, which is 150 Billion, and assume a 1% commission; that's 1% of 150,000 million, or 1500 million on a 50 million marketing investment.

Is it really that hard to sell gold?

What have we not covered in this forum to convince people to buy?

Are our thoughts really so in-ar-tic-u-late?

What am I missing?

Black Blade

(02/02/2000; 01:25:57 MDT - Msg ID: 24099)

Not bad for a barbarous relic!

Condensed from the WSJ, Friday Jan., 20, 2000, section B1.

The lost treasure of the SS Central America is finally out of legal limbo. The haul of gold bars and coin are expected to bring in over $100 million. The treasure has been tied up for the past 12 years while the legal maneuvering among the courts, the recovery team, their investor group, The Union Bank of California, Christies International and insurance companies that had paid off claims 143 years ago had run its course. The SS Central America sank off the coast of the Carolinas claiming the lives of 425 gold-rush prospectors and crew during a hurricane in 1857. The cargo included gold worth $1.2 million. The loss contributed to the financial panic of 1857.

In 1988, treasure hunter Tommy Thompson, backed by a team of investors called the Columbus-America Discovery Group began salvage operations. Eight insurers claimed the treasure for their own based on policies of their corporate predecessors had paid off on more than a century ago. Mr. Thompsons response: "finders keepers". The US District Court in Norfolk, VA, essentially agreed giving 92% to Thompson and his group, and 8% to the claimants. The California Group will begin touring with the display of gold and a giant replica of the SS Central America next month. Five stops are planned: New York, Las Vegas, San Francisco, Philadelphia, and Long Beach, CA.

Jason Happy

(02/02/2000; 01:30:08 MDT - Msg ID: 24100)

Last time to clarify...

In case my last post did not present the message clear enough...

A mailing that is 1/10 as effective as my father's, who made over a million dollars in a lifetime doing it...

Would pay of $30 for every $1 invested...

This is my current quandry/connundrum/question/concern/querry/problem

Anybody care to enlighten me?

SteveH

(02/02/2000; 03:40:32 MDT - Msg ID: 24101)

Stratfor

repost on Japan:

From: "alert@stratfor.com"
To: redalert@stratfor.com
Subject: Japan

STRATFOR.COM's Global Intelligence Update - 2 February 2000

By The Internet's Most Intelligent Source of International News &
Analysis http://www.stratfor.com/
__________________________________________

Europe Offers U.S. an Exit from Kosovo - Now What?
http://www.stratfor.com/CIS/commentary/c0002012316.htm

STRATFOR.COM Global Intelligence Update
2 February 2000

Japan Borrows From Banks To Float Economy

Summary

Japanese Prime Minister Keizo Obuchi said Jan. 28 that his country
would forgo fiscal reforms until the economy stabilizes. On the
same day, the Japanese government announced it would begin
borrowing money directly from Japanese banks to cover budget
shortfalls. By refusing to implement deep, painful and necessary
reforms - and instead borrowing from domestic banks to fund
additional unworkable government "stimulus packages"- Japan has
sentenced itself to a descending spiral of economic malaise.

Analysis

Japanese Prime Minister Keizo Obuchi stated in a Jan. 28 speech to
the Diet, Japan's legislative assembly, that "fiscal reform is
important," but that the country "cannot commit the mistake of
undertaking it while the economy is not firm and before it is on
the path of full-fledged recovery." His remarks came within hours
of the Japanese government's announcement that it would begin
borrowing money directly from its crippled banking system in order
to meet its financial obligations to local governments.

Government policies have locked the Japanese economy in a downward
spiral. In order to promote growth, Japan creates supplemental
budgets funded by borrowed money. When the government money runs
out, the economy again slips into the doldrums, thus necessitating
new projects funded by new loans. This deepening addiction to
borrowed money has caused catastrophic damage. Japan's inefficient
economic structures promote social welfare at the cost of stymied
growth.

Japan already holds the record as the world's most indebted
government. Its newest budget deficit, at 38.4 percent, will only
compound this. At this pace, Japan's debt will top 150 percent of
its GDP within three years. Japan's budget and economic structures
are not sustainable, and by refusing to adopt direly needed
reforms, Japan's economy will only decay further.

Put simply, Japan is attempting to borrow-and-spend itself to
recovery, but without constructing an environment that encourages
private sector development. Every action the Japanese government
takes along these lines to bolster its economy only extends the
damage.

Japan's latest plan seeks to achieve three goals: give business to
Japan's banks; decrease the value of the yen; and gain additional
income for the government without issuing new bonds.

First, Japan's recession has idled many of the nation's banks; few
companies are willing to take on additional financial risks until
the economy recovers. The new plan would give the banks some badly
needed business.

Indeed, Japan's banks are awash with money, but this does not mean
they are healthy. Japan's banking sector is still struggling to rid
itself of at least $2 trillion in bad loans, acquired from two
decades of irresponsible lending practices. Furthermore, Japan has
a bad habit of instituting superficial reforms throughout its
political and economic systems. Its banking industry is no
exception. When many Japanese banks went bust after the Asian
financial crisis, several "reformed" themselves by closing foreign
offices in order to avoid adherence to international financial
norms. Moreover, Japan went so far as to refine the meaning of a
bad loan, loosening the criteria, thereby delaying or preventing
unprofitable enterprises from foreclosing. This, in turn, meant
that on paper the banks appeared to be more financially solvent
than they really were. It's easy to avoid a debt reckoning if you
rewrite the financial laws.

Japan's second goal is to increase the country's money supply. In
borrowing from these same capital-rich banks, the government will
inject additional money into its economy. Japan hopes that this
additional spending will reduce the value of the yen and increase
the international competitiveness of Japanese exporters. Yet, in
the recent past financial markets have shrugged off every attempt
by Japan to reduce the yen's value; there is no reason why a
slightly less direct attempt will be successful. In the unlikely
event that it does work, it will be a fleeting success at best. As
soon as the Japanese lending spree ends, the yen will rise again.
Japan will have spent borrowed money and achieved nothing.

Third, the plan calls for loans instead of bonds - Japan's
preferred method of borrowing money. After nearly a decade of
issuing bonds to fund massive, and irrelevant, infrastructure
projects in an attempt to jumpstart the economy, Japan has
saturated its bond market. Japan's plan allows the Japanese
government to obtain additional funds without harming the bond
market.

This actually magnifies Japan's debt problem. One of Japan's
advantages over its neighbors during the Asian financial crisis was
that Japanese debt was long-term at low interest - it in and of
itself did not trigger a crisis in the way that Korea's short-term
development debt did. Japan's new plan destroys much of that
advantage by racking up short-term high-interest loans for regular,
recurring expenses. This is tantamount to charging your rent on a
high interest credit card that you cannot pay in full. If Japanese
debt rises as Japan's Finance Minister Kiichi Miyazawa predicts, it
will top $6.15 trillion this year. When Japanese interest rates
rise, as they must eventually, the cost of servicing this mountain
of debt will be massive. Japan will have secured an additional
source of income, but condemned itself to paying interest payments
indefinitely.

Powers outside of Japan have noticed these problems. Fitch IBCA and
Moody's Investors Service - international credit rating agencies -
have both reduced Japan's credit rating and are considering
lowering it further due to excessive debt. This raises the cost of
borrowing for Japanese businesses. The G7 and the OECD have also
tried and failed to get Japan to take more appropriate action.

Japan's Asian neighbors are also aware that the region's economic
colossus has feet of clay. Japan's Miyazawa funds, designed to
stimulate the purchase of Japanese exports in Japan's neighbors,
have found few takers in recent months. Japan has also seen most of
its Pacific Rim trading partners eschew new trade links with Tokyo
in favor of lashing themselves to a seemingly unending U.S.
economic boom. This is unsurprising considering Japan's
unwillingness to dismantle its outdated protectionist policies and
its inability to stimulate consumer demand. This "Fortress Japan"
mentality atop a mangled financial infrastructure will ensure a
continued exodus of economic - and therefore political - power from
the world's second largest economy.

By publicly abandoning financial reforms, Japan is sending a
dangerous message. Japan continues to borrow in order to fund
temporary stimulus packages. These stimulus packages create an
economy dependant on continual government investment, which can
only be paid for with more borrowing. Having exhausted the bond
market, Japan has now resorted to higher-interest loans to
perpetuate this vicious circle and make the Japanese economy even
more indebted, and more out of synch with the rest of the world.
Japan's day of reckoning is not far off.

(c) 2000 WNI, Inc. http://www.stratfor.com/

__________________________________________________

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Bonedaddy

(02/02/2000; 06:01:41 MDT - Msg ID: 24102)

Jason

The wick of my lamp is short and it's light is dim. Come, join me by the fire and let your madness run with mine.
I agree completely with your marking analysis. By mass marketing, if only a fraction of the people reached were to buy GOLD, it should have a huge impact on price. Ah, but we live in interesting times. An aside to ponder: The coyote does not approach his prey directly, but he circles, checking the wind and the look of the situation from many angles. Consummate skeptic, the coyote, I like him. But even he is easily snared, because when he isn't stalking prey, he's not so careful. He likes to run on the same well known trails. For most "investors" today, GOLD does not represent money. It's not on the radar screen. The coyotes don't see it as prey. Mass marketing GOLD may yield some good result right now, but not a windfall. That would take a paradigm shift away from the view that stocks without dividends, or even earnings, are money. This brand of "investing" is the antithesis of the concept of stored value. As long as worthless stocks yield paper gains, GOLD will not be seen as money. Continue to formulate your marketing plan my friend. But realize that timing is everything. If there were a large demand for physical GOLD anytime soon, would there be enough available to feed the market? Well established brokers might quickly run out of coin and bullion. For me, the safest play is to aquire the GOLD now and sell some of it into a panicked market farther down the trail. Basically, I can stalk the coyotes now, which is fun and educational, but not terribly sucessful. Or knowing their weakness, I can set my snare in the trail and bide my time.
The most rational market plan will only succeed in a rational market. Under the current paradigm, if you applied your GOLD plan to the creation of the next worthless "fad" trinket, the world would beat a path to your door. Why not develop and market a little electronic doll that sits next to the computer and tells stock market investors how wonderfully wise they are? It could chant mantras about the markets always going up. It could quote Abby Joseph Cohen every fifteen minutes throughout the trading day. It would be a hit, I guarantee. You could then invest the proceeds in physical GOLD. I've got to saddle up now pard, daylight is breaking.

Journeyman

(02/02/2000; 06:37:20 MDT - Msg ID: 24103)

Gold standards, competing currencies & unstated assumptions

@Aristotle, ORO, FOA, TownCrier, Mr. Gresham, Yellin, Peter
Asher, Stranger, Canamami, PERMAFROST, Farfel, ALL

Hmm. Aristotle, you've already got me thinking . . . .

In the heat of "battle" (not always a fruitful mindset for a
friendly if highly animated discussion) I may have given a
distorted impression of my position - - - to myself as well
as to others. Fighting _against_ the conceptions of a
perceived "enemy" (the slimey faction of the alternative
currencies folks, that is the banksters who wanted and got a
monopoly on money manufacture, and politicians they paid-off
to get it,) turns out not to be the best way to approach a
problem with an open mind.

I am in tune with the notion of competing currencies, where
the competition is fair and open. In the case of the modern
context, my unstated assumption is that REDEEMABLE gold
instruments (there isn't any reason such instruments
couldn't be megabyte, that is "electronic" in nature) would
have the upper hand.

There could and would be I.O.U.s (debt instruments) of
various sorts, perhaps even national brand names such as
"dollars," "yen," "lira," etc. circulating (bought and sold)
simulntaneously with gold, but they would ALL be circulating
in a free market context.

I suppose my ultimate assumption is that the REDEEMABLE gold
instrument, including the stability of completed barter in
it's heritage, would beat out the other currencies in free
and open competition, and would become the standard the
others were measured by. Other special purpose IOUs would
be used, but as credit-card debt, bank debt, etc. is today,
these IOUs would tend to be denominated in the most
universal units, ("dollars", "yen" etc. today, gradually
evolving into direct units of gold as E-commerce puts the
proper value on transaction costs and transparent _world-
wide_ consumer understanding.) Remember however, "free and
open competition" among currency alternatives is NOT the
current situation.

In self-defense, and to understand why certain folks might
be slightly ticked and focus on fighting _against_
something, the historical context of how gold was violently
and illegally taken out of competition with the purely paper
dollar with which it would have otherwise been competing,
that is, how gold was taken out of competition, particularly
here in the U.S. needs to be kept firmly in mind. For those
who don't know, after 1933 until 1974, "your" government
claimed gold ownership by Americans was ILLEGAL. That is,
the bankster/government factions in society made gold into a
"controlled substance," like cocaine or heroin -- and they
got away with it! (I'm not making this up -- ask me!)

To sum-up my position, including all those previously
unstated assumptions: I favor a free-market in currencies,
including any IOUs anyone wants to try to sell or trade,
including Uncle Billy's scribble on the back of that
envelope, and even "yen," "dollars," or "euros." I assume
that under such competition among trade token alternatives,
gold will prove to have an "unfair" advantage in that it's
still the "esperanto" or "electricity" of trade.

Keeping in mind goldfan's classic observation - - -

"In trading systems, barter is the only reality. All
the rest is an illusion put in place to "manage" the
system for stability until the exchange is "settled" by
completing the barter." -goldfan (1/30/2000; 9:30:04MDT
- Msg ID:23863), Chaos Dynamics and the World Economy

gold will have the advantage of "settling" the underlying
barter on the spot as opposed to carrying a future
obligation around and hoping it will be settled -- or that
you can off-load it before it's discovered it's bad debt.

Regards,
Journeyman

P.S. One final related though ironic observation: Pre 1933
"Redeemable in Gold on Demand" dollar bonds _were_ indeed
debt instruments, that is IOUs, promising to deliver
"dollars" which were defined as a specific amount of gold.
Specifically, in 1933, a dollar was 25.8 grains of standard
gold or 23.33 grains of fine gold. That is, a dollar was
about .05 ounce of gold.

The intentionally look-alike post 1933 paper dollars,
however WEREN'T and AREN't debt instruments or IOUs since
they don't promise to deliver anything to anyone. That is,
those of us who insist that current FRNS are "debt" are
incorrect! (There is a "debt quality" to _any_ general
barter instrument however (including gold) in that it is
_expected _to be tradable for stuff later. The difference
between gold and "national brands" however, is that gold can
be traded nearly anywhere around the world. This has many
implications -- as those who have followed ORO and FOA and
the oil-for-gold notions here know.)

To repeat: Pre 1933 Federal Reserve Notes were IOUs,
promising to deliver gold to the bearer on demand. Post
1933 fiat FRNs are NOT debt instruments or IOUs.

Black Blade

(02/02/2000; 06:44:47 MDT - Msg ID: 24104)

Gold hot outta the gate! Up $1.85 and rising!

Au up at the open, up $1.85 to $284.25. Rhodium up another $100. Question: will it last?

Journeyman

(02/02/2000; 06:57:29 MDT - Msg ID: 24105)

Gold standards, competing currencies, & unstated assumptions [Addendum]

@Aristotle, ORO, FOA, TownCrier, Mr. Gresham, Yellin, Peter
Asher, Stranger, Canamami, PERMAFROST, Farfel, ALL

It occurs to me that the off-shoot of the "competing currencies" perspective (below, since I posted it first) sort of defuses a lot of the disagreements here, or at least transmutes them into speculations as to which brand of trade token, "dollar," "euro," gold, etc. will win in a fair fight, which will come in second, etc.

I like that much better. Of course, PERMAFROST now thinks I'm a turncoat!

Regards,
Journeyman

Jayne

(02/02/2000; 07:47:43 MDT - Msg ID: 24106)

FOA and Forum

2/2/00
FOA and FORUM
Never judge a man until you have walked in his shoes! Just an assumption on my part, but I bet I am close to the truth. Hasn't anyone questioned why Michael Kosares hasn't said a word about this issue with FOA and Permafrost. Why is he just letting it settle a bit. Possibly, MK remembers a date in 1999. I personally believe that FOA has had the worst year of his life. 1999 will not be a year he will ever forget.
Everyone should go back and read the archive of (11/23/98;20:23:51MDT-Msg ID:1067) then
go and read FOA�Michael"FOA(3/14/99; 11:17:14MDT-MsgID:3351). My personal feelings
are that FOA lost through death a loved one of some sort. MK message that came back on the nite
of 11/14/98 was May the God of us all bless you and Another and keep you . You have made a
difference in many lives. FOA left our site for 4 months, his return was 3/14/99. Yes, its 2/2/00
approximately 6 weeks of 3/14/99 from his return in 1999. What date did he lose someone he loved so much.
What has the last year been like for him on top of his affairs in this financial world mess. He continues
to answer all of our questions, sometimes gets beaten up, lives in the real world and has gone through
shock/denial, anger, questioning, depression, acceptance of the loss of someone he loved so much.
All in a years time. Some say he should roll with the punches, ignore those who post just to cause
disruption. Be more thick skinned. If we knew the truth of the shoes he truly walked this past year, we
would all say he was one of the most thick skinned individuals around. We all go along in our merry ways, just another day in this world for us, yet, we never stop and think about what others have going on.
FOA, take all the time in the world you need. Feel your emotions and more important get some rest.
YOU DESERVE IT! Come back when you are ready. No explanation is needed, no apology to
anyone. Just come back and BE WHO YOU ARE. A very sensitive and caring individual who has
given more than you could ever get back. The 4 months you were gone at the end of 98/99 you were
missed. Anniversary dates, especially the first year are the toughest! Sometimes it's like a shock
all over. It creeps up on you. Just one thing wrong can happen or be said and anger comes back
full fledge. That's OK, as it passes. Wishing you the best on your trail in life and praying that the
year 2000 is a little more gentle to you.

Goldfly

(02/02/2000; 07:49:18 MDT - Msg ID: 24107)

Blast!

I knew I should have bought more Rhodium...

That stuff was at about $650 8 months ago.

What is Rhodium?

SteveH

(02/02/2000; 07:58:02 MDT - Msg ID: 24108)

In case nobody is looking...

The whole precious metal group has decided it doesn't like the air where it was at. Could this be it?

Market Mth Open High Low Last Change Date Time Ask Bid
Gold(CMX) Apr 285.4 289.2 285.3 288.8 +3.4 2/2/00 6:39 286.0
Platinum(NYM) Apr 459.5 466.5 459.5 465.0 +12.1 2/2/00 6:37
Palladium(NYME) Mar 502.00 506.00 492.50 502.00 +9.45 2/2/00 6:39
Silver(CMX) Mar 525.5 531.5 524.5 530.0 +4.7 2/2/00 6:41

Journeyman

(02/02/2000; 08:03:21 MDT - Msg ID: 24109)

Marketing gold @Jason Happy

Hi Jason!

Don't be put off by us older foggies here who don't respond to your marketing ideas. I know how effective some of these strategies can be. I fell "victim" to a land sale boiler room in Vegas when I couldn't afford it and KNEW I WASN'T GOING TO FOLLOW THRU. But these guys had an answer to EVERY objection I came up with (and I came up with a lot of objections.) So I made the down payment. They'd earned it!

The one objection I didn't use (stupid me) was "I don't want the land." I think marketing gold is a good idea --- check out the multi-level gold marketing organization previously calling itself "Family Of Eagles." They even got the Canadian to mint a series of 1/10 oz. coins with FOE mint marks!

Anyway, I hope you'll keep us posted on your efforts! How about a trial marketing campaign, complete with website & literature??

Regards,
J.

SteveH

(02/02/2000; 08:07:09 MDT - Msg ID: 24110)

Euro double backing

www.kitco.comrepost:

Date: Wed Feb 02 2000 09:39
LIBERTY ("WASHINGTON AGREEMENT" announcement #2 PENDING?) ID#263379:
Copyright � 1999 LIBERTY/Kitco Inc. All rights reserved

"Around 747 metric tonnes of gold could be transferred to the European
Central Bank from member central banks if European union governments
approve the ECB's plan to double its reserves, said John Reade, analyst
at Warburg Dillon Read."�
"The European Parliament recently approved the ECB's request to double
its reserves to ERU100 billion but the plan has yet to receive the green
light from E.U. governments."
"If approved, the proposal would support gold prices as it would remove
the threat of significant official sales over the long term, WDR's Reade
said."
Later in the day, the story continued: "So far, the gold market appears
to have ignored the possibility that the ECB may announce a doubling of
its gold reserves.
That may change as the approval process moves along," said Reade. End.

***

Funny how we are predicting this stuff now. Someone suggested this just last week as a means for the ECB to protect the EURO.

elevator guy

(02/02/2000; 08:32:17 MDT - Msg ID: 24111)

GOLD sharply up on COMEX

tp://www.quote.com/quotecom/livechartsGCM0 at $291 this morning. My guess is that the ECB plan to double its reserves is the reason. With so few people that are aware of that news, it means that just a few buyers can swing this thinnly traded market up or down.

elevator guy

(02/02/2000; 08:36:17 MDT - Msg ID: 24112)

Cant get theah from heah!

http://www.quote.comThat link wont work. Go to above link, then click on "Live Charts", then enter symbol of choice.

18KARAT

(02/02/2000; 09:18:46 MDT - Msg ID: 24113)

goldfan (02/01/00; 23:42:50MDT - Msg ID:24093)

>Maybe the mortgage provider can be "blamed" if for instance, they make loans too easy, and so encourage sellers to raise prices.

Some would think so. But I would suggest that imprudent lending on a large scale has it own particular form of penalty. i.e. bankrupcy for both the borrowers and the lenders. Let the borrower and the lender beware. We are all mature adults and the money you lose might be your own.
The real problem occurs when governments give guarantees.
The government uses your tax money to subsidise someone else's screw ups. This is what they call "moral hazard".
But everyone has the right to blow their own money on mad or intemperate schemes.

As an extra point: "Austrian" economists believe that
whenever you create money "credit" out of thin air without a corresponding creation of real wealth, you are distorting the price signals and creating inevitable misinvestment.

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

>The higher price for one house on the block, causes a revaluation of all the other houses. Their owners rush out to the bank, find yes indeed, the bank will increase their mortgage. So one sale creates 10 mortgages, the proceeds go into stocks, where one sale creates 10x the valuation in the stocks not on sale, increasing margin available for their owners, and generating yet more sales. Is this not money creation? It is certainly, the "illusion of wealth" creation! Maybe it's only money if we can spend it

You are raising a fascinating question here. Given that security trading only occurs at the margin why are all securities of the same type valued at the same price. You know: Why do we value all shares of Microsoft at the last trade when in fact many of those individual stocks were last traded at totally different prices.

The concept is known as fungibility i.e. the idea that all equivalent securities are interchangable. It is really a convention. In practice if everyone tries to sell their shares at the last price traded they will simply drive the price down. The truth is that the value of a security is what you get for it at the time you sell it. Any other price at any other time is notional. Of course that doesn't stop margin lenders from lending against the security at its notional or "current market" price.
The fact that there is no real connection between the current market price and what the security will actually fetch in the fullness of time when you sell it, is one of the things that makes margin lending the most dangerous game in town for both the lender and the borrower.

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

>Maybe I'm wrong, but I understand that the job of Fannie Mae is somehow to place billions of dollars returning from the current account deficit, which can't be sucked up by Treasuries since the government is no longer running a deficit ( in the open anyhow). This ready availability of funds is pushing up the real estate market big time. maybe someone here with more knowledge could comment on this.

Sounds plausible, but if it's true, it's risking creating a real-estate price bubble.

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

>Concerning mortgage-backed securities, packages of mortgages... presumably the seller of these has to put the cash to work, and so seeks another loan to make. ( This loan might will be of lower quality, higher risk, since all the good stuff available has been sold in the mortgage package). Well, isn't this a loan that wouldn't have been made, if they hadn't securitized the mortgages? And so, just the act of creating the package and selling it, has created more money?

I can only repeat the point I made. As long as someone is buying the security with their own cash no money is created because the money is merely transferred from the lender to the borrower. i.e. the borrower gains a newly created loan for x dollars but the buyer of the security hands over x dollars of his funds so he has x dollars less to spend.
It balances to zero.

18K

CoBra(too)

(02/02/2000; 09:50:05 MDT - Msg ID: 24114)

"Forward Into The Past" - Time Magazine titles its latest....

article on Austria - Subtitle - Austrian voters are fed up with mainstream political parties, making the unthinkable all too possible.
Please, All forgive me for venting - though I remember
the Waldheim affair only too well - As president alledged to be SS - and that after two terms of Secretary General of the UN - give us a break!
So now we know, AGAIN, Austria is the "pariah" of the EU and the world and held at ransom for other countries fascistoid problems. Even if I do understand the concerns, triggered by a loud and filthy mouthed J. Haider, I cannot understand the reactions, which seemingly derive from politics as: " If you can't cope with your own problem, export it to the weakest link"!
Great solution, reminding me of the problems of fiat currencies! and as I've recently posted that some of the depreciation of the euro might originate in the CDU/CSU financial scandal and Austria's problems to form a new government in a social (un?)-democratic EU in 4! months after elections,I am starting to get upset and saddened and
have to conclude: As gold is the pariah of the financial world, adding insult to injury, Austria is the pariah of the
"democratic" world.
This is the kind of shortsighted policy, perverting any
goodwill and trust in the future of our globalised world.
Apologies for mostly off topic post - best CB2

PS: @ Ari - Sorry, Sir wi'll try to clear up hedge fund
implications - haven't have time to go back yet -
thanks for answer and thaanks for your efforts - Wi'll be looking forward to your next series>

TownCrier

(02/02/2000; 09:59:00 MDT - Msg ID: 24115)

Today's Market Report: Gold breaks higher at opening NY session

Market Report (2/02/00): Gold has broken out of the sideways trend it's held so far this week, moving up over $3 to $285.50 in an early, sudden move as the New York trading session began. Trading has largely been subdued in these ahead of the Fed's 14:15 ET announcement on interest rate policy, but physical buying and short covering was reported in overseas action ahead of the Chinese Lunar New Year holiday. Sources say the metals markets have already priced in the probable 25 basis point hike, with the potential for additional near-term hikes. If the broader financial markets react significantly to the FOMC announcement, the metals markets will have only 15 minutes to reflect the developments; New York trading ends a short 15 minutes later.

Those of you on inflation watch should be aware that this latest FOMC meeting comes as the US economy officially enters the record books as the longest-ever US economic expansion. In the background, there are rumblings. International Monetary Fund Chief Michel Camdessus had a chance to share some of his views and warnings--although carefully delivered without absolutes as is ever the case with statements by high officials--with reporters after speaking to the Council on Foreign Relations. As reported by Reuters, the former French central banker and now outgoing (two weeks) IMF head warned, ""I do believe that at this moment, the euro is too weak. This means that perhaps the dollar is too strong." With its Monday close at 96.93�, the euro has lost 3.7% this year against the dollar (following last year's slide of 16%), frustrating many western national policy makers in light of the huge U.S. current account deficit that shows no signs of relenting. Camdessus warned that while the state of this broader measure of the U.S. trade gap is not "an immediate threat," it is "a symptom of a very dangerous and unsatisfactory situation, mainly that of a perennial insufficiency of national savings in the U.S."

Meanwhile, crude oil continues to rise, lately on fresh news that the American Petroleum Institute reported US crude stockpiles fell last week by over 10 million barrels at a time that analysts were calling for a gain. Cold weather and limited imports were cited as the reason for the drop in inventory. An oil analyst at Merrill Lynch told Bridge News "Things are tight, they're getting tighter." And while Energy Secretary Bill Richardson said oil prices above $30 would bring about inflationary pressures, that seems to be OPEC's target value at this point. An Iranian oil ministry source indicated the conditions under which OPEC might consider raising its output in March would be Brent Crude prices on the International Petroleum Exchange climbing above $30 and staying there. Currently, Saudi Arabia is moving ahead on plans to switch its pricing mechanism to an IPE Brent weighted-average for crude sales to its European customers in April. State-owned oil company Saudi Aramco proposed the change to counter "perceived manipulation and volatility of published dated Brent assessments." Bridge News reports that Iran has indicated that it is also looking into a new pricing mechanism for its European customers.

Moving back to gold, today's release of COMEX delivery intentions revealed another 321 gold contracts were held up for delivery. And again, like yesterday, Deutsche Bank and The Bank of Nova Scotia were in line to receive a third of those apiece, with HSBC Securities taking a fifth. The three-day total for COMEX gold delivery to be completed by month's end is now 514,200 ounces (16 tonnes.)

That will do it for today, goldmeisters. We'll see you here tomorrow.

goldfan

(02/02/2000; 10:15:14 MDT - Msg ID: 24116)

Which bank? 18KARAT,anyone

18KARAT thanks for your last. I get that if the money comes off the shelf, from savings, the work done and paid for, then it's not inflationary. To me the gap in time between buyng the goods.... and doing the work, getting paid, and paying for the goods, is called a loan. The longer the average time gap, the greater the loan, the more difficult to ever do the work needed to justify it, the more the inflation...?

In the new new age, as I understand ORO, we may be using a type of bank new to most of us...

Assume I'm considering banking at an independent bank, stand-alone, no government printing press to back it up. What should I look for in the balance sheet and income statement, cash flow, and notes, to help me assess the management, the degree of risk I'm taking with my deposit? (Assume I know enough about accounting statements to know when someone one in charge is blowing smoke in my face answering my questions.) 18KARAT your posts have answered some of these questions, ie matching terms of borrowing and lending to the extent possible. How do banks or other financial institutions book an asset like a mortgage, with collateral, compared to one without collateral, like a demand loan? Where does the quality of the promissory note show up, the degree of risk in it, whether it's backed by security or not? Thanks.

Goldfan

goldfan

(02/02/2000; 10:29:24 MDT - Msg ID: 24117)

CNNfn joining the USAGOLD band?

http://cnnfn.com/2000/02/02/economy/economy/ The link goes to this story, and other links there are interesting too...

Dangerous times

Preston Martin, a former Fed vice chairman, told CNNfn that the Fed likely will raise rates several times this year to slow the economy's progress. Even with that, he said, the Fed is facing what he described as one of the most dangerous times for the economy since 1929, the infamous year of the U.S. stock market crash. (569KB WAV) (569KB AIFF)

The Fed already has raised rates three times since June to slow economic growth. Even with the rate increases, however, little evidence of slowing economic activity has surfaced. On Friday, the Labor Department reported the economy grew at a 5.8 percent pace in the fourth quarter, its strongest showing of the year. And consumers are on a tear, according to other reports, with little interest in keeping their money in the bank. One sector of the economy that appeared to be flinching in the face of rising rates was the red-hot housing market. The Fed's three rate rises have spurred long-term bond yields to back up significantly in the past six months. Because bond rates are directly linked to mortgage rates, consumers are paying more to finance the purchase of a new or existing home. Even so, "While sales are slightly below their peak levels of late 1998, this sector hashardly suffered a body blow from the run-up in long-term mortgage rates," said SherryCooper, chief economist of brokerage Nesbitt Burns Inc. "Until the housing sector slows significantly, it is far too premature to look for a broad-based slowing in the economy."

FWIW in gold
Goldfan

Jason Happy

(02/02/2000; 10:37:39 MDT - Msg ID: 24118)

Sorry about my bad math last night...

Oops...

Here was my mistake:

1% of people moving 100% of their assets is the 150 Billion.
Then, I went to 10% of each, thinking it would be the same... nope.
10% of people moving 10% of assets would be 150 Billion out
of the stock market, not 1/1000, but 1/10.

And, unfortunately, many forigners are also invested in U.S.
stocks, not just 1/2 of U.S. households.

Also, the general public does not control nearly so much
wealth. Which is the problem with using large averages.

Something like 90% of the wealth is corporate.

I remember reading Gary North's figures for money in the Banks. The corporations own most of the (then 4 trillion in m1,2,3) while the people own a paltry $300 Billion in bank accounts. He was working these numbers to try to determine the liklihood of a run on the banks.

So, once again, to rework the numbers of a mass mailing...

The 1% response of people, not corporations, spending 100% of their bank balances on gold only... we are talking 3 Billion spent. 1% commissions would be $30 million, a losing proposition on a $50 million mailing.

Assuming people control 10% of stocks, as they control 10% of bank balances... 15 Billion...

So mobilizing people out of stocks to buy investment gold could bring a return, but not spectacular.

And, this is still assuming not 1/1000 to invest 10%, but 10% of people to invest 10%, which is a really high response rate for a mailing, the best you can possibly hope for, hoping that everyong buys the gold through you, and not some other dealer.

More realistic numbers don't look quite as pretty.
Oops...

TheStranger

(02/02/2000; 11:15:33 MDT - Msg ID: 24119)

Just Making Sure Everyone Is Paying Attention

From today's Wall Street Journal:

"February 2, 2000

Manufacturers Stayed Very Busy
In January, Purchaser Data Show

By YOCHI J. DREAZEN and LISA MILLER
Staff Reporters of THE WALL STREET JOURNAL

WASHINGTON -- The manufacturing sector remained strong last month,
though many companies reported paying higher prices for industrial
commodities.

The report from the National Association of
Purchasing Management reinforced fears that
inflation is lurking just ahead. The NAPM
index slipped to 56.3 in January -- the lowest
level since August -- from 56.8 in December.
This is the 12th straight month the index has
remained above 50, signaling that the
manufacturing sector is continuing to expand.
Still, many respondents said they were
beginning to see some signs of a slowdown.

Separately, the Commerce Department said
that construction spending reached a record
high in December after climbing a
faster-than-expected 2% from November. For
the year, construction spending was 6% higher than in 1998, suggesting
that the interest-rate-sensitive sector has remained largely immune to
Federal Reserve rate increases. Much of the rise was driven by a surge in
government spending for both military and civilian purposes...

...The NAPM survey had some ominous news for Fed decision makers on
the lookout for signs of inflation: the prices index jumped to 72.6, a
five-year high, as commodity prices, especially oil, continue to spike.
Manufacturers have previously reported a desire to raise their prices to
offset the increased costs, but such efforts have largely failed due to fierce
competition. Still, NAPM officials say that surging costs may soon force
manufacturers to raise their prices.

"There are some gathering storm clouds," said Norbert Ore, chairman of
the NAPM's business-survey committee and director of purchasing for
Chesapeake Display Packaging Co. "We're very close to the level
where manufacturers have to seek some pricing relief, whether it's politic to
do so or not."

The Commerce Department's report, meanwhile, showed that the nation's
construction sector, generally one of the first to feel the sting of higher
interest rates, remained robust despite the Fed's three rate increases last
year.

Doubting Thomas

(02/02/2000; 12:32:29 MDT - Msg ID: 24120)

Plan to boost Hong Kong as asia gold center

http://www.insidechina.com:80/news.php3?id=129752 Raymond chan,headof the Chinese Gold and Silver Exchange Society puts forth a plan to open a bonded warehouse for gold in Hong Kong subject to government approval.
------"establishing the warehouse would allow so-called loco [sic],(local?), London trading of gold in Hong Kong with buyers and sellers assured of an acceptable tradable form of gold priced in US$ per ounce."-------Turning to the word gold price,Chan saidhe expected it to rise in 2000'---in a range between US$ 280 and US$ 380 this year."
Suggest reading full text at above link.
Chan specified Gold priced in US$, There is an ocean of US dollars sloshing around in China and environs, What happens when the US equity market bubble pops? (some pop!)----Dollars for gold? Time will tell.

TownCrier

(02/02/2000; 12:51:51 MDT - Msg ID: 24121)

Saudis to Go Ahead with Europe Crude Pricing Switch in April

As you will see below, if an "unhappiness with the perceived manipulation and volatility of published dated Brent assessments" can lead to a change in the mechanism for European pricing, with North American and Asian markets under investigation, it doesn't require much imagination to see similar displeasure over similar problems with gold pricing to result in a shift in the pricing system...such as moving away from the futures in favor of a physical market. This is policies come about...they change/evolve due to problems and limitations of their previous form.
---------
By Jim Washer, Bridge News
London--Feb 2--Saudi Arabia will go ahead with a switch to IPE Brent
weighted average-based pricing for crude sales to its European customers
in April, an official with state-owned oil company Saudi Aramco said
Wednesday.

Aramco currently bases its crude pricing for Europe on newswire
published assessments for North Sea dated Brent crude, but has in recent
months been discussing a switch away from dated Brent with its customers.
The switch to pricing based on a new Brent weighted-average index
published by the UK's International Petroleum Exchange had now been agreed
in principle with European customers, the official said, in readiness for
a changeover for crude sales for April loading onwards.

"That's the plan," the official said. Work was now being done
finalizing all the legal language in the new sales contracts "to
everyone's satisfaction," he said.

Introduced in November, the IPE Brent weighted average is posted daily
on the exchange's website at http://www.ipe.uk.com. The weighted average
is derived from the daily trade on the IPE's Brent crude oil futures
contract.

Saudi Arabia is the world's largest exporter of crude oil, with
current total production of about 7.6 million barrels per day. Exports to
Europe account for around 2 million bpd of that total.

Aramco had proposed the change because of its unhappiness with the
perceived manipulation and volatility of published dated Brent
assessments.

At least one other major crude exporter, fellow OPEC member Iran, has
also indicated that it is looking at a move away from pricing based on
published assessments for its European customers.

The Saudi proposal has met with a positive response from European
customers, the Aramco official said.

"This has all been gone over with the customers," he said. "Everyone's
agreed to what we're going to do."

Aramco was also looking at changing the basis for its crude pricing to
Asian and North American customers, the official added.

Its sales to Asia on based on the average of published Oman and Dubai
crude grade assessments, with North American crude sales priced against
published assessments of US WTI crude.

"There are problems with the markers in both regions, but nobody's
come up with a good solution yet," the official said. "There's no
consensus among customers about what they would like to do, [but] we're
still looking to try to change in these markets."

The concentration on the legal technicalities of the changeover in
Europe was aimed at anticipating any problems that could occur when the
new system is actually implemented for April crude sales, the official
added.

"We have to make sure the legal language's there," he said. "I don't
think it's going to be that big a problem, [but] we'll hear the screams
fairly quickly" if it is, he added.
***
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN.

goldfan

(02/02/2000; 12:57:11 MDT - Msg ID: 24122)

Risk-taking and Economic chaos

Risk

I'm getting interested in investigating this, about our lives and trading times...

First I'm going to define it a little, then ask for some help in establishing measures and seeing how it fits into the chaos dynamics framework for evaluation and decision points.

Three kinds of risk-taking, personal risk, corporate risk, banking and government risk.

Personal risk -----feeds----> corporate risk----feeds----> banking/government risk
Personal risk<---------feedback----------banking/government risk

The three types of risk taking are related by this recursive equation, which is a classic case for the expression of chaos dynamics, which, undampened, will lead to wild oscillations and collapse.

Personal risk

The wages we earn can go three ways, into payments for current purchases, payments on past purchases, savings. The more the debt, the higher #2 will be, unless our wages increase, which they haven't. Even productivity increases create more debt, since a static wage has to chase more goods. ( see Sean Corrigan at Gold-Eagle.com for this idea). Add to this, that we are buying more from foreigners than we sell them, so more borrowing is needed to cover the trade deficit. Plus the miracle of compound interest further exponentially increases our payments for past purchases.

With savings rates at zero, or even negative, and consumer debt at 95% of disposable income and climbing, consumer spending and debt formation increasing faster than disposable income, consumers holding equity mutual funds and wildly overvalued .com's in preference to bonds, clearly personal risk taking is very high. (There's an additional risk in this last, bonds are usually in the owners name, stocks are held in street name at the brokerage. So in a real crisis, the stocks would become the property of the broker's creditors.)

What is a good measure for this risk? Maybe the unemployment rate ( or the personal bankruptcy rate), compared to what it will be if current attitude to risk persists. See the last section for my feeble efforts to measure it.

Corporate risk

Corporate risk is measured in the debt/equity ratio and the likely direction of interest rates.
When we have most companies manipulating the data to present balance sheets and income statements that try to obscure the "state of the nation" and misleadingly enhance the earnings per share, when we have corporations borrowing to buy back their stock, push up P/E ratios, and hence share prices, same for ESOP's and selling Puts, to increase income from "financing" instead of "the business", giant mergers proposed and conducted, merely to generate stock market profits for insiders, trading advertising banners on the net, both sides booking a "sale"... the corporate risks are clearly enormous.

What are average debt/equity ratios? How high is too high? Somewhere I read that corporate debt, at 24% of equity, is heifer than it has ever been, is that right? The problem here is the corporate philosophy that says that increasing the stock price is the goal, not providing a reliable product , cultivating the market for it, and providing long term employment to people in a healthy community.

Banking/Government risk

The marriage of convenience for fleecing the citizens ( I guess this is what ORO would say about it). In my way of thinking right now, banks, equity mutual funds, money market funds, stock brokers, trust companies, credit unions, all take deposits and massage them for the purpose of savings, investments, and trade. Sure the risks to depositors vary greatly among all these, but most depositors today, think of the risks as approximately equal, and just go shopping around as if the only choice was between different grocery stores. They're all backed by banks, backed by government printing presses. So the limits to supply, and therefore. to demand, will be the limits set by governments, and then banks. Their behavior is risky indeed these days.

The attitude is summed up by a quote from The Toronto Globe and Mail Feb 1, repeating something said by Jacob M. Schlesinger in the Wall Street Journal, (Long Boom Owes Big Debt to Capital Markets) I doubt they're smart enough to have intended the pun!!

"Before asset backed securities, securitization, the heavy risk of lending used to land solely on the bank making the loan. But when banks turn around and sell their loans as securities, countless investors around the world each take on a small portion of that risk.
The expansion of capital markets by such methods means that the U.S. now has more of what Mr. Greenspan calls "spare tires" in its financial system. That lowers the odds that any one pothole- a banking crisis, for example- will bring the economy to a halt."

The same philosophy about the new financial systems of hedging, derivatives, delta this and that, has become the received wisdom of governments and the media, used to soothe consumers into ever more risky behavior, preserving the "fleecing mechanisms" ( see the feedback loop in my diagram above.)

On the matter of securitization reducing lending risk. Banks and others off load packages of mortgages which generates cash, which they must then loan out. But presumably in a competitive world, the new loans will be of lesser quality, more risky, than the ones they just securitized. So they will have increased their overall risk by this securitization strategy, not decreased it. And if they securitize the low quality stuff, then someone else gets it, probably using short term funds, and the systemic risk is increased.

Hedges etc.

Seems to me, all this apparatus to supposedly reduce risk, means that financial people just increase the riskiness of their behavior, and persuade us to increase ours (via feedback) because they feel somehow safer, in order to increase profits. Same as if I get ABS brake on my car, and so drive more recklessly, because I find I can stop quicker and more surely, so when I do crash it's with much greater energy and more damage. ( a car at 80 mph contains 75% more energy than a car at 60 mph, even though its speed has only increased 33%, at 100 mph, the energy is 175% more!!).

What would be a measure of the risk taking behavior of Banks/governments? Maybe, the amount of the currency relative to some standard in gold? Let say the POG is traditionally at 40% of the Money supply divided by the gold in Fort Knox. Then today, the M3/gold ratio is $6.5 trillion/8000 tonnes , works out to $2700 per oz. The traditional POG would be 40% of that, $1080 per oz. So at $285, we have 2.5X too much money in circulation. Effectively, the $ should be devalued by 60%. Lots of banking risk!!

Risk Taking Measures

Personal Risk.
Maybe the unemployment rate ( or the personal bankruptcy rate), compared to what it will be if current attitudes to risk persists. Maybe the unemployment rate will be 30% if attitudes persist.

Corporate Risk
What are average debt/equity ratios? How high is too high?

Banking/Government Risk
The amount of the currency relative to some standard in gold? Gold should be at $1080/oz. Effectively, the $ should be devalued by 60%, and maybe soon will be...

Comments and criticism gratefully solicited.

BTW Nothing is good as gold

Goldfan

.

TownCrier

(02/02/2000; 13:02:42 MDT - Msg ID: 24123)

FOMC Press Release: Policy Statement

Release Date: February 2, 2000

For immediate release
The Federal Open Market Committee voted today to raise its target for the federal funds rate by 25 basis points to 5-3/4 percent. In a related action, the Board of Governors approved a 25 basis point increase in the discount rate to 5-1/4 percent.

The Committee remains concerned that over time increases in demand will continue to exceed the growth in potential supply, even after taking account of the pronounced rise in productivity growth. Such trends could foster inflationary imbalances that would undermine the economy's record economic expansion.

Against the background of its long-run goals of price stability and sustainable economic growth and of the information currently available, the Committee believes the risks are weighted mainly toward conditions that may generate heightened inflation pressures in the foreseeable future.

In taking the discount rate action, the Federal Reserve Board approved requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Kansas City and San Francisco. The discount rate is the rate charged depository institutions when they borrow short-term adjustment credit from their district Federal Reserve Banks.

TheStranger

(02/02/2000; 13:10:51 MDT - Msg ID: 24124)

Inflation Will Be Even Worse In Europe

Greenspan tried again to knock inflation down with a feather, today. But think about the poor Europeans. Their weak currency will make for even greater inflation over there. Putting up any fight at all will be practically impossible, given the newness of the economic recovery and the still-high unemployment levels. There would be riots in the streets. I'm afraid this doesn't bode well for the Euro.

TheStranger

(02/02/2000; 13:25:12 MDT - Msg ID: 24125)

CoBra

Does this pan-european response to Austria's internal political affairs not illustrate the very problem facing Euro in the long run?

Yet, Austria is a democracy. What else can the government do but fulfill the wishes of the people?

TownCrier

(02/02/2000; 13:29:32 MDT - Msg ID: 24126)

Sir Stranger

Various ECB officials have pointed to the European block as capable of weathering economic crises elsewhere in the world due to their degree of self-reliance. Value for value, if they can export (anything) as much as they import (oil) -- and recent numbers show that they can -- then the external exchange rate of the euro should not paint an inflationary canvas with a brush as wide and grim as you seem to have selected for them. The ECB president recently said their biggest concern was that public perception of a "weak" euro might translate into demands for wage increases, which could then give rise to higher prices all around. What element has led you to your inflation prognostication, and more importantly, in what sence are you using the term "inflation"...in regard to prices, or to money supply?

TownCrier

(02/02/2000; 13:36:53 MDT - Msg ID: 24127)

The Fed added $1.505 billion today

http://biz.yahoo.com/rf/000202/u4.htmlThe banking system received the temporary reserves through overnight system repurchase agreements.

TownCrier

(02/02/2000; 13:49:10 MDT - Msg ID: 24128)

Wary of Contagions, Americas' Finance Chiefs Meet

http://biz.yahoo.com/rf/000202/80.htmlIn setting up a meeting this Thurday for finance ministers spanning North and South America, Mexican Finance Minister Jose Angel Gurria said, "It's very clear that when a country in the region has problems, no matter where it is and independent of its size...it has a contagion effect. It has an effect of contaminating the rest of the economies in the region, and the perception in the markets is that the region as a whole has a problem."

It would seem that it was in an attempt to gain a measure of immunity to these types of woes that propelled Euroland toward its single currency.

TownCrier

(02/02/2000; 14:09:23 MDT - Msg ID: 24129)

This may surprise you...HEADLINE: Oil Prices, When Adjusted for Inflation, Are Lowest Since Nixon

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Bloomberg%20Energy&touch=1&T=energy_news_story.ht&s=7f3de57f022e1933b137cbe43e123da3This Bloomberg report compares the inflation-adjusted price of Arab Light crude in October 1981 at $40.99 per barrel, while the per barrel price in December 1999 was only $13.99. (The U.S. has not yet reported January inflation rates.) Beshr Bakheet, managing partner of Riyadh-based Bakheet Financial Advisors, said, "Oil was an undervalued commodity in the 1990s and now it seems to be cyclically recovering its fair value, and this is far from calling oil prices overvalued."

A source at the Centre for Global Energy Studies in London offers a good additional reality check that we could be in store for yet higher prices as warranted: "In 1976, consumption was lower. Refineries' throughput is much bigger now, and there's simply not enough supply. The situation is very tight."

TownCrier

(02/02/2000; 14:44:22 MDT - Msg ID: 24130)

Rubin warns of risks to new economic paradigm

http://biz.yahoo.com/rf/000202/29.htmlSpeaking today at the London School of Economics, former U.S. Treasury Secretary Robert Rubin cast doubt upon the likelihood that an information-based economy could render the business cycle, and its downturns, meaningless. SecTreas Rubin does not appear to have put much faith in the notion of a "new paradigm" or a "new economy." He said, "This view of the economy is contrary to all of human history with respect to markets and economies, and that should be a sobering caution."

He said that complacency had become a great threat to the economy, coming on the back of "a record trade deficit, tight labour markets, a low personal savings rate and stock valuations which were high by conventional measures" as listed by Reuters. Rubin said those factors were being improperly brushed off. "With each successfully averted crisis, with each near miss, the certainty that things will always work out seems to grow and with it the likelihood of unsound decisions in the public and private sector."

CoBra(too)

(02/02/2000; 15:23:31 MDT - Msg ID: 24131)

@ Stranger - .Msg24125... and TC Mg 24124

Hello Stranger - It's now an internationl response to Austria's internal political affairs - and as I do feel the response is exaggerating the underlying problem (though I understand the gist of the message- try to introduce same message to Turkey, for instance,a new candidate for EU-membership)- A Union starting to strive by devouring the
smaller members under questionable contexts won't in my mind deserve to any "seignorage" (tku ORO) to print 'even' paper, in lieu of legaal tender and god beware money!
And yes - Sranger - Austria is a democracy, denied the right to change the ongoing perversion of same.
Sorry for political and off topic post-
@ TC- Inflation will be even worse in Europe - You may be right, even for the wrong reasons - yes it is a blessing to have lower exchange rates vis a vis the $, benefitting EU exports - sorry official-speak - and for the right reasons
- I'm totally backing your assessment.
It oesn't bode well for the EURO - go gold BC2

TheStranger

(02/02/2000; 15:24:37 MDT - Msg ID: 24132)

Town Crier

Thanks for your comments. I have based my bullish gold outlook for a year now on my expectation that a world which was expecting SOME deflation was going to get SOME inflation instead (emphasis on "some"). I have never painted a picture that was anything like "wide and grim". However, as we are constantly bombarded by information from all directions, I do not blame you for making this mistake.

My point was merely that the weakening Euro aggravates rising European import prices (such as oil, for example). Because of double-digit unemployment in several European countries, and because recovery there is still very young by comparison to the U.S. expansion, Duisenberg will experience greater political opposition in trying to tighten monetary policy than will Greenspan. Meanwhile, Greenspan's tightening may, in itself, be part of the weak Euro problem. Does that help?

Current gold bearishness is underpinned by the notion that a nation with veritable full employment has the latitude to defeat inflationary pressures with relative ease. In other words, it is thought that the strong U.S. economy can easily survive higher interest rates long enough to nip inflation in the bud. This perception is evident, I believe, in the optimism on Wall Street. Nonetheless, because the Fed failed to act soon enough, the perception is probably wrong.

Duisenberg, on the other hand, doesn't even have the luxury of full employment in his favor. Given, for example, the French penchant for street demonstrations, it is not hard to envision what popular reaction might greet higher European interest rates.

Meantime, thanks, as usual, for all you do, Townie. I am forever in your debt.

canamami

(02/02/2000; 16:31:51 MDT - Msg ID: 24133)

Stranger, Town Crier - Peter Cook on the Euro

Stranger&Town Crier,

Re your exchanges of earlier today, I believe you will both find Peter Cook's article very interesting (I find he is one of the pre-eminent writers on the Euro). Of the two continent-wide currencies, does the Euro have the possibility of being truer money, owing to the hoops those who would manipulate it for political reasons must go through? I suspect this was (at least partly) FOA's point when he argued that the Euro had an advantage over the dollar not only because of the external "overhang" facing the dollar, but because many different governments have an input re the Euro, making it less vulnerable to political pressure. Of course, one must also offset the greater vitality and adaptability of American society viv-a-vis Europe, as well as the US' greater discipline re governmental expenditures.

Plunging euro proves a policy test for Europe, Peter Cook says
Wednesday, February 2, 2000

THE GLOBE AND MAIL - Canada's National Newspaper

Peter Cook

Brussels -- It is a safe bet that, if the euro did not exist, Europe's money crisis of the moment would be worse. The Germans would be alarmed by the selloff of their once-mighty mark, an alarm shared by the French and Italians, while the Finns, the Irish and the Spanish would be fighting off speculation that their interest rates and currencies must rise.

In the way such things happen, markets would be exaggerating the weakness of the weak and the stamina of the strong.

Instead, with 11 European currencies grouped together in a monetary fraternization that is just 14 months old, the euro faces a test, but not a crisis.

It is a near certainty that, when the U.S. Federal Reserve Board's policy-making committee ends its deliberation today, the decision will be made to raise U.S. rates. That act in and of itself could send a euro that has fallen below parity with the U.S. dollar plunging toward 90 cents (U.S.). The counter to it would be a matching move by the Governing Council of the European Central Bank meeting in Frankfurt tomorrow. Putting aside its inhibitions about a still-weak European economy, it could raise rates to shore up the currency.

The test here is whether the internal situation or the external one is thought more important. In the old days, it was the external economy that mattered (as it does for other countries like Britain and Canada now). A fall in the value of your money against your neighbour's money threatened higher inflation and capital flight and, to combat it, higher rates and a slower economy.

However, that is not the case now that Europe has a continent-size currency where exchange rates are fixed. Sure, it must worry about the price of imported oil, which is denominated in U.S. dollars. But, beyond that, it has precious few worries. The euro zone countries trade mainly with each other and their domestic prices are not going to be altered by the trade they do with others. They are in this respect like U.S. states -- which have never worried much about the external value of the U.S. dollar and have, if anything, preferred it to be weak.

So what we have here is a policy test for the European Central Bank. In the next 24 hours, we will find out it if it is fixated, in the traditional European way, with where its money stands against the U.S. dollar or whether it has the courage to break free of the old thinking and shrug off a further euro plunge.

In reading the entrails, it is a decision that could go either way. The chiefs of the Bundesbank, the euro zone's most influential member bank, are old thinkers and want the currency propped up. Others, including ECB president Wim Duisenberg, seem more relaxed. The task of the bank was "to deliver a climate of stable prices," he said over the weekend. In addition, it has delivered a true common market in capital and corporate activity. Why, then, also worry about one euro equalling one U.S. dollar?

The argument lays out, in a graphic way, the advantages of continent-size currencies. There are only two of them in the world but, increasingly, their influence and their reach is spreading. Why? Because any country that joins Europe's currency bloc, or attaches itself to the U.S. dollar, can take the same in-your-face attitude to a fall in the currency. First, it is not a national crisis. Second, it is someone else's crisis, to be dealt with in a larger context by the U.S. Fed or the ECB.

The U.S. dollar is strong and its strength has some Canadians, along with Latin Americans and Asians, talking about linking themselves to it. The euro is weak and, in its hour of weakness, Greeks and Danes and Estonians are flocking to join. This provides proof that a continent-size currency is valued for delivering certain things like price stability and low interest rates that small countries managing small currencies cannot, in similar circumstances, deliver.

Okay, this is in some minds outweighed by the great disadvantage of joining a "maxicurrency," namely the loss of the ability to run one's monetary affairs for oneself. In Europe, the British regard this as the greater prize and are becoming even more adamant about staying out of the euro. In North America, Canadians feel their economy is large enough to resist being bossed around by the Americans (who would never share control of their currency as the Europeans have done) and that they can make it on their own.

Looking ahead 10 years, or 20 years, one wonders whether the British and Canadians will still be proud currency loners, surrounded by a crowd of countries that have tied their fortunes to the U.S. dollar or the euro or perhaps the yen. From the world of many currencies, we seem to be moving to the world of a few and the greater economic safety it offers.
Peter Cook can be reached by e-mail at pcook@globeandmail.ca

YGM

(02/02/2000; 16:41:10 MDT - Msg ID: 24134)

Daylight Thru The Fog?

From Golden Sextant-----------Go GATA!Also Posted By lemetropolecafe's........Bill Murphy

CURRENT MPEG COMMENTARY

�

February 1, 2000. Two Bills: Scandal and Opportunity in Gold?

Last week the world's movers and shakers held their annual confab in Davos, Switzerland. Bill C. and Bill G. were there. No doubt the scandal enveloping Helmut Kohl, Europe's greatest statesman since Churchill and De Gaulle, provided much grist for gossip. But here at home, some began to glimpse the outline of a possible new Clinton scandal -- one that could ultimately eclipse Watergate or Teapot Dome.

Evidence is accumulating that the administration of Bill Clinton may have turned the Exchange Stabilization Fund (the "ESF") into a political slush fund to make itself look good and simultaneously profit some of its closest Wall Street friends and supporters. Specifically, the known facts support credible allegations that the Clinton administration has effectively capped the gold price by using the ESF to backstop the selling of gold futures and other gold derivative products by politically well-connected bullion banks. Such interference in the free market price of gold would undermine its traditional role as a leading indicator of inflation. And it would do so at the same time that the administration's many adjustments to the CPI have rendered that lagging indicator of inflation also suspect. Among the bullion banks most heavily involved in selling gold futures and purveying gold loans, forward sales and other derivatives that undercut its price is Goldman Sachs, former Treasury Secretary Robert Rubin's old firm.

These are serious allegations, but the current administration scarcely merits much benefit of the doubt. If these allegations are incorrect, Treasury Secretary Summers can deny them in unequivocal language as Fed Chairman Alan Greenspan did two weeks ago with regard to similar allegations of gold price manipulation by the Fed. Indeed, in a formal letter to Senator Lieberman (Dem., Conn.) (reprinted at www.egroups.com/group/gata/346.html), the Fed chairman not only denied that the Fed had intervened in the gold or gold derivatives markets, but also added: "Most importantly, the Federal Reserve is in complete agreement with the proposition that any such transactions on our part, aimed at manipulating the price of gold or otherwise interfering in the free trade of gold, would be wholly inappropriate." [Emphasis supplied.]

The odd behavior of the gold price over the past five years, including massive gold leasing and heavy bouts of futures selling apparently timed to abort threatened rallies, has generated considerable speculation regarding intentional manipulation by governmental authorities. What has made weakness in the gold price all the more perplexing are mounting shortfalls of new mine production relative to annual demand. Because most nations deal in gold through their central banks, they are prime suspects. Clarifying remarks that he made to Congress in 1998, Mr. Greenspan confirmed in his letter to Senator Lieberman that some central banks other than the Fed do in fact lease gold on occasion for the express purpose of trying to contain its price. Gold leased by central banks to bullion banks is typically sold by them into the market in connection with arranging forward sales by gold mining companies or making gold loans to mining companies or others. The attraction of gold loans is their typically low interest rates (known in the trade as "lease rates") of around 2%.

The Fed and the ESF are the only arms of the U.S. government with broad statutory authority "to deal in gold" and thus by reasonable extension in gold futures and derivatives. Were the Fed to engage in such activities, it would of necessity have to do so subject to all the institutional safeguards that govern its more important functions. Unlike the Fed, the ESF is virtually without institutional structure or safeguards. It is under the exclusive control of the Secretary of the Treasury, subject only to the approval of the President. Indeed, direct control and custody of the ESF must rest at all times with the President and the Secretary. The statute further provides (31 U.S.C. s. 5302(a)(2)): "Decisions of the Secretary are final and may not be reviewed by another officer or employee of the Government."

Originally funded out of the profits from the 1934 gold confiscation, the little known ESF is available for intervention in the foreign exchange markets. In the absence of a Congressional appropriation, the Clinton administration used funds from the ESF to finance the 1995 U.S. bailout of Mexico. However, accepting the Greenspan dictum that it "would be wholly inappropriate" for the Fed ever to intervene in the gold market to manipulate the price, it is hard to imagine any situation in which such intervention would be appropriate by the ESF, never mind one involving large profits for the former investment bank of the Secretary himself.

Last week, in response to an inquiry from Bridge News, Secretary Summers "categorically denied" that the Treasury was selling gold. With all due respect to the Secretary, this is not the allegation that knowledgeable gold market participants and observers are making. Their allegation is that the ESF -- by writing gold call options or otherwise -- is making sufficient gold cover available to certain bullion banks to allow them safely to take large short positions in gold, thereby putting downward pressure on the price and in the process making huge profits for themselves.

Two devices that have put the most pressure on the gold price in recent years are sales of gold futures contracts on certain public exchanges, the COMEX in New York being the largest and most important, and sales of leased gold in connection with gold loans and forward selling by miners. Bullion banks that engage in these activities must of necessity take short positions in gold. While these positions can result in large profits for them when the gold price declines, they can -- if unhedged -- also result in large losses should the gold price rise.

The most common tactic used by bullion banks to hedge against such losses is the purchase of gold call options, usually from gold producers, other large holders of physical gold, or entities with sufficient financial resources to guarantee cash settlement. In the absence of such protection, bullion banks leasing gold or selling large amounts of gold futures contracts for their own account (or the accounts of any but the strongest gold credits) would be forced to assume risky net short positions on which they could sustain huge losses in the event of an upward spike in the gold price. At the same time, sellers (often called "writers") of gold call options also assume risk, for they will be called upon to provide gold (or equivalent cash settlement) to the bullion banks in the event that the gold price rises above the strike prices of the options.

Given its own resources of something like $40 billion dollars and its connection to the U.S. Treasury, which controls the nation's official gold reserves of about 8150 metric tonnes, the ESF has the ability to write gold call options in circumstances where private parties would not. Should it do so, it can effectively permit favored bullion banks to engage in gold futures selling and gold leasing under conditions where they would otherwise be forced to curtail these activities as perceptions of increasing risk rendered call options from private sources either too expensive or even unavailable. What is more, the ESF can write these options clandestinely so as to camouflage the true source of what otherwise appears as inexplicable downward pressure on gold, thereby creating market uncertainty that itself augments bearish sentiment and increases the profits of bullion banks privy to the scheme.

With the Fed's announcement that it, unlike some other central banks, does not operate in the gold or gold derivatives markets, the focus of suspicion naturally shifted to the ESF. But to understand fully why gold market participants and observers increasingly sense market manipulation originating somewhere in the U.S. government, it is necessary to recount and highlight some recent history of the gold market, particularly for those not fully conversant with it. And even for those who are, Fed Chairman Greenspan's recent letter requires reassessment of working hypotheses involving assumptions of gold price manipulation by the Fed. More detail on much of what follows can be found in earlier essays and commentaries here at The Golden Sextant, together with various links to supporting or explanatory information.

The story begins in 1995. Gold is slumbering as it has for some time around US$375/oz. Japan's economic situation is worsening, and in mid-1995 the Japanese cut interest rates sharply. Gold begins to stir, jumping over $400 in early 1996, propelled in part by Japanese interest rates so low that they force yen denominated gold futures on the TOCOM into backwardation (i.e., when prices for future delivery are lower than spot). The yen is falling; gold lease rates are rising. From the U.S. perspective, an economic collapse in Japan threatens to exacerbate the U.S. trade deficit and possibly trigger massive dishoarding of Japan's large holdings of dollar denominated debt, including U.S. Treasuries.

From the European perspective, there is concern not only about the obvious economic effects of a Japanese collapse, but also that it might cause sufficient disruption in the existing international payments system to complicate severely or even prevent the planned introduction of the euro in 1999. An accelerating gold price responding to world financial turmoil is hardly a propitious environment for the introduction of a new and untested currency.

The G-7 central banks and finance ministers cobble together a plan to support Japan, including a strategy for controlling the gold price through anti-gold propaganda backed by small but highly publicized official gold sales augmented by leasing of official gold in large quantities at concessionary rates. For Belgium and the Netherlands, the largest European sellers, gold sales also help to meet the Maastricht Treaty's criteria for the euro.

Gold analysts, who at the beginning of 1996 were almost unanimous in predicting a new bull market for gold, are blind-sided. Virtually none foresaw such a coordinated official attack on gold, and many are slow to recognize its broad scope. The gold price steadily declines from over $400 in early 1996 to well under $300 in early 1998, and stays under $300 for most of 1998 and into early 1999. Every time gold looks to rally, it is slammed on the LBMA or COMEX by the same small group of well-connected bullion banks. Particularly notable in these attacks are Goldman Sachs, Chase and Mitsui, which regularly runs by far the largest net short position on the TOCOM.

Scared by falling prices and encouraged to do so by their bullion bankers who are also their lenders, many gold mining companies respond by increasing their hedging activities, expanding forward sales and buying more gold put options. The forward sales, generally made with gold leased from central banks through bullion banks, add to the downward pressure on gold and provide fees to the bullion banks, augmented by further windfall profits on the loaned gold as the price continues to fall. The bullion banks earn further fees by selling put options to the mining companies, who frequently are forced to finance buying shorted-dated puts from the bullion banks by selling them long-dated calls.

Trading around $280 in April 1999, gold is below the total cost of production for many mines and not far above the cash costs of quite a few. What is more, annual gold demand is now almost 4000 tonnes, exceeding annual new mine production of 2500 tonnes by almost 1500 tonnes. This deficit, building over several years, is largely filled by sales of gold leased from central banks by the bullion banks. Analysts trying to calculate the net short gold position of the bullion banks in early 1999 are coming up with some astonishing figures, some as high as 10,000 tonnes, equivalent to four full years of production.

Since much of this leased gold is sold into the Asian jewelry market, particularly to India which regularly absorbs 25% to 30% of annual world production, many question where all the gold necessary for repayment will be found. But at the beginning of 1999, some is expected to come from the proposed sale of over 300 tonnes by the IMF to raise funds for aid to heavily indebted poor countries, an initiative strongly supported by the U.S. and Britain.

On May 6, 1999, gold again nears $290 and is threatening to explode above $300 due in part to increasing doubts that the proposed IMF gold sales will be approved. Short positions are in grave peril. Then comes a wholly unexpected bombshell which will have even more unexpected consequences.

On May 7, 1999, the British announce that the Bank of England on behalf of the British Treasury will sell 435 tonnes of gold in a series of public auctions ostensibly to diversify its international monetary reserves. The manner of the British sales -- periodic public auctions instead of hidden sales through the BIS -- belie any effort to get top dollar and smack of intentional downward manipulation of the gold price. All indications are that these sales were ordered by the British government over the objection of BOE officials. Palpably spurious and inconsistent reasons for the sales are offered, but no persuasive ones. There is only one logical conclusion: the gold sales were directly ordered by the Prime Minister for unknown political or other reasons. What is more, his reasons are unlikely to have been frivolous. As leading supporters of the proposed IMF gold sales, the British clumsily put themselves in the position of front-running them, and ultimately the British sales are an important catalyst in forcing the IMF to change tack.

For most knowledgeable gold market participants and observers, the British announcement is the smoking gun -- proof positive that the world gold market is being manipulated with official connivance and support. But what none yet suspects is that the BIS, the ECB and the central banks of the EMU countries are having serious second thoughts about the gold manipulation scheme.

The British announcement quickly sends the gold price into near free fall toward $250. Gold mining companies panic. Urged on by the bullion banks, led again by Goldman Sachs, the miners add to their hedge positions. The very dangerous practice of financing short-dated puts with long-dated calls expands exponentially as financially strapped mining companies, threatened with reduction or loss of credit lines by their bullion bankers, are often left with little other choice. Then comes a second and even larger bombshell that takes the bullion bankers and their customers completely by surprise. Indeed, it is likely a watershed event for the entire world financial system, comparable only to the closing of the gold window in 1971.

On September 26, 1999, 15 European central banks, led by the ECB, announce that they will limit their total combined gold sales over the next five years to 2000 tonnes, not to exceed 400 tonnes in any one year, and will not increase their gold lending or other gold derivatives activities . Besides the ECB and the 11 members of the EMU, Britain, Switzerland and Sweden are parties. The 2000 tonnes include the remaining 365 tonnes of British sales and 1300 tonnes of previously proposed Swiss sales, leaving only 335 tonnes of possible new sales. The announcement, made in Washington following the IMF/World Bank annual meeting, is ironically christened the "Washington Agreement" although the government in Washington played no role. However, the BIS, IMF, U.S. and Japan are all expected to abide by it, and the BIS is expected to monitor it.

The effect in the gold market is quick and dramatic. Within days, as some gold shorts rush to cover, the gold price jumps from around $265 to almost $330 and gold lease rates spike to over 9%. By late October gold retreats back under $300, and a month later lease rates are almost back to normal levels. But the hugely over-extended net short position in the gold market is clearly revealed and far from being resolved. Two heavily hedged gold mining companies, Ashanti and Cambior, are virtually bankrupt and in negotiations with their bullion bankers. Indeed, soon the entire rationale of hedging is under comprehensive review throughout the gold mining industry as shareholders rebel at practices that take away the upside of their gold investments.

As the details of Ashanti's and Cambior's hedge books are disclosed, the recklessness of gold hedging strategies foisted onto to them by their bullion bankers becomes all too apparent. Ashanti's lead bullion banker, Goldman Sachs, is the subject of scathing comment, including allegations of serious conflicts of interest. See, e.g., L. Barber & G. O'Connor, "How Goldman Sachs Helped Ruin and then Dismember Ashanti Gold," Financial Times (London), Dec. 2, 1999, reprinted at www.egroups.com/group/gata/299.html. Clearly the most aggressive bullion bankers have been caught completely wrong-footed and totally unawares by the Washington Agreement. Significantly, rumor is that the agreement was hammered out secretly among the members of the EMU, the BIS and Switzerland, that the British were given a chance to sign on after the fact, and that the U.S. was not informed until just before the Sunday announcement. For references to European press commentary on the genesis of the agreement, see W. Smith, "Operation Dollar Storm," www.gold-eagle.com/editorials_99/wsmith111099.html.

Besides the three provisions relating directly to central bank activities in the gold market and one calling for review after five years, the Washington Agreement contains this statement: "Gold will remain an important element of global monetary reserves." The ECB and 11 EMU nations hold collectively around 12,500 tonnes of gold reserves (almost 1.4 ounces per citizen), making the EMU as a whole by far the world's largest official holder of gold. What is more, unlike the U.S. which values its gold stock of about 8150 tonnes (under 1 ounce per citizen) at an unrealistic $42.22/oz., the EMU marks its gold reserves to market quarterly.

The notion, shared by many, that the EMU would forever acquiesce in the trashing of its gold reserves by bullion banks operating in the largely paper gold markets of London, New York and Tokyo appears in retrospect to have been incredibly naive. Indeed, a careful reading of the 69th annual report of the BIS issued in June 1999 suggests that European central bankers were already questioning the effectiveness and sustainability of Japan's low interest rate policy, and were very concerned about the implications of the LTCM incident for the world payments system. With the euro successfully launched, they quickly lost reason to continue capping the gold price and became much more concerned about the increasingly parlous state of the gold banking system to which they were lending.

Often referred to as the central banks' central bank, the BIS is not only the principal forum for discussion and cooperation among the world's central bankers but also the world's top gold bank. Established under international treaty in 1930 to facilitate payment of German war reparations, the BIS from its founding has kept its financial accounts in Swiss gold francs, making conversions at designated or market rates as appropriate. It holds approximately 200 tonnes of gold for its own account and records on its balance sheet separate gold deposit and gold liability accounts in connection with the banking services it provides to central banks and other international financial institutions. That the BIS in early 1999 was not as aware as gold analysts in the private sector of the bullion banks' dangerously leveraged condition is almost inconceivable.

Fed Chairman Greenspan's letter to Senator Lieberman is highly significant in that it tends to negate the impression many had, including myself, that a rift had developed between the Anglo-American central banks and those of the EMU over gold. Rather, the Fed's position as expressed in the letter, together with the BOE's position that the decision to sell British gold came from Her Majesty's Treasury, implies a rift not among the major central banks, but between them and the British and American governments operating through their Treasury departments. In this connection, the Fed and the BOE labor under a handicap that does not affect the Europeans, for whereas the central banks of the EMU have direct legal responsibility for their nations' gold reserves, in both Britain and the U.S. this responsibility rest with their Treasury departments.

What is more, a quite plausible scenario now appears to explain the British gold sales. Whether it is true or not, only a very few high officials in the British and American governments and their bullion bankers are in a position to know for sure. But on known and reasonably inferred facts, the following hypothesis can be constructed.

The ESF was writing gold call options for certain bullion bankers, principally those most active in selling futures and arranging forward sales: Goldman Sachs, Chase, et al. As of April 30, 1999, it had outstanding a sizable position at strike prices in the $300 area. For writing these options in a generally falling market, it had net earnings from premiums but these were not in context large amounts, at most a very few dollars per ounce. In the ESF's monthly financial reports required to be filed with the Senate and House Banking Committees, these amounts were listed as miscellaneous income.

When gold threatened to explode over $300 in early May, and with IMF's proposed gold sales in trouble, the ESF found itself in much the same position as that of Ashanti and Cambior after announcement of the Washington Agreement. Gold call options previously sold for a few dollars an ounce threatened to cause losses many multiples of these amounts if the gold price jumped by $50 to $75. If settled in cash, exploding volatility premiums would add hugely to the loss, putting the effective strike price far above the nominal one. On the other hand, if settled in gold at the strike price, the ESF would have to deliver gold from U.S. reserves or go into the market to cover, adding more upward pressure to the gold price.

Worse, unlike the modest premium income from sales of options, huge losses could not be hidden from Congress in the monthly financial reports to the House and Senate Banking Committees. Not to panic. The ESF, being under the direct control of the Secretary and the President, has an option not available to others. Call the British Prime Minister and arrange for a very public official gold sale designed to kill the incipient gold price rally.

Cavan Man

(02/02/2000; 16:47:29 MDT - Msg ID: 24135)

CB2 24131

Don't be too hard on yourself. Here in lala land, we too have problems which are, practically speaking, intractable. It would pain me too much to enumerate so I'll pass. More knew there was no Utopia.

Considering the performance of the Euro, is there any possibility that European bankers and decision makers might have a strategy other than intervention to support the currency? After all, product differentiation must be a big part of their marketing strategy. In other words, give me one compelling reason to buy the Euro 'cause, I've got one already.

We have our Haiders too CB2. Remember OK City? Regards

YGM

(02/02/2000; 16:50:16 MDT - Msg ID: 24136)

The entire Reg Howe piece..Golden Sextant..

http://www.goldensextant.com....can be read if interested at above link...sorry for the missing part & for the length of the piece (it may have already been posted) but it is VERY heartening to see some sense being made of this seemingly arrogant and blatant, never-ending manipulation of Gold pricing.....GO GATA.....YGM.

RAINMAN

(02/02/2000; 17:10:51 MDT - Msg ID: 24137)

FOA

Obviously M.K. took the " PERMAFROST " opportunity to give up the FOA / ANOTHER scam.
It must have been time consuming for him and the return was modest : out of the few people who post here regularly, how many end up buying his stuff on a regular basis ?
The problem is that FOA's position was becoming difficult : If you say every day " stocks are going to crash " once every 10 to 20 years , you are right.
The same is true with Gold : it is obvious that the financial system won't survive in its present form . However , will it last another 5 , 10 or 20 years ? Nobody can tell.
FOA / ANOTHER = M.K. were facing years or decades of time consuming posting until they could claim to be right.
Every time FOA was claiming that a turn-around was at hand , the market proved him wrong .
His whole theory about the Euro has also been ridiculed by the recent behavior of the US $. Obviously again , the FOA / ANOTHER scam was really becoming counterproductive for this site.
Maybe , in the short run , a few lurkers would buy some stuff , but this is not a way to build a long term customer base.
All ideas developped by the " famous " FOA and A . are not original and somebody in the gold dealing industry with a taste for macroeconomics could do the same.
Good night to all.

Leigh

(02/02/2000; 17:26:53 MDT - Msg ID: 24138)

RAINMAN

Dear RAINMAN: Your comments are not only untrue but extremely rude. We at USAGOLD are grief-stricken at the thought of losing FOA. We love him as a person. For you to brazenly state that FOA's contributions here are nothing but a sales scam is to insult ANOTHER, FOA, Michael Kosares, and all the Forum members. Please leave unless you can contribute something positive to our Forum.

RAINMAN

(02/02/2000; 17:35:58 MDT - Msg ID: 24139)

@ Leigh

My dear Leigh ,

You are entitled to your own opinions as I am to mine.
What I just said might be false but it is certainly not rude since only proper language was used.
You lost your mental drug and some of your dreams.
Maybe some money as well , but who has not ?
You know as well as I do that the quickest way to make a small fortune in the last 19 years was to start with a big one and invest in GOLD.
Things will change , but think of the lost opportunities.
Best wishes.

CoBra(too)

(02/02/2000; 17:44:01 MDT - Msg ID: 24140)

Warning - OFF TOPIC!

There is nothing in sight to curb bubbles - FOMC raised basic rates - widely anticipated - 25 basis points- ONLY! -
-Let's go on and celebrate 'irrational exuberance' for ever!
- I just hope AG will live as least as long as I, and then some to serve my kids with the same kind of chimeras of
'exuberantly kind' annual stock market profits - instead of
sweaty toil for not even beating cost of living (once called inflation - a dragon Allan alledgedly has beaten once and for all).
I hail the slayer of the drag(-on) of economic cycles, the founder of everlasting goldilocks and the keeper of the evergreen. May he be the ruler of the green flo(-at)od until
his handicap requires to cover his short(s)- comings.
Anyway, Whim D. may get a chance to recover his wits from the latest foray to suggest an 50% inrease in gold backing
to the euro - vs green - the color of the day, century, millenium ... stupid.
Don't give up - Try again and again and.... resign and go..... gold!

TheStranger

(02/02/2000; 17:49:25 MDT - Msg ID: 24141)

canamami and RAINMAN

canamami - Thanks for the Peter Cook editorial. I have serious doubts about the long-term viability of the Euro as presently constructed. One monetary policy and 11 fiscal policies just sounds awkward to me. The first real test for the Euro will be when it is time to prime the pump in, say, Spain and tighten the screws in, say, Austria. In the U.S., a central fiscal policy might help relieve such imbalances where, in Europe, the lack of one might exaggerate them further. It should also be remembered, these are not just countries. They are geographic regions with all that implies about differences in local products and services. Still, I am NO expert on the subject. I wouldn't have the courage to publish my views in the paper. That's for sure.

RAINMAN - perhaps if you try to think of FOA as a person, perhaps like you or me, who has put a great deal of effort into sharing his ideas here. Our value as a Forum is often in getting things right. But I believe the debate itself is also a force for truth. No one can deny the enormous contribution of this single man.

I suspect Michael is away from the Forum these days. I am sure you will find him plenty concerned when he returns.

One point that I think JA has already made, however. Sometimes getting at the truth is messy. I think it would serve us all well to develop a thicker skin when these things happen. Leaving the room doesn't serve anybody's better interests. Nor does heckling, of course.

RAINMAN

(02/02/2000; 17:49:56 MDT - Msg ID: 24142)

@ Leigh

Maybe , most of the posters / lurkers here don't know how the scam started but here it is :
Once , there was a Gold Forum ( Kitco ) with a lot of posters and a lot of gold buying power. On that site , ANOTHER appeared and made ridiculous predictions with precise deadlines.
He was eventually laughed out ( just as he expected ) and ended up here , drawing a few guys from the other forum.
This how USA GOLD came in the spot light . ( a small spot but still better than before )
Since then , he graced this forum with a few posts here and there ( with a nice imitation of language difficulties which don't hold under close scrutiny )
To be able to keep the gullible crowd in awe on a daily basis without wasting to much the ANOTHER caracter , FOA was invented.
FOA was less time consuming since no language difficulties forgery was needed.
Now , you are witnessing the end of a respect inspiring effort at making some money out of this forum.

Jason Happy

(02/02/2000; 17:57:56 MDT - Msg ID: 24143)

more bad math...

goldfan (2/2/2000; 12:57:11MDT - Msg ID:24122)
"M3/gold ratio is $6.5 trillion/8000 tonnes,
works out to $2700 per oz."

nope... here's the numbers:

$6,500 Billion / 8000 tonnes
8000 tons x 32152/oz = 257 million oz.
$6,500,000 million / 257 million oz.= $25,300 per oz.

You were off by a factor of 10, better than I was
earlier, when I was off by 100. Sorry.

--> Still lots of banking risk, more than you thought!

As an aside, I throught Yahoo! was over valued when it had
a market cap of $5 Billion. I saw it and laughed. Today,
its market cap is $86 Billion.

Maybe these internet stocks are NOT overvalued? They
are priced at a realistic notion in terms of gold at $25,300/oz.?

Maybe the internet stocks will NEVER CRASH, they are already
at correct dollar/gold values? The price of everything else just
needs to catch up?

CoBra(too)

(02/02/2000; 18:01:00 MDT - Msg ID: 24144)

@ Leigh - Frost- and Rainmen are...

permanently trying to season the BBQ - let's leave them to the freezin' uncomprehension of winter (who me?).

Best CB2

YGM

(02/02/2000; 18:08:24 MDT - Msg ID: 24145)

Jayne (Message # 24106)

Hear Hear!Well put.post......YGM

Leigh

(02/02/2000; 18:09:31 MDT - Msg ID: 24146)

CoBra(too)

Dear CoBra: PERMAFROST and RAINMAN belong ON the barbeque grill. I would enjoy hearing them sizzle and pop.

The policy of freezing silence, while gentlemanly, didn't work very well to muzzle Chris or PERMAFROST. They continued to spout their nonsense to the point that FOA left. I have come to the conclusion that this type of poster should be shown the exit door before real damage is done.

YGM

(02/02/2000; 18:19:29 MDT - Msg ID: 24147)

F.O.A.

Just A Plain Thanks.........for broadening this mans perception of the worlds financial stage....even if you are more or less than we percieve you to be, you have been here thru thick and thin, RAIN or Shine. Time will prove out your theories and predictions. If you are the invention of someones imagination, then I'd say they did a terrific job and should write a book......YGM.

RAINMAN

(02/02/2000; 18:40:09 MDT - Msg ID: 24148)

@ Leigh @ Cobra (too )

I understand you .
This forum must have been the center of your intellectual life recently.
To realize that one has devoted time and demanding thought process to a scam must be painfull. It is certainly better to relagate this kind of disturbing possibility to the realm of non existence.
Like true democrats , you propose to push into oblivion anything which don't fit into your perception of the world.
Good luck with your lives.

RAINMAN

(02/02/2000; 18:43:27 MDT - Msg ID: 24149)

@ Leigh @ Cobra (too )

By the way , Germans and Japanese alike conducted BBQ type experiment during WWII.
You guys don't belong to your time.

Leigh

(02/02/2000; 18:49:30 MDT - Msg ID: 24150)

RAINMAN

Cyber-barbeque. We're up to date around here. Seriously, RAINMAN, why don't you find a forum where you fit in? There are some great stock forums on the Internet.

admin

(02/02/2000; 19:01:05 MDT - Msg ID: 24151)

Leigh,

Rainman is now history around here. I will not put up the wholesale denegration of this table from anybody. I have patiently sat back and watched this thing unfold hoping that reason and civility would once again take hold. It hasn't. If someone wants to post tripe about the New Paradigm being the Last Paradigm about to bring heaven to earth then you had better go over to one of the stock brokerage sites and raise your glass with the rest of the spinmeisters. It ain't gonna happen here. On top of that, I didn't want to present USAGOLD as the ultimate protector of FOA for his benefit as well as the table's in general. As it turns out, that may have been an error. An attack on that gentle soul seems to have been an attack on us all. Anyone else in the mood to have their code pulled? I'm still here and I'm still watching. My hope is that FOA will return despite the now apparent orchestration to run him off. That orchestration appears to have an over-riding purpose. I'm not going to bother answering this Rainman's absurd charges. I would like nothing better than have FOA at his seat at this table right now and have clowns like Rainman pounding salt with the rest of the paper money crowd somewhere else. Why do these people want to spend time here anyway? I've had it. I'd rather see this place go down in flames than give an inch to the rabble and anti-intellectural pretenders who would attempt to undermine the work of a lifetime -- mine, FOA's Another's as well as the countless others who struggle with ideas here and try to make some sense out the complex situation we are faced with.

I'm going to start pulling codes. Most of you know the line. Those who don't will quickly find out where it is.

Leigh and all the others (too numerous to mention) I appreciate your courage and style in standing your ground. Don't worry I won't let this go any futher.

USAGOLD

(02/02/2000; 19:08:32 MDT - Msg ID: 24152)

admin

In case anyhone has any doubts about the previous post, it was me. Hit the wrong code. MK

goldfan

(02/02/2000; 19:11:02 MDT - Msg ID: 24153)

Jason Happy (2/2/2000; 17:57:56MDT - Msg ID:24143)

More Bad Math Thanks Sir Happy, when I read your post I laughed out loud!! Gold at #25300/0zX40 % = $10000/0z. So I was out by 10!! At today's POG of 285, the dollar is over valued by 97%!! Banking risk indeed. Maybe there's something wrong with my reasoning. But I agree that under this scheme, Yahoo and the others are priced about right. So those who rotate soon into the resource stocks, the "value" plays will get a huge reward. Trouble is, it'll cost $200 for a Big Mac then too..

FWIW in gold

Goldfan

CoBra(too)

(02/02/2000; 19:15:54 MDT - Msg ID: 24154)

Mr. Rain - Man, I agree you're an intellectual - micro-soft -

and please don't ever consider I may be in your league. Your'e already too smart for yourself and BTW you'd never stop to reconsider to leave some crumbs of your wisdom to some of the less advantageous in(-in)tellectual cripples, trusting your efficacy.
Po{u-o)r(ing) Man, when you've grown out of adolescence and still remember your gracious distribution of knowledge please, be kind enough to remember the few (no, not precious) remarks of goodwill, directed to a generation of
generated "B{N}-itwits"!
As an afterthought, I hope my antics in antique lingo are not too disturbing for your Intel(lect)!

HI - CM - will answer later!

goldfan

(02/02/2000; 19:20:59 MDT - Msg ID: 24155)

Safe Spaces for Conversation and Debate

Higher Authority

The idea of every man, or woman for themself is maybe ok as a dream, an ideal. All independent, cooperating in peace and harmony without need to appeal to a higher authority to settle disputes. But it is in the history of humans, or animals, for that matter, IMHO unworkable. Just look at this site. FOA and others, can't coexist with a nuisance like PF. The cry is, MK please rescue us. Make some rules, MK. Enforce them! Thanks MK, it takes Bear energy to keep the space safe.

So we need governments. Maybe the socialist experiment has gone too far in some cases. But the aim is noble. To find a way to live and cooperate together based on the idea that you can't measure value by money or power alone. Given human weakness, I'm a bit suspicious of the thought that we can do it all with volunteer charitable organizations. The ones I've known are also prone to become burdened with power politics and sometimes with cabals pushing a particular personal agenda, that satisfies them but none outside their group. And even the ones that do work, wind up with 5% of the people doing the work that all ought to cooperate in. Like school parent committees. Half educated half wits become president by default.

In this area, the pre-Ojibway people (pre 1500) had a civilization that stretched from the Great Lakes to Winnipeg, and lasted in harmony with each other and the land, for over 4000 years. One of the most successful civilizations of all human history. How did they do It?

And I'll bet they had something like gold, for money, and as a store of precious value. Probably shells from the far away Caribbean, and so, scarce.

FWIW

Goldfan

RossL

(02/02/2000; 19:24:22 MDT - Msg ID: 24156)

Sign of the times?

I have noticed some "gold is dead", "sell all your gold and gold stocks" messages popping up on several investment forums recently. It's just like the propaganda that appears in the major media from time to time. Could it be an orchestrated reaction to something that GATA is doing?

Also, the Reg Howe piece on Golden Sextant is really drawing some widespread attention.

The gold shorts are starting to sweat.

Cavan Man

(02/02/2000; 19:33:20 MDT - Msg ID: 24157)

CB2

Don't stay up too late tonight. BTW, I had $140 greenbacks left over from last month so I bought a 4 Ducat minted 1915; might be a restrike? I am developing a taste for Austrian coins. Perhaps someday I will vist your beautiful country!

koan

(02/02/2000; 19:36:22 MDT - Msg ID: 24158)

Platinum, palladium and rhodium still rising!

This is headline News folks! Why the above is important to gold and silver is because it will stimulate speculation. why it is probably real is because it is based on supply shortages and supply / demand fundamentals in a mkt that by and large is anti speculation . I have been loading up on platinum and palladium plays, and am nervous, but the power of the above move cannot be ignored. I am watching gold and silver very closely. Russia supplies, I think, 60% of the worlds palladium and have suspended supplies. Auto makers are short palladium. Why would Russia speed up supplies when the price is rising so well. If I was Russia I would drag my feet and then just feed the mkt slowly - we'll see.
What the inflation talk does is give a positive backdrop for an upward move.

Cavan Man

(02/02/2000; 19:42:35 MDT - Msg ID: 24159)

To USAGOLD Forum

RE: FOAHello to all. I'd like to offer a ransom (yes, you guessed it, in GOLD)for our friend's return but need help.

I offer one King's Head Sov.; George or Edward, take your pick not UNC just XF (sorry). Who's with me?

MK can pass the hat and make arrangements for delivery.RSVP

goldfan

(02/02/2000; 19:56:06 MDT - Msg ID: 24160)

Peter Asher signals jammed

emails to peter@peterasher.com come back with earthlink unknown. Maybe you're not hooked up at home yet?

Goldfan

nickel62

(02/02/2000; 19:56:51 MDT - Msg ID: 24161)

Who did you think FOA?Another was anyway the Easter Bunny?

I personally don't care who the various posters are in "real "life, that is their own business. What is very graciuos of them is to spend their time helping all of us become smarter and better informed. For that I would like to thank all of you and add my hope for a return of all missing members who have contributed so much to my understanding of a subject I have been studying for most of the last twenty five years. The sharing of information and knowledge is a very powerful tool.Goldfan thank you for your earlier post, it was very enlightning.

USAGOLD

(02/02/2000; 19:58:54 MDT - Msg ID: 24162)

Follow-up...

While I'm venting, let me make another point. The purpose of this Forum, believe it or not, is not simply to generate profits for Centennial Precious Metals. It is also to promulgate an idea -- that idea being in its simplest frame of reference -- Sound Money. As we are all learning there is a whole universe of thinking that attends that concept. Centennial will get its share of the gold market whether or not this Forum exists. At the same time, I will not in the least bit underplay how important its been to the current and hopefully future fortunes of this gold firm. Have you ever noticed though how many times I have failed to respond to questions from the Forum that would have been considered an excellent sales opportunity by any investment broker? (Stranger, you know what I'm saying.) Have you ever wondered why I do not run any ads here? Why we only lightly toot our horn from time to time? Have you wondered why I haven't commercialized this site? Don't get me wrong. We have done fairly well over the past few years and God-willing we will do well in the years to come.

This Forum was originally created as a place where people of a like mind with respect to gold could have a place to gather and discuss their views, their opinions, their lives. I consider that and that alone to be of extraordinary importance and I am proud to be able to provide it. USAGOLD is a dream realized. Up until places like this existed, people who felt as we do about the nature of money, economics and politics were completely shut out from the public discussion. The fact that FOA and Another were around to help launch the site was a happy circumstance for me and the rest of us who first gathered here. At the same time, they were the catalyst. It was their acceptance of my invitation to post here that made it all possible. It was even a happier circumstance for me to see the intense level of thinking, interest and ideas that evolved here as a result of their presence right up until some of the strong posts from this afternoon. (I wish I could name names but I am sure I would leave out a shining star. I don't want to do that.) Do I agree with everything FOA and Another espouse? No, I do not. Anyone who has read the posting carefully can see that. But I do revel in the level of discussion among highly intelligent people that come here simply because these two teachers have decided to camp here for awhile. I have this strange notion that the pen is indeed mightier than the sword and this Forum is my testament to it. So in this way I am in all of your debt. You have made this more than I ever thought possible. This place was created for the gold investor and that's the way it will stay. Thank you, my friends and fellow goldmeisters. Let us hope that we ALL continue to walk this road together. And may this Mighty Oaken Table, like the subject discussed over it, never lose its luster.

SteveH

(02/02/2000; 20:19:46 MDT - Msg ID: 24163)

Speaking of gold and its protection

http://www.i-charity.net/sw.cgi/ptn/list/4?sid=4275This is a petition to support the Second Amendment, which protects the "right to own gold."

CoBra(too)

(02/02/2000; 20:20:00 MDT - Msg ID: 24164)

MK - Admin - well spoken - thank you

- We all feel part of your family - please accept our gratitude for the site your providing - See you in Denver-
CB2

canamami

(02/02/2000; 20:28:37 MDT - Msg ID: 24165)

Possibly Defamatory Posts

MK,

I am writing because I value the excellent Forum you provide, which facilitates the exchange of ideas for those of us who post and lurk.

It would appear that at least a couple of recent posters were actually aiming to damage your business. Some of the others may have been aiming at that, or were just simply disturbed individuals. You may wish to retain the services of a some sort of cyber-detective, to ascertain the identity of these individuals. An action for defamation could lie against them if they can be identified (I believe the torts are called "injurious falsehood" and "slander to trade", and there are probably others a defamation lawyer could identify). Obviously, if some posters are trying to harm your business or impugn your business character, some sort of action to suppress such activities may be required.

Yours truly,
canamami.

SteveH

(02/02/2000; 20:34:04 MDT - Msg ID: 24166)

Speaking of posturing

I took the recontracting post earlier regarding oil and the Euro as doublespeak for posturing oil payment in Euro's. Am I stretching that or are others thinking what I am thinking: oil payments in Euro are close at hand?

Cavan Man

(02/02/2000; 20:39:41 MDT - Msg ID: 24167)

Derivatives: Europe and America Part Company Again

http://www.prudentbear.com"In yet another sign of Europe's increasing philosophic divergence from the US FED and Treasury, the European Commission is expected this month to call for banks to account more fully for derivatives, stepping up pressure on the banking industry to reform and more fully disclose the nature of its risk position in financial statements."

canamami

(02/02/2000; 20:40:32 MDT - Msg ID: 24168)

Reply to SteveH - "Currency Basket" Settlement

It could be that the Arabs are moving to accepting more than one currency for oil settlement. Several months ago (I posted at that time) it was suggested on CNBC that the Arabs could move to "currency basket" settlement. When asked to respond to the "currency basket" rumours, the "guru" of the day said that that possibility had been talked about for a long time, but would never happen. What was the title of the Bond movie...."Never Say Never Again".

SteveH

(02/02/2000; 20:47:09 MDT - Msg ID: 24169)

canamami

Seems like a first step to the Euro for settlement to me. Slow switchover instead of a leap.

Sure seems like this is all tracking just like we have been talking. Scary, eh?

TheStranger

(02/02/2000; 20:50:52 MDT - Msg ID: 24170)

Michael

BRAVO!

goldfan

(02/02/2000; 20:54:04 MDT - Msg ID: 24171)

nickel62 (2/2/2000; 19:56:51MDT - Msg ID:24161)

Greetings Sir n. ou said, and I want to heartily agree
>>>>>> What is very graciuos of them is to spend
their time helping all of us become smarter and better informed. For that I would like to thank all of you and add my hope for a return of
all missing members who have contributed so much to my understanding of a subject I have been studying ...... The sharing of information and knowledge is a very powerful tool.<<<<<

You also said, very graciously,

>>>>Goldfan thank you for your earlier post, it was very
enlightning,<<<<<<<

I'm wondering to which of my posts you were referring?

Thanks
Goldfan

Solomon Weaver

(02/02/2000; 20:57:33 MDT - Msg ID: 24172)

risk - the measurement of the unexpected

goldfan (2/2/2000; 12:57:11MDT - Msg ID:24122)
Risk-taking and Economic chaos
------
Goldfan, perhaps you have had a haughty draft of our special brand of ale....I noticed that you did an excellent job of listing all of the "risky" behavior at multilevels in the web of human economies.

Please consider my humble advice (remember I am an Earl Grey Tea totaler):

One great definition of risk : the mathematical chances of an "unexpected outcome". The risk of my stepping off a yellow line painted on the road can be identical to the risk of my stepping off a beam of the same width suspended across a chasm (as long as I am emotionally stable enough not to affect the outcome by my concern of the difference in the stakes).

In my very limited understanding of chaotic mathematics, one uses such math to describe the behavior of an "oscillator". Particularly interesting to the mathematician is the "simple mathematical pattern" which underlies the "apparent chaotic" movement of the oscillator at the boundry conditions. Chaos math seeks this pattern, but it is not able to predict an outcome in the same fashion as Newtonian mathematics would. Chaos seeks to describe systems which are outside of classic boundries.

In the same fashion, changes in the oscillation of economic activities, which appear to be outside of "classic" analysis, may be understood better by using this chaos math...but why choose to study risk? The various parmeters you suggest are not units of risk.

What is amazing in my opinion is that given the "stakes" involved (for example the financial survival of retirees who have saved their entire life and have no options to earn new income) that we have developed many investment games which because they are sold with glossy paper brochures are just sitting ducks waiting to have an "unexpected outcome" (i.e. eventually enter into a high risk mode). You don't need chaos math to make this story any more compelling.

---

By the way, if the only way to claim ownership of stock is to ask for the coupons, does this mean that I am entitled to ask the broker who manages my IRA (tax defered) to send me certificates to be held at home????

pdeep

(02/02/2000; 21:02:18 MDT - Msg ID: 24173)

Bond Buy-back

http://www.publicdebt.treas.gov/opd/opdpenny.htmHere's a question I have been trying to figure out.

The Treasury tells us it is buying back T-bonds with the "surplus." However, the "surplus" is wholly due to social security cash which is spent in the current year and turned into T-bonds. Hence, any "surplus" is generated by buying a long term T-bond and placing it in the Social Security Trust Fund (so-called). One can verify that the Treasury Public debt continues to increase.

If this is the case, if the "surplus" is already called for by a T-bond, how can the purchase of T-bonds lower the Treasury Public Debt figures? In fact, how can it put pressure on the long term bonds at all?

I'm sorry if this is a naive question, but I cannot seem to wrap my mind around it.....

Canuck

(02/02/2000; 21:11:52 MDT - Msg ID: 24174)

USAGOLD

" PERMAFROST and RAINMAN belong ON the barbeque grill. I would enjoy hearing them sizzle and pop."

Even our lady Leigh can spout off from time to time, as it seems.

Permafrost's departure (I assume) was late in coming, yes?

DIRECTOR

(02/02/2000; 21:20:49 MDT - Msg ID: 24175)

BRAVO FOR MK

Thank you to MK.I have mostly been a lurker at this fine Forum. But it does irritate me to see some of the recent unwelcome Posters that have shown up here. Thank You MK for defending yourself and this great FORUM that you provide for us.I would only ask that in the future you would discard such unwelcome Posters as soon as you notice them.You have the right to do so,and there should be no interference from anyone here about your decisions. We all know you are a FAIR AND HONEST PERSON. There should be no pleading from anyone on this FORUM to let anyone come back that you have judged as bieng undesirable.So please keep us proud of you and the FORUM.And I plead of you FOA,to PLEASE come back and guide us on the TRAIL so we won't be triping over any logs that may fall in our path.And Thank You to all the GRREAT POSTERS here,and you are all GREAT. Except of course the occasional ones that MK is dealing with.

goldfan

(02/02/2000; 21:25:10 MDT - Msg ID: 24176)

Solomon Weaver (2/2/2000; 20:57:33MDT - Msg ID:24172)

Sir Solomon Thanks for your remarks on my "risk-y" post. I'll think a bit on what ye've said there and let ye know in the mornin if any thin else occurs t' me...

As for your stock certificates, In Canada, we have a thing called an RRSP which I think is like your 401k, and the certs there are held in trust, by a trust company, because they are tax deferred and belong to the government as well as to the purchaser. So these should be safe from the clutches of the broker's creditors. But I don't know about IRA's, if the certs are in street name, unprotected by a trust company, then you should certainly ask that they be delivered to you, in your name, at home. You own them, you're entitled to them. The broker will probably charge you something to register them.

Nothing is as good as Au
Goldfan

TheStranger

(02/02/2000; 21:28:31 MDT - Msg ID: 24177)

What Is the Fed Looking At?

http://dailynews.yahoo.com/h/nm/20000201/ts/economy_fed_1.htmlI think it is a measure of the value of this forum that everything you read below was thoroughly spelled out in advance RIGHT HERE, MANY MONTHS AGO! It brings me pleasure in the extreme to see it now in the popular media. There is but one piece of this forecast which remains to be fulfilled. If we can just keep Canuck in his seat a little bit longer.

From Yahoo Business News:

"...two key inflation indicators released on Friday were certain to raise some eyebrows at
the inflation-phobic Fed.

Inflation across all sectors of the economy, measured by the implicit price deflator in the
gross domestic product report, rose 2.0 percent in the fourth quarter, almost double the rise
in the previous quarter.

Workers' pay and benefits increased a larger-than-expected 1.1 percent in the fourth
quarter, according to the government's Employment Cost Index data. The ECI saw the
biggest quarterly jump in benefits costs since early 1993.

Finally, Fed officials frequently mention that a number of temporary factors which conspired
to keep U.S. inflation low in the past few years are now heading in the opposite direction.

Weakened economies in Asia are springing back to life, oil and commodity prices are
gaining momentum and U.S. healthcare costs are rising too.

Consumers Spend With Abandon, Workers Running Out

One of the Fed's chief concerns is an imbalance between supply and demand. Consumer
demand is extraordinarily strong, but the workers needed to produce all the goods or
provide all the service they demand are in increasingly short supply.

``Demand is putting very significant pressures on an ever-decreasing available supply of
unemployed labor,'' Fed chief Alan Greenspan said last week.

Greenspan says a ``huge'' rise in stock prices was swelling consumer wealth and driving
demand to a level where supply could not keep pace without creating inflation."

Gandalf the White

(02/02/2000; 21:30:28 MDT - Msg ID: 24178)

"HoF" Nomination for Post # 24162

This golden gem should be mounted at the ENTRANCE to the "Hall of Fame". -- What say you all ? -- Seconds ?
<;-)

PH in LA

(02/02/2000; 21:44:49 MDT - Msg ID: 24179)

Acid Rain! & Perma Frost!

We always have to hold our noses, and try not to get any on our shoes whenever people like Rainman and Permafrost put in one of their idiotic appearances. Rainy has obviously been around Kitco long enough to know a little history. Well, so have I. Funny that I don't seem to recall anyone named Rainman going that far back. I do recall posters with the same stupid points of view, who also never bothered to prove anything they said either. Whose ideas were always destructive. Who delighted in stirring up ill will. Of course, these yahoos paraded around under a wide variety of handles. I remember one who boasted that he had eight passwords at Kitco at the same time... all valid (until they started getting kicked off, one by one). This same poster even had his own website where he never bothered to post anything at all (except to whine stridently when Bart finally kicked his ass for blatent bad manners). About the only idea he thought worth-while to post about was "arrows". His completely forgettable point was something about "arrows not meaning a damned thing". This is the mentality of Rainman. ie. No mentality at all.

How true to form that he still blathers on about "lost opportunity". As if all stocks always go up (or at least have for the last 18 years). How about that one Fleckenstein was talking about the other day? "Jnet.com" or something. $40 million market capitalization and the company's prospectus says "Presently the company has no business activity or prospects. It is seeking the right opportunity to merge with another company." How 'bout this one? Rained-on-man? Someone made money on this one. Was it you? If not, why not try to get some of it. It should be going up just as soon as it finds a company to merge with. Whatever you do, don't buy any of that useless GOLD! They're going to be giving that stuff away pretty soon! Maybe you have some laying around that you'd like to give me. On second thought, don't bother. I wouldn't take it from you. Give it to one of your clients instead.

As far as your STUPID, STUPID, STUPID idea that Another and FOA are Michael Kosares: Do you have any idea how hard it would be to pull off a deception of that magnitude? Hell, every time one of those Kitco jackasses tried to pass himself off as someone else, they were always spotted right away. Hepcat, RJ, LGB, etc. And they think MK could do it. HA! All those assholes tried, and made laughingstocks of themselves. Now they want to show up here as Rainman. Or Permafrost. What jokes!

It's always the same story. They think they smell a little blood in the water and they start oozing out of the woodwork again. With the same laughable story. Like chickens pecking an injured hen to death.

But there is no blood in these waters. FOA/Another have not conceeded the field. They are just revolted by the likes of Rainy and Permy.

So am I.

PS. Sometimes only one kind of language says what has to be said. It is not profane. It is real.

koan

(02/02/2000; 21:51:06 MDT - Msg ID: 24180)

inflation

I agree completely about demand and "wealth creation" being inflationary. And high oil prices just exacerbates and speeds up the inflationary pressures. Where it ends is anybodies guess. I would expect the feds to continue to tighten to try and gradually slow down the mkt. Pretty basic analysis - hardly worth my mentioning .

Goldfly

(02/02/2000; 21:54:06 MDT - Msg ID: 24181)

FOA - Remember....

Remember? (As near as I can recall....)

"Boys they are that shout at the wind. But a strong wind has no ears!"

TheStranger

(02/02/2000; 22:02:29 MDT - Msg ID: 24182)

koan

They haven't even started to tighten. These quarter point increases in light of what's been done to the money supply are a joke!

Jason Happy

(02/02/2000; 22:22:04 MDT - Msg ID: 24183)

Right on!

http://www.i-charity.net/sw.cgi/ptn/list/4?sid=4275SteveH, I went to the second amendment website url you gave, and in the time it took me to read the page and sign it, 30 other people had also signed the online petition. Up to 4494 at this time... Yahoo! (tm) oops, I mean, Yee Haw!

goldfan, 8-)

Journeyman

(02/02/2000; 22:22:40 MDT - Msg ID: 24184)

Much ado and many wasted man-hours about nothing @Nearly ALL

Aw, look folks, just ignore these guys if you don't like 'em! Echoing YGM & Nickel62 was it? I really don't care who comes up with good ideas and challenges, or what they call themselves. Ditto the drivel. "Journeyman" isn't really MY name, you know!

Just ignore what you don't like -- if it goes away, fine. If not, continue to ignore it.

And don't let FOA's squimishness infect the whole culture here --- pretty soon I'll be afraid to write my mind for fear of hurting someone's feelings. When that happens, I'll banish myself!

Look, every time one of these folks posts, they get more column-inches in reply than FOA, ORO, and TC combined --- from YOU!! That's probably the main reason many of them do it. I bet they're gleefully counting up the responses and the man-hours it took you to write those responses right now.

RELAX,
Journeyman

Jason Happy

(02/02/2000; 22:28:18 MDT - Msg ID: 24185)

HA HA!!!

http://www.i-charity.net/sw.cgi/ptnIf you go to the home page of i-charity, above, you will see that they run several online petitions...

I just about lost it, when I saw that the first petition offered is an ANTI-gun petition, and I thought that I unwittingly just supported the enemy by giving these guys any sort of publicity. Oh no! After all, the anti-gun petition is listed first!

Then, I went and checked the numbers, to see how many people signed the "stop the guns" petition... Grand total? Are you ready? 29! HA HA!!!

Marius

(02/02/2000; 22:42:09 MDT - Msg ID: 24186)

On MK's rules, thin skins, & civility

I must admit that I missed the actual catharsis which caused FOA to withdraw from the forum. Forgive me, but I was preoccupied battling this rather nasty upstate NY winter. I've commented before on MK's absolute right to regulate the discourse here, and I appreciate the relative civility at this forum.

However, I think one needs a certain epidermal thickness if you're going to put prognostications and theories on the table, particularly in the rough and tumble world of the InterNet. The majority of the forums I've visited (prior to this one) are frequented by barbaric, illiterate slobs. Anything you say out there can get you "flamed"--not just challenged rudely, but shouted down by the mob. It's not for the faint of heart, or the overinflated ego.

I can't say I completely understand or agree with all of FOA's theories and predictions, but I appreciated being able to read them. I pass over a lot of stuff here that I view as either incomprehensible, or pure wind, but I always come back in the hope I'll find that one tidbit that sheds light on some issue. That will continue to be the case with the reassurance that Michael isn't afraid to kick a little butt when the circumstances call for it!

THX-1138

(02/02/2000; 22:44:07 MDT - Msg ID: 24187)

Judicial Watch Question

http://www.goldensextant.comIs there any information within the article "Two Bills" that Judicial Watch could use to prosecute Bill Clinton with?

I was trying to decide whether it would be useful to send that article to them.

A guy can always hope can't he.

ORO

(02/02/2000; 23:02:53 MDT - Msg ID: 24188)

18K - the value and the last price

The setting of prices at the margin

You wrote in response to goldfan:

>The higher price for one house on the block, causes a revaluation of all the other houses. Their owners rush out to the bank, find yes indeed, the bank will increase their mortgage. So one sale creates 10 mortgages, the proceeds go into stocks, where one sale creates 10x the valuation in the stocks not on sale, increasing margin available for their owners, and generating yet more sales. Is this not money creation? It is certainly, the "illusion of wealth" creation! Maybe it's only money if we can spend it

You are raising a fascinating question here. Given that security trading only occurs at the margin why are all securities of the same type valued at the same price. You know: Why do we value all shares of Microsoft at the last trade when in fact many of those individual stocks were last traded at totally different prices.

The concept is known as fungibility i.e. the idea that all equivalent securities are interchangable. It is really a convention. In practice if everyone tries to sell their shares at the last price traded they will simply drive the price down. The truth is that the value of a security is what you get for it at the time you sell it. Any other price at any other time is notional. Of course that doesn't stop margin lenders from lending against the security at its notional or "current market" price.
The fact that there is no real connection between the current market price and what the security will actually fetch in the fullness of time when you sell it, is one of the things that makes margin lending the most dangerous game in town for both the lender and the borrower.
------------------------------------

The value of nothing

There is a separation of value and price. At a given price one will find a given number of sellers at otherwise identical market conditions. The value of something to the seller, in his circumstance, and in monetary terms - is obviously lower or equal to the sum of the price and the associated expenses of the sale.

The buyer, obviously sees the value of the purchased item to be higher than the price paid. Otherwise, the price at which the deal was consumated would have been different.

The price is set between two valuations. It is to the mutual advantage of both parties under the circumstances.

The price of everything

For the financial markets, as with any others, including real-estate, prices are set at the margin both by those wishing to sell and those willing to buy. Those who do not sell value the item more highly, those who do not buy either have not the interest or the means - or they just do not think the value is below the price.

Prices in times of panic and liquidation are often the result of irrationality of fear (also the buyer's fear of opportunity loss) and that of involuntary actions such as bankruptcy and margin calls, as well as the occasional result of automated trading. These are the result of a change of circumstance.

Often one finds that Graham's security analysis methodology which values a business in rather strict terms is the correct way for an investor to choose among opportunities. It is not to the trader's advantage to seek value but to follow the conditions dictating price, most prominent among them the mood and the psychology of the markets.

Here comes too the point of common opinion. People tend to hold common beliefs that are wrong because they are uninformed, disinformed, or do not think for themselves. Most people are wrong about most things most of the time. The only things where common views are correct are when people see the obvious, or have been carefully educated till their understanding is sufficiently close to complete.

The common contrarian instruments of traders have had great results but are still not adopted by everyone. Indeed, they would not be contrarian if they were. In many cases, the momentum of a market may continue well beyond the point where contrarian indicators go on "red alert" as a strong wind of psychology may be reinforced by true or false news and reports.

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

Buying the house in the example you discuss sets the expectations of the people of the neighborhood, telling them that the value they had assigned to their home was appropriate for the time and are happy for not selling. The people who did not buy but were interested in buying would either be saying "I can't believe they paid so much", or "I wish we bought when prices were lower".

As prices continue their trend one finds certain threshold levels are reached where vast numbers of people decide to sell since the improvement in other areas of life relative to the option of staying in the same house when such a good bid price is available is just too much for them.

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

To put it in a nutshell; prices are set by those engaged in trade but also those who do not participate in the trade still have a part in dictating prices by their decision not to sell or not to buy.
It is, therefore, justifiable under most circumstances to use the last price as the measure of price for the whole inventory.

tedw

(02/02/2000; 23:03:34 MDT - Msg ID: 24189)

INTEGRITY

http://www.usagold.com
I thought the article on the Golden Sextant was great.

I only have one thing to add. Denials by the Treasury Secretary (verbal or in writing) mean nothing. The Treasury
Secretary answers to Bill Clinton.

I think Bill has proved he can look us all in the eye and lie. And I see no credible evidence that he has had a change of heart.

He has no integrity. Adolph Hitler signed an agreement not to Invade Czechoslavakia and it meant nothing to him. Our Government at the highest levels is wicked, without integrity, and their denials or promises mean nothing.

Golden Truth

(02/02/2000; 23:15:46 MDT - Msg ID: 24190)

TO CAVAN MAN & F.O.A

Cavan Man count me in for a 1/10oz GOLD Maple Leaf to have F.O.A return, i can mail it to C.P.M, if Sir F.O.A accepts your gracious offer!
G.T

Skip

(02/02/2000; 23:25:15 MDT - Msg ID: 24191)

2nd for "HoF" Nomination for Post # 24162

Gandalf the White (2/2/2000; 21:30:28MDT - Msg ID:24178) submitted "HoF" Nomination for Post # 24162.

I second that nomination.

--Skip

koan

(02/02/2000; 23:32:44 MDT - Msg ID: 24192)

money supply and inflation

I am sure you are right Stranger. Money supply theory is simply outside my arena of knowledge. Wish I knew more about it.

Farfel

(02/02/2000; 23:44:47 MDT - Msg ID: 24193)

Swimming in the New Paradigm....

So this week Qualcomm announces a pact to sell its wonderful products in China, and the stock rises 20% in a flash.

But when the Chinese government recently announced it is allowing retail gold sales to the Chinese people (potential one billion customers) for the first time in ages, the gold price failed to register its own immediate 20% gain.

Where is the syllogism here? There is none.

Where is the consonance in logic? There is none.

It's called "The New Paradigm," and it is truly a Wall Street scam to end all scams. Nobody other than Bill Clinton and his merry gang of manipulators could have conceived of such a scheme.

Thanks

F*

YGM

(02/03/2000; 00:09:02 MDT - Msg ID: 24194)

Apologies if this has been posted previously.........

http://www.mcalvany.comAn Urgent Message from Don McAlvany:

Dear Friend,

If you are anything like me, you are growing increasingly perplexed by the price action of the financial markets. This past year the Dow Industrial Average was up nearly 25%, yet two-thirds of the stocks listed on the New York Stock Exchange were down! In fact, over 30% of the stocks on the NYSE hit their 52-week lows during the week of December 17th.

Additionally, the NASDAQ composite index was up an unbelievable 86%, yet virtually the entire move was accounted for by only four issues (Microsoft, Intel, Dell, and Cisco). Again nearly half of the stocks listed on the NASDAQ were down for the year! According to Media General Financial Services, a Richmond, VA market data company, the 1999 figures for the three major stock exchanges are very sobering. They reported that 4186 stocks declined in value, while only 3397 rose in value. Furthermore, if the interest and high tech stocks are removed from the equation, the stock market performed horribly last year.

Why then do investors seem to have such a peace about their stock portfolios? I believe we have been massively distracted from what is really going on. The news media is reporting only part of the story. Our attention is continually directed toward the indexes (like the Dow), toward the price action of the Internet stocks, toward the high flying IPO's (Initial Public Offerings), and toward the latest and largest takeover mergers. All these elements give the illusion of success, well being, and growth. But what is really going on?

For the vast majority of stocks, there is an ominous story developing. Stock yields, as measured by dividends are at historical lows (less than 2%). Price/Earnings Ratios (P/E ratios) are absurdly and historically high. Why aren't investors responding differently to the fact that 63% of the stocks listed on the NYSE are in a market decline?

I have been warning our readers of these facts while trying to make sense of some of the other financial markets. Long-term bonds, for instance, turned in their worst performance in over 20 years! 30-year bond values dropped nearly 25% from December 18, 1998 to January 12, 2000! During that 13-month period, interest rates soared from 5.0% to just over 6.7% (a 34% increase!). This jump in rates has actually devastated the market value of the 30-year Treasuries. How can investors remain so complacent in light of such grim results?

What is actually behind the rise in interest rates? What is causing this enormous shift to take place in the markets? I believe the answer lies in what the Federal Reserve has been doing while we were all being effectively distracted in other directions. Last year, the Fed embarked on the very perilous course of rapidly expanding the monetary base. So rapidly, in fact, that we now face some serious repercussions. We remember all too well the painful consequences of double-digit inflation in the late 1970's. But how many remember the reason for that inflation? The inflation that we experienced in the latter half of the 1970's was a direct result of the monetary expansion that took place in the preceding years.

The definition of inflation is an expansion of the money supply. What we term "inflation" generally refers to the rising prices of goods and services that we "see" and "feel." Yet rising prices are the result of inflation, not the cause. The problem is caused by excess dollars in the system vying for or chasing the same number of goods and services. In a perfect economic model, the money supply should only expand as rapidly as the growth of the economy, only as fast as new goods are created. But this isn't what has been going on.

The Fed has been on a "drunken binge" recently. According to the U.S. Financial Data published by the Federal Reserve Bank of St. Louis, the following increases have taken place. The Adjusted Monetary Base for the last two months of 1999 was up 48.1% on an annualized basis. For the entire year it was up a full 16%. Adjusted Reserves were actually up 41.8% for the year with an annualized rate of over 100% for the last six months!

The Financial Times of London reported in their January 10,2000 issue that in the three months ending January 3rd, the consolidated assets of the U.S. Federal Reserve Banks surged an annualized 64.3%!

These are huge increases. In their attempt to insure liquidity for our financial markets, I fear the Fed is on a collision course with inflation. The decade of the 1970s should serve as a cruel reminder of what happens when the restraints are removed from monetary expansion. It was a time when the government "ran the printing presses." Double-digit inflation ravaged the average investor. It only subsided with Paul Volker finally and decisively cut credit and raised interest rates to astronomical levels. (Remember interest rates between 18-21%?)

The Fed has only two choices now:

1. To cut back on liquidity, raise interest rates, and stop credit expansion; or

2. To continue to expand the money supply at an ever increasing rate to maintain and prop up the financial markets.

If they do the former, the U.S. could be thrown into a severe recession/depression. Stock prices would collapse and the current "prosperity" would come to an end. If they choose the latter, we could literally be heading towards runaway inflation. Neither choice is easy - both could end very badly.

What about the gold market? Of all the economic and world events that can affect the price of gold (ie., currency devaluation, economic uncertainly, military action, a rush to liquidity, Central Bank selling, etc.), inflation clearly stands out as the most dominant influence. In the same decade of the 70s, while the money supply was expanded and interest rates rose, the price of gold soared. Gold initially jumped from $35/ounce to $197/ounce before retracing to $102. From there gold continued its meteoric rise until it hit $850. Although gold's performance has been lack luster in recent years, it is worth noting that it still trades at eight times higher than it did in the early 1970s. Remember too that the purchasing U.S. dollar has lost 85% of its purchasing power since 1972.

Gold has always served as the world's "safe haven" for money. If we indeed are entering a period of inflation, we would all be well-advised to hedge against rising interest rates, lower corporate profits, falling bond prices, and a continuing decrease in the purchasing power of the U.S. dollar. The best insurance I know of for an economic portfolio is gold. Because economic trends today tend to be global in nature, I would expect world demand for gold to increase significantly over the next 6-18 months.

During a single day of trading last year, gold jumped $44.00. This was during a period of reasonably secure and normal markets. It was announced that the Central Banks might cease their gold liquidations. However, what would happen in a day or in a week if panic actually set in? There would be little or no time to act or react. I continue to encourage our investors to purchase gold now in quiet markets while it is still vastly under-priced. No one waits to buy fire insurance until the flames reach the second story at their house. Please don't wait to protect your portfolio until it is far more expensive to do so, or until there are too many others trying to do the same thing. I encourage you to read the information throughout this site carefully. I believe it will prove to be very helpful in preparing for the uncertain times ahead.

Sincerely,

Don McAlvany

YGM

(02/03/2000; 00:26:40 MDT - Msg ID: 24195)

GATA Bank Account Balance

http://www.gata.org$148,698.00.......not too shabby for 12 months of so-called disgruntled gold stock shareholders whining....I think it was Martin Armstrong that dismissed GATA as such.........How's the cell Martin? Did you paint the bars Gold?......I truly hope your associates don't leave you holding the bag......They deserve MUCH more attention than you......Could be Rubin and his Goldman Sachs buddies will be paying the piper soon also.......YGM.

Peter Asher

(02/03/2000; 00:35:06 MDT - Msg ID: 24196)

Goldfan

Just got in. Robin forgot to cancel the forwarding from here, down to there and the dog was still chasing his tail. All fixed now.

Still reading 2/2 posts.

Chrusos

(02/03/2000; 01:24:45 MDT - Msg ID: 24197)

FOA

http://www.usagold.com/cpmforum/default.htmlDear FOA
As a serious lurker who relishes your posts as the best on the net I have come out of deep cover with a message of support. I am based in Cape Town. I read extensively on many sites but there is nobody who does it like you. I have clipped all your posts and together they read so coherently, elegantly and intriguingly. If you leave us here on the trail after guiding us for so long what shall we do?

From my lawyer's perspective your posts, uniquely, best articulate and fit the momentous times in which we live. Your trail guidance has pointed out the landmarks and territory, which I would otherwise wander in, lost, not really knowing where north is.

I am very happy to be billed as one of your followers � this does not mean of the slavish mindless sort but rather as a student who has found a wonderful professor with a special worldview.

Mr. Permafrost is aptly named as frozen sterile subsoil. I would be very upset too if I was in your shoes and he insulted and baited me in public. So I hope that MK will remove Permafrost. Substituting him for you is like giving us a worn out, stinky old vagrant's shoe for a Rolls Royce. I also enjoy all the other wonderful posters but to me you are the best and have profoundly challenged my thinking.

May God bless and strengthen you. I wanted to quote you something from the book of Sirach 6:36 part of the apocryphal writings of the Bible " If you find a man of understanding, get up early to call on him; wear out his doorstep with your visits."

Thank you for everything you have given us � I for one deeply appreciate it. Please keep leading us on the golden trail and sharing your wisdom with us, your digital friends from around the world

Elwood

(02/03/2000; 02:53:39 MDT - Msg ID: 24198)

Gold as Money

Aristotle wrote previously:

Aristotle (02/01/00; 14:42:52MDT - Msg ID:24055)
Journeyman and FOA

Begin quote:

Journeyman, in response to these words by FOA:
-------"a free world economy needs and demands a
currency that can expand and contract with changing
conditions. The curse of the old gold standard was that
it didn't allow this latitude and always created a
crisis when needs required this flexible money supply.
Only a separate gold market can offer a means to truly
measure the success of the money creating treasuries.
This is the direction we are heading, for better or
worse."------you, then, offered this challenge:
"I would suggest that any of us hard-core gold bugs who wish
to defend a return to some form of gold standard, need to
address the objection stated so well by FOA above."

The particular bone I have been gnawing on since the new year began has been an attempt to lay out the nature of a natural currency system in terms that don't overwhelm my own overtaxed brain cells--all three of them. It is very nearly ready for submission, and I can tell you now that the world as we know it needs, I repeat, NEEDS fiat currencies. At first blush, that my seem to run counter to everything that we stand for, but I assure you, it is the only way for Gold to truly have its day, as it should--as it will. The various failings in the past were due to a flaw in the architecture of the monetary system. If I have succeeded in my effort, the truth of the matter will be a source of extreme comfort to Goldhearts, and will strike everybody else as quite natural and, in fact, desired. The good news is that all signs point to the euro system as ushering in the repairman for the flaws in the old architecture. If they follow through with it, and get the support as needed, current Gold owners will reap the benefit of their foresight and wisdom--or else they will simply be basking as the beneficiary of plain ol' dumb luck. If these repairs are brought to completion, as I am inclinded to believe they will be, then we will never see Gold so cheaply obtainable--whether you choose to measure its price in dollars or by such means as loaves of bread.

End quote

Elwood replies:

No, Ari, I think this is one area where FOA has it wrong. Gold, like other forms of wealth, is nothing more and nothing less than an economic good. Like other economic goods its price, as determined by its value in trade with other goods, is set by factors relating to supply and demand. [Note: I'm speaking of physical gold, not paper gold.] If the supply of gold falls in relation to that of other goods its price will rise. That is, in a system which uses gold for money, the prices of other goods in terms of gold will tend to fall over time as technological advance occurs. This technological advance is what drives our civilization forward. Any society in which the laws and institutions promote the division of labor will experience this progress and economic growth.

FOA states, it seems, that our modern world, because it is modern, requires a money supply that is flexible or that is able to expand and contract as needs required it. This need cannot be fulfilled by a fiat currency since a fiat currency, history has shown, only expands. The same fate which is about to befall the dollar will, in time, consume the Euro as well, but that time is much further down this road we travel.

The reason that the Euro will be used widely in the near future is the choice that is being granted to those who engage in economic transactions: Gold or Euros. In essence, we have a system with parallel convertibility rather than the direct convertibility we've seen in systems of the past. This parallel convertibility will, at some point in the future, be outlawed due to its tendency to reduce the "flexibility" of those who issue the Euro fiat currency.

What I'm getting at is that, even today, gold, if used as money, will adequately suffice in that capacity. Over time as its value rises relative to other goods more will be mined or converted from other uses just as today more oil is produced when its price rises relative to other goods.

Regards,

Elwood

Canuck

(02/03/2000; 04:48:10 MDT - Msg ID: 24199)

Apologies

@M.K., LeighSorry re: last night.

Still a little choked re: FOA.

Still puzzled (re: PFrost) shots at Oro ("Lord ORO" - the financial wizard; and "pagan ARI" - the sensible/sensitive
aristocrat)

@Stranger: You are the MAN. Your finesse is only overwhelmed by your intelligence.

nickel62

(02/03/2000; 05:20:42 MDT - Msg ID: 24200)

Goldfan The post I was referring to was on the Three Risks.

"The problem here is the corporate philosophy that says that increasing the stock price is the goal, not providing a reliable product , cultivating the market for it, and providing long term employment to people in a healthy community."
You have pointed out many of the current problems in this article. Combining this with ORO's piece on the marginal nature of pricing assets at the value of the last sale leads to part of the answer in how we got here.
Twenty years ago I had the opportunity to visit the proprietary trading desks of several large Wall Street firms. This was in the quiet period between 1980 and 1982 when the stock market was a backwater and long term returns to equity for the prior ten years were 2% per year or less.Nobody and I mean nobody wanted to work in this business except a few obsessed individuals who thought stock investing was the only job in the world. The world of Wall Street was in transition from the clubby high commission old school tie days of the seventies , when "traders " almost always came from the New York fruit and fish markets and seldom had more than a high school education. They survived on their wits and their ability to do numbers accurately and reliably in their heads,thus the fruit and fish market served as a good training ground.The main trading room of Morgan Stanley (they had just started doing their own trading before that they had looked down on that part of the business)was a medium sized room with fifty or so people running around contacting clients over the phone and relaying the various bids and asks to a group of "position traders" who sat on a raised platform inthe front of the room so they could see the various sell side traders who sat at their phones and took calls from their respective client traders who worked at the major buy side firms. Thus a market was made. The power of the market was what determined price. But the really memorable thing was that under the raised table sitting on the floor was an MBA with a personal computer cranking the various information that the position trader wanted into the computer.now remember at this time personal computers were brand new and almost primitive. but what that young kid was doing was figuring out how to move the price so that the firm could make a profit on the block of stock they were positioning and resell it at a higher profit. ORO's analysis had been done by someone on Wall Street and they had figured out that if you could find a way to move that last trade all the stock you held could be "revalued" upward and maybe sold at that price. The various techniques of limited float and resricted stock and buy and hold investors could be manipulated by various means to make sure that the rest of the outstanding stock didn't reappear in the market to mess up your orchestrated price and vast profits beckoned. The simple story shows where this would lead. As index funds (and which stocks would go into them)
provided the means of generating predictable demand to be used to help lift stock prices when desired. The predictible nature of this index buying gave a clear direction of which stocks would rise and the effect this would have on future buying by how large a percentage this stock would represent in the indexed purchases of all future buyers. Pointing ut your vision of the unfolding dynamics allowed you to convince other non-indexed managers of the future price direction of particular stocks and thereby gain their willing purchasing power and/or willingness to buy and hold and therefore not mess up the manipulation. The targeting of uncooperative money managers with disinformation or convincing them to go short on stocks you were manipulating higher would both punish the non compliers and strengthen the play by providing additional non-price sensitive buying as the stocks that were shorted had tobe re-bought to cover at much higher prices. The use of delta hedging to protect the downside of clients could be sold at a price and this would allow the shorting of large amounts of a target stock that when the conterparties had to cover could provide explosive upside caused by non-price sensitive buying done in a panic as the underlying stock gets to levels not thought possible by other market participants. Those foolish enough to think they are playing in a free market are sucked in further as they continue to sell or buy thinking that the historical value points are still valid, or the techical trading points for that matter. In reality the game has been changed by the manipulators and these value and technical inflection points now become useful tools to use against their folowers. i.e. Get someone outside the game to sell a stock short because it is so obsuredly overvalued and then use your various tools to drive it much higher. Point out the direction to other follow the leader managers and they will jump on to help lift the price either through knowing cooperation or more commonly through the fact that they are twenty something kids who haven't a clue. So I now know where the young man sitting on the floor under the Morgan Stanley position trading desk has gone. Ultimately to allow the wiping out of my generations retirement savings through the concentration of indexed funds in a hand full of ridiculously over-valued "blue-chips" who are doing exactly what goldfan has so eloquently pointed out. Producing false earnings and restricting the shares outstanding and using all the corporate cash flow and additional borrowing power to enrich themselves and the investment bankers who help them control the deal.

18KARAT

(02/03/2000; 06:05:41 MDT - Msg ID: 24201)

Re: ORO (2/2/2000; 23:02:53MDT - Msg ID:24188)

Wealth and value.I heartily agree, Oro, with everything you said, but you know, it's still a very curious thing that Goldfan is drawing our attention to.

Let's say Microsoft's market cap goes up by a couple of billion dollars today as a result of a small rise in its share price negotiated by the few people who actually traded. and of course implicitly consented to by all the non-traders.
There is no corresponding movement of money that has occurred to explain where that rise in value has come from.
There is no place where a few billion bucks has disappeared to explain how it came to be in Microsoft.
The value of the wealth in the stockmarket is simply not a conserved quantity.
Likewise no-one had to labor to create the billions of extra dollars wealth.

Let's say a bunch of speculators go mad and drive up the price of a stock, daytrading amongst themselves.

The whole of the market finds itself so much wealthier.
In so far as the stock can now be sold at its new value, for dollars. Does this mean that money has been created?
and is it not true that even if you sell a share at twice the price at which you bought it, no money is created because the transaction of buying and selling is a zero sum game.
The share goes from seller to buyer, the money goes the other way.
The total wealth increases if the share is sold at a higher price than its previous transaction.
Yet no money has been created.
The money has changed hands at a higher rate of exchange relative to the shares.
Yet, the total number of shares and dollars that exist after the transaction is exactly the same as the number that existed before, though they are in different hands.
You could of course argue that the utility or public good has increased because both the buyer and seller are happier.
So is that what wealth is - a measure of happiness.

In 1987 when 40% (or whatever) of the capitalization of the market disappeared in one day.
Where did it go?
Who got richer when all those shareholders got poorer?
All those billions of dollars of shareholders' wealth just disappeared.
And the value of the shares is not just an illusion because you could at any time trade them for cash, houses, private jets etc...

Can you see why I'm suggesting that wealth defined by transactions at the margin in a securities market is purely a notional concept?
It really is just paper wealth until it's sold and in the bank.
Or exchanged for real goods.

18K

Black Blade

(02/03/2000; 06:19:05 MDT - Msg ID: 24202)

PM markets still look good, especially PGM's, look at Rhodium!

FOCUS-Key platinum metals comfortably above $500

By Marius Bosch

LONDON, Feb 3 (Reuters) - Platinum and palladium set new highs on Thursday, spurred by good demand and a supply shortage, dealers said. Platinum moved to its highest in nearly 10 years, while palladium set an all-time high. Both were fixed in London at $502.00 a troy ounce. A shortage of spot metal caused by a lack of deliveries from major supplier Russia was behind the soaring prices, with palladium and platinum already 13 percent higher than at the start of 2000.

Rhodium, another platinum group metal (PGM), continued its sharp climb, with dealers quoting the asking
price as high as $1,975 -- an eight-year peak but still well-off the highs of $7,000 reached in 1990. ``Rhodium and the PGMs once again are the only metals in the complex worth mentioning,'' said Helen
McCaffrey, Treasury Analyst at NM Rothschild & Son.

Russia supplies more than 70 percent of the world's annual palladium needs but political factors have
kept Russian palladium off the market so far this year and for most of 1999. Platinum and palladium, along with rhodium and ruthenium, are used in various combinations in autocatalysts to purge noxious gases from exhaust fumes.

PLATINUM LEASE RATES SKY-HIGH

McCaffrey said platinum and palladium were supported by a quarter percentage point increase in U.S. interest rates. ``It is difficult to argue against the trend at the moment, however, we will be watching the forward markets -- particularly platinum's - for signs of further lending which may see prices ease off slightly,'' she said. Lease rates, or the cost of borrowing metal, helped fuel platinum's rally with the rate to borrow one-month platinum now around 60 percent, double the rate in mid-January.

Palladium does not suffer too much from liquidity problems with the current lease rate around 8-9
percent, well away from the 200 percent seen in previous rallies. Dealers said platinum's premium over gold is the largest it has ever been. ``The platinum-gold spread is as big as its ever been, but bearing in mind the overall views on both metals, it would be brave to even sell it here,'' one bullion dealer said.

Russia was unable to export platinum last year due to loose wording in a December 1998 law which was
not amended until early 2000, and major South African producers said last week they would not be able
to increase exports. A decree on Russian platinum quotas, allowing exports, could be signed in 10 to 20 days or even sooner, a senior Russian industry official said on Wednesday.

GOLD STEADY IN EUROPE

Gold traded steady in Europe, and was last quoted at $285.00/$285.50 from the New York close at
$284.50/$285.25. Dealers said gold remained in its recent range of $280.00 to $290.00. ``Physical demand remains weak and fails to add some price support. The market is now a bit long and the risk for some profit-taking is increasing,'' a Swiss dealer said.

Silver remained stuck in its recent range and dealers expected the trend to continue. It was last quoted
at $5.19/$5.22, just up from the New York close at 5.17/$5.20.

nickel62

(02/03/2000; 06:49:51 MDT - Msg ID: 24203)

Remember the old story about the dumb brokerage client?

who falls in love with a very micro cap Canadian mining stock and begins to buy a little every day. The thinly traded stock eventually begins to rise and the client becomes all the more in love with its possibilities. Soon he has sold some of his other stocks and buys more and more of the micro-cap mining stock and it continues to rise. Now fully convinced of his investment genius in finding the source of great future wealth he sells all other investments including his life insurance and house and buys yet more of the stock. Needless to say it rises still further as he purchases the last tiny bit on margin. Then becoming sated with his success he decides to diversify and calls his broker to suggest he sell a little to buy a new name. The brokers classic response of "To who?" sums up the problem of stock manipulation before they invented index funds and delta hedging. With these two new computer driven systems the market price can be obtained for a portion at least of the stock by increasing the number of shares at the margin that can be sold to realize real proceeds and therefore reward the manipulators.

Is money created? Well everyone who ones our little mining company stock thinks he has seen a "real" increase in his net worth. Being uninitiated in the "skam" these other owners are patting themselves on the back for their wisdom in being "buy and hold long term investors".They accordingly prepare to spend their newly acquired wealth either directly by selling to the computers or indirectly by increasing their margin debt either directly or indirectly.
In the US stock market if you replace our Canadian micro cap with GE,Intel,Cisco Systems and Microsoft you have over 27% of the NASDAQ valuation. While not all of these are necessarily in the NASDAQ the same effect is achieved. Sell to whom? The computers until the flows reverse.Then find out that MicroSoft et. all are worth 10 cents on the dollar best case. Don't think so? Then hang around and see what pricing stocks at the margin means when the leverage is reversed. No Bid!

Black Blade

(02/03/2000; 06:50:53 MDT - Msg ID: 24204)

s&p futures up +8.50, Au up +0.80 at $285.30, Bonds up slightly again.

Looks like fun on the street today after only a puny 0.25% rate increase. Hmmmm..............

Thriver

(02/03/2000; 07:17:30 MDT - Msg ID: 24205)

on a lighter note...

Taking it with you

There once was a rich man who was near death. He was very grieved because he had worked so hard for his money and he wanted to be able to take it with him to heaven. So he began to pray that he might be able to take some of his wealth with him.

An angel hears his plea and appears to him. "Sorry, but you can't take your wealth with you."

The man implores the angel to speak to God to see if He might bend the rules. The man continues to pray that his wealth could follow him. The angel reappears and informs the man that God has decided to allow him to take one suitcase with him. Overjoyed, the man gathers his largest suitcase and fills it with gold bars and places it beside his bed. Soon afterward the man dies and shows up at the Gates of Heaven to greet St. Peter.

St. Peter seeing the suitcase says, "Hold on, you can't bring that in here!" But, the man explains to St. Peter that he has permission and asks him to verify his story with the Lord.

Sure enough, St. Peter checks and comes back saying, "You're right. You are allowed one carry-on bag, but I'm supposed to check its contents before letting it through."

St. Peter opens the suitcase to inspect the worldly items that the man found too precious to leave behind and exclaims, "You brought pavement!!!???"

Julia

(02/03/2000; 07:28:48 MDT - Msg ID: 24206)

MK, FOA, ANOTHER

Michael,
Thank you for clearing the "debris" from under our table.

Julia

koan

(02/03/2000; 07:32:18 MDT - Msg ID: 24207)

palladium up $14 to $512

Palladium is screaming and pulling the other metals with it. Platiunum is up $6.80 and gold and silver up lesser amounts. As I mentioned over the last two days this was a scenerio I thought could happen, but still along way from it. I think what is working in palladiums favor is that there just isn't "any" . and I doubt that many users would have stock piled much, becasue the price has been rising steadily and you generally would not stock pile at percieved high prices - this is a great drama . Thanks for keeping us informed Black Blade.

Ulysses

(02/03/2000; 08:07:11 MDT - Msg ID: 24208)

Lawyer's gold

http://www.usagold.comAllen G's on his deathbed,tells his wife to put his gold in suitcase above his bed in the attic s that when his spirit ascends to heaven he can grab it on his way up. Six weeks after he dies, wife is up in attic, notices suitcase is still there.Silly man'she thinks,he should have told me to put it in the basement.

FOA

(02/03/2000; 08:11:45 MDT - Msg ID: 24209)

Changes

Some changes I was asked to make.

Hello all,
The last post (s) by Rainman only underscored the point Another made to me earlier. His (Another's) message is so strong and political that it will always draw out "verbal assassins" in an effort to destroy the concepts (MK understands this and communicated it to me also). Especially as they (events) start to really confirm this new direction. Some of these (forum) disruptions are deliberate and some are due to mental dysfunction, but all of them divert most people from fully grasping the trail in the context given. I don't think everyone fully realizes just how much of an
impact these "Thoughts" (as political wills force the issue) will have on the international assets and business plans of major people. Some of them will argue against these viewpoints as if all their wealth depended upon it. Indeed, it just may!

Some time ago (many years), he privately planted these Thoughts very deep in the minds of a few. Only recently were these items produced on the Web for all to see. It was done in a way that did not betray things gained in confidence, but still made people see the world as others did. Another withdrew when the attacks (he knew would come), arrived. I wanted to continue on in a "narrative" fashion that would spell out these changes (events) more clearly as they occurred. As an American, I knew that most "Western Thinkers" would not ,did not and will not grasp these
political changes until they were well underway, or worse. Even then, every attempt will be made by special interest groups to show events in a different (more dollar friendly) light. Virtually assuring a stampede once the real bell is rung.

Truly, other major changes in world affairs are coming. Once they are visible, I believe Another will return and comment. Again, he does not write to engage people, he writes to place other minds "in the pipeline of political thoughts and directions". I truly think it has more to do with ethics and honour than the love of man. This may be a harsh observation on my part, but some cultures (as well as individual standards) require this.

So:
My posting here as FOA has attracted to much of the same caustic attacks that he walks right through. In reality, he is thick skinned as one could imagine such a person to be. As one of you posted an "A" item earlier, "these attacks are as boys having words with the wind, yet a strong wind has no ears" (or something like that). But, as the "thin skinned Westerner" I am, I do a poor job of representing his thoughts the way it was done before. After Permafrost continued his mindless comments, I was "asked" to no longer post as FOA in a give and take forum setting. Even
though I offered extended reasoning, it was never addressed in a clean logical fashion. The Rainman item only underscored this. But (if MK will allow), I will continue (as FOA) the "Gold trail Hikes" in posted letter form somewhere else on the USAGOLD site. We can still address many of the forum discussion items as deemed necessary. Yet, it will be done more in a letter format. If I am to post again on the forum (sparingly), I must use a different handle and debate the issues as myself, rather than represent the Thoughts of Another. This removes me from a conflict most of you did not know existed.

Also:

To everyone that wrote here in support of these writings, I reply with a thanks from a true heart. I accept this knowing that your words are also for all the other fine persons that post here.
MK, you are the Hollywood producer and director of this drama. A film being shown around the world for all to see. It's your call my friend?

Thanks FOA

Diewarzu

(02/03/2000; 08:22:51 MDT - Msg ID: 24210)

FOA, Permafrost, et al...enough already!

Just a lurker's perspective...
This forum seems to be becoming more of a soap opera than a gold discussion forum. Drop the egos and post your ideas. It seems that people here are more interested in making each other feel good about how good this post was and how intellectual that post was and how much of a wonderful thinker this person is and how foolish that person is and who is the most educated, etc, etc. GEE WIZ! Who cares about all that stuff...I just want to learn more about gold and related issues (I used to read this site daily several months ago, but now I rarely come here more than once a week due to all the extra "ego fluff" type posts). Nothing is either good or bad; only thinking makes it so. So drop the prideful thinking, get over it and use this forum as a means to share wisdom/insight/knowledge that is "relevant" to the subject matter: GOLD! Sheesh, didn't realize that "sensitivity" training was going to end up being a requirement to read/post on this forum. P.S...Hope I didn't step on any toes or offend any egos with this post;->

JCTex

(02/03/2000; 08:54:21 MDT - Msg ID: 24211)

FOA

I cannot tell you how nice it was to see "FOA" on the board, again. I am too damned proud to beg, but I was weakening fast. There is no way you could know how much many of us appreciate what you have done in the past, and we look forward to whatever you and MK work out. Your knowledge and perspective is not something easily replaced, if at all.

Leigh

(02/03/2000; 09:05:01 MDT - Msg ID: 24212)

Diewarzu

Dear Diewarzu: In case you haven't noticed, this is an INTERACTIVE forum of human beings. We can't help developing friendships and relationships of all sorts. If that bothers you, there are other places (golden sextant, gold-eagle editorial archive, etc.) where you can read in peace. We won't bother you there.

Leigh

(02/03/2000; 09:09:43 MDT - Msg ID: 24213)

FOA

Thank you for sticking with us! I can't wait to see your new "Trail Hike" site!

Ulysses

(02/03/2000; 09:11:37 MDT - Msg ID: 24214)

pdeep msg#24173

http://www.usagold.comThe Social Security surplus buys NON-MARKETABLE Treasury securities ,i.e. worthless I.O.U.s.This is money owed to U.S. taxpayers by U.S. Govt.-kind of like owing money to a relative- if it doesn't get paid back, who cares?

elevator guy

(02/03/2000; 09:36:42 MDT - Msg ID: 24215)

@FOA

Good to hear your "voice" again!

I didn't realize Another was caught up in pressure squeeze regarding your posting.

If you post by a different handle, I'll know it right away, as soon as you say: "We walk this trail together, yes?"

Holtzman

(02/03/2000; 09:41:46 MDT - Msg ID: 24216)

The Latest....

Holtzman here,

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Wave Theory
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I've no memory of whether this next bit is fact or simply historical fiction, but I recall a story set several centuries ago in a coastal village in Japan. One day the ocean pulled back, as if for low tide, but then it kept going and going until the beach was exposed halfway to the horizon. Shellfish lay helpless on the exposed sand. The fishermen left their boats where they lay aground and walked about, collecting their day's catch by hand. Children went out to collect pretty shells by the handful. No one seemed to think this ominous. Indeed, the villagers to a man assumed this was a gift of good fortune.

All but one. On the bluffs overlooking the beach lived an elderly gentleman. As he looked out upon the strange sight below him, he realised instantly what was going on. He'd seen this happen nearly a century before when he'd been little more than a babe. There was no time to lose, but his swiftest son would still take at least half an hour to reach the village below, and they were well out of shouting range. The man took up a torch and ran to his fields which were then quite dry as harvest time approached. He cast the torch into the fields and the fire quickly spread. He yelled to his sons to help him fan the flames. They thought he'd gone mad but thankfully they obeyed him.

Far out on the exposed beach, most of the villagers had their eyes on the sand, but one child looked back homeward and saw smoke rising from the headlands. Her cries roused the adults. The threat of losing the harvest overwhelmed the villagers' fascination for the beach, and they all ran, man woman and child, back through the village and up the hills to save the crops.

The last of them had just arrived at the top of the cliffs when they heard a roar behind them. They looked back and beheld what the old man had known was coming. The horizon looked wrong. It rose well above where it should have been, then could be seen for what it truly was: a dark grey wall of water towering in across the sands where they'd stood scant minutes before. It continued in, rushing over the boats that were still in their berths, crashing over the market at the beach's edge, howling inland with a ferocity unimaginable. In seconds the entire village was gone, and the waves were lapping scarcely a hundred paces from where they stood at the top of the high bluff.

Simply Me wrote in (1/13/00; 2:24:52MDT - Msg ID:22814), "Just a report from street activity. Gold and silver is being dumped all over the place! Small time dealers don't even want it because the premiums have crashed." Sadly, this is what I was afraid would happen. It's why the poor tend to remain poor: most never see the wave coming. And even among those who do hear the roar, most would rather die than be seen by neighbours as someone who dares to buck the trend. It's only a tiny minority of people who have the intestinal fortitude to do the opposite of what the neighbours do.

To everyone here reading these words, the simple fact that you Are reading this forum means that you are one of that farsighted minority. Now of all times, with the dot com seabed lain open enticingly in front of you, don't capitulate. The tide will return. Count on it. When the ocean is in its calm time, the beach is a wonderful place to reside and thrive. But when you see the warning signs, no matter how strongly you hear the call to follow the masses, have the sense to keep near high ground.

And should anyone ever wonder why so many people take time out of their busy lives to expose their observations to this Forum, let's just say that that old man's sacrifice set a standard worth aspiring to.

A few weeks ago, another poster said that I did not understand the road ahead. He was quite right: none of us have certain knowledge because there's always some aspect somewhere that we haven't considered yet. Far from upsetting me, his comments Inspired me to respond with what I hope will be yet more aspects for debate. And I very much hope that he will return and help us continue the exploration.

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Gold in a Dollar Collapse
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Mr Gresham made an excellent point in (01/02/00; 02:30:24MDT - Msg ID:22030). I'd previously stated that I didn't expect the purchasing power of gold to dramatically increase just because of a fiat currency crisis. Which is to say, a ducat buys dinner for two today, and I expect it will most likely buy dinner for two in the years following any particular fiat currency crisis.

But I should have more clearly stated that, during the onslaught of a fiat currency collapse, and especially at its epicentre, all bets are off. To discern what may happen in future, I find it best to look for similar situations in the past.

Before the imminent collapse of the USSR was visible to all, one Russian rouble had a purchasing power within the USSR of slightly more than one U.S. dollar. Even then, however, there was a certain favouritism for external currencies, particularly U.S. dollars, among those who bought and sold on the black markets (which, in practice, meant every Russian citizen). If you wanted to purchase forbidden goods, you had to do so with dollars. Still, the rouble/dollar exchange rates, both official and black market, didn't waver much from year to year.

As each Soviet citizen in turn became aware that the USSR was dead but simply hadn't stopped moving yet, he or she began doing what many readers here did prior to Y2K: they began converting their local currency into anything which would hold resale value and/or sustenance value. And, as always, there were those who did not see, who trusted in the authorities to keep things proper forever. It breaks my heart to think of the millions of people, most of them elderly, who within a few months' time saw the purchasing power of their rouble life savings dwindle to 1/1000 of its former purchasing power. How many pensioners do you know of who could withstand receiving the equivalent of $9 per month? However, those Soviets who had spare rooms full of vodka bottles or rice or U.S. dollars survived and in many cases thrived.

Did the purchasing power of a bottle of vodka increase within the Soviet Disunion? Did the purchasing power of a paper U.S. dollar rise there? In the heat of the collapse, most assuredly so. By one hundredfold? Perhaps in exchange for a few items, yes, but not across the board. Urgency plays a great part in short-term expenditure decisions. Would you spend $20 to post a letter? Without hesitation you would if that letter were a valuable contract which absolutely positively had to get there over night. But even a rich man wouldn't send Christmas greetings at such postal rates.

When faced with an urgent need to purchase a scarce commodity, desperate people will spend whatever is necessary. For example, the dollar cost of vital medicines in the collapsing USSR did indeed soar. Over the short term. Because the entire world had not collapsed along with the USSR, and because the black marketers' lines of import/export had not collapsed along with the official ones, a rising price quickly inspired suppliers to import more, which in turn brought prices back down. When considered in retrospect, those ex-Soviet citizens who were able to avoid spending their U.S. dollars managed to pass from one end of the storm to the other without a dramatic change in the purchasing power of their holdings. During the chaos, however, the U.S. dollar was seen as better than gold, simply because it was reliably steady.

But barely a decade before, that same U.S. dollar had been anything but steady. Following WWII, the U.S. experienced a multi-decade economic boom, brought about largely by the absence of competition (the rest of the planet's factories having been, in the main, bombed out of existence). By the Viet Nam war period, however, the rest of the planet had recovered. Meanwhile, the U.S. had made a strategic blunder by allowing its military/economic might to be fuelled by nations not under its control. The U.S. had then compounded its blunder by defending and sustaining Israel.

Do understand here that I appreciate the twentieth century jewish desire to return to the religious homeland, and I appreciate the U.S.'s long-standing inclination to come in on the side of the underdog. The problem is that, when any humanitarian gesture places a nation at a military disadvantage, the cost in vulnerability is generally higher than can be justified.

Certainly from the Muslim point of view, the modern nation of Israel was and remains nothing more than the latest crusader kingdom, an invasion from Europe populated by Europeans. Be clear on this: Arabs do not see Israelis as Middle Easterners. They see Israelis as Germans, Poles, Russians, Americans, etc., people who have the indecency to walk about in public with practically no clothes on. Time and again when Westerners launched crusades, they were worn down then turned back by the Islamic world's superior military might and tactics. This last time, in the mid-1900s, the Muslims discovered they were no longer superior in either. But then they realised they held an even more powerful tool of persuasion. They had the oil.

Interestingly, most U.S. citizens I've spoken with seem to think that OPEC's crude oil price hiking was responsible for dollar inflation in the 1970s. From what I've observed, though, OPEC simply provided the initial moment of clarity. It was the U.S. government itself which caused the inflation, indeed which encouraged it.

U.S. military commanders (who had, since the 1940s, assumed they were invincible) had already watched in growing alarm as tiny Viet Nam successfully snubbed its nose at them. Into this uncertain environment came a clarion call: oh my god, someone could pull the oil out from under us. Those of you who've read Tolkien will recall Sauron's moment of clarity when he looked out of his supposedly invulnerable fortress to see the source of his power poised to fall into the flames.

Fortunately for the U.S., there was more than one source of oil. But those domestic sources (and neighbourhood sources such as Latin America) came with a higher cost of production, and the infrastructure necessary for significant production had been neglected in favour of temporarily cheaper sources half a world away. For the same reasons the U.S. instituted rationing during WWII, the U.S. instituted inflation during the 1970s.

How would that help? The production cost to pull a barrel of oil from an American well was drastically higher than the cost from an Arabian well. With the U.S. suddenly realising it had allowed itself to become beholden to forces potentially outside their control, there came the urgent need to increase the retail price of a barrel of oil, at least within the borders of the U.S., to such an extent that U.S. wells could be profitably dug and operated. To safeguard the U.S.'s military support structures, it was consciously decided by the U.S. federal government that the U.S. economy should be sacrificed by inflation. Once sufficient domestic infrastructure had been restored, it was possible to reverse gears and enter the Volcker era. Texans be damned; Alaskan oil would still flow.

This, by the way, answers another question raised here some time back: why should the Bank of England be fool enough to sell its gold at what everyone could see was a 20-year low in price? The answer is simple: because there was something far more valuable in danger of being lost than whatever measly loss might be incurred on a sale of gold. To again reference Tolkien, a man who refuses to cast away something of value at need has lost all sense of proportion.

And what was that far more valuable something which the BoE was trying to defend? Not the LBMA: that's only a side issue intended to draw attention. The core issue is simply that Britain wishes to avoid becoming Europe's equivalent of Alabama, or worse yet Puerto Rico. The UK wishes to enter Euroland as the equivalent of New York. And history is on our side in this regard. Britain's historical tendency is to hold back and watch how some new era begins, learn by watching other people make mistakes, then join in when things are well under way.

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Infinite Diversity in Infinite Combinations
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FOA wrote in (12/29/99; 7:51:39MDT - Msg ID:21774) that, "the diversity and different social nature of Euroland will become it's most profound currency strength. If they were a more homogenizing people like the US, the Euro would become just another dollar! Their Old World, Hard Money conflicting nature will be reflected in a New Gold Market and a responsible world currency. Their practical Real World focus will not allow them to reject this digital currency as we move forward in world trade. The very best balance for the next 1,000 years. National states and broad based cultures, such as China and India will wholeheartedly embrace such a system. The prospects of using the Yen in such a world demonstrates the lack of understanding about how that currency and it's society functions."

I almost frantically hope you are right, FOA. But it does seem to me that, while the progress of an historical event may appear to be along a single path, very seldom if ever is there a single driving force behind it. Rather, like the tectonic plates I mentioned earlier, any resulting motion is caused by one opposing force failing to hold its position. There is a fault line running through the EU right now, and the American Experience has already provided the appropriate names for our adversary positions: States' Rights versus Union.

Ten years from now, will Germany be a sovereign nation, or just the European equivalent of Michigan? Will a portion of a Austrian citizen's retirement taxes be diverted to support a less productive Spanish citizen's retirement? That's how it is today in the U.S., with Chicagoans supporting Mississippians. I can see the benefits, and the perils, in both sides. I also have no significant say in which side will win out.

The average Californian does not know whether the earth beneath his feet will shift leftwards or rightwards, nor does he know exactly when the shift will occur, but he's quite certain the earth will shift someday in some way. As a result, he builds his house to withstand a shift in any direction. And that is certainly the situation in which I and my neighbours find ourselves.

I cannot say with any confidence, FOA, that loose and competitive confederacy will be the actual result for the EU. Interlocking alliances and even monetary unions have been implemented before, with widely varying results. Much as I sympathise with past American advocates of States' Rights, I'm not sure that Jefferson's loose confederation would have fostered a better standard of living for its people than the strong Union which was actually implemented. I do suspect, however, that it would have been less threatening to its citizens and indeed to its neighbours. For example, a loose confederation would have lacked the military might to have stolen the northern two thirds of Mexico. And it certainly would have lacked the ability to confiscate its own citizens' property.

While Spain, France, and Britain were taking turns vying for world empire, there was no rationale for European unification. The phrase "I am a European" occurred then about as often as the phrase "I am an Earthling" occurs today. Europe was a geographical abstraction only, not a source of commonality. But thanks to the end of Empire and in particular to the longevity of the Cold War, this continent now finds itself not so unlike the North American colonies of the 1700s. In contrast with the peoples outside the EU, we find to our surprise that Frenchmen are not so very different after all from Spaniards.

For that reason and others, I think that ultimately there's no chance of avoiding a United States of Europe. But there are two ways of getting there, and the first is the one I must say I prefer. That would be a gradual evolution over many generations, gently reaching a stage where Europe is as homogenous as, say, Australia. But much as I would prefer it, the odds of Europe developing this way are quite small in my opinion. A far more likely future as I see it, and a far more ominous one as well, involves a compulsory United States of Europe.

CoBra(too)'s posts on 2/2/2000 provide an early warning sign of the trend which I fear will continue, and indeed accelerate: Austria's sovereign right to elect its own leaders is already coming under increasing pressure from the EU. A loose confederation of equals would not do such things. A compulsory federal government like the present USA most assuredly would. I don't recall the details, but didn't an American State a decade or two ago elect a governor who was flagrantly in favour of apartheid? How did that go over in the other States, and what was the reaction of Big Brother? For that matter, isn't South Carolina currently being pressured to change its flag? I can think of few more emotional tokens of sovereignty than one's flag.

As to whether FOA's optimistic expectations will carry the day, or whether my and CoBra(too)'s more worried view will, I simply cannot tell. Although history is filled with the brevity of triumvirates and confederacies, it's always possible this time it will be different. Be reassured, FOA, I deeply hope you are right. I just don't feel sufficiently optimistic to bet my life on it.

The strategy which presents itself to me is to build my house to withstand any of several outcomes. That means to own British pounds because the UK is my nation today; to own euros because the EU is highly likely to become my nation all too soon; to own dollars because, who knows, the Fed may prove more reliable than the ECB; to own physical gold because no-one should trust any government overmuch; to continue to own unhedged gold mining stocks because they may yet have their day; and to own the stocks of well-established multinationals which are large enough to be their own nations, because they are often able to survive and even thrive when one of their many host countries convulses under them.

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Peter's Neo-Feudalism
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To Peter Asher regarding (12/28/99; 23:08:52MDT - Msg ID:21760), actually I quite agree with your conclusions about what you call neo-feudalism. As I allowed during a previous post, I'm rather a great admirer of Nicolo Machiavelli. You'll note that he wrote The Prince in the 1500s as something of an open letter to a self-made lord whom Machiavelli hoped might bring order to Italy. Heredity does often provide continuity, but every dynasty must start somewhere.

And dynasties have a way of changing their appearances over the millennia. I feel that The Prince should be required reading for anyone trying to make his way in the modern business world. Simply replace the word Prince with the word Manager as you read it and you'll see why. Individuals all over the planet have democratic voting rights as citizens of their nations, yet walk through the doors of their workplaces and immediately become, as you say, "Serfs and Lords."

The biggest single difference in today's neo-feudalism versus the medieval model is that heredity is no longer a given. In the U.S., the "all men created equal" credo is accommodated by allowing a schism between ownership and management. While the succession of managers ideally encourages survival of the fittest, the succession of ownership still allows for heredity. The Ford family, for example, has had on-again off-again generations participating in management, whilst the family fortune has descended through each generation regardless of management participation. But is Henry Ford the Whateverth a public figure? No. Is he secretive, or at least intensely private? Yes. Does any U.S. citizen fear him? Not that I've ever heard. Why? Because he isn't doing anything worth becoming alarmed about.

Interestingly, a similar owner/manager schism has been more slowly forming in the UK and in Europe. For example, Elizabeth Windsor is, in a manner of speaking, the largest shareholder of the kingdom, but it is Tony Blair who manages it for her. The ceremony to open parliament is very similar to an annual stockholders' meeting where the owners give their blessings to the managers' plans. While Elizabeth has far less influence over her corporation than does Bill Gates over his, this is because Elizabeth is no longer the majority shareholder of sovereignty.

Her predecessor, George III, had considerably more influence over his parliament's management, and let me be the first to say that this was to everyone's detriment. His arrogant disregard for the concerns of other shareholders (members of parliament, home country aristocracy, and also colonial aristocracy such as George Washington) resulted in the splintering of the English speaking world and came close to causing a revolution at home to boot. Thomas Payne, the man who wrote the Common Sense pamphlet so intensely popular in the colonies, was in fact a fresh-off-the-boat Englishman who had tried (and failed) to begin the revolt within the mother country.

I'll admit to being basically a monarchist, or at least a willing feudalist, and yet I do firmly believe that a man's actions are more important than his birth. For example, I think Prince Charles' actions have not earned him the throne, though the tradition of heredity will most likely place him on it. Pity. I would favour skipping him and placing the crown directly on William's head, allowing House Spencer to more quickly replace the obviously failing House Windsor. But as you can see I would still favour placing a crown on Someone's head.

I also think Bill Gates is someone to be far more concerned about than any Rothschild in the past half dozen generations. At least the Rothschilds' goal as a family is discreet continuity. They don't need to build an empire. They already possess an empire, just as the present generation of the Henry Ford family does. All they have to do is maintain and defend what they already have. By contrast, upstarts such as Bill Gates and the original Henry Ford must radically alter the world around them if they mean to rise above their humble beginnings and acquire great wealth. People with the Rothschild mindset living in California go out of their way to build earthquake-resistant homes. People with Bill Gates' mindset living in California are standing over the San Andreas fault working away at it with a jack hammer. Which sort of people would you prefer to live next to?

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Putin: a good word
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To The Invisible Hand, who was concerned about imminent nuclear war begun by Russia in (12/31/99; 7:16:55MDT - Msg ID:21891) and (12/31/99; 15:02:02MDT - Msg ID:21911)...

There's little mystery to why Yeltsin resigned.

Holtzman

(02/03/2000; 09:43:47 MDT - Msg ID: 24217)

The Latest....Part 2

Though Yeltsin's campaign was briefer than George Washington's, I think the two men would have understood one another. In both cases, had they been younger, neither would have let go the reigns of power. The exhaustion of age gave Washington no choice but to let the fledgling U.S. begin its clockwork presidential succession. There's reason to hope the same exhaustion will now let Russia follow in the U.S.'s footsteps. I have no fear of Putin. Indeed, he seems quite rational.

The only motivations Russians ever had to reach out beyond their lands were the zeal of Communism and the fear of outsiders invading them. With Communism disgraced, the zeal is gone. That leaves only the fear of invasion. Regarding that, I deeply resent the way NATO and the EU have handled things. We should have invited Russia into NATO and the EU ahead of all others. Her economic shortcomings pale into insignificance compared with her military might (both the part which is still loyally Russian, and the part which is up for sale to the highest bidder).

So long as we fail to welcome Russia into Europe, especially if the EU quickly becomes a compulsory United States of Europe, we invite at best another cold war with a spurned Russia, and possibly even a hot war. Probably not under Putin, and hopefully not at all, but where's the sense in running that risk?

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Why 2K?
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To Strad Master, who wrote in (12/31/99; 19:34:42MDT - Msg ID:21933), "Well, it looks like Y2K may turn out to be the biggest hoax in world history." Certainly that was the sense one got in the innocently quiet dawn which followed the Hour of supposed Doom.

But was European monetary union a hoax? Everyone aware of its impending 1/1/1999 deadline was on edge in the months (even years) leading up to it. Would it work? Surely something would go horribly wrong. The whole of western Europe would collapse into financial anarchy without hope of recovery. Well, not exactly. What did in fact happen was that every involved individual did his or her panicking ahead of time. No-one over here in the financial community spent the 1998/1999 New Year's at home. Result: only a very few minor glitches which were beaten into submission well before opening hour the following Monday.

I'd been quite confident since then that the century date changeover would be navigated by the professionals just as EMU had been: smoothly and with minimal upset. Perhaps not every penny spent on Y2K remediation was efficiently spent, but the calm aftermath justifies almost any amount of waste. Though Y2K provided many opportunities for hoaxes, Y2K itself was no hoax.

Which is why I wrote on Tuesday 28 December 1999, "I personally expect there will be no significant software downtimes in any of the English speaking world's crucial systems (finance, military, power supply, communications)."

But my, was I wrong.

Barely a day later, the automated credit card equipment in my part of the world seized up. It did not seriously hinder me because I had, some months ago, tucked away one paycheque's worth of �5 and �20 notes. These functioned quite well as soon as I could make it to the front of the queue, past surprisingly dim people who kept hoping that perhaps it just needed one more attempted submission and their faith in plastic would be restored. It wasn't the end of the world as I knew it. All the same, it was certainly more obnoxious than I'd anticipated. And it arrived a few days ahead of schedule just to be especially tricky.

I'd also expected rather a stronger upward surge in financial investments come Monday 3 January 2000, and a rather stronger downward surge in metals. Neither materialised. Indeed, things then proceeded to become quite wonky in ways I'd never anticipated. So much for making specific predictions. I promise I'll stay nicely nebulous in future.

Dudley Moore: "But do you feel you've learned from your mistakes?" Peter Cook: "Oh, certainly, certainly, I've learned from my mistakes. I'm certain I could repeat them precisely."

Yours,
I.V. Holtzman

PS: Gandalf, Aragorn, there's a mining related page at http://www.speakeasy.org/~ohh/lossiel.htm I think you'll find most intriguing. Indeed, I highly recommend the entire http://www.speakeasy.org/~ohh/tolksarc.htm site.

PPS: There are deeper truths than gold, my friends, and Canuck Gold gloriously stated one in (01/20/2000; 09:49:02MDT - Msg ID:23254): "Idealists... If only everyone would come around to their way of thinking, everything would be right with the world. (I know this from practical experience because my wife is one of them.)" Thank you, Canuck, I'm relishing that maxim... in solitude of course, because if I share it with a certain someone I'll never hear the end of it .

TownCrier

(02/03/2000; 09:45:07 MDT - Msg ID: 24218)

Today's Market Report

Market Report (2/03/00): Gold drifted sideways, looking for a direction in overnight action. The path of least resistence it found was generally upward, particularly during the London session where the AM gold fix was $285.25, up $2.15 from yesterday's fix. In early NY trade the yellow metal is currently at $284.90 up 40� from yesterday's NY close. Financial World News reported that London gold was thinly traded "but physical demand continued to underpin general business" according to dealers there. With Hong Kong markets closed February 4th - 7th for the Chinese New Year holiday, activity is expected to decrease, with gold holding a narrow range during this time.

The Fed's widely anticipated rate hike of 25 basis points was taken by the market in stride yesterday. The early and heavy COMEX buying was said by traders to be from "a large NY trade house...along with a broker typically associated with fund activity," according to FWN. This was said to be followed by other funds joining in. Bridge News reported that UK officials with HM Treasury said today that the Bank of England is set to continue the auctioning of the 290 tonnes remaining in its originally announced program to sell 415 tonnes following the completion of this first phase of sales on March 21st. We can't help wondering why these Treasury officials felt compelled to make a point of this item today, unless it is a thinly veiled attempt to reassure jittery bullion banks (and their depositors) that this physical gold would indeed be made available to help satisfy their needs for the metal.

The World Gold Council is a self-stated proponent of gold in all its forms, and it is not opposed to sales, seeing these transactions to be the vital function of gold as a strategic economic asset. But they draw the line where the reasons for sales by the official sector are couched in a fog aimed at altering the public's proper perception. In a speech last week to The Business Club Zurich, WGC's CEO Haruko Fukuda offered these good words in regard to the circumstances surrounding the UK gold auctions: "Right from the start, we at the World Gold Council have been critical of Britain's gold auctions, a policy which has puzzled many observers. The British government argues that in terms of volume related to the size of the market these auctions are inconsequential. That is a fair point. After all, global demand for gold is currently exceeding newly mined supply by more than 1,000 tonnes a year. But we have consistently argued that this reasoning entirely misses the key message that is being sent to the market by these auctions. That message is not that 'the British government is mobilizing some of its gold reserves in order to help solve some domestic crisis' but instead it is that 'the British government is selling some of its gold reserves because it no longer believes in gold as a reserve asset', and it is this message which has been so intensely damaging. Parliamentary opponents to the British gold sales have persistently called upon the Prime Minister, Mr Tony Blair, and his Chancellor, Mr Gordon Brown, to deliver a coherent, economic rationale for these sales, but these calls have been dodged by the government. Instead, there have been obfuscation and evasion; the auctions have been defended by the government not on the basis of sound economic policy but along the lines of 'everyone else is doing the same', which is not only untrue but also astonishingly weak."

Meanwhile, the same parties (Deutsche Bank, The Bank of Nova Scotia, and HSBC Securities) continue to be on the receiving end of the growing number of delivery intentions announced for the February COMEX futures contracts. Today, another 285 contracts were added to those 5,142 contracts already called for during the previous three days, lifting the total amount scheduled to change hands by this month's end to 542,700 ounces of gold.

That will do it for today, goldmeisters. We'll see you here tomorrow.

Cavan Man

(02/03/2000; 09:50:21 MDT - Msg ID: 24219)

Dear FOA and USAGOLD

FOA: Whether for ethics and honour or, love of man, your friend has let the horse out of the barn. I humbly submit to him that he has created for himself somewhat of a responsibility to continue with his THOUGHTS which demand his continued presence and consultation to some forum venue. as his time permits.

USAGOLD: You have said you do not agree with all FOA/Another have said, nor do I. However, I believe it is correct to say you do agree with much of it. Simply as an outlet for their collective insight, this forum is invaluable. I know from your words you intended from the beginning to make a home here for FOA/Another. At the same time, you rightly host an open invitation to comprehensive debate and disagreement for the benefit of all. But,either we see the wisdom and merit of the FOA/Another discussion or, we do not. If we do, then, realizing the highly controversial nature of the content of discussion, we make a concerted effort to maintain civility for their benefit on this forum. If you want to label that comment censorship then, fine. Conversely, if we do not see the merit of their THOUGHTS then, perhaps allow some other accomodation. In my opinion though, any other accomodation will be less than good although obviously better than none.

You are the best censor we know.

Indeed, this person, FOA, has a true and good heart; so generous is he/she with knowledge and understanding. This person has been challenged here by participants who are both esteemed and nitwits using highly inflammatory rhetoric. Please exercise a bit of diligence and editorial license when it comes to participants who engage FOA/Another in a manner not befitting the very high intellectual standards of this forum.

We live in an increasingly hostile and uncivil world. While we cannot control what surrounds us, we can make some modest attempt to influence what is written here at this web site.

Thank you for reading.

TownCrier

(02/03/2000; 10:01:51 MDT - Msg ID: 24220)

The Fed today added $4.765 billion to the banking system

http://biz.yahoo.com/rf/000203/1b.htmlTo help meet the system's reserve-maintenance needs, the Fed added these temporary reserves using overnight repurchase agreements. So what else is new?

Thriver

(02/03/2000; 10:38:13 MDT - Msg ID: 24221)

A quick comment on FOA/Another's contributions

An old joke goes that two scientists will spend hours arguing over the expected results of an experiment that would take five minutes to perform.

What most people don't realize is that often it is more important to know and understand reasons and techniques behind something than just to somehow get the 'right' answer. Students who take enought math classes find this out.

The fundamental message of FOA/A that I get is to buy and hold physical gold. Most people I know would dismiss this out of hand as far too simple. Why, there is even less thought or timing involved than buying index stock funds.

For me, this I would anyways, even if I had never heard of FOA/A. BUT, it is truely interesting to get a peek behind the curtain, and see beyond the magician's hand motions. For we all know magicians are masters of the sleight of hand, and offical explainations we are given aren't designed to enlighten.

I'm a mere page here at the castle. But when my chores are done I do like to sit on the floor just out of sight, and hear the talk of the mighty ones sitting at the table.

nickel62

(02/03/2000; 10:54:52 MDT - Msg ID: 24222)

Inverted yeild curve means recession ahead!

Traditionally an inverted yeild curve means a recession is being picked up by the bond market. I hurry to add however since the number of outstanding 30 year bonds are actually very few and the proclivity of our financial masters to continue to manipulate every market in sight I might wonder if the plunge in 30 year yeilds is signalling something different this time. Economic chaos perhaps in the derivative markets?

Journeyman

(02/03/2000; 11:01:57 MDT - Msg ID: 24223)

Defending Gold: Chapter 2a @Elwood (2/3/2000; 2:53:39MDT - Msg ID:24198)

Nicely put!!

Regards,
J.

SteveH

(02/03/2000; 11:21:51 MDT - Msg ID: 24224)

It starts

www.lemetropolecafe.com

Le Metropole members,

Rumors are sweeping Wall Street that a primary
bond dealer is going under as a result of the
Treasury's announcement that it is reducing 30
year Treasury bond supply.

The Fed has denied an emergency session has
been called,but does not deny a big dealer in trouble.

30 year bond yields have collapsed in a very short
period of time from 6.76% to 6.06%. Forward price
30 years are even lower in yield.

There are many market players caught the wrong
way on yield curve trades as the curve has now
inverted in what must be record time.

>From a Cafe European bond dealer:

"something should happen because this thing is lethal for all asset swappers"

Banking stock index diving.

Meanwhile, the cash market for oil products are
on fire with cash prices way above NYMEX.
Situation very explosive.

Gold only up $1.40 in this VERY BULLISH gold
market environement. Manipulation crowd desperate
to hold gold price down to avoid a gold derivative
blow up as is occuring in the bond market.

More later

Le Metropole Cafe

All the best,

Bill Murphy
Le Patron
www.LeMetropoleCafe.com

TheStranger

(02/03/2000; 11:41:03 MDT - Msg ID: 24225)

The Round Table

When I arrived a little over a year ago, this forum was an inchoate group of goldbug intellectuals struggling to understand the machinations of a beleaguered market. I remember Michael used to post a greeting to every new member who happened along. Sometimes, on a slow day, he would challenge the room with a thought or two just to keep the discussion from dying.

But, today, the USAGOLD Forum has become a place where many intelligent people from many different backgrounds help piece together a gold mosaic which enlightens us all. This growth did not happen by accident. It happened because our host understood two heads to be better than one and a whole lot of heads to be better still. I often wonder if Michael, himself, isn't awed by the result.

I don't like to read inflammatory or disruptive posts any more than the next guy. But I submit the truth we seek has never been jeopardized by the heat of this debate. Yes, hotheads do get angry and storm out of the room (I've done it myself). But, perhaps because no other forum equals what is offered here, they ALWAYS come back.

It is in the nature of this beast, I believe, that no one of us shall ever deliver the whole truth. For this reason, as I have said before, I believe the table only serves us well to the extent that it is truly round. Let us hope that no one who shares his wisdom here will ever be granted a seat at its head. And, as for our proprietor, let us hope his wisdom continues to guide him towards an open debate where censorship and expulsion are limited only to those cases where deliberate attempts have been made to seriously disrupt the process.

goldfan

(02/03/2000; 11:42:00 MDT - Msg ID: 24226)

nickel62 (2/3/2000; 10:54:52MDT - Msg ID:24222)

http://www.prudentbear.com/markcomm/markcomm.htmVolatility exponentially increasing is the mark of the beast!!! If it were a bridge vibrating in the wind, we would be well advised not to drive onto it. Article by Auerback at link above is on this subject, some clips from that below. It may not be a new thought, but if Mr. AG. wanted to get the world back to some sort of gold backing for currency, is he not making all the right moves so as to have the result appear inevitable??

Auerbach>>>>Ironically, earlier statements of Mr. Greenspan suggest that the Fed chairman once had an appreciation of such counterparty risks. Giving evidence to a Congressional Committee in 1994, Greenspan noted that "the failure of a
major derivatives dealer could impose credit losses on its counterparties that could threaten their financial health. Second, the dynamic hedging of options positions (e.g. associated with portfolio insurance) and certain other risk
management techniques lead market participants to buy assets when prices are rising and to sell when prices are falling. In principle, such behavior could amplify market price movements."

The Fed chairman added that "even if derivatives activities are not themselves a source of systemic risk, they may help to speed the transmission of a shock from some other source to other markets and institutions." Such an analysis seems prescient in light of what occurred in Asia, Russia, and Latin America in 1998, yet by this time the leader of the Fed appeared to be singing a completely different tune. Rather than establishing a lead on restricting or, at
the very least, regulating derivatives' trading and exercising some oversight over the US banks and other financial institutions which employed such instruments, Greenspan came out against such measures.He pointedly
opposed the FASB proposal to make derivative positions more transparent for investors by requiring such companies to mark to market their positions. Both he and then Treasury Secretary Rubin also blocked then CFTC Chairman Brooksley Borne's attempt to bring over-the-counter (OTC) derivatives under the control of the Commodity and Futures Exchange. Ms. Borne eventually losther job for aggressively pushing the proposal.Greenspan argued that such reforms "may discourage prudent risk management activities and could insome cases present misleading financial information."<<<<<

Maybe AG doesn't want to fix the system until it is irretrievably broke, kind of like pouttting exlax in the hooch to make your kids stop drinking it.

FWIW
Goldfan

Al Fulchino

(02/03/2000; 11:57:28 MDT - Msg ID: 24227)

Rhodium up 600$; 40% . What exactly is it?

Partial information on it:

Rhodium is a precious metal of the Platinum group with properties of wear and corrosion resistance that make it ideally suitable as a final finish for all types of jewellery whether real jewellery made from other precious metals such as gold or silver or fashion (costume) jewellery made from a variety of materials such as copper,brass,cast pewter or cast zinc.

Rhodium is a white bright metal as plated and has many advantages over other white metal finishes such as silver or tin in that it is very hard so as to provide good wearing ability but also rhodium is almost impervious to attack by most naturally occurring chemical compounds and so the finish

does not tarnish

SteveH

(02/03/2000; 12:15:16 MDT - Msg ID: 24228)

question from a person

This was sent to me. Thoughts are not mine but his comments are interesting:

Dear Sir,

There are so many articles written on the U.S economy, its gov't debt,
current a/c deficit, the "bubble" market, gold manipulation, huge money
supply, US$ strength...etc.. It looks like that the whole situation is
going out of hand and we are heading towards a disaster. The only
strange thing is it still has not happened after so many years. Similar
to other crises happened in Latin Am., Asia or Russia, we need some
events to trigger the crisis and several "sniper" funds to do the
killing.

The strength of the US economy is under the blessing of these crises.
Historically, the US$ had been in a downward trend from 1985, e.g. :
- SFR - 85' US1=2.80 95' US$1=1.20
2/00 US$1=1.65
- FFR - =10
=4.85 =6.75
- DMK - =3.30
=1.35 =2.01
- BPD - =0.90
=0.50 =0.62
- YEN - =260
=80 =107
It bottomed in 1995 and started to improve since then. Reason? Probably
due to the several crises
that happened in : Mexico from 7/94 to mid-96 and
Asia from 4/97 to end-98 and
Russia from mid-98 to mid-99 and
Brazil from end-98 to end-99 and who is next ?

Suddenly US is a very reliable place to park your money and invest for
the long term because US has
the " master planner" of the universe that can prevent crisis from
happening (in the US only). For this to
continue, there has to be more crises around the world so as to make US
look good. The biggest challenge to US's status right now is Europe and
its EURO. So we need some events there to trigger a crisis (is there one
already?) and the "master planner" and its satellite "sniper" funds will
have to position themselves and get ready for the kill. The objective is
the "transfer of wealth".

US is a debtor nation. It owes others too much money but there are lots
of ways to get the money back. But don't worry, after you are being
shot, they will send in the "red cross" (IMF, BIS or a consortium of
banks) to save you and get you up so that the game can continue some
times in the future. This is different from the Vietnam or Korean or
communist warfare which are sure to lose. This is a money game that the
US is pretty sure to win. Nobody or no country is able to fight the
"master planner" and its powerful "sniper" funds. The tiny states of
Europe, even the Union, are no match to the US so the natural place to
invest is still US which is comparatively speaking, safer.

Europe has its own problem to solve now and its EURO is under pressure.
It is too young to stand on its feet and without the blessing of the US,
its survival is seriously in doubt. Indeed, it would be a naive thinking
that your enemy will help you to beat himself or to let you share his
fortune. Definitely not a good time to invest in Europe. The hunting
dogs (from US) are sniffing for the prey and very soon you will smell
blood in the street. If Europe falters, the US is really infallible.

Is my "imagination" a little wild.
Any comment? Thanks.

goldfan

(02/03/2000; 13:13:11 MDT - Msg ID: 24229)

Solomon Weaver (2/2/2000; 20:57:33MDT - Msg ID:24172)

Solomon thanks for your cheerful response. Ale sounds good. Here's more....

You said
<<understood better by using this chaos math...but why choose to study risk? The various parameters you suggest are not units of risk. <<<<

When Hillary was asked "why climb that Everest mountain, man, are you crazy? He is reputed to have answered, "because it's there". I really like probability theory, without knowing much about it. And I do really get a rush out of finding simple equations that seem to describe complex events. To me, a good equation is like contemplating a language of God. I like Art too, and beautiful gold coins, but I'm utterly transfixed by something like :
e*� + 1=0.

>>>>>>What is amazing in my opinion is that given the "stakes" involved (for example the financial survival of retirees who have saved their
entire life and have no options to earn new income) that we have developed many investment games which because they are sold with
glossy paper brochures are just sitting ducks waiting to have an "unexpected outcome" (i.e. eventually enter into a high risk mode). You
don't need chaos math to make this story any more compelling.<<<<<

No you don't need it, but I think we can use it like ships use radar in a fog, to avoid the big icebergs that would sink us. Hopefully, we won't just use it to go faster, thus increasing the risks again. Maybe use it to allow us to enjoy the voyage more, feeling safer, and in fact, being safer. nickel62 had a compelling story about the way the stock traders use derivatives, etc. to defraud us and eventually themselves. Maybe if we got good at detecting changes in fractal dimension, we would be able to spot the scams in the way the numbers came up, and stay away from them. I wonder if the pure stock trading isn't still in the small caps anyway, where the float isn't big enough to interest the big guys??

From Webster's, Risk: 1. hazard, peril, exposure to loss or injury 2. Insurance. a. the chance of loss or the perils to the subject matter of insurance covered by the contract; also, the degree of probability of such loss. b. short for the amount of risk, that is the amount which the company may lose...

So this is the sense I am using the word, as when we talk about the risk/reward ratio of a particular contemplated stock purchase. The downside (risk) is the probability of loss of a certain amount, the upside (reward) is the probability of gain , probability as in 10% or 20% or quite likely( 80%?)or not very likely(maybe 5%?). (Fascinating how we use the word probable and possible.)

I'm hoping I can do this without going into the 10% plus or minus 2% 19 times out of 20 that the statisticians use.

Also to respond to your note on chaos dynamics. As I get it, the strange attractors, are cascading bifurcations of wonderful shapes that emerge when a recursive equation is repeatedly solved, output becoming input, over and over and the results graphed or displayed on a screen. Moreover, these patterns which repeat and repeat, are shown in reality, as changes in scale, but not dimension, fractal dimension. The shapes look the same, yet are different in "size". Think of a coastline, its shores bumpy and indented, the closer you look at a segment of shore, the more it appears to be the same "shape" as the large coast line itself. The shore of a mud puddle would display the same.

Studying the recursive equation that represents such a system, lets us figure out its fractal dimension. When the fractal dimension changes abruptly, we know we are at a saddle point, about to cascade over into another area of the pattern. Anyhow, I'm no expert on this. But It fascinates me. And I think it gives substance to our intuitions when it comes to human affairs. How many people do you know who get into a "saddle point" and then just fall back into the same old pattern, instead of changing habits, and getting to new territory?

FWIW

Goldfan

(02/03/2000; 13:16:44 MDT - Msg ID: 24230)

FOA re:your 24209

FOA, I have not posted to you directly in the last 8 months of following your posts but have searched this forum constantly for your THOUGHTS. I was deeply saddened last night when I read your final reply. The feeling I had was one of great loss, like if your best friend moved to another state.

Needless to say that my eyes got watery when I read your 24209. It's great to see you again. I look forward to our next hike.

GD

goldfan

(02/03/2000; 13:16:44 MDT - Msg ID: 24231)

OOPs!!!My Msg ID:24229)

that's e to the power of pie times i. This translator doesn't recognize my pie sign. Not enugh ale, or it would be more pie eyed.

Goldfan

goldfan

(02/03/2000; 13:17:09 MDT - Msg ID: 24232)

OOPs!!!My Msg ID:24229)

that's e to the power of pie times i. This translator doesn't recognize my pie sign. Not enough ale, or it would be more pie eyed.

Goldfan

ORO

(02/03/2000; 13:56:10 MDT - Msg ID: 24233)

Currency systems - cool site

http://members.tripod.com/~poetpiet/guest_appearances/intro_to_currency_issues.htmFollowing a link provided by SDRer I found this site.

He was suggesting this piece of work from Dr. Zander, 1935:

http://members.tripod.com/~poetpiet/guest_appearances/exit_monetary_chaos.htm

Enjoy

Particularly good for Aristotle, Journeyman, Nickel62, goldfan, 18K, and anyone else trying to figure out which currency structure is "better" or more likely to satisfy the needs of the various contenders for power.

goldfan

(02/03/2000; 14:41:23 MDT - Msg ID: 24234)

cleaning up my Msg ID:24122)

Sorry I messed up some math and some numbers in this post. Cheerfully pointed out by Sir Happy.

for corporations, the current number is debt at 26% of assets (an all time high?).

for the value of the dollar, traditionally, POG is 40% of the M1/oz., not M3/oz. so the figures become, the M1/gold ratio is $510billion/8000 tonnes , works out to $2000 per oz.
The traditional POG would be 40% of that, $800 per oz. So at $285, we have 2.8X too much money in circulation. Effectively, the $ should be devalued by 64%.

Crazy, but that's close to what I had anyway. All routes lead to Rome...

Goldfan

goldfan

(02/03/2000; 14:46:04 MDT - Msg ID: 24235)

More from Yahoo

Sunday February 6, 9:02 pm Eastern Time

Gold price soars in Asian morning trade

Gold analyst Gavin Wendt of Intersuisse said gold's latest surge had to be seen in the context of the European Central Bank's
(ECB) September decision to cap gold sales at 400 tonnes a year for five years.

A cap on producer selling, added to the ECB cap, allowed the latest price surge to outpoint the six percent rise sparked by the
ECB's September decision, which at the time set $300 an ounce as the metal's next target.

``That's the important thing. The really weak link has been the supply side. The demand for gold has been extremely strong,''
Wendt said.

Central bank sales had been exacerbated by producing selling, with producers not showing faith in their own product, he said.

``Why should anyone else have any confidence when producers themselves are taking this negative pessimistic view, locking in
prices at (low) levels?''

Wendt believes that the gold market will show a lot of volatility at present prices.

Hedge funds may wish to revert to covering short positions but may now face a fundamental change through not being able to
rely on an artificial cap on prices from producer forward selling.

``Now there's more opportunity for the gold price to go up so I think they'll be more cautious about entering into short selling. If
anything it might just start to get them thinking the other way and maybe start taking some long positions,'' Wendt said.

Cavan Man

(02/06/2000; 19:50:47 MDT - Msg ID: 24542)

USAGOLD

MK, while you're at the table, I have made a couple attempts to get FOA's "overviews" in the HOF. I have complied by posting the seconds etc. Would you please put this on your "to do" list? Thanks.

Matrix

(02/06/2000; 19:54:23 MDT - Msg ID: 24543)

Australian Market Update

Very aggressive buying out of Sydney this morning, with reuters falling over on the opening , and failing to give up to date live prices. Gold stocks up strongly, however "the market" does not yet believe in the sustainability of the rally. Alot of the stock buying coming in from offshore. The majority of Australian producers hedge through the purchase of put options, and generally speaking forward sales make up a smaller component of there hedging operations. I would expect DeCrespigny and company to join in with Placer Dome, given that it will be largely symbolic if they do so. Hope this is of use!

PH in LA

(02/06/2000; 19:54:38 MDT - Msg ID: 24544)

Off the charts!

The Kitco chart has been redrawn with the lines real close together. Nevertheless, the line is clear off the chart.

One of the most interesting sights on the gold trail/journey and where is FOA? We sure do miss you. (My new unfinished site would be happy to host your comments until Michael gets USAGold retooled. E-mail me at: ph@prodigitalrecords.com)

What about that PermaClown? Where are his/her misguided superficial stupid comments when we need them most?

Seems like I saw some trash in the garbage can this afternoon. Must be some of his stupid remarks. Right where they belong. Where they can do the most good!

Solomon Weaver

(02/06/2000; 19:59:37 MDT - Msg ID: 24545)

is winter really the season for shorts??

Small lesson which seems to be appropriate here.

I once had bought 1000 shares of a small Boulder based biotech called Nexstar...because I liked their technology and they already had strongly growing sales...the stock ran up and down between $9-14 for about a year...then there was an announcement that they were being bought out at $16 per share in 3 months. When the stock hit $15.75 I sold. Then I watched in dismay as it rose further to $18.00. Now who in the world would be interested in paying $18.00 for a stock which was on the block for $16.00 (friendly bidder in a thin market...not like the telecoms). Well, as it turned out, the short position on the stock had been about 15% of the float.

It seems to me that what we are seeing in gold is "only" the action of short covering...I wonder what it will take to get new long energy into the game???

Poor old Solomon

Cavan Man

(02/06/2000; 20:06:59 MDT - Msg ID: 24546)

Dear FOA

Well, I tried the old "every man has his price" tactic and it failed miserably I see. Only myself and Golden Truth put our chips (your ransom)up although I know all here are painfully aware of your absence. Your thoughts are good as gold. Hope to see you here this week.

Bon soir

Journeyman

(02/06/2000; 20:24:11 MDT - Msg ID: 24547)

Who's running this show?

@goldfan (2/6/2000; 10:18:27MDT - Msg ID:24487) @SteveH (2/6/2000; 10:18:10MDT - Msg ID:24486), Aristotle, ALL

There's been talk today of the U.S Treasury being a maverick to the
FED, and conspiracies by this or that group to cause this and that effect.

Don't over estimate these guys. Remember, Greenspan only claimed ~60%
accuracy for the FED's predictions. Goldfan, particularly with your
posts on chaos theory (now morphed into "complex phemoemnon" theory,
I believe) you may be aware that major effects are "caused" by effects
too subtle to measure or anticipate. Thus what's happening now isn't
under anyone's control. To give give the FED, the U.S. Treasury, FOA's
folks -- or anyone -- this power in your thinking grossly overestimates
their powers and will ultimtely distort your thinking.

NO ONE's "in control." And NO ONE knows exactly how this will all turn
out. As Ludwig von Mises points out:

"We may assume that the outcome of all events and changes is uniquely
determined by eternal unchangeable laws governing becoming and development
in the whole universe. We may consider the necessary connection and
interdependence of all phenomena, i.e., their causal concatenation, as the
fundamental and ultimate fact. We may entirely discard the notion of
undetermined chance. But however that may be, or appear to the mind of a
perfect intelligence, THE FACT REMAINS THAT TO ACTING MAN THE FUTURE IS
HIDDEN." -Ludwig von Mises, Human Action A Treatise on Economics, Third
Revised Edition (Chicago, Illinois: Contemporary Books, Inc. 1966),
pg. 105 [I added capitalization emphasis -j.]

We humans are all to apt to attribute powers to control complex phenomena
such as the economic system to humans and human institutions, when in effect
such attempts, inescapabley made with less than adaquate knowledge, lead to
additional instabilities, not less. BUT having made such attribution, our
tendancy when things go wrong is to demand more such control attempts,
usually by the same bodies that screwed things up in the first place.

A prime example is found in the literature of conservation. It seems like
a good idea to prevent forest fires. Right? I mean Smokey The Bear and
all --- But it turns out that only a very small percentage of forest fires
are caused by man. Nature causes most of them through lightening strikes.

Now it may seem strange, but nature has been around much longer than Smokey,
and she likes forest fires. The trees and animals in the woods evolved
in a context where forest fires happened, and obviously have survived. They
can handle normal forest fires. In fact, from the tree viewpoint, normal
forest fires clear out underbrush, helping to break it down to what becomes
humus, and clear out old, dead trees and any over-growth of smaller
sapplings.

But in our infinite wisdom, man decided ALL forest fires were bad, and
got very efficient at stopping them -- all the forest rangers in their
look out towers and all. So the brush builds up and up, and when a fire
breaks out, it spreads faster because there's more fuel available for
the fire, which now threatens to become a confligration. When such a
fire gets going it burns hotter and further than nature ever allowed,
and destroys mature trees as well as the undergrowth. That's just what
happened in Yellowstone Natl. Park a few years back.

Can you think of any parallels to such a situation apropos to this forum?
To the Austrian economists, "malinvestment" is equivalent to underbrush.

Regards (and keep the water handy)
Journeyman

Solomon Weaver

(02/06/2000; 20:42:36 MDT - Msg ID: 24548)

a little bit out of control

Journeyman

Great post....even if the right hand (Treasury) had known what the left hand (FED) was doing....

Humanity faces a great conundrum....with our massive numbers and very powerful physical technologies, we have created a globe where, although mother nature is still queen, we live more and more in "systems structured by humanity". We take responsibility to "control" them.

I think Goldfan would do well to study some "systems theory" to add to his chaos interests. It is probably impossible for humans to invent a perfect economic system, but assuming we can come closer, is it not strange that we seem to continue sailing forward with the wrong map?

I remember a good stock broker friend telling me once "I have been in the business for over 20 years, and the most facinating thing about each market at each moment is that there are always people willing to stand on both sides of the trade."

Poor old Solomon

Solomon Weaver

(02/06/2000; 20:49:57 MDT - Msg ID: 24549)

GOLD EAGLE SITE OVERWHELMED

The following lifted from the TimeBomb2000 Forum

It seems that a whole lot of people are sitting up tonight thinking about Gold.

Or could it be a concerted effort to "jam" gold info for a while??? Let's hope it is only the former.

Poor old Solomon

----

GOLD-EAGLE ACCESS RATE EXPLODES TO OVER 300,000 HITS PER DAY!
(vronsky) Feb 06, 22:03 About an hour ago the GOLD-EAGLE traffic soared to heights never before experienced. We were running at a rate of more than 300,000 hits PER DAY ...AND IT'S SUNDAY! Again our Server was temprarily overwhelmed, shutting it down for an agonizingly long period of about 30 minutes. I say 'agonizingly,' because gold was soaring in the Far-East.

To remedy the problem - especially in anticipation of tomorrow's avalanche of burgeoning traffic - we are increasing the Gold Forum cache, and will shorten the periods to One-Hour segments. This will speed-up your access rate, while diminishing the server load. Therefore, to see previous posts, use the "Select Previous Periods" function at the head of the column of postings. A more convenient solution will be forthcoming later in the week.

It all goes to show, rapid progress brings problems. Nonetheless, it's encouraging to recognize today's hit rate of 300,000 accesses/day translates to 9,000,000 hits per month...the ranks of goldbugs worldwide are swelling and amassing, which means MUCH HIGHER bullion prices are on the horizon! Gold-Eagle.Com Link

-- Zdude (zdude777@hotmail.com), February 06, 2000

Leigh

(02/06/2000; 20:50:36 MDT - Msg ID: 24550)

PH in LA

PERMAFROST melted in the heat of the cyber-barbeque. Actually, he went over to Kitco and told them that he voluntarily quit our site because his life was being threatened (?). He found lots of hugs and sympathy over there.

Voyager

(02/06/2000; 20:52:11 MDT - Msg ID: 24551)

USA GOLD

Please explain LeMetropoleCafe. Have see referenced other times. Thanks.

p.s. Please keep an eye on Platinum for me.

Solomon Weaver

(02/06/2000; 21:04:37 MDT - Msg ID: 24552)

go here and walk forward

http://www.egroups.com/group/gata/2.html?

Lots of great material inspired by the gold discussions at LeMetropolCafe

Poor old Solomon

PH in LA

(02/06/2000; 21:13:15 MDT - Msg ID: 24553)

Voluntarily slinking away like a coward

would be a better way to put it in my book. But your comment is well taken, Leigh!

Voluntarily? Sure! And I guess Chris left here "voluntarily" too.

Yes, I also saw some of Perma's whining over there a few days ago. And naturely, there was no serious discussion offered to his/her absurd contention that he/she had "debated" with FOA because anyone capable, willing and/or interested in the whole monetary discussion thread left Kitco long ago. This was the price they all paid over there for insisting that everyone has the right to sling intellectual mudballs whenever and where ever they please. Kitco is nothing but a shell of what it once was. I guess that makes them all very happy there. Funny how some of the very lightest of the intellectual light-weights (such as LBG) also disappeared from the radar screen at about the same time.

Solomon Weaver

(02/06/2000; 21:19:25 MDT - Msg ID: 24554)

chart showing dramatic growth of derivatives in 90s

http://www.gold-eagle.com/editorials_00/ci020700.htmlhttp://www.gold-eagle.com/editorials_00/ci020700.html

Particularly of note...the majority of derivatives are OTC (not visible) and are interest rate swaps....no big surprise that the bond moves have got some in trouble...

Soooooo....tomorrow, Summers will hum and haw and announce that the plans to buy back 30 year issues is being "delayed" a bit....

Poor old Solomon

goldfan

(02/06/2000; 21:30:58 MDT - Msg ID: 24555)

Voyager (2/6/2000; 20:52:11MDT - Msg ID:24551)

http://www.lemetropolecafe.com/Saw your question, the link above is their front page, tells you about them. One of the best places for really up to date knowledge on gold, investments, economics, world wide. Mr. Murphy is the leader of GATA, the gold Anti-Trust Action Comnmittee that has done, is doing, maybe more than any other group to get the gold manipulations out in the open.

FWIW

Goldfan

Black Blade

(02/06/2000; 21:46:24 MDT - Msg ID: 24556)

RE: USAGOLD msg. 24526

OLE! indeed. Esta precio de oro, es buen, verdad? Tal vez un precio de $400 esta semana! The Aussies held tight, the Asians are wavering a little. Gold pulled back slightly, but is still up +$7.50. You are right though. The Brits may try to step in front of a frieght train on this one. Maybe this sudden rise may convince them to cancel the march 21st auction. I only wonder what the rumored Barrick conference call will be about (2pm EST). Barrick could call an end to hedging like Placer Dome and push Au higher, or they could restate how hedging is good for Barrick, (while horrible for shareholder return), which would probably slow down the AU advance. There has been a grass-roots email campaign to Barrick over the last couple of days in an effort to convince Barrick that hedging only destroys shareholder value, even if the profit margin is OK. The shareholder is the owner of the business. I think that this point should be put across to Barrick management before they make their conference call tomorrow. Mucho suerte! Black Blade.

goldfan

(02/06/2000; 21:58:26 MDT - Msg ID: 24557)

Journeyman (2/6/2000; 20:24:11MDT - Msg ID:24547) Journeyman (2/6/2000; 20:24:11MDT - Msg ID:24547)

Sir Journeyman I am honoured by your attention to these posts of SteveH and mine, and thank you for the mathematical reference.
You said:
>>>Remember, Greenspan only claimed ~60%
accuracy for the FED's predictions. Goldfan, particularly with your posts on chaos theory (now morphed into "complex phemoemnon" theory,I believe) you may be aware that major effects are "caused" by effects too subtle to measure or anticipate. Thus what's happening now isn't under anyone's control.

NO ONE's "in control." And NO ONE knows exactly how this will all turn out.<<<<

and I certainly agree. And I guess I was only speculating that the apparent divergence between the Fed and Treasury, was maybe not an accident, but something they cooked up to profit themselves and their friends. It is fairly predictable I believe, that interest rate tightening by the Fed will cause short rates to rise, and bond buying by the Treasury will cause long rates to drop. Surely somebody with prior knowloedge of the moves could profit?. I have come to believe that few really big moves, big mergers, big government actions, are taken with the best interests of the people or of the ordinary shareholders, in mind. I don't imagine Summmers or any of them except maybe AG and the banksters, have the least clue about the topics we discuss onthis forum.

and I know you're right, it will be the breath of a butterfly that blows this thing apart, unexpected by everyone....

FWIW
Goldfan

Black Blade

(02/06/2000; 22:03:17 MDT - Msg ID: 24558)

Barrick email addresses for anyone interested (Thanks 1912 at GE)

Let your views be known:

Barrick managers:

bmulligan@barrick.com

ryoung@ barrick.com

ksipos@barrick.com

and, important:

investor@barrick.com

tedw

(02/06/2000; 22:10:51 MDT - Msg ID: 24559)

Gold Rise

http://www.usagold.com
As somebody mentioned, I too noticed very little press about Fridays Gold move, just a few short blurbs. Interesting.

The Bank of England has egg on its face again. A few short days after they sell gold at the $290 range it explodes upward. How long will the Brits let them do it?

And how does this bode for future auctions there and elsewhere?

Gold:Real Money!!
I like Al Fuchinos reference to the manipulators as "The Evil Surpessors". Thats what Im going to call them.

Jason Happy

(02/06/2000; 22:35:23 MDT - Msg ID: 24560)

A letter sent to all barrick email addresses posted:

Dear Barrick Management,

Last year, I convinced my father to buy gold and gold stocks. He decided on Barrick
and Homestake. During October '99's run, I quickly convinced him to sell his $10,000
worth of Barrick and buy DROOY instead. The next day, Barrick faltered, while
DROOY soared.

On Thursday last week, Feb 3rd, DROOY increased in price more than any other gold
stock, 30%, because they are strongly positioned to profit from upside moves in the
POG, because of their lack of hedging.

Why should I buy a gold mining company that bets against a future rise in the price of
gold through hedging, when the major incentive to own a gold mining company in the first
place is if the price of gold rises in the future?

I understand you have hedged in the past to stay in business. Good for you. Will you
avoid forclosure if gold soars to $600/oz? Perhaps your mine holdings will be acquired
by unhedged companies like DROOY, Harmony, and others?

Sincerely,

on behalf of my father,
"Annonymous Happy" (real name inserted in real letter)
former stockholder

cc http://www.usagold.com/cpmforum/

Black Blade

(02/06/2000; 23:16:10 MDT - Msg ID: 24561)

From Aussie Assoc. Press

Aust dlr stronger at noon on strong gold price, bonds_2 Sydney

Australian gold stocks soared today after bullion prices surged to four month highs on Friday. In New York, gold closed Friday up $US23.20 at $US310.40 per ounce thanks to producer buybacks amid massive short covering. The rally was triggered by anticipation and later confirmation from some gold producers that hedge books would be unwound ahead of higher gold prices. At 1220 AEDT, gold was trading at $US318 an ounce in Australia. Mr Volanakis said the volatility in the Aussie of last week was not over, with the market thin due to a lot of Asian players being out of the action because of Chinese New Year last Saturday. But he said the local currency looked very strong today and was set to test the 64.10/20 resistance level. At noon, the Australian dollar was at 0.6514/6519 euro from 0.6377/82, 1.2849/72 New Zealand dollars from 1.2793/16, and 0.4017/22 British pounds from 0.3942/48. The US dollar was at 107.26/31 yen from 107.58/63 at the close Friday. The euro was at $US0.9816/9821 from $US0.9896/01 and 105.31/36 yen from 106.46/51. MORE 07-02 1232

Chris Powell

(02/08/2000; 00:58:04 MDT - Msg ID: 24669)

Who sold Barrick those calls?

http://www.egroups.com/group/gata/368.html?Who sold Barrick those gold calls? Maybe,
Reginald H. Howe says, it was the U.S.
Treasury Department's Exchange Stabilization
Fund. Nobody else would have the bucks or the
stupidity.

http://www.egroups.com/group/gata/368.html?

Chris Powell

(02/08/2000; 00:59:23 MDT - Msg ID: 24670)

How the Exchange Stabilization Fund fights gold

http://www.egroups.com/group/gata/369.html?Here's a summary of how the U.S. Treasury
Department's Exchange Stabilization Fund
is probably being used to suppress the price
of gold, and an explanation of why it is so
dangerous. Send this essay to your
representatives in Congress and ask that
it be frankly confirmed or denied.

nickel62

(02/08/2000; 01:23:37 MDT - Msg ID: 24671)

Stranger I just spent an hour reading over yesterdays posts.

And I think your is the best. If you don't mind I would like to repost it so we all remember this is a bull market.I know I keep forgetting it, I 'm sure others do as well.

TheStranger (02/07/00; 17:34:51MDT - Msg ID:24636)
The Gold Bull Market
Just a reminder that this gold bull market is only 9 months old, yet it has already risen 21% in dollar terms. Sometimes, it seems like we forget that.

jaydeevee

(02/08/2000; 01:53:59 MDT - Msg ID: 24672)

Sir Farfel . . . I'v been at the Office . . . am back at home now . . . .

http://www.usagold.comSir Farfel (sorry about the Sir! You indicate that you're not too fussed with the 'Sir' bit; and further, you point out to the forum that the frequent use of 'Sir' in a posting is a characteristic of Kaplan's posts.)

Let us assume, Farfel, that you are a great teacher. I don't really know whether you are a great teacher or not as I don't know you. From the little I'v read of your posts you certainly are a very knowledgeable and articulate person.

Why then would you, the 'teacher' react to me (a student of gold - a learner!) by continuing to indicate that I must be someone else?

I find it totally incredulous that you offer as evidence (that I am Kaplan) in that I used the word 'Sir' frequently in my recent posts.

I thought the theme of this forum was 'knights of old'; and I have witnessed the word 'Sir' used many, many times by different 'posters'.

I use the word 'Sir'; and I'm Kaplan! Very odd!

Let me now take an opportunity to say that I have developed a deep respect for the creator of this site, Mr. Michael J. Kosares; and ALL 'posters' at this site. Most of the time I didn't feel 'worthy' to post in such company; but being a follower of GOLd, maybe - just maybe, brings out the best in a person!

I believe history is being made here at USAGOLD FORUM. We are witness to an experience (this magnificent internet! this immediate flow of information!) that in future years will surely be regarded as a quantum leap in the evolvement of humankind. This IS pioneering stuff! History!
Eat your heart out Columbus! We GOLDBUGS are explorers, risk takers ALSO!

I'v learned so much here - about GOLD and myself. I'v been a student many years of my life but have not had a learning experience of the QUALITY that I have had reading this site. I'v learned about GOLD & LIFE! Who ever imagined that reading USAGOLD would be a life changing experience! Yet it is! Where else can you get this type of education? Where can you intelligently question the awesome powers that be?

I'm not posting here to upset you Farfel, or to upset anybody else, in any way whatsoever; but I do find it strange, after reading this site every day for months, that I get a reaction such as yours.

It certainly isn't a 'welcome to the site' reaction from you; and I feel that other 'lurkers' might well be intimidated to NOT post! A loss to the site!

I have posted on this site as 'jaydeevee' about six times over the past five months; and believe that my posts were quite boring stuff relative to the great work that is posted here! Yet we all need to start somewhere! We need encouragement to post here in such august company.

On the other site, one can search a 'poster's postings over time. Collect all the 'postings' of the one person and examine them at the one time. USAGOLD does not seem to have this facility; and I'm certainly not saying that this 'search' facility is a good thing.

If USAGOLD FORUM had this 'search' facility, you could look at all my postings, you would not/could not make the assertions that you have made.

To finish off, in the first of my recent posts, I referred to Kaplan's advice in gold ONLY; and his advice over the past FEW (ONLY) months.

I am, and was always aware that Kaplan's statements regarding internet stocks, platinum, paladium & crude etc. have not, as yet, come to pass.

Anyway, peace to ALL for now!

Black Blade

(02/08/2000; 03:39:08 MDT - Msg ID: 24673)

Palladium up +$18.00 to $553.00

http://www.kitco.com/market/Platinum down a couple of bucks and Gold barely budging. The PGM's still moving up overall.

Black Blade

(02/08/2000; 04:17:20 MDT - Msg ID: 24674)

Harmony has no hedge policy....so what does this mean for Aussie Goldfields Ltd.

SYDNEY (Dow Jones)--South Africa's Harmony Gold Mining Co. (HGMCY) has bought a 19.95% stake in Australia's Goldfields Ltd. (A.GOL). Harmony bought the stake from Hanson PLC (HAN) of the U.K. for A$1.25 a share or A$41 million in total, Goldfields said in a statement.

Aparrently Goldfields has over 600,000 oz sold forward.

The Goldfields investment is subject to approval from Australia's Foreign Investment Review Board and the South African Reserve Bank. The price paid by Harmony compares with Goldfield's closing level Monday of A$1.10 a share. Harmony later said the transaction marks its entry into Australia, and is in line with a strategy to pursue growth opportunities outside South Africa. "We have been investigating the Australian gold sector for some time as it contains several highly prospective regions and offers a number of attractive opportunities," said Chief Executive Bernard Swanepoel in a statement. The Goldfields stake will be a "base from which to investigate further opportunities in Australia," he said.

Black Blade

(02/08/2000; 04:21:26 MDT - Msg ID: 24675)

Palladium screams higher!

The fun isn't over yet:

Palladium up +$23.00 to $558.00 this morning, Pt down only -$0.50, Au down -$0.25, Ag sinking fast -$0.22.

Canuck

(02/08/2000; 05:18:28 MDT - Msg ID: 24676)

@ Al F.

Sorry about the mis-read yesterday.

Got my 'chips on/chips off' messed up.

My sincere apologies.

SteveH

(02/08/2000; 06:05:21 MDT - Msg ID: 24677)

ESF repost from Cleveland Fed site

The Exchange Stabilization Fund:
How It Works

by William P. Osterberg and James B. Thomson

Increasingly controversial, the Exchange Stabilization Fund is
used to influence the international value of the U.S. dollar and to provide aid to foreign countries. The debate surrounding the Fund will become more informed, suggest the authors, when observers understand how to calculate the total amount of resources available to the Fund. This Economic Commentary explains how the ESF's balance sheet figures must be adjusted to produce an accurate account of those resources.

The increased turmoil in international financial markets, starting with the Asian crises of 1997, has led to calls for financial assistance from the wealthier nations. In December 1997, the United States announced a $5 billion commitment toward an international package of financial assistance for South Korea. Two months earlier the United States pledged $3 billion for assistance to Indonesia. In both instances, the Exchange Stabilization Fund (ESF) was to be involved.

Established by Congress in 1934 to help stabilize the international value of the dollar, the ESF received little public attention until it was used in the provision of financial assistance to Mexico in the wake of the peso crisis of 1995. Indeed, greater scrutiny may have been inevitable given the ESF's expansion beyond its original mandate.1 Despite the recent attention, the full range of ESF activities and the actual amount of available ESF resources are not well understood. This impedes an informed public discussion of ESF operations.

A major goal of this Economic Commentary is to facilitate accurate assessments of the amount of resources available to the ESF. First, in order to understand the uses of ESF resources, we provide an overview of ESF operations. Second, we examine the ESF balance sheet to show how "total assets" is a poor measure of the resources available to the ESF for one of its major activities, foreign-exchange intervention. Third, we discuss how any measure of ESF resources must take account of warehousing and swap lines. Finally, we suggest a better procedure for assessing the amount of resources available to the ESF.

An Overview of the ESF

The ESF began operations on April 27, 1934, with capital of $2 billion. Initially, $1.8 billion of the ESF's reserves were maintained in the Treasury's gold account. The remaining $200 million was deposited in a special account at the Federal Reserve Bank of New York as the working balance for investing in gold and foreign exchange.2 The working fund of the ESF has expanded over time, reaching as high as $42 billion in mid-1995.3 As documented by Schwartz (1997), most of the growth in ESF assets has occurred since 1960 and has comprised increases in foreign exchange and securities. As of June 30, 1998, almost 60 percent of the asset total had been financed by cumulative net income, mainly reflecting interest earnings and capital gains on foreign currencies.

The Gold Reserve Act of 1934 excluded the ESF from the congressional appropriations process and explicitly authorized it to operate without congressional oversight and accountability. In other words, Congress gave exclusive control of the ESF to the executive branch. All decisions regarding the ESF are made by the Secretary of the Treasury, subject to the approval of the President.

Legislative changes in the late 1970s reduced somewhat the secrecy under which the ESF operates and made it more accountable to the Congress. For instance, since 1979 the administrative expenses of the ESF have been subject to the budget process. Moreover, a 1977 amendment to Section 10 of the Gold Reserve Act provides that:

"� a loan or credit to a foreign entity or government of a foreign country may be made for more than 6 months in a 12-month period only if the President gives Congress a written statement that unique or emergency circumstances require the loan or credit be for more than 6 months (31 U.S.C. 5302(b))."

Finally, 1978 legislation requires the Treasury to provide monthly statements of ESF activities to the House and Senate Banking Committees. Nevertheless, none of these legislative changes has reduced the discretion of the Treasury Secretary in operating the ESF. All of his decisions are final and not subject to approval by the Congress.

The Size of the ESF

A common misperception about the ESF is that its size is adequately measured by the "total assets" number reported on the ESF balance sheet, published quarterly in the Treasury Bulletin (see table 1).4 This might seem to be a reasonable presumption since the ESF cannot unilaterally issue debt in financial markets. However, several important aspects of ESF operations are not apparent from its balance sheet. In particular, since many ESF operations use dollar assets, any limitation on the conversion of nondollar assets to dollar assets is relevant to an assessment of available ESF resources.

Intervention, the purchase or sale of foreign currencies to influence the international value of the dollar, is a major use of ESF resources (see box, opposite). The other is the provision of financial assistance to foreign countries. Whenever the ESF sells foreign currency, it produces a crediting of the ESF's (nonmarketable) U.S. government security account with the Treasury, which is equivalent to "dollar" cash assets. When purchasing foreign currency, the ESF first obtains dollar balances�possibly by selling some of its Treasury securities to the Treasury (with the Federal Reserve [hereafter, the Fed] acting as agent). The subsequent purchase of foreign exchange with dollars leaves the ESF with a lower level of Treasury securities but an offsetting increase in "foreign exchange and securities."

Thus the relevant measure of resources available for ESF interventions depends on whether foreign exchange is being bought or sold. Dollar assets are needed to buy foreign-currency-denominated assets. On the other hand, purchases of dollars are financed from international reserves, which include official holdings of gold, foreign government securities or deposits at foreign central banks, the reserve position in the International Monetary Fund (IMF), and special drawing rights (SDRs).5

ESF accounting for SDRs provides another example of why total assets is a poor measure of available resources. The SDR is an international reserve asset created by the IMF (under the First Amendment to its Articles of Agreement) to supplement existing reserve assets. The value of an SDR is determined by reference to a basket of currencies of the five largest industrial-economy member countries of the IMF. Pursuant to the Special Drawing Rights Act of 1968, SDRs allocated to the United States or otherwise acquired by the United States are resources of the ESF.

There are three SDR entries on the ESF balance sheet (see table 1). The SDR asset entry and the SDR liability entry, "SDR allocations," pertain to ESF linkages to the IMF. The allocations represent the current value of the provisions of SDRs by the IMF to the U.S. Treasury, which were transferred to the account of the ESF.6 The SDR asset entry reflects the dollar value of SDR allocations to the United States plus interest earnings, valuation changes, and sales and acquisitions of SDRs from other IMF participants.

The third entry, "SDR certificates," equals the portion of the SDR assets which has already been "used." As noted earlier, all SDRs owned by the U.S. government must be held by the ESF. In other words, the ESF cannot engage in transactions with either the U.S. Treasury or the Fed that would result in a reduction in the ESF's SDR holdings. Thus, in order to convert SDRs to dollar-denominated assets, the ESF issues a claim on its SDR assets to the Fed�SDR certificates�in a process called monetization.7 While this does not decrease the SDR asset entry on the balance sheet of the ESF, it does increase the certificate number by the amount of the monetization. By law, the certificate entry cannot exceed the SDR asset entry. However, up to the limit imposed by the SDR asset total, monetization increases the size of the balance sheet, since the certificate amount increases dollar for dollar with the eventual purchase of assets (for example, foreign-currency-denominated government securities).8

Since the monetization process increases the total asset number while decreasing the amount of SDRs available to be monetized, the certificate total must be subtracted from total assets to arrive at an estimate of the ESF's available resources. Thus, although total assets of the ESF on June 30, 1998, were $39.7 billion dollars, a slightly more accurate measure of available dollars would be $30.4 billion. This is the sum of the nonmonetized portion of the SDR total ($10 billion SDRs minus $9.2 billion SDR certificates), the entry for U.S. government securities with the Treasury ($15.7 billion), and the dollar value of the German mark and Japanese yen items ($13.9 billion).

Off-Balance-Sheet Financing

Congress limited the ability of the ESF to issue liabilities on its own and thus, perhaps intentionally, limited the ESF to financing new interventions through the sale of assets, a practice known as asset management. However, beyond the uses of SDRs and securities as described above the ESF can obtain additional dollar resources by moving foreign-denominated assets off-balance sheet through an arrangement with the Federal Reserve System. Thus, the $30.4 billion on-balance sheet asset number is still a flawed measure of the dollar assets available to the ESF.

The first problem is that, once the Treasury securities ("dollars") are exhausted, the ESF cannot use its German mark assets or Japanese yen assets to purchase additional mark or yen items, respectively, without first converting them into dollar-denominated assets. This conversion of the ESF's foreign currency portfolio into dollar-denominated assets requires an off-balance-sheet financing arrangement with the Fed, referred to as warehousing.

Warehousing is a swap transaction in which the Fed buys foreign exchange from the ESF in a spot transaction and sells it back with a forward transaction �that is, the ESF agrees to exchange dollar assets for foreign exchange on the date the forward transaction comes due. The ESF balance sheet would thus record a decline in "foreign exchange and securities" but an increase in the "U.S. government securities" total, which could be used to purchase foreign currency or implement dollar loans to foreign countries (the forward transaction would not appear). In other words, the Fed warehousing arrangement allows the ESF to take a leveraged position in foreign assets that is not reflected on the ESF's balance sheet.

Two factors complicate the ESF's ability to use the Fed warehouse. First, the size of the warehouse is determined by FOMC deliberations. Although the size of the warehouse was increased to $20 billion to help finance the Mexican financial assistance package in 1995, it is currently limited to $5 billion with no balances currently outstanding. Second, although the currencies currently eligible for the warehouse are indicated in the Authorization for Foreign Currency Operations, they are not necessarily the same as the currencies that the ESF needs to exchange.9

Since about 1978, warehousing has been controversial. Goodfriend (1994) argues currency-warehousing agreements between the ESF and the Fed provide the ESF with additional funding that circumvents the congressional appropriations process and statutory limits on Federal borrowing.10

The second problem with the on-balance-sheet asset measure of ESF resources is that it ignores swap lines. Swap lines, formally called reciprocal currency arrangements, are credit lines between governments (or central banks) stipulating terms which, usually for a short period of time, allow either country to borrow the other's currency.11 The mechanics of drawing down a swap line are similar to that of warehousing�offsetting spot market and forward market transactions�except that our swap lines do not provide us with dollar assets directly but rather provide dollar assets for the other country. As in the warehousing arrangement, the forward market transaction does not appear on the balance sheet until the expiration of the swap line.12 Drawings might be renewed once routinely, but statutes require that the executive branch report subsequent renewals to Congress. Both the Fed and the ESF maintain swap lines the sizes of which are indicated in the quarterly summary of ESF and Fed foreign exchange operations published in the Federal Reserve Bulletin. As of March 31, 1999, the only authorized ESF swap line was with the Bank of Mexico for $3 billion.13

Finally, any measure of ESF resources available for intervention needs to take account of any stated commitments by the U.S. Treasury to provide financial assistance to foreign governments via the ESF. For instance, the commitments that had been made to Korea and Indonesia would have reduced the total resources available for intervention as reflected on the June 30 balance sheet by $8 billion.14

Summary

The Exchange Stabilization Fund, under the U.S. Treasury, is now routinely involved in efforts to stabilize currencies and to provide financial support to foreign countries. However, the amount of resources available to the ESF and its range of activities are perhaps not well understood by many observers. In this Economic Commentary we correct the misperception that "total assets" is a good measure of available ESF resources.

First, "total assets" ignores the fact that the monetization of SDRs does not decrease the SDR asset entry even though the total amount of monetization is limited by the SDR asset number. Consequently, total assets must be reduced by the outstanding amount of monetization, measured by the SDR certificate number. Second, estimates of resources available to the ESF for intervention must take into account the warehousing arrangement with the Fed. The current limit on the size of the warehouse is relevant to whether the foreign-currency-denominated assets could be converted into dollars for use in purchasing foreign assets. Third, outstanding swaps and any existing commitments of ESF funds should be reflected in estimated ESF resources. An understanding of these points is a prerequisite to an informed debate regarding any change in ESF funding.

The Fed and the ESF in Foreign-Exchange Intervention

Since the ESF's inception, the Federal Reserve Bank of New York has been the officially designated agent for the ESF in intervention operations. In 1962, the Federal Reserve System's Federal Open Market Committee (FOMC) authorized open-market transactions in foreign currencies for the account of the Fed, and since then, the Federal Reserve Bank of New York has acted as agent for both the Fed and the ESF in such transactions. Starting in 1978, the ESF and the Fed have almost always intervened jointly.

Although the decision to intervene is usually made jointly by the Treasury and the Fed, it falls primarily under the Treasury's purview. While the two entities routinely intervene in the same direction and amounts for their individual accounts, formal independence is maintained. In other words, the Treasury can instruct the Fed to intervene on behalf of the ESF but it cannot force the Fed to intervene for the Fed's own account.a

--------------------------------------------------------------------------------
a. One exception to this would be a declared national emergency.
See also Owen F. Humpage, "Institutional Aspects of U.S. Intervention," Economic Review, Federal Reserve Bank of Cleveland, vol. 20, no. 1 (Quarter 1 1994), pp. 2�19.

Table 1 ESF Balance Sheet, June 30, 1998
Assets
($ millions) Liabilities and capital
($ millions)
Held with U.S. Treasury: U.S. government securities

Special drawing rights (SDRs)

Foreign exchange
and securities:
German marks
Japanese yen

Accounts receivable

Total assets
15,691

10,001

5,898
8,018

119

39,727 Current liabilities:
Accounts payable
Total current liabilities

Other liabilities
SDR certificates
SDR allocations
Total other liabilities

Capital:
Capital account
Net income gain
(+) or loss (�)
Total capital

Total liabilities
and capital
223
223

9,200
6,524
15,724

200

23,581
23,781

39,727a

--------------------------------------------------------------------------------
a. The column sum does not equal this number because of rounding error.
SOURCE: U.S. Department of the Treasury, Treasury Bulletin, December 1998, p. 108.

Footnotes

1. See Anna J. Schwartz, "From Obscurity to Notoriety: A Biography of the Exchange Stabilization Fund," Journal of Money, Credit, and Banking, vol. 29, no. 2 (May 1997), pp. 135�53; Walker F. Todd, "Disorderly Markets: The Law, History, and Economics of the Exchange Stabilization Fund and U.S. Foreign Exchange Market Intervention," Research in Financial Services Public and Private Policy, vol. 4 (1992), pp. 111�79; and C. Randall Henning, "The Exchange Stabilization Fund: Slush Money or War Chest?" Institute for International Economics, Washington, D.C., 1999.

2. Although originally authorized to deal in both gold and foreign exchange, the ESF has tended to deal primarily in foreign exchange and, to some extent, in the securities of sovereign nations (including U.S. government securities).

3. See Schwartz (footnote 1), pp. 136�7.

4. For example, a December 4, 1997, article discussing the proposed rescue plan for South Korea states that "the U.S. money, if needed, would come from the Exchange Stabilization Fund�. The fund contained $40 billion as of the end of March�." See "South Korea, IMF Finalize $55 Billion Bailout Plan," Los Angeles Times, p. D1.

5. The U.S. drew on its IMF quota in
1964� 66, 1968, 1970�72, and 1978 for amounts totaling $6.5 billion. Treasury securities denominated in foreign currencies were issued in 1962�74 ("Roosa" bonds ) and in 1978�79 ("Carter" bonds) for $11.1 billion. See Schwartz (footnote 1), pp.143�4.

6. These IMF provisions of SDRs to the U.S. Treasury occurred in four separate actions between 1970 and 1981.

7. The last big cash-in, or conversion of, SDRs was in the third quarter of 1995 to fund part of the financial assistance offered to Mexico.

8. The conversion of SDRs first augments the asset-side entry for U.S. government securities. This entry, plus "foreign exchange and (foreign government) securities" more directly permits the funding of ESF activities such as the purchase and sale of foreign currencies. For example, U.S. government securities can be used to purchase foreign currency as part of an effort to depress the international value of the dollar. This would then add to the foreign exchange total, which is largely held in the form of foreign currency government securities, rather than cash.

9. The authorization is published annually in Annual Report of the Board of Governors of the Federal Reserve System. See also Owen F. Humpage, "Institutional Aspects of U.S. Intervention," Economic Review, Federal Reserve Bank of Cleveland, vol. 30, no. 1 (Quarter 1 1994), p. 5.

10. See Marvin Goodfriend, "Why We Need an 'Accord� for Federal Reserve Credit Policy: A Note," Journal of Money, Credit and Banking, vol. 26 (August 1994, Pt. 2), pp. 572�80.

11. See Humpage (footnote 9), pp.7�8, for further details on the accounting associated with swap lines.

12. Because a forward transaction commits the ESF to exchange foreign currency for dollars at a fixed price in the future, the true exposure of the ESF to foreign-exchange risk is not reflected on its balance sheet.

13. In the last quarter of 1998, Federal Reserve System swap lines were reduced from $32.4 billion to $5 billion ($2 billion with the Bank of Canada and $3 billion with the Bank of Mexico), and the ESF eliminated its swap line with the German Bundesbank. There are no outstanding swaps for either agency. Reasons stated for the reductions included history of disuse, formation of the European Central Bank, and the existence of other arrangements for monetary cooperation.

14. The commitments to Korea and Indonesia and also to Thailand have since been rendered inoperative. However, as of June 1999, the ESF still provides backstop to the Bank of International Settlements� $7.5 billion dollar support package for Brazil.

SteveH

(02/08/2000; 06:08:28 MDT - Msg ID: 24678)

After having read the ESF doc...

I would say that if thought gold was a currency or had an effect on the dollar as a currency, they might believe it within their realm to buy and sell gold or gold-based securities, options, or futures in order to control it.

That is abominable.

The ESF can be sued as an entity? Hmmm? Class-action?

Al Fulchino

(02/08/2000; 06:19:44 MDT - Msg ID: 24679)

Canuck/Tomcat

Canuck, No need to apologize, I knew it was a misread, but still thought it was funny. Actually I am more of a bull than my wife would prefer.

Tomcat, Hope you are not losing much on the tranfer from silver to gold. I am sticking with my current ratio, which is about70% gold and 30%silver as far as physical goes.

lamprey_65

(02/08/2000; 06:26:43 MDT - Msg ID: 24680)

After a little thought...

Seems to me that Barrick tells us at least two things:

1. Someone "owed" them a favor - why else would a sane entity sell them calls so cheaply in this volatile environment? I get the sneaking suspicion that Barrick has been providing its gold to whoever sold them these calls. Is there a way to find out who Barrick sells gold to?...it is a public company.
2. Barrick sees the possibility of sustained POG above $319 as early as March 1, otherwise they would not have made the changes or bought the calls. Notice POG fell back well below $319 very dramatically right as Barrick announced - we're not in March yet.

Seems that this move above $300 was allowed by the manipulators to coincide with Barrick's announcement...they've given up the defense of $290 (it probably has less meaning now as January is over and those calls have been taken off the table). Is $290-300 the new floor with an upper no-fail defense line of $360? Seems that way to me, we'll see. The last no-fail was line was $335, which is also an important resistance level that will become support on the way up - I noticed it is also the level above which Barrick can buy gold from the calls purchased beginning in 2001. That would make this year's likely target range 319-335 and next year's 335-360? All I've got to say about that is - Good Luck.

It looks like the bullion banks have thrown in the towel only in that they now concede that gold is going up...however, they want the rise to be completed in controlled stages. I am now convinced that Barrick is their "Stooge"...to much history there to ignore - especially with Bush and Mulrooney (sp?) having ties to the company. Ever wonder about those 79 tons from Kuwait? I have.

I noticed some mention yesterday that the DOW was having a hard time of it BECAUSE OF HIGHER GOLD PRICES!
People are scared of gold - they are scared of the truth a price rise would tell.

Lamprey

tedw

(02/08/2000; 06:36:58 MDT - Msg ID: 24681)

Miscellaneous

http://www.usagold.com
First of all, I know Jaydeevee is NOT kaplan. By his rythmic
prose I can tell without a doubt that Sir Jaydeevee is really Jimmy Hendrix!!!

All eyes seem focused on the ESF thanks to Reginal Howe.
I would suggest its time Freedom of Information Requests are sent to the ESF asking about those Gold Calls sold to Barrick. The ESF is a part of the Federal Government and would be obligated to respond to such a request. There very easy to make and perhaps Gata will act in that way. Perhaps Ill do it myself. (PS: If my body is found floating down a river you will know who to suspect).

It looks to me like this bull market has stalled a bit. I think the long term outlook for Gold is very bullish but with uplegs marked by periods of corrections and doldrums.
I also think there are powerful money interests that dont want Gold to rise too fast too soon, but the market forces may dictate to them.

Central Bank Auctions. Are these price surges in Gold enough
to cause the Bank of England or the Swiss to re-think their
sales of Gold? If I was English Id be a little perturbed about them giving away the national treasure.

What do you all think? Is the market going to press on a bit, stay where its at, or slump back down?

My feeling, based on nothing, is that we will see Gold bounce around in the $300-$3100 range like it did in the $290-$300 range for awhile, then jump up later when the stock market crashes or some Bank auctions are cancelled.

Remember: its not money thats the root of all evil,its the
LOVE of money.

SteveH

(02/08/2000; 06:37:34 MDT - Msg ID: 24682)

Guess what?

Gold down 4, now at 300.50 (april).

So what else is new.

ESF sucks!

Journeyman

(02/08/2000; 07:15:35 MDT - Msg ID: 24683)

Greenspan's POG goals

Somewhere awhile back (POG ~$400/oz.), Greenspan said he wouldn't be happy till gold was below $360. (No time to locate specific details, this is strictly from memory -- Greenspan's number is rock-solid however -- made quite an impression on me at the time.)

Regards, j.

Golden Boy

(02/08/2000; 07:31:22 MDT - Msg ID: 24684)

The MISSING link to Barrick's Hedge

I attended Barrick's meeting in Toronto yesterday. The key point which i haven't seen discussed in any write-up is theat the calls Barrick bought are NOT deliverable in Gold. The specifically said that if the calls were in the money, it would only lead to a CASH settlement. THIS IS HUGE. Why? The bullion bank does not need to go out and buy gold to deliver aginst the option, it only needs to transfer cash, preventing the bullion bank from being squeezed. Point #2. Barrick sold forward an additional 600,000 ounces in the 4th quarter. They had 14 million ounces at the end of Q3, delivered agianst the 1 million ounces they produced and ended up with 13.6 million, therefore they added 600,000 ounces. Barrick continues to feed the bullion banks. The only positive out of the Barrick announcement is that Barrick has set itself up to take advantage of them potentially buying back their hedges. The calls will make them a lot of money if the decide to buy their hedges back and announce that at a later date to the market.

TownCrier

(02/08/2000; 07:33:02 MDT - Msg ID: 24685)

Sir Solomon Weaver's question

Solomon Weaver (02/07/00; 19:54:18MDT - Msg ID:24651)
dollars dollars everywhere and not a ....
>>>>>TownCrier (02/07/00; 15:19:06MDT - Msg ID:24621)
>>>>>Fed adds $6.26 billion to banking system reserves
>>>>>Three-day repos were the flavor of the day.
Hey TownCrier, is there ever any days when the FED drains back these reserves???
Poor old Solomon
----
Yes, but they are few and far between.
In the past 10 months or so the Fed drained reserves maybe half a dozen times...most of those coming in the wake of Y2K. The Fed has taken no action at all on only a handful of days. Every other day (which is most of them), including many of them this year, have been operations to add reserves.

lamprey_65

(02/08/2000; 08:17:58 MDT - Msg ID: 24686)

Golden Boy

Thanks for the info about the calls being deliverable in cash only...this clears things up. Now I KNOW that 319-360 is expected through next year.

Lamprey

tedw

(02/08/2000; 08:20:45 MDT - Msg ID: 24687)

How to make money in a manipulated Gold Market

http://www.usagold.com
There is a subject worth discussing.

lamprey_65

(02/08/2000; 08:59:53 MDT - Msg ID: 24688)

tedw

If you're talking about stocks, I'd say you buy now and sell this year when $335 POG is hit and the price stalls. You then buy back at the end of the year near $335 and wait for $360 next year before selling.

Sounds like a plan anyway.

Lamprey

Bill

(02/08/2000; 09:00:42 MDT - Msg ID: 24689)

Gold Calls not deliverable in Gold?

Golden Boy / Town Crier

Correct me if I'm wrong but calls could NEVER be repaid in gold anyway. One needs to exercise his option to enter into a contract, then call for delivery. I know it sounds like a technicality though, I don't put it past them to use this play on words to lower market psychology. What do you think?
Bill

Golden Boy

(02/08/2000; 09:22:33 MDT - Msg ID: 24690)

Bill

If the calls Barrick bought were 'ordinary' why would they not just net out the Short-term calls they sold. I know they might have different excersize prices but they shouldn't show them seperately. The reason why they show them seperately is because they have different covenants to them. The calls they sold are deliverable in gold and the calls they bought are deeliverable in CASH. And for the last time, Barrick manipulated the media into thinking their hedge book decreased, it didn't. Hedging is negative to the gold market because future production is sold at spot sprices driving the spot market down. Barrick continued to purchase 600,000 oz. of forward contracts in Q4. They want us to believe they're helping the gold market now, we are all brainwashed to believe that.

lamprey_65

(02/08/2000; 09:26:49 MDT - Msg ID: 24691)

My view on gold stocks...

1. You never try to trade them short term
2. You only buy every 3-4 years when the market is turning up from a major bottom (like now!)
3. You only buy those stocks leveraged to higher prices...i.e. you do NOT buy a hedge fund like Barrick. Current earnings are not the goal when bouncing from a bottom, you want those stocks that have the most to gain from an increase in POG. Buy either non/low hedged miners or mines with large reserves only minable at higher prices (such as the South African Mines). This is a bet on higher prices, you're either right or you're wrong...hedging your bets with something like Barrick is a waste of money (and distasteful considering the circumstances).

If you look at the history of gold, these opportunities arise only once or twice a decade. I made a nice gain in '93 in a similar environment...got to pick your spots on the stocks. You can buy the physical ALL the time :-)

Lamprey

lamprey_65

(02/08/2000; 09:28:54 MDT - Msg ID: 24692)

Correction

Make that buy every 6-10 years!

L.

ORO

(02/08/2000; 09:42:52 MDT - Msg ID: 24693)

Chris Powell - The calls

The calls sold to barrick are part of their current blackmail operation against their banks.
The bullion bankers were faced with two options: (1) Barrick buys as much bullion on the markets as it can - up to the 4 years estimated production they have sold forward, bringing up the price of gold and putting both barrick and its bankers in peril. (2) The banks issue calls settled only in dollars, knowing full well that the respective central banks behind each bullion banker will bail them out.

I suggested to FOA, some time back, that the bullion banks would have bought such dollar settled calls from the Fed. However, that is not the way the Fed operates, nor would it take upon itself to issue this dollar for gold pumping equipment, this stupidity is reserved for the bankers themselves. What the Fed does, as it always has, is bail out the banks when the options go into the money and cause the banks to sell assets. The Fed will buy or swap these assets as necessary to keep them afloat. The bankers get their way by doing the usual schtick; while dancing the Tango the bankers dip and threaten their Fed partner with falling to the floor and creating a great embarrassment.

What the Fed does not manage to monetize, the Fed will reorganize with the help of a Federal government banking agency like the FDIC, or create an RTC. The flailing bank's liabilities to the lenders that set it up to fail are covered by the Fed.

The issue of such calls en masse by the bullion bankers would imply that the corporate structure above them is going to be shifted so that the failure of the bullion bank would not reach the corporate parent. Expect such action soon, if the owners can find the appropriate legal loophole - because this is an illegal move.

Golden Boy

(02/08/2000; 09:48:52 MDT - Msg ID: 24694)

DONT BUY BARRICK

To all the senior executives at Barrick:
Your premium sales program has netted you $1.5 billion in the past. If you divide that amount by your $300 million shares, it has added $5 to your share price-congratulations.
How high would your share price be if you never hedged?
In september when gold was trading around $320, your share price was $25 ($7 higher than it is today). At $350 gold your share price should be trading around $35. Myself and most other people on this site belive your hedge book has depressed the gold price to the sub-$300 levels causing your share price to be around $17. You can babble all you want how your hedging gains has allowed you to buy Bulyanhulu and Pascua but your shareholders would much more greatly appreciate a share price at least double what it is today. You might not think you have that big of an effect on the gold market but you do, just look at yesterday when your company single-handedly droped the gold price $15 with your announcemnt. My advise to you would be to drop your ties with the bullion banks and start supporting your industry. The assets you have are the best in the business, unfortunately the management discount being applied to you far offsets the true value of your properties.

P.S. You might want to follow the Ashanti class action law suit very carefully because you might receive one as well.
How does this sound. Barrick being tried for conspiring to manipulate the gold price downwards so they can acquire assets at a fifth of their true value. Example - purchasing Sutton shares for approx. $10 when back when gold was $375 they were trading at $50. I hope everybody listens to Bill Murphy and his followers and buys every other gold shares other than barrick.

R Powell

(02/08/2000; 10:01:54 MDT - Msg ID: 24695)

Golden Boy

Thanks for the info. and idea. It certainly makes sense to me that Barrick knows an announced anti-hedging policy will move market sentiment and prices higher so....why not load up on calls before moving the POG higher? Then they won't look quite so foolish at the next shareholders meeting. Reminder to all--- CEO of Barrick is tonight's guest on CNBC's Squawk box! Perhaps more propaganda, perhaps not. Jaydeevee MAN are you really Elvis!!

R Powell

(02/08/2000; 10:07:53 MDT - Msg ID: 24696)

Lamprey 65

Maybe Barrick plans to make big bucks with those calls. maybe?

lamprey_65

(02/08/2000; 10:18:18 MDT - Msg ID: 24697)

R Powell

Yes, that is my take on it...Barrick restructured this way for a reason -- I also think the bullion bank(s) - and whoever else was involved in structuring the deal - owe Barrick for "favors rendered"...I can't prove it, but it makes sense from the facts.

I do not own ABX shares. I am beginning to think, however, that a class action law suit is in order here by gold shareholders and low/non hedged miners. It's worth some thought. It's probably the only way to get to the bottom of this thing - work in conujuction with GATA. It would also put more pressure directly on Barrick. The charge - price fixing and collusion.

Lamprey

TownCrier

(02/08/2000; 10:31:26 MDT - Msg ID: 24698)

Today's Market Report

Market Report (2/08/00): To better understand what happened yesterday, we need to take one step back to see the big picture. To read the standard North American press reports one is given the distinct impression that we live in a world where the gold market is dictated by the actions of gold producers Placer Dome and Barrick to the exclusion of all else....crediting Placer's announcement with the rise and Barrick's announcement with the fall. (However, the price has not fallen back to its mid-280 starting point so what we've got so far is essentially a healthy retracement.) Seemingly lost in the shuffle is the role of the world's second-largest producer, Gold Fields. Setting the stage much earlier in the year with bids at the UK gold auctions in order to unwind their own hedge positions, Gold Fields chairman Chris Thompson then announced from Johannesburg on Thursday in the strongest of terms that gold miners must ween themselves from the self-defeating practice of hedging future production due to the depressing impact such action has on prices. (By way of example of the extent of this activity, Reuters reported that recent statistics by industry consultant Gold Fields Mineral Services showed producer hedging effectively added 445 tonnes to world supply last year, up from 88 tonnes in the prior year.) As we say, that set the stage, but the gold traders likely took it with a grain of salt. Then when the very next day arrived with news that Placer Dome (world's fourth(?) largest producer) was suspending its hedging program, traders likely panicked, a new paradigm to be imminent in which all producers would promptly renounce gold derivatives and unwind their positions. Overseas follow-through trading when their markets opened Monday added further to New York's Friday action. With a Barrick announcement scheduled for Monday afternoon, traders were positioning themselves for what would surely be Barrick's confirmation that a new era had dawned. It wasn't to be....Barrick Gold Corp simply announced that it had made adjustments to its hedging program, revealing among other items that the number of ounces committed had been reduced by nearly half in the fourth quarter of 1999, down to 9.8 million from 18.8 million ounces. Barrick claimed to have 100% of production hedged through 2001 with 25% hedged in later years. Obviously, this wasn't what the market was expecting to hear, and although it gave up much of its exuberantly speculative-based gains.

Reuters indicated that analysts are saying that over the next several days gold could be extremely susceptible to news or announcements coming from other producers and central banks....as market participants try to come to terms with the likely future direction for the price. Largely lost in the standard news was yet another South African producer, this one being the world's largest. Bridge News reported that Anglogold yesterday said it would be lowering its own remaining hedge position going forward with intentions to begin delivering into its existing hedges...rather than waiting for a rainy day. Nice work there, guys. (Anglogold has also been an active participant in the past UK gold auctions in order to unwind hedges.) Despite the supportive role for the industry played by these two important South African producers (Gold Fields and Anglogold), Bridge News offers us this insight that the chairman of Canadian producer, Barrick, may be falling victim to his own publicity....meaning that he believes it. Take a look...

"HEADLINE: Chairman of Canada's Barrick says firm is carrying gold sector.
Toronto--Feb 7--Peter Munk, the chairman of Canada's
Barrick Gold Corp., said the company has been instrumental
in carrying the gold industry through its prolonged price
slump in recent years. Although the company continues to
hedge all its gold production at a time when other major
producers are opting to suspend hedging activities, Munk
feels poorly managed gold producers that sell gold into a
falling gold market are a much greater detriment to the industry."

All together now...."Gimme a break." And finally, the regularly scheduled release of the weekly balance sheet of the European Central Bank revealed that the Dutch Central Bank is drawing ever nearer to completely their program to move 100 tonnes of gold prior to September 26th this year. Another 5 tonnes was moved last week through the BIS, lowering the ECB's total gold assets by a small 47 million euros, leaving a total of 116.248 billion euros on the books. We'll have to see if the gold market can react intelligently to this latest step in what should already be a well-known Dutch phenomenon.

A we go to fetch this report to the server, we see that spot gold has stabilized near $296. After all the volatility and post-Barrick disappointment, we're still up $12 from where trade began on Friday morning. Four percent gains in two full trading days seems pretty impressive in my book....especially on a financial instrument that is typically revered for its stability.

That will do it for today, goldmeisters. We'll see you here tomorrow.

PH in LA

(02/08/2000; 10:44:49 MDT - Msg ID: 24699)

More and more stupid.

Date: Tue Feb 08 2000 06:33
PERMAFROST (My friends...) ID#230273:
Copyright � 1999 PERMAFROST/Kitco Inc. All rights reserved. "Please consider these thoughts...

"The entire fiat currency supply of the world is not worth ONE ounce of gold! Because the paper or digital tokens of Big Brother have absolutely no intrinsic value. Their only marginal value lies in their "convertibility" to toilet paper... Fiat IS A CRIME! under the constitution of the United States. Alan Greenspan belongs in jail!"

Well, here we have about as near as what our friend Permafrost can get to what for him passes for "thoughts".

Nothing but a lot of shouting from atop a soapbox. "Greenspan belongs in jail!" he yells, because "The entire fiat currency supply of the world is not worth ONE ounce of gold!"

This is plain and simple stupid!

It belongs in the same category as jabbering gibberish about "illuminati" and"goddess venus".

Most rational human beings know a nut when they hear one. The best a rational person could say in his defense is that friend Permafrost is indulging in hyperbole. Because if "all the fiat currency supply of the whole world REALLY is worth less than ONE ounce of gold", then no doubt Permafrost would be willing to exchange all the fiat currency he posseses for one ounce of gold, a business proposition he would be very stupid to accept; unless of course, by gathering together all his fiat money, the sum would total less than $300. If that is so, and his dumb idea has merit in spite of our rational collective rejection of his stupid premise, certainly there would be someone else who might be interested in "exchanging all their Federal Reserve Note (fiat) dollars" for an ounce or two of gold. I assure you that I don't know anyone who is even half that stupid.

"...the paper or digital tokens of Big Brother have absolutely no intrinsic value. Their only marginal value lies in their "convertibility" to toilet paper" says Permfrost.

Here we have the simple statement of a lie that even a simple-minded birdbrained fool can see right through. Because, first of all, fiat IS convertible to gold. Anyone who has any fiat currency at all knows that this is so. But the underlying even more stupid premise of Permafrost's "thought" is that "nothing has any value whatsoever but gold". This is a foolish idea. Beyond its appearance... a nice shiny yellow color, ductibility, permanance (it doesn't tarnish) gold has value only for its convertibility!!!!!! Because you cannot eat it. It has no value as food at all. It can only be exchanged for food. The same way that fiat currency can be exchanged for food. The same goes for shelter. Gold is not a house. It can only be exchanged for a house (like fiat currency can be exchanged for a house). A house to live in. Or to raise a family in. And gold and fiat currency can both be exchanged for entertainment (to overcome boredom). Neither one is the least bit entertaining. (Even Chris's drivel is more entertaining than either Federal Reserve Notes or gold. The same goes for automobiles and transportation (to overcome the boredom of staying in one place). Ever hear of oil, PermaStupid? It can be exchanged for either gold or fiat currency. In fact, millions of barrels of it are exchanged every day. This is value.

Only a nut thinks that gold is the only valuable substance in existence. Because in fact, it gets its only value for its exchangeability to other far more valueable commodities. Any rational person knows this without even thinking about it.

And anyone with even an ounce of rationality knows a maniac when he hears one. Idiots like Permafrost give the friends of gold a bad name: "Stupid" is the reputation he gives us. If FOA wants to persist in his self-imposed exile because of the irrational hyperbole of nuts, he weakens his whole premise. These lunatic fringe morons are celebrating a victory of stupidity over rationality over there at Kitco at this very moment. By letting them influence even one among us to stop posting, we sink a little closer to their level, abysmal as it is. They must be ignored. Even giving them just the appearance of engaging in what they call "debates" with us is a lose/lose endeavor. They will never be convinced by rationality. All they understand is stupidity.

For the sake of rationality, ethics, and honor, FOA should think long and hard on his position. If he lacks time and/or energy to continue posting in the selfless manner he has shown, that can be understood and accepted. But that he validate the forces of stupidity by withdrawing because of them? This can never be accepted!!!

TownCrier

(02/08/2000; 10:48:40 MDT - Msg ID: 24700)

Typos: can't live with 'em, can't type without 'em

http://www.usagold.com/DailyQuotes.htmlClick the link to see a somewhat more error-free Market Report.

Farfel

(02/08/2000; 10:56:32 MDT - Msg ID: 24701)

SELL BARRICK GOLD: A Trip Back in History, Two Years Ago

...AND BOYCOTT TRIZEC HAHN!

Letter Printed in THE TORONTO GLOBE AND MAIL BUSINESS SECTION

December 12, 1997

Re: "Munk Pans Knee Jerk Reaction Against Gold."

Dear Editor:

Mr. Peter Munk of Barrick Gold has some gall to blame World Central
Banks for the horror story unfolding in the gold mining industry. In
fact, he is one of the leading contributors to the malaise afflicting
the precious metal. Barrick's shareholders ought to fire him summarily
along with his entire executive board of sycophantic ducks.

Yes, it's true that, owing to forward hedging, he locked in most of
Barrick's production at $410 an ounce. Most observers would consider
that a shrewd tactic. However, it is a Pyrrhic victory at best. In
reality, forward sales of gold by self-serving mining companies like
Barrick contributed to the over-supply of gold in the market. When gold
reached $410 an ounce and the world's largest mining company sold
forward such a huge position in gold, is it any wonder that Central
Banks decided they ought to follow a similar course...especially given
gold's stagnant price over the last decade?

Mr. Munk further feigns concern about the possible social disruptions
that might unfold in a major gold-producing country such as South
Africa. When he dumped Barrick's gold supply upon the market at $410 an
ounce, was that an act of social conscience where South Africa is
concerned? Hell, no...it was Barrick acting in its own selfish
interest, oblivious to the perceptions and ramifications this huge
forward sale would have on the world gold market.

If gold mining companies really wish to convince Central Banks that gold
stands any chance of future appreciation, then they better skip the hot
air and pursue immediate, tangible strategies in addressing the
over-supply problem.

First, they must immediately cease all forward sales of gold. Secondly,
they must announce to the world that all future exploration of gold is
ending today and they will only work the existing mines. Third, they
must consolidate their industry so that it is similar structurally to
other major oligopolistic/monopolistic commodity suppliers (such as
OPEC). Fourth, they must mount a concerted propaganda campaign to
convince Central Banks and major global financial institutions that gold
truly is a financial reserve and not merely another commodity. In other
words, they must shift their focus from supply to demand. It seems
everytime we open a newspaper or turn on the TV today, we see a constant
assault on the value of gold mounted by disciples of the so-called "New
Paradigm." It would make a great deal more sense to forego opening a
single gold mine and use the monies saved to finance pro-gold lobbyists
and media exponents who can reverse the negative psychology that's
developed around the metal.

If the foregoing measures are adopted quickly, then I predict you would
see a short squeeze on gold that might send it back into the
stratosphere. In doing so, tens of thousands of hard-working miners
still might have jobs by the time Christmas rolls around.

The most unnerving aspect of the current gold crisis is its potential
spillover effects. Weakness in gold is spilling over onto other metals
such as platinum and copper. In effect, if counter-measures are not
enacted swiftly, we soon might witness numerous mine closures in
virtually every metal industry. Can you just imagine the devastation
this phenomenon would wreak upon the resource-dependent Canadian
economy? Already, various financial analysts are attributing unusual
weakness in the Canadian dollar to currency speculator concerns over
future, pandemic weakness in Canada's resource sector.

In conclusion, I would ask Mr. Munk one final question: if he is truly
bullish on gold as he claims, then why the hell is he shifting
significant amounts of assets into Trizec-Hahn, the commercial property
developer? If he truly believes in the gold mining industry, then he
is sending the wrong message by simply buying back his own company's
shares. The only message the buyback sends to the world is that Peter
Munk believes in Peter Munk. Instead, he should acquire another major
gold mining company (like Battle Mountain, Placer Dome, TVX, Homestake,
Royal Oak, or Kinross). In doing so, he will put the entire gold market
on notice that short sellers best beware because mining consolidation is
in the works.

TownCrier

(02/08/2000; 11:03:27 MDT - Msg ID: 24702)

Sir Bill and gold call options

Bill (02/08/00; 09:00:42MDT - Msg ID:24689)
"Gold Calls not deliverable in Gold?
Correct me if I'm wrong but calls could NEVER be repaid in gold anyway. One needs to exercise his option to enter into a contract, then call for delivery."
----
If the call options are trading through New York in association with COMEX, then "you are correct, sir!" (ala Ed McMahon to Johnny Carson) The instrument underlying the option would be a COMEX futures contract.

In the European markets, all bets are off. I have no knowledge of the variety of ways in which their gold derivatives might be structured.

nickel62

(02/08/2000; 11:31:25 MDT - Msg ID: 24703)

Journeyman I remember the discussion where Greenspan said

he wouldn't be happy till gold was below $360 an ounce. It was quite a while ago and I remember it shocked me at the time. Sorry I don't remember any more of the details either.

FOA

(02/08/2000; 11:55:06 MDT - Msg ID: 24704)

(No Subject)

PH in LA, Cavan Man, and ALL,
I'm waiting on some possible new structural changes to this website. If it works out it will be very interesting. Also, I will receive a new handle for this forum and for the first time post representing myself only (not anyone else). Give it some time, this will all work out very well.

Only market events can change the opinions of "hard" gold bugs that are looking too much into the past for guidance. No amount of human logic or our discussion will sway them to view the future in a different context. Many of them only see the here and now plus 3 steps in front of them.

Later, god willing, all of us will "walk the gold trail" as a group (FOA included) with an eye on the future, not the past.

Thanks all,,,for your many comments ,,,,,, I'm taking this time to complete several projects. Will
return later (a number of days).

FOA

Golden Truth

(02/08/2000; 12:10:17 MDT - Msg ID: 24705)

GOLD AND SILVER.

Take a look at the Gold And Silver charts over at Kitco Exactly at 1:00pm, they both started to head down.
Coincidence? i think not. Then exactly 1 hr later Platinum came falling down, but today is now right back up at $515/oz.
This is a historical high folks if you would of bought in Jan of 1999,(back in the good old days)@ $342/0z you would be up 33%, thats 33%. Thats alot of money and still bought GOLD today, thanks to the MANIPULATORS (Barrick), by the way you guys are TRUE SCUM! I,am certain you will be hated by all non hedged Gold miners and worshipped by Cambior and Ashanti Gold mines, enjoy it while it lasts, because the WORD is out! BUDDY and your dirty little secrets are now being shouted from the rooftops of the common man on the street and we are feeling real HUNGRY for BLOOD.

Good luck Mr Barick you are going to need it!

Farfel

(02/08/2000; 12:12:02 MDT - Msg ID: 24706)

SELL BARRICK GOLD, BOYCOTT TRIZEC HAHN: Nothing has Changed

The facts are this:

1.On Monday, Barrick had the opportunity to set fire to the gold market and really run the price up. IT DID NOT DO SO.
Only a gold short, when presented with such a "golden" opportunity, would deliver bad news to the gold market.

2. Instead, it announced a 30% increase in future gold production, thereby implying that there would be tons more gold available to the market.

3. It claimed it had dropped its hedged gold position to around 9.8 million ounces, BUT THERE IS ABSOLUTELY NO TANGIBLE EVIDENCE IT HAS BOUGHT BACK A SINGLE OUNCE OF GOLD.
Instead, it bought call options and, in the incredibly sleazy manner in which this company operates, it seems to have determined that these call options are an effective offset to its total hedge position of around 19 million ounces. In other words, by the company's esoteric calculations, its seems their call options cover around half of their hedged position.

However, Barrick's hedge requires it deliver PHYSICAL GOLD to the counterparties, NOT cash received from paper call options. Therein lies yet another Barrick deception.

4. As long as people like Vernon Jordan, one of Clinton's closest friends, sit on the Board of Barrick, it is simply preposterous to think that Barrick is anything other than a vehicle acting on behalf of an extremely anti-gold administration.

5. As long as Goldman Sachs acts as corporate investment advisor, it is impossible to imagine the company is anything other than a vehicle acting on behalf of an extremely anti-gold administration.

I will reiterate this fact once again: if you hold any other gold stocks besides Barrick gold, then you are most likely betting against their appreciation by also owning Barrick.

When I first wrote a public letter attacking Barrick Gold, I received a very intimidating phone call from their investor relations representative.

Back in 1997, she phoned me at my house and ripped me an asshole for DARING to question Barrick's motives. There was much innuendo that if I dared to continue such attacks, there would be a legal corporate response aimed my way. Well, here we are over two years later, and the gold industry is virtually destroyed while Barrick picks up property after property.

Maybe I was on to something back in '97, don't you think?

Barrick's management thrives on fat salaries and bonuses while its brain dead, moronic shareholders eat shit, watching a forever deteriorating share price, all the while thinking there is a big payoff awaiting them at the end of the rainbow.

Barrick does NOT want the gold price to rise. That is categorically obvious, and so there is only one logical solution if you wish your gold assets to appreciate:

SELL BARRICK GOLD, and BOYCOTT TRIZEC HAHN, its major affiliated company.

If you belong to a gold fund, call up the gold fund manager and DEMAND he sell BARRICK ASAP.

Thanks

F*

Golden Truth

(02/08/2000; 12:18:19 MDT - Msg ID: 24707)

TO F.O.A

HI F.O.A :-) I,am very happy to see you here again, and yes i to am excited to see you return. Also it will be kind of neat to see you in a fine "new" form!! You are the best F.O.A thankyou so much for not giving up on your true fans.
All the best and see you soon, i now i can hardly wait!
Thanks again G.T (Big Smile to you) :-)

jaydeevee

(02/08/2000; 12:58:56 MDT - Msg ID: 24708)

Doesn't taste TOO bad when you get used to it.......

http://www.usagold.comFarfel, you posted:

"Barrick's management thrives on fat salaries and bonuses while its brain dead, moronic shareholders eat shit, watching a forever deteriorating share price, all the while thinking there is a big payoff awaiting them at the end of the rainbow."

Right on Farfel! Great post!

That's EXACTLY what we (me) investors in gold stocks have been eating!

Journeyman

(02/08/2000; 13:20:04 MDT - Msg ID: 24709)

The most excellent & long awaited event is a hit, but masked by the "game." @Aristotle, ALL

Hey folks, I know the "game is afoot," but don't miss Aristotle's latest, posted yesterday! I'm still digesting it, but let me tell YOU, it's a tasty meal!!

Just go to the archives for yesterday, February 7, 2000 and SEARCH for "Msg ID:24589", "Msg ID:24593", "Msg ID:24602", and "Msg ID:24610" in that order!

Bon appetit!

Regards,
Journeyman

Cavan Man

(02/08/2000; 13:30:47 MDT - Msg ID: 24710)

To ORO

Can you explain the relationship between today's announced "productivity gains" and the government's inflation numbers? Are these productivity numbers in any sense real?

Do you think we are looking at another full year of "goldilocks"?

Thanks

Leigh

(02/08/2000; 13:46:32 MDT - Msg ID: 24711)

Zenidea and beesting

Many (belated) thanks for the gold-hiding tips! Beesting, I thought of your PVC capsule idea when I saw the shipwrecked gold coins on CNBC yesterday. They had all kinds of yukky mineral deposits on them. Too bad there was no PVC to protect them back in 1857!

Zenidea, where are you from?

Zenidea

(02/08/2000; 13:58:04 MDT - Msg ID: 24712)

just me

Leigh, Western Australia. :)

Usul

(02/08/2000; 14:25:44 MDT - Msg ID: 24713)

@jaydeevee, farfel

It's a Gold Bug's Life!Hey! Who ordered the poo-poo platter?

jaydeevee

(02/08/2000; 14:47:34 MDT - Msg ID: 24714)

Right on! usul ......

http://www.usagold.comLOL!
Gotta find another restaurant to eat in....

USAGOLD

(02/08/2000; 16:20:21 MDT - Msg ID: 24715)

Barrick Comment...

Gold up $3 in overnight market.

The one thing that is getting lost in all the
discussion about Barrick is the rock bottom fundamental change in the carry
trade/forward business. It used to be that all the majors were forced
to play along with Barrick and the bullion banks as a matter of survival. Now the split
between the quasi-hedge funds like Barrick and the traditional producers
has widened to a public chasm. Barrick stands on one side of the chasm
and Gold Fields, Placer Dome, Euro Nevada and to a certain extent Anglo
stand on the other. Each will try to pull the other into the chasm in an on-going tug of war. At
least now we have combatants -- that alone is a major breakthrough we
all need to incorporate into our thinking. As physical gold owners we
are no longer alone in this battle. We have recruited some stalwart
public allies in the real producers and the European Central banks. Over the course of the past week, that fact of life has become evident to the chagrin of the bullion banks and the Bank of England, and to the delight of gold advocates all over the world.

Journeyman

(02/08/2000; 17:04:10 MDT - Msg ID: 24716)

A note on Barrick, Ashanti, derivatives, evolution, etc.

http://www.destiny-worldwide.net/rcg/newform/money.txt
@Aristotle, Goldfan, Farful, Oro, 18Karat, ALL

One way to view Barrick and Ashanti is that these companies
are just in the early stages of an evolutionary path
peculiar to business organizations in modern fiat-based
economies. Bear (or for that matter, bare) with me a
little, I think you'll find this interesting, maybe even
useful!

Today we think of economies as being separate. Each
separate economy has it's own separate "national brand" of
fiat currency. As a result of no longer having a universal
standard of value, formerly provided by the old gold
standard, (there was no longer even a second-hand value-
standard once the connection of the dollar to gold was
broken and Bretton Woods broke down), each currency
fluctuates in value vs. the others on a day to day, even
minute to minute basis. Such fluctuations wouldn't happen
with a gold standard. But that's another story, right Ari?
;)

This ceasless fluctuation created problems for trade across
borders. Suppose you just bought a load of VCRs from Sony
of Japan to retail in the U.s. and agreed to make equal
monthly payments for these VCRs over the next year.

Sony doesn't want to be paid in dollars; it want's yen. You
don't have any yen and likely won't get any in the normal
course of your business. This means you'll have to go out
and buy yen in the foreign exchange markets. Over the next
year, if the yen goes up relative to the dollar, you'll have
to spend more dollars than you thought to buy those yen - -
- on the other hand, if the yen goes DOWN, you'll spend
fewer dollars to buy the yen and get an unexpected "windfall
profit."

But you're an electronics retailer not a gambler. You're
not really interested to speculate on such fluctuations, and
you don't know how to build such uncertainty into your
business equation.

Cut to ......

People now talk of the "real economy" and, separately, the
"financial economy." Just 15 or so years ago, the term
"financial economy" wasn't in common usage and at that time,
still existed mainly to service the needs of "real economy"
businesses doing cross border trades. These financial
economy organizations, mostly banks, quickly discovered that
most of their customers, just as the electronics retailer,
didn't want to gamble on currency fluctuations either.
These mostly banking institutions learned to take the
"gambles" for their customers instead - - - at a nice
profit, of course. This was the beginning of the now huge
market in interest-rate-based derivatives, which now
comprise some 60% of notional value of all derivatives.

Today what was the tail has become the dog. As of about
1989, economist Kenichi Ohmae estimated that only about one
dollar of every 32 traded in the foreign exchange (fourEX)
markets was traded to facilitate cross-border trade; the
other 31 of the 32 dollars, Ohmae thought, was traded in
various types of short-term speculations. Things have only
gotten more lopsided on the side of the "financial economy,"
read "gambling economy" since. Today for example, the total
world-wide value of all derivatives is currently estimated
at $80 trillion by the BIS (Bank of International
Settlements.) Clearly, if you consider the that the "real
economy" is the dog and the "financial economy" is the tail,
the tail is now wagging the dog - - - regularly and
VIOLENTLY! Right goldfan? ;)

What's this have to do with Barrick and Ashanti, etc.?
Well, banks weren't the only organizations to discover the
lure of the forex and derivatives casinos. Especially
businesses that had large overseas import/export operations
discovered them too, and some of them mastered the game.
For example, those special low-interest deals you get from
Ford (Ford Credit Corporation) and GM (GMC Credit) are based
on the "financial economy" arm of these erstwhile "real
economy" businesses. In fact, the economic viability and
competitiveness of these companies depends as much on their
financial operations as on their manufacturing prowess.

Some even more surprising evolutions from "real economy" to
"financial economy" were performed by companies like GE.
About 40% of GE's income is produced by the GE Credit branch
of the company. Why is this surprising? Because GE stands
for "General Electric" - - - which has divested itself of
it's electrical business to focus on the more profitable
financial division.

Possibly even more surprising is Primerica, now a purely
gambling, ah, financial economy company. Care to guess what
it started as? Did you guess it started as the country's
largest container company, American Can Corporation? Didn't
think so, but that's the correct answer.

Again you ask, what's all this have to do with Barrick,
Ashanti, etc.? Well, just as did American Can, General
Electric, etc., these companies are on the trail to
discovering they may be able to make more money gambling on
derivatives than in producing their primary product, in this
case gold. Barrick is further along in this discovery
process than Ashanti - - - Munk and his crew are beginning
to think they can beat the game. Ashanti is just a neophyte
sucker, but if they watch others like Barrick, they may get
the idea they can win too - - - or at least become a little
better at playing. Other miners just learned the game's too
tough and aren't so anxious to play anymore.

The problem is, of course, the "financial economy" games
(stock markets are the most visible and commonly played of
these games) are quite seductive. If you play right, you
can make big bucks and never have to get dirt under yur
fingernails. There are other apparent advantages too
numerous to mention, and that's why we've lost GE, American
Can, etc.

On the bright side however, the seductivity of these games
has kept a lot of money circulating in these "casinos" which
keeps it from bidding for "real economy" goods and services
- - - which keeps "inflation" in the "real economy" low (so
far) and has saved us (so far) from the massive general
currency depreciation which would almost certainly otherwise
occur.

The following clip is an excellent example of how these
games distract money from competing for many "real economy"
goods and services, thus slowing currency depreciation
(relative to these "real economy" goods and services at
least):

If there is a homey artifact of the bull market, it is
Bort Carleton's white 1989 Range Rover. Carleton, 54,
is a footwear consultant in suburban Los Angeles who
first got into the market five years ago. The Range
Rover, a present from his wife, is an object of
conspicuous practicality--just the thing for shuttling
around his {eight}-year-old twins. But lately he has
come to reconsider the vehicle. "I've had my Yuppieness
with it," he concedes. Now he has lost interest in
flaunting his wealth in a garishly expensive
automobile, especially when the money can go to a more
worthy cause. *"I'm going to sell the Range Rover," he
declares, "and invest the money.*" -John Leland,
Blessed by the Bull, Newsweek, April 27, 1998, pg. 51

I believe there were other examples cited on this forum - -
- the couple who bought an expensive new home but weren't
going to furnish it because they would have to take money
out of their stock investments to do so, etc.

A brain teaser for your consternation and edification: Can
the "financial economy" hoover so much buying power that it
drys-up the "real economy?" What are some symptoms you
might look for?

Regards,
Journeyman

P.S. The above URL link is an old post from my colleague, L.
Reichard White, that includes some direct quotations from
Kenichi Ohmae, etc. and from which I have liberally borrowed
in this post.

motor man

(02/08/2000; 17:50:41 MDT - Msg ID: 24717)

drooy

http:www.usagold.comQUESTION FOR THE GOLD ROCKET SCIENTIST IN THIS BUNCH "Q" WHY WITH ALL OF IT'S GOLD RESOURCES IS THE STOCK "DROOY" SUCH A CHEEPIE, AND IS IT A RECCOMENDED SHORT AND/OR LONG TERM HOLD? IF NOT WHAT IS A BETTER STOCK TO OWN? RESPECTFULLY SUBMITTED "DA MOTORMAN"

(02/08/2000; 17:54:51 MDT - Msg ID: 24718)

Michael

From time to time I try to make note of the number of hits reflected in the counter on your home page. My observation is that you are going to get your second million hits much faster than the first. There seems to be a correlation with gold's increased volatility and number of hits at this site. I think it might be interesting for you chart hits per month since the inception of this site either in your newsletter or somewhere on this site. . I have for sometime thought of the Internet's great potential as a knowledge equalizer. If enough people come to utilize the Internet's potential for providing information and knowledge, it will become difficult for those who would manipulate markets or conspire against their fellowman to succeed. Since such programs only work under cover of darkness. Now if one were to recognize the growth and knowledge shared at this site is also happening at a hundred other gold sites, there is a lot of power in that. It's like a small pebble that starts to roll down from the top of a mountain that eventually will be instrumental in moving many massive boulders as it progresses along that downhill path.

lamprey_65

(02/08/2000; 18:22:22 MDT - Msg ID: 24719)

motorman

http://www.drd.co.za/Let me preface by saying I do own DROOY.

It's a moderately hedged, high cost South African miner with very large reserves. The stock is HEAVILY leveraged to gold above $325.

Lamprey

nickel62

(02/08/2000; 18:46:41 MDT - Msg ID: 24720)

Journeyman as usual a truely great post!

The division between the real and the financial economy is so elegant that it is possible for the first time to see why the rate of "thing" inflation has remained so low. Thanks

Phos

(02/08/2000; 18:48:12 MDT - Msg ID: 24721)

Federal Reserve Radically Expands Money Supply

http://www.icrn.com/McAlvany_Intelligence_Report/Pardon me if this has been posted already.

Don McAlvany (Intelligence Report) has a Real Audio interview from Jan 31 (see link) on what the Fed has been doing with the money supply. I think FOA would smile if he heard this as it agrees with what he has been predicting for some time now. McAlvany talks about the gold price suppression in the interview. It merely confirms what many have been saying here but it is nice to hear someone else say it as well. I recommend a listen. It sounds grim as he sees no solution or alternatives to either hyperinflation or massive deflation.

goldfan

(02/08/2000; 18:51:12 MDT - Msg ID: 24722)

Journeyman (02/08/00; 17:04:10MDT - Msg ID:24716)

Sir Journeyman Interesting thoughts. I've been groping along the same trail myself today. First , You said:

>>>On the bright side however, the seductivity of these games has kept a lot of money circulating in these "casinos" which keeps it from bidding for "real economy" goods and services
- - - which keeps "inflation" in the "real economy" low (so
far) and has saved us (so far) from the massive general
currency depreciation which would almost certainly otherwise
occur.<<<
My understanding is just the reverse, that the money games being played by the financhal sector are in fact creating piles of excess money whicd is the inflation. Just because the air is calm, doesn't mean it doesn't harbor a hurricane!! (ORO or someone else might correct me here) Anyway ,IMHO i'ts not calm...

Just Imagine!

Imagine a society where the money earners in "essential" goods and services are:
-buying stuff as fast as possible
-not earning more
-dis-saving in order to buy more
-increasing debt in order to buy more

And:

-where "savings" are being removed from most stocks, (and bonds?)

-where a few stocks are attracting voracious buying and and higher prices,
using credit money spun into the system from governments to corporations, who get money from the sale of manufactured "essentials", and use it to enhance stock prices.

-where anew kind of brokerage firm, the "dot.com" has found a way to market their own stock, as a business, by selling other people's goods below cost.

And:

-Where governments, to get elected, continue to spin the money for this scam, and bleed the essential business and societal structures, to make it possible.

The "crash" comes when the in-flow of money slows, so that the outflow of money (energy) is greater than the in-flow, and the structure of the mania, the vortex, implodes and dies.

So we move from the extreme of the "momentum" attractor, the mania, to the extreme of the "buy-and-hold" attractor, depression.

With thanks to ORO, Nickel62,SteveH, Aristotle, All.

FWIW

Goldfan

goldfan

(02/08/2000; 18:54:35 MDT - Msg ID: 24723)

A Poem For a change

Getting Rich

No one of sense believes
We get rich
Flinging handfuls of our money
Into the streets
Expecting the beggars
To come rushing back
With handfuls more for us

Or pouring our savings
Gold coins into bottles
Floating them offshore
With notes our name and address
Imploring the finder
To send the gold back
With much more to boot

Why then do you believe the Stock Market
Is such a generous ocean
That Poseidon become
God of Lotteries
Will rise up out of that sea
His chariots full of gold
The Pearly Gates
Wide open for you and me?

Goldfan
Dec 30 1999

Just Weight & Measures

(02/08/2000; 18:54:44 MDT - Msg ID: 24724)

Up we go!

It's not over until it is over! Palladium up to $580. Gold recovering some of it's earlier losses! In the long run paper always burns, but the interim is sometimes disconcerting.

Cavan Man

(02/08/2000; 19:09:34 MDT - Msg ID: 24725)

USAGOLD 24715

Thank you for pointing out the forest through the trees.

Now, how 'bout those links? I emailed Marie.

goldfan

(02/08/2000; 19:17:02 MDT - Msg ID: 24726)

Strange Attrractors, Currencies and Economies

In what follows for what works, I owe a complete debt to ORO, Aristotle, many others, and the errors are all mine.

Strange Attractors, Currency and Economies

Part 1. Market Trading and "Strange Attractors"
Goldfan (02/07/00; 15:14:53MDT - Msg ID:24619)

Part 2. Fiat and Gold strange attractors

The pattern over time of the purchasing power of any fiat currency is apparently, a repeating pattern, a strange attractor with a recognizable pattern differing only in scale from one economy to another using any form of fiat dollar. It starts high in purchasing power at the beginning of its life, and trends up and down, but mostly down, from then on, until at the end, it disappears in a wild chaotic burst of hyperinflation.

In catastrophe theory, it would be called a "fold", one of the seven types of catastrophe, a continuously inflating balloon, or, someone living, then dying. (Interesting the mathematicians use the same word as the poker player, "to fold," as "to get out".)

The Purchasing power of gold appears to have, over the centuries, a characteristic stable pattern that rises and falls, but never disappears, much like the way gold itself behaves as a a physical substance.

Part 3. Economies

My simple picture of a"Domestic" economy is as follows:

1. Domestic Structures for making/building and selling "essential" goods/services,
same structures generate .....................Earnings(wages)

2. Foreign structures selling/buying essential goods/services in "domestic"
(imports/exports)

(Activity patterns of making, selling, spending , borrowing, that are a mix of the "strange attractors" for each of these)

$$$$ flow into:
Capital Mediating structures

3. Brokerage Firms, Banks, Money market funds, etc. all deposit takers including pseudo businesses like Amazon.com and other .com's,
Financial Intermediaries like Fannie Mae, Stock and Bond markets, Currency and options markets, all speculative financial structures, etc.

4. Government Treasury and CB (the FED)

$$$$ flow into:
5. Structures for Saving

6. Non-profit structures for
maintenance of society

Each of the above structures has somewhat standardized patterns of ways of doing their core activities that are the "strange attractors" for that structure. Many of these are the same, even if on a greater scale, as they have been for centuries.

4. Liquidity and the Combination of Strange Attractors for Greater Stability

4.1 The notion of Liquidity is related to acquisition energy, or demand energy and how much supply energy there is to match it.

The mathematics of Chaos Dynamics predicts that when energy is oscillating between two "opposite" patterns, two strange attractors, the system may break down in chaos and then emerge with a new pattern, a third "strange attractor" which importantly, will display more symmetry than either of the two, and thus be able to "contain" more energy than either.

So, for example, the two strange attractors of buying and selling stocks can generate wild oscillations, threatening to wreck the system, unless they are combined in one operation that includes the introduction of "liquidity" through "market making", and arbitraging. Of course, as we well know, even this new container, the third strange attractor, may not hold the energies in a mania, but it is a definite improvement on the two originals alone.

4.2 Gold and Fiat currency, a Combination for Stability?

It should be possible to use the gold attractor, its trading pattern and purchasing power over time, to ally with the Fiat Currency pattern to avoid the inevitable decline and extinguishment of the fiat. The idea here would be to convert the the "fold" catastrophe climax of the fiat, to something like what is in maths called a "cusp". This is a catastrophe which is less severe than death. In a cusp, the system just drops to a lower level of energy, then climbs back up again, over and over. Examples are a diving board, or a resettable mousetrap.

Better heads than mine will understand how this might be set up in our currency system and banking systems. Nevertheless, a bigger task will be to get the vast mass of the people to understand and adopt the new attractor, Maybe it would be easier in the Far East say, where gold has always been part of daily trading in some way.

4.3 There are four "Strange Attractor" patterns for Liquidity.

4.3.1. High Demand, High Prices..... the typical inflation pattern, high liquidity increasing the energy in the container... high growth

4.3.2. Low Demand, High Prices....wide bid/ask, low liquidity
no energy flowing into the container...stagnation

4.3.3.High Demand, Low Prices..... the energy is just passing through,
maintaining the energy in the container, static, low growth.

4.3.4. Low Demand, Low prices.....deflation, energy flowing out of the container, not being replaced.

5. The "Containers" of the Economy and the Liquidity of their Energy (currency) Flows.

In part 2. above, I charted the various containers of the economy.

Assessing their energy flows, we see the situation today in the US is:

The Domestic Economy of "essential" goods/services and wages is in Liquidity stage 3. Just passing the energy through. The growth and capital assets created are being mortgaged to supply energy to the capital mediators. and the savings structures. The structures for essential goods/services are barely being maintained.
Wage earners are not earning more, are drawing down their savings and increasing debts in order to increase consumption.

The Import/Export of Goods and Services sector is in deficit, so it is just adding energy to the Capital Flow Mediator sector. Liquidity stage 3.

The Capital Flow Mediator Sector is in Liquidity Stage 1. High Demand High Prices Inflation and Growth in contained energy.

The Savings Structures sector is the same.

The Non-Profit Structure, Maintenance of Society and Environment is in Stage 2. Low Demand High Price, like stagflation. I guess???

6. Problems

The oscillation between strange attractors in the capital flow mediator and savings structures and the continuous flow of energy into this sector from government actions threatens to (or maybe already has) spill over into a mania blowoff of the fiat money attractor which is the energy of this system.

A buy and hold mentality would normally be the counter balance to a momentum mentality here, but the momentum mentality has taken over to the extent that it appears to be so single minded as to be a mania.

We need a lot more symmetry and we're not going to get it, without deflating the capital mediators and the savings sectors.

Next , I have to try to get ORO's assessment of the role of Demographics into this.....

7. Story of a Hurricane

The day is calm, air and sea each containing their own energy within the their own strange attractors of "calm air", "calm sea".

This sea has a current of very warm water though, encountering cooler air.
Warm air over the sea is rising, drawing cool air into the center, with increasing wind velocity.

Increased wind makes increased waves.

Soon the waves are very large, the strange attractors for wind and sea are the same though, just on a vastly increased scale. The fractal dimension has not changed yet.

The in-moving wind forces, and the up-moving warm air, conspire to transmit a twisting, rotating motion to the column of air over the sea.

As the energy is transferred from the warm sea to the column of air, the rotation becomes fiercer, its velocity increasing rapidly.

The waves of the sea, meanwhile, have grown huge, and are starting to get so steep,their tops break and tumble down the steep sides. The howling wind grabs thousands of tons of water off these breaking tops, and hurls it horizontally.

The fractal dimension has changed drastically.
Chaos has entered the realm of the sea, waves combine and crash against one another, so much water has been flung into the air, the two have become almost indistinguishable.

Meanwhile, the up-flowing column of warm air, and the in-flow of cooler air, each with their own pattern, their separate "strange attractors", have combined their two attractors to make a third with more symmetry, containing enormously more energy than when this whole episode started.
A miles-high rotating vortex of ferocious wind energy, with the power of a thousand hydrogen bombs, tears itself loose from its birth pad, and goes raging over the water, creating chaos on that sea wherever it moves.

It can only be extinguished by rubbing off its energy on everything, sea, land, structures, that it encounters.

Eventually, it will lose energy and subside. Let us hope not too many living creatures were in its path. (Including treasure hunters.)

In the Economies of our history, we have gone in this analogy, from the Depression of the 30's to the Mania of our times.

FWIW
Goldfan

USAGOLD

(02/08/2000; 19:19:51 MDT - Msg ID: 24727)

Thank you for your observations. I will try to get this idea of yours into the next newsletter (or possibly somewhere here) because I think you are correct. What you say is very important. There is a correlation between the amount of traffic on sites like this and the amount of knowledge required to facilitate political action, not just in the gold realm (in which most of us have an acute interest) but other areas as well. Jefferson understood the correlation between knowledge and freedom well that's why he made sure the First Amendment was added to our constitution.

I think the big factor all three political parties are underestimating in this election is the power of the internet. Today we had two politicians from the Republican Party vying for the label of "Reform Candidate" when neither represents anything close to "reform." Both believe that there is a budget surplus, neither believes in term limits, neither has exhibited even a rudimentary understanding of economics, and thus far I haven't heard a single word about how we are deal with "rising Europe" and "collapsing Japan." All they can talk about are marginal tax cuts which no American seriously believes will have a credible impact. The internet, as this thing goes on, is going to have a major impact and I think that impact for the most part will be positive. It may create a surprise in the general election that any of the major political parties foresaw.

Farfel

(02/08/2000; 19:21:29 MDT - Msg ID: 24728)

Confirmed: BARRICK Announces No New Hedging. LOL

Michael, today's late announcement should send gold up a minimum of $30-$40 an ounce in a spate of panic buying and if it does not rise at least 30-40 an ounce tomorrow, then we can all rest assured that this gold shorting corporate shark is lying through its teeth once again, and has simply released a statement aimed at trying to assuage its own gold shareholders that it really does wear a white hat. In other words, "Let's put out a nice press release and get these guys off our backs. In another week, they will have forgotten about us."

Michael, the proof is in the pudding, and the market insiders will know whether or not Barrick is sincere. They will scramble to cover hedges and wet their pants along the way if they are certain Barrick is sincere; if they know it is another Barrick con job, the price will hardly respond.

Personally, I doubt this company's sincerity on any matter.

But if Barrick is sincere, the gold market MUST have an EXTREMELY strong rally tomorrow. Failing that, we will know that this press release is a diversionary tactic and nothing more.

If that is all it is, then I URGE GOLD INVESTORS to remain steadfast in pursuit of justice and continue in the path of filing a class action lawsuit against this company for all varieties of malfeasance, not limited to breach of anti-competition statutes, market rigging, antitrust collusion, and a litany of other transgressions.

You can get in touch with MILBERG WEISS, as I am doing, and
do your part in creating a Class to file against this company and its entire Board of Directors on both a corporate and personal level.

But MOST IMPORTANTLY, SELL BARRICK, BOYCOTT TRIZEC HAHN, and invst the proceeds in other gold companies that WANT a rising price of gold and do not collude to destroy an entire industry.

Thanks

F*

USAGOLD

(02/08/2000; 19:27:50 MDT - Msg ID: 24729)

Cavan Man...

She was trying to get you some quotes this afternoon. In process.............I did see the pictures. They are really neat and I think cufflinks very stylish (so did she) -- pandas, eagles or maples.

We can also get tux pins. Yes, tux pins for those who go to the black tie events........I think all the meisters ought to be thinking about taking this gold thing to the next level......

USAGOLD

(02/08/2000; 19:35:31 MDT - Msg ID: 24730)

Farfel...

It appears that Barrick made its announcement yesterday, the phone rang off the hook with stockholder complaints today and they altered their public position to keep stockholders from marching on corporate headquarters.

Lesson learned. Keep up the pressure. They respond to stockholder complaints. They're wrong. Everybody knows it. They need to change. Too many now understand the connection between the Barrick business plan and gold thwarted.

You are right in your campaign, Farfel.

ALL: Keep up the pressure. They hate it but means more to them than the value of their stock and whether or not stockholders are going to dump it.

tedw

(02/08/2000; 19:40:47 MDT - Msg ID: 24731)

Manipulated market

http://www.usagold.comLAMPREY 65

Where did you come up with the buy and sell prices of $335 and $360.

USAGOLD

(02/08/2000; 19:40:50 MDT - Msg ID: 24732)

Sorry....Left out a word in post to Farfel...

ALL: Keep up the pressure. They hate it but means more to them than the value of their stock and whether or not stockholders are going to
dump it.

Should read:

ALL: Keep up the pressure. They hate it but NOTHING means more to them than the value of their stock and whether or not stockholders are going to dump it.

Chris Powell

(02/08/2000; 19:48:32 MDT - Msg ID: 24733)

Barrick embarrasses itself

http://www.egroups.com/group/gata/370.html?Latest "Midas" commentary from
GATA's Bill Murphy.

motor man

(02/08/2000; 19:49:47 MDT - Msg ID: 24734)

drooy

http:www.usagold.comLamprey, Thanks for the info! I own mucho Rands of DROOY @1.50. Hope we see 3.00 soon! I need to pay my good uncle Sam too soon!!

SteveH

(02/08/2000; 20:37:13 MDT - Msg ID: 24735)

Platinum is leading the way

repost

Date: Tue Feb 08 2000 22:29
Khan (Platinum Correction) ID#90199:
Platinum is now up 46 backaroos CRB http://www.crbindex.com/curquote/crbquote.mhtml

You know, I remember some poster here or at kitco, from whence the above came, that said (was it preacher or prechter???) platinum would be used to move gold higher. Seems like he might have been right. Like for all of us though, timing was a little early.

koan

(02/08/2000; 20:38:09 MDT - Msg ID: 24736)

(No Subject)

Platinum up $46 to $544 - Palladium last I heard at $595! - Good luck all.

koan

(02/08/2000; 20:41:38 MDT - Msg ID: 24737)

platinum moving gold higher

If you check last week, here, you will see that was me, I think. I wasn't sure if it would move gold higher, but I thought it was headline news!

Ulysses

(02/08/2000; 20:59:27 MDT - Msg ID: 24738)

ABX

http://usagold.comIf ABX announced a suspension of hedging and no increased gold production ,gold would have shot thru the roof, thus making MANY more mining cos profitable, something that ABX does not want.They want huge cash flow for themselves from mining their cheap stuff so that when t hese other miners go bankrupt they'll have the cash to pick them up for a song. I believe ABX is just another arm of U.S. Govt-GS, etc.After all, George Bush,Brian Mulroney, et al sit on the B.O.D. They'll do nything to keep the price of gold down. Boys, we're dealing with the smartest'shiftiest gold mining co around.

Journeyman

(02/08/2000; 21:01:45 MDT - Msg ID: 24739)

Money, money, who's got the money? @goldfan, Nickel62, ALL

"My understanding is just the reverse, that the money games being played by the financhal sector are
in fact creating piles of excess money whicd is the inflation. Just because the air is calm, doesn't mean
it doesn't harbor a hurricane!! (ORO or someone else might correct me here) Anyway ,IMHO i'ts not calm..." -goldfan (02/08/00; 18:51:12MDT - Msg ID:24722)

Sir goldfan, you're absolutely right! But we don't really disagree here. The question is always "where IS the money supply NOW?" It's relatively "calm" here in the "real economy" but not "there" in the "financial economy" where the "money" and inflation are living for the time being.

Of course, there IS the "wealth effect" working in the opposite direction. Simple models of all kinds, are, well, simple afterall. Talking of my model mostly.

Anyway, the key question is always, "Where is the money NOW?" And of course, you'd like to know where it will be later, and exactly when that later will be, but as von Mises observes, the future's always hidden to acting man.

And as Yogi puts it much more elegantly, "Prediction is very difficult, especially of the future."

More about difficulties with the idea of "money supply" later!

Regards,
Journey

P.S. Nickel62 -- thanx for your positive comments!

Ulysses

(02/08/2000; 21:03:23 MDT - Msg ID: 24740)

ABX

Ulysses

(02/08/2000; 21:03:25 MDT - Msg ID: 24741)

ABX

THX-1138

(02/08/2000; 21:40:56 MDT - Msg ID: 24742)

Barrick share price

The increasing backlash from Barrick shareholders due to the outrageous hegging pratices of this company are driving the companies stock price down.
It would be funny to find someday that one of the largest gold mining companies in the world someday having a share price below a dollar.
Keep that up and they might get thrown off the NYSE and onto the OTC stock market.
Imagine Barrick being threatened with a hostile takeover because their share price goes down the tubes.
What would be even be funnier is if a former penny stock company ends up buying them out.

Yup, that would be really funny if the hegging practice they endorse to drive other mining companies out of business backfires and gets them instead.

Solomon Weaver

(02/08/2000; 21:42:13 MDT - Msg ID: 24743)

let bygones be bygones

PH in LA (02/08/00; 10:44:49MDT - Msg ID:24699)
More and more stupid.
----
Sir PH in LA....MK was kind enough to banish Frosty from our Forum...it concerns me that if we go to Kitco, pick up his comments there, repost them here with critisism, we are only inviting the spirit of his kind to re-enter here under a different disguise.

Not that I agree with him...just think it is only civil to leave our hands free from the banished ones.

Poor old Solomon

Adrian

(02/08/2000; 22:01:46 MDT - Msg ID: 24744)

media 'objectivity'

http://www.afr.com.au/content/000208/invest/invest5.htmlA first poster here,
I appologise about the delay, but time differences and the requirement for USAGOLD registration has made this slightly stale, although I feel no less poignant. The following is from the leading financial paper in Australia, coming out when gold had just run through the $US310 mark and BEFORE the Barrick announcment. The paper did not run a clarrification later after the error had been pointed out.

"However, in a briefing note to its clients yesterday, Credit Suisse First Boston noted that Placer's 2 million ounce, or 62-tonne, drop in its hedging book was "dwarfed by the anticipated 500 million tonnes of official sector sales that we can expect in 2000"."

The 500 million tonne quote sort of sums up the lack of concise reporting required to allow golds value to be seen by all.

Strange that only bearish mistakes are made in this paper, which is bearish in extremes to the gold sector.

Anyway, now that I have the registration matters sorted out, expect a more rapid posting in future learned ladies and gentlemen.

koan

(02/08/2000; 22:05:16 MDT - Msg ID: 24745)

PGM's and gold and silver

I posted several times last week (here) that I thought the movement in the PGMs might move gold up ( and might be the cause for the PDG hedging NR) - I mentioned this before there was any movement in gold (glad it is on record). I was sort of surprised that so few were reacting to it (the PGM story) and as of today still were not. I finished all of my buying of the PGM mining stocks just today and there was still almost no activity (bought all last week posted here)? I was flabergasted. I have felt for a long time that what was missing from the metals mkts was SPECULATION. When I saw that speculation, plus what I perceived as supply demand fundamentals rising in the PGM's, it seemed logical that gold and silver might react, especially as all of the other variables were in place i.e. inflation fears, a crazy bond mkt, and an overinflated speculative stock mkt and tons of cash sloshing around, high oil and a recovering Asia. We shall see what tomorrow holds. I mostly just bought PGM's and will traverse if I see the others follow.

JLV

(02/08/2000; 22:15:49 MDT - Msg ID: 24746)

Koan

I'm looking for a good PGM stock, mind telling which ones you picked up?

Thanks in advance

PH in LA

(02/08/2000; 22:21:12 MDT - Msg ID: 24747)

Letting Bygones be bygones

Mr. Weaver:

Amen to that. I couldn't agree more with you.

On the other hand, I was really addressing FOA with reasons that he should consider before allowing their kind to have their way with him. At the same time, since I long ago renounced posting over there, there is no other way to address some of the issues (and non-issues) that they revel in there except by bringing it up here. Rest assured that they read the posts here with far more interest than we read theirs there. Earlier, I had offered to hold Permafrost's feet to the fire for his unreasoned comments. That still seems like a worthy intention, since he persists in airing them, even parading them around as if they had more merit than they do. (ie, any merit at all.)

That said, I will be probably even more happy than you, yourself to leave them alone, and not stir up their hornet's nest, although sometimes being civil does not mean turning the other cheek.

goldfan

(02/08/2000; 22:53:02 MDT - Msg ID: 24748)

Journeyman (02/08/00; 17:04:10MDT - Msg ID:24716)

Greetings Sir Journeyman I'm finally getting back to your excellent post. Feeling a little annoyed with myself for not offering you any congratulations on its simplicity and elegance. Congratulations!!

some clips and my response:
>>>Clearly, if you consider the that the "real
economy" is the dog and the "financial economy" is the tail,
the tail is now wagging the dog - - - regularly and
VIOLENTLY! Right goldfan? ;)<<<

I totally agree, don't feel its my knowledge though, comes from ORO, for me.

>>>On the bright side however, the seductivity of these games
has kept a lot of money circulating in these "casinos" which
keeps it from bidding for "real economy" goods and services
- - - which keeps "inflation" in the "real economy" low (so
far) and has saved us (so far) from the massive general
currency depreciation which would almost certainly otherwise
occur.<<<

My understanding is, that if we didn't have all these financial gamesters, we would have much less inflation to deal with, when it finally hits. Because of their activities, the booms are bigger and the busts are a lot bigger!! There is no bright side to this for me. By their criminal use of political power and their cynical manipulation of the media and people's ignorance and gullibility, they have maybe destroyed my children's chance to live in reasonable prosperity and civility.

>>>>A brain teaser for your consternation and edification: Can
the "financial economy" hoover so much buying power that it
drys-up the "real economy?" What are some symptoms you
might look for?<<<<

I agree it can. And is doing so. I overheard a tidy and matronly woman talking to a her friend in a coffee shop the other day. Said,

"I can't understand it, there seems to be so much money around, so many things to buy, so much advertising and talk of a good economy, but I'm poor and my friends are all poor. We all seem to be struggling to make ends meet. Something is dreadfully wrong somewhere."

That's the gist of what she said anyhow. Now if you look at the stats, workers have had hardly any wage increases in constant dollars, for the past 20 years! Sure there is this story that productivity has gone up. But the workers haven't received any of it. In this country, Canada, farmers have made the most productivity gains of any group, over the last 50 years. Yet they are practically out of business. Nobody will pay them a fair price for their food. It can all be bought cheaper by exploiting people somewhere else in the world. I bet the banksters are involved somewhere in this too.

Certainly, the supermarkets do ok. If more people got raises in the real economy, we could afford to pay our farmers a decent wage through a bit higher food prices. So your answer is yes we could drive every enterprise that can be done elsewhere out of our country. And we are doing it. When the crash comes, we won't be able to find the capital to do this stuff for ourselves. We have eliminated our fishery, and our forests, sold our natural gas and oil at cut rate prices. And the knowledge economy is no more available to us, than it is to the Taiwanese, and they're willing to work a lot harder than we are, if I judge by the way their kids reap all the scholarships here.

50% of the people on welfare in this province are children. What did they do to deserve that? Add that to the fact that 17% of Canadian children are living below the poverty line. That's a chunk of people with probably little stake in the society, no feeling its theirs, and so prone to violence and crime to get what they want. So there's another statistic, is the pool of people at the bottom going up or down? Here, its going up. And finally, I notice the money men and the hot shot new age systems and computer people aren't too interested in the future of this particular society either. Along with doctors, and lawyers, they'll happily move anywhere else in the world, for more money. And they don't believe in paying for the schools or the infrastructure that got them where they are.

Thanks for the opportunity to blow off.
I'm still having a lot of fun here, trying to make sense of this stuff and come up with accurate and simple ways to describe what I 'm learning.

Hasta la vista

Goldfan.

goldfan

(02/08/2000; 23:04:14 MDT - Msg ID: 24749)

Seconder wanted for ORO's post to HOF

In my (2/7/2000; 10:02:24MDT - Msg ID:24597)

I nominated ORO's latest for the HOF
ORO's post on JAPAN and the relation between fiat currency based economies and their demographics
ORO (2/7/2000; 1:08:34MDT - Msg ID:24565)

Seconder so far is Journeyman, need one more, who will it be??
Thanks

Goldfan

Farfel

(02/08/2000; 23:13:25 MDT - Msg ID: 24750)

Sleazy, Slimy BARRICK GOLD...SELL THIS CRAPPY COMPANY NOW!

Actually, the news release yesterday stating that Barrick will NOT increase its hedges is simply a joke.

The whole world's attention was focused MONDAY on Barrick, NOT Tuesday. Every speculator in the world, all of Wall Street, and all the financial media were awaiting Monday's press conference.

Barrick was in a great position to send gold rocketing to the moon. Instead, they heralded their 30 PER CENT increase in future gold production and touted the wonderful virtues of hedging gold. They claimed to have decreased their hedging by about 50 percent when in reality they closed out a mere fraction of their physical hedge while picking up a huge number of call options that they feel "covers" any potential hedge risk. ALL TOTAL BS!

Then, when the company receives an avalanche of hate mail from its shareholders (rightfully so, because look at the crappy performance of its stock), the company sneaks out a puny little one paragraph statement yesterday saying it will not increase its hedges. It does so in hopes of cooling the tempers of its enraged shareholders.

BIG F_ING DEAL!

IT'S TOO LATE, MR. MUNK. NOBODY'S WATCHING ANYMORE! YOUR ANNOUNCEMENT OCCURRED IN AN EMPTY ROOM!

Today, they will print your puny little statement (if they print it at all) on the back page of Bloomberg, the Wall Street Journal, and Reuters. CNBC will never mention a word on the subject. Nobody will see or hear your wonderful announcement except the few diehard dedicated gold investors who follow such things.

Bill Murphy will print it in one of his GATA releases, attempt to pump up gold investor hopes, but all of 300 people will read it, maximum.

BIG F_ING DEAL!

Do you understand, Mr. Munk? We are on to you and your deceitful misconduct in this market.

You are a gold short. You have been a gold short since 1996 and you can pretend to be something else but that is what you are and that is what you will be until market forces (God Willing) send this metal to the moon and sink your rotten company, burying you and all your partners in crime.

Thanks

F*

Journeyman

(02/08/2000; 23:15:26 MDT - Msg ID: 24751)

Money, Money II @goldfan

Thanks for the kudos -- and take a few bows yourself!! We all learn from each other, and yes, more from ORO, but I don't recall him discussing chaos theory???

"My understanding is, that if we didn't have all these financial gamesters, we would have much less
inflation to deal with, when it finally hits." -goldfan (02/08/00; 22:53:02MDT - Msg ID:24748)

YES!! I agree entirely. The question is, did the gamesters create all the buying power themselves, or did they have help? Which ever, they are now, it seems, keeping it in the casinos and off the streets -- for now at least. Being the optimistic polyanna that i am ;> I guess this is "good" in the short term, but as you indicate, "in the long run, we all are dead," to resurrect Keynes.

And the kids that all the politicians claim to care so much about . . .

Regards, j.

koan

(02/08/2000; 23:21:40 MDT - Msg ID: 24752)

JVL

Out of respect for USA gold I seldom mention stocks or anything competitve with USA GOLD, but I don't think he will mind if I do it just once. The producer would be North American Palladium PDL - CDNX - the two most popular juniors would be Altoro - ATG (Kaiser's pick) on CDNX and Pacific North West capitol - PFN ( Fagan's pick)- CDNX and of course the entire Sudbury nickle, PGM district. Good luck to you. PS I own them all, so do your own due dilligence, these are not recommendations, just the ones many talk about I don't really know much about them .

Black Blade

(02/08/2000; 23:27:36 MDT - Msg ID: 24753)

Barrick is a real killer!

The heat is really coming down on Barrick, not only is the share price falling faster than gangue down a waste dump, the campaign of email and phone calls from irate shareholders is intensifying. Also there was another worker fatality at the underground Miekle Mine (Barrick of course) this last week. That's five fatalities in the last year. It would appear that Barrick not only doesn't care for it's shareholders, but miners could be included as well. At this rate MSHA (Mine Safety and Health Administration) will shut them down and then hedging will be a moot point!

Black Blade

(02/08/2000; 23:36:12 MDT - Msg ID: 24754)

KOAN and PGM's

Notice that Stillwater (SWC) blasted through $41/share and Idaho Consolidated (V.IDO) blasted from $0.17 to $0.66. Looks as if this fun will last awhile. PGM's are still screamin' higher tonight, and look at Rhodium! Still moving along nicely. All I can really say is "S. Kaplan, eat your heart out!" BTW, remember Goldspoon? I'm sure he is either a funky monkey giddy with joy, or drunk as a skunk tonight :-)

JLV

(02/08/2000; 23:53:37 MDT - Msg ID: 24755)

Koan

Thanks, good luck tomorrow. (I don't think you're going to need it)

Black Blade

(02/09/2000; 00:02:14 MDT - Msg ID: 24756)

Barrick (Ho Hum)

Just talked to a friend of mine in Elko, NV. He told me that he sold his position in ABX (1400 shares) is picking up some HGMCY. Get this: He works for ABX!

Also, I was going through the most recent annual report from MIDAS Gold Fund (MIDSX), they don't own any ABX. If any here own shares in a Gold Fund, contact your funds reps and let them know how you feel about ABX!

Also, Harry Bingham (Pimco Investments) was on Bloomberg's sector segment today. He did a good job putting up a good case for gold in ones portfolio. Way to go Harry!

elevator guy

(02/09/2000; 00:47:27 MDT - Msg ID: 24757)

@Farfel, my esteemed teacher and brother in gold.

http://www.gata.orgSir, you are a very pragmatic and articulate man, who has his own style and energy. Gold fans around the globe are enriched by your words of truth, and benefitted by all your efforts on behalf of gold. You are a great asset to the cause, and fear no one on line.
However, you stepped on my toe today, when you said that GATA has all of 300 "listeners". Even if meant in a humorous, non-serious way, to say so puts a force for justice such as GATA in a less than favorable light, much like saying to the enemy before battle: "We dont have any real guns, just these pea shooters here" It is not a good political/psychological strategy to belittle those forces who are on our side, although they may be in a different battalion than your own. GATA is a growing voice, and has done much to bring to the attention of Congress, and the world at large, the overt manipulation of the gold market.
They do not sit content in safe chat rooms, "preaching to the choir" about monetary transparency and honesty, but they "take it to the streets", sending letters to Congress, mining companies, and spreading the word all over the net almost every day.
We should support GATA.org in every way, as they do battle with the evil scum sucking shorts, in my humble opinion.
Also, it was Bill Murphy of GATA, who got me in early on the wild ride in gold, from his Midas commentaries over at lemetropolecafe back in August last year, just before the big breakout. No one else offered that advice to me, nor tipped me off to the tremendous risk/reward ratio of a long position at that time. I gained much "evil" fiat currency from that advice, and am glad to be one of a very select group of 300. So he is my hero, and I dont know if he is yours or not, but your words seem to insinuate that GATA is insignifigant. I will get over my miffed feelings and move on, however.
It is my beleif that GATA has made some great headway in educating lawmakers and laymen like myself of the abhorrent practices behind the scenes in the gold industry. Every person, whether they be layperson like myself, or educated economic rocket scientist like yourself, every person who speaks the truth adds to the weight of the battle cry, and our voices ring through the great halls of our capital, and the gathering resonance will drive the guilty mad with its ring of truth.
No one who has an interest in a transparent and free gold market could gain anything from disparaging the efforts of those who fight for the same cause, and for the same goals.
Lets let the opposition know that GATA is a tiger, with BIG NASTY TEETH, and being armed with justice and truth, they will prevail, through the print media and through the net, with the power of the post, and by the grace and power of the Living God.

Black Blade

(02/09/2000; 01:15:35 MDT - Msg ID: 24758)

Found This on other Forum (Thanx GoArmy)

The following was posted by GoArmy (other Forum), What's good for Ashanti should be good for Barrick:

I just contacted Milberg Weiss Bershad Hynes & Lerach Law Firm. They were very interested in Scumbag Barrick idea and asked if their stock is plunging as a result of their hedging. I said - you betcha. They asked are there any Barrick shareholders that are willing to file a lawsuit against Barrick, I said You betcha. They said that their attorneys will carefully research Barrick and give me a call. However, I do not hold any Barrick shares, attorney told me that they need Barrick shareholders names to do the job. They said that it would be very helpful if some of Barrick shareholders who got screwed by Barrick give them a call. I strongly encourage everyone who lost money on Barrick stock to call this number 1-800-320-5081.

Black Blade

(02/09/2000; 01:19:22 MDT - Msg ID: 24759)

endfraud@mwbhlny.comMilberg Weiss Bershad Hynes & Lerach Law Firm

SteveH

(02/09/2000; 02:53:42 MDT - Msg ID: 24760)

You awake?

April gold up 6.3 now 308, dollars that is. Platinum up 19.1 (April that is)

SteveH

(02/09/2000; 02:55:19 MDT - Msg ID: 24761)

You awake?

Ooops, now April gold up $7.3, my mistake.

Back to sleep now!

Jason Happy

(02/09/2000; 02:57:24 MDT - Msg ID: 24762)

I'm awake.

Palladium dropped for the first time in 3 days from 580 to 560.

SteveH

(02/09/2000; 03:01:08 MDT - Msg ID: 24763)

You awake?

Jason,

Must be taking a breather. I show it at $570, but that is a delayed and an April future price.

Jason Happy

(02/09/2000; 03:03:05 MDT - Msg ID: 24764)

I'm awake.

I'm looking at the kitco 24-hour spot price charts. Gold's last was $305.00

Zenidea

(02/09/2000; 03:49:33 MDT - Msg ID: 24765)

just me :)

I try my hardest not to believe anything until it has been proven , nor am I inclined to disbelieve anything
until it has been disproven. So here I am sitting on the fence contemplating the different opinions of those mature enough in this forum of whom ( Give each other the permission to be who we are. )

I see the arguments that transpire in USAGOLD and the personalities that are accepted. ( love the sinner but not the Sin ) For me this place or the people seem to make up a cocktail. Like water , sugar and yeast , and we know they individualy are good for us , but added togeather that makes alcohol, an explosive situation. Hehe but in this instance the beauty seems to be in the premise's that crop up continually, and these premises are recognised , I mean all are listened to.

Correct me if I am wrong please re: fitting in here . I promise to stay reserved lurking and paraphrased in my speech :) via the posts if indeed I say anything much, until I learn more .

My Love of Gold and the precious metals in that certain spot of the periodic table of the elements is simply born by the beautiful talents or properties these elements posess. Is that Silly or inate ?.

I hope when I learn more from listening that I will be accepted or tolerated by the wise :). Right now all I have to contribute is that I have this gut feeling looking at the charts , that these charts look like they are in labor, and ready as the contractions begin to give birth !:).

Black Blade

(02/09/2000; 04:47:38 MDT - Msg ID: 24766)

You all Still Awake?

Check out the PM's! Au up +$7.70 at $305.80, Pt up $35, Pd up $5, Ag up $0.03. Maybe Peter ChipMunk's no new hedging message is being picked up, hmmmmm........, Somehow I think there is more happening.

tedw

(02/09/2000; 05:06:38 MDT - Msg ID: 24767)

The Evil Surpressors

http://www.usagold.com
Some thoughts on the Gold situation:

Last summer I decided to go long Gold because I realized that Gold was at 20 year lows, and that is about all I realized. I have done well the last few days (Thank God), but I have also learned quite a bit the last year about the
Gold market, both here and at www:lemetropolecafe.

Maybe I can sum it up. First of all, I was naive in that I believed that the Gold market was a free market. I suppose that is the prevalent belief in the world, but there is certainly a lot of evidence to the contrary.

There are great political forces as well as age old greed and ambition at work on the Gold market. Surging gold prices would be the unequivocal announcement to the world that inflation has returned, and that the fiat money system
is a failure. In the case of the United States the Criminal activities of the government in subverting the right of the
people to honest money would again start to be revealed. To some extent the fiat money system functions because of peoples belief in it, and when inflation roars to high levels peoples faith in it begins to erode;everyone who lived through 1976-1981 should remember that. So the government has a vested interest in a low gold price as it helps to keep inflation (a secret tax)hidden. A low gold price (and excluding food and energy costs from their inflation indices) helps keep the charade alive. The mechanisms for the low gold price are not completely understood by me, but it is certainly a bizarre state of affairs when gold mining companies are pushed to the edge of bankruptcy by a RISING gold price. It seems the central bankers and fiat money governments have had a vested interest in keeping the price of gold below fair market and that other bankers and financial institutions have used this policy to further their own greed and keep gold depressed. Really, these are SELFISH people, evil surpressors as Al Fuchino calls them. As most of us know, the fiat money system allows the government to secretly steal out of your pocket without your consent. Their interest seems to be Power and not the well being of the people, nor certainly not what is right. The bankers and fincancial institutions seemed to be motivated by greed and ambition only: lease gold, sell, re-invest at a higher interest rate. Their wealth is increased and the paper money sham continues on. It seems to me that the new Euro (with its backing of gold at 15% which may soon be increased) is Europe's attempt to challenge America for world supremacy, a power struggle. Europe itself is becoming one nation no doubt and its backing with 15% gold is rather curious. Since it is not redeemable to the bearer in Gold, what good is it? Is it Europes attempt to create a currency which is more attractive to the world than the dollar? I think so. At any rate this new Europe is a force,perhaps a prelude to a new world government, and as we all saw in October exerted its influence on Gold.

At any rate, a free market in Gold would be one where these powerful political/banking forces were not trying to deliberately maniupulate the price of Gold up or down, and that does not appear to be the case presently. Power, ambition, and greed seem to be at the root of it.

One thing the evil surpressors (in fact, all evil people in all times and all places ) fail to realize is this:

There is a GOOD force in this universe, more powerful than any evil that exists, and that works in mysterious ways. In the end, the evil surpressors will lose.

Black Blade

(02/09/2000; 05:13:10 MDT - Msg ID: 24768)

Producer Buy-Back Overnight!?

By Marius Bosch

LONDON, Feb 9 (Reuters) - Spot gold prices jumped over two percent in Europe on Wednesday, vaulting the key $300.00 area on market talk of a producer buying back its hedge position. Gold hit a high of $306.00 an ounce bid, up $8 or 2.6 percent on Tuesday's New York close at $298.00/$300.00. It was last quoted at $305.25/$306.75. At the twice-daily fix in London, the gold price was set at $306.00 a troy ounce, $9.85 or 3.3 percent up from the previous day's fix of $296.25.

Gold stocks in South Africa, the world's biggest producer, moved sharply higher on the gold price rise. By 1100 GMT, the Gold Index .JGOL) had gained 2.75 percent to 1,247.1. Dealers said the price rose sharply after talk of a producer buyback of its hedge positions swept through the market on Wednesday morning.

``It feels like a producer buyback going through the market. It is quite aggressive and it (gold) feels like $310,'' one London dealer said. Gold rose to a three-month spot high of $319.00 on Monday following Canadian miner Placer Dome Inc's decision to suspend its hedging programme last Friday, saying it expected gold prices to rise. But the rally fizzled out on Tuesday after market expectations that Barrick Gold Corp would follow Placer's lead were not met.

Dealers and analysts said the market was still digesting Barrick's statement that it remained committed to hedging -- a practice whereby gold miners sell future production forward to lock in higher prices. Gold's reversal began after Barrick said it was committed to hedging, although it halved the size of its hedge book in the last three months of 1999 to 9.8 million troy ounces.

Dealers expected the market to remain very volatile. That was evident in the bid/offer spread, which moved between $1 and $2 on Wednesday morning, compared with the usual 50 cents. ``We expect gold to remain very volatile today and expect gold to bounce back higher again. The metal could attract some buyers again this morning and move to $305.00. ``But we remain very cautious, especially during the afternoon, as the COMEX session is expected to be very volatile again and volumes rather significant,'' Frederic Panizzutti, vice-president strategy and research at MKS Finance in Geneva.

Jason Happy

(02/09/2000; 05:41:27 MDT - Msg ID: 24769)

POG

Spot Gold at 306.50, highest it's been since NY's close yesterday... with an hour to go 'til NY open.

Black Blade

(02/09/2000; 05:52:04 MDT - Msg ID: 24770)

Au up +$9.70 to $307.80

You all seeing this?

goldfan

(02/09/2000; 06:04:12 MDT - Msg ID: 24771)

Liquidity question?

Farfel, Nickel62 question?
Farfel, Nickel62 I've never been a successful day trader, momentum trader. I've done ok in the past researching good stuff, then doing the old buy and hold and get out when the run seems over. So I need your help with this. How can you tell from the bid/ask spreads and the price, volume action, on a stock whether the market is liquid or not? Do the same rules apply to the POG market? Is there something in this that lets you know the market is likely manipulated? ( I could venture an answer to this, but I want to hear from the experts before I get egg on my face(smile))

Thanks

Goldfan

goldfan

(02/09/2000; 06:17:19 MDT - Msg ID: 24772)

tedw (2/9/2000; 5:06:38MDT - Msg ID:24767)

Greetings Sir Ted Thanks for your thoughts in this. I want to respond to this clip. You said:

>>>Europe itself is becoming one nation no doubt and its backing with 15% gold is rather curious. Since it
is not redeemable to the bearer in Gold, what good is it? Is it Europes attempt to create a currency which is more
attractive to the world than the dollar? I think so. At any rate this new Europe is a force,perhaps a prelude to a new
world government, and as we all saw in October exerted its influence on Gold.<<<<

I hope we won't have a world government, unless it is just a bunch of people sharing problems and trying for mutual solutions.

And I like your exploration of the ECB 15% gold supporting the EURO some way. Feels to me like it does. Gold has a steady presence and reasonably stable buying power, in nearly all human communities throughout our history. And is physically nearly indestructible too. So it should be capable of stabilizing the fiat money we need for trade.

I am reading Aristotle and ORO here avidly, hoping to get a clue about the currency regime we should support. We are all going to be involved in deciding whether to do stuff like egold on the Net or not. So the question is right in front of us even now.

Cheers

Goldfan

Phos

(02/09/2000; 06:22:53 MDT - Msg ID: 24773)

Class action lawsuit against Barrick

Good morning, fellow masochists. I hope some Barrick shareholders do come forward to be a part of the class-action lawsuit, should the firm deem it worthwhile. It is interesting though, that even though the law firm would pursue a suit on behalf of Barrick shareholders, all gold stock owners have suffered losses because of Barrick policies and should all be entitled to claim damages. That could be some settlement.

Meanwhile, with the Fed pumping money into the system like there is no tomorrow (and thanks to the Fed, there may not be a particularly pleasant one), the tech stocks should continue to roar ahead like an out-of-control locomotive and they will be the place to be. Has Mr Gradualism lost control here? The parallels with the 1920s become more frightening with each passing day. Surely, gold be showing the effects of this massive asset inflation?

Hope the ESF is ready with a fistful of calls this morning. They might be needed early.

Cavan Man

(02/09/2000; 07:01:16 MDT - Msg ID: 24774)

POG

mrci shows pog up further at 310

Trail Guide

(02/09/2000; 07:30:40 MDT - Msg ID: 24775)

test

this works? be back when I have more time.

Goldy Locks Guy

(02/09/2000; 07:53:02 MDT - Msg ID: 24776)

A good site for metals pricing.

Hi....I thought I would let you know of a good place for metals pricing during the day...and that would be Monex.com. Lot's of folks look at Kitco, but they are so "off" sometimes it's not even close...but they are good to get a feel for what's happening oversea's during the evening and night...Monex.com update like every minute or two....but, maybe I shouldn't mention this as Monex is a competitor to USA??? I haven't even look in this place to see if they have a live quote area..But anyway...just rambling now. Gold currently 309. silver at 5.41

Jason Happy

(02/09/2000; 07:53:10 MDT - Msg ID: 24777)

market's open

Gold stocks are initially performing better than tech stocks at the open... DROOY up 9.4% at 1 13/16, gold at $308.10

Luv_G7

(02/09/2000; 08:45:16 MDT - Msg ID: 24778)

Refco News is Dis-Information

The news bite form James Steel at Refco (Bridge News) contains blatent dis-information. More proof that much of the news coming out these days is an attempt to talk down the market.

Mr. Steel talks about the Swiss, who are "not signatories of the Washington Agreement" to cap central bank sales at 2,000 tons. My info indicates that this is a false statement, and that the Swiss most definitely fall under the agreement.

Futhermore, all of the EU central banks with large holding have signed the agreement. The actions by the Dutch are also within the agreement, and they don't have much left to sell.

Remember, many of the most quoted analysts are sleeping with the bullion banks these days. They are all collecting their paychecks from the scoundrels who have sold down the market, and they're all running scared.

Go to GATA for the facts.

Benson

Al Fulchino

(02/09/2000; 09:00:39 MDT - Msg ID: 24779)

Tedw and Goldfan

First, a BIG thank you to all who took time to contact Barrick! See what happens when a light is shined on "The Evil Suppressors"! The power will continue to drain to the average citizen from those who in the past have said to us all, "This sandbox is mine, YOU stay out! You don't have the bloodlines to be in here with those of us in the know"

Ted and Goldfan: The euro is a welcome addition to today's monetary system. Today's system will be shaken if the Europeans stick to their guns and truly use gold as some type of realistic backing. All we have to do now is help give backbone to our congressmen and have them support a similar or stronger structure for our dollar. We have to hope that those in control of the US Dollar's strength are not so drunk on their cuurent power they now have no vision.

In another forum, last night it was posited that the Russians would soon back their ruble with gold, simply because they COULD and those of us in the west would laugh at the value that they ascribed to it. And also the Saudi's would with their oil, simply because they COULD. But with all the evidence of paper supply versus actual of gold and with the current supply of oil and its price , we are as close to witnessing a historic breakthrough as I can imagine. I have never felt this way until now.

Chrusos

(02/09/2000; 09:02:28 MDT - Msg ID: 24780)

Elevator Guy Msg ID:24757

Bravo! Sir E Guy for your inspiring and amusing gold revival talk
It certainly gave me a LIFT

Go Gold Go GATA

TheStranger

(02/09/2000; 09:08:39 MDT - Msg ID: 24781)

Inflation Update

Wall Street held a party yesterday after the U.S. Labor Dept. reported that productivity gains reduced the nation's effective rate of wage increase for 1999 to 1.9%. Higher productivity supposedly means companies don't have to boost prices in order to raise salaries. Unfortunately, somebody forgot to tell the good news to the people who haul just about every single thing you buy:

February 9, 2000
Railroads Are Raising Hauling Rates
By as Much as 4% Amid Higher Costs

By DANIEL MACHALABA
Staff Reporter of THE WALL STREET JOURNAL

Railroads are starting to charge more for the freight they haul.

Some of the country's largest railroad companies are boosting rates as
much as 4% this year, more than double the annual rate adjustments the
companies have put through in recent years.

Railroads said they need the higher rates, because their fuel and labor costs
have spiked upward. And they see an opportunity to raise them now, due
to the continuing strong economy and shortages of track and equipment. It
also helps that their chief competition, the trucking companies, are
attempting to raise rates about 5% this year.

"Temporarily at least, railroads have some pricing power that they haven't
had in a decade," said David Wyss, chief economist at Standard & Poor's,
a unit of McGraw-Hill Cos., New York.

Al Fulchino

(02/09/2000; 09:12:51 MDT - Msg ID: 24782)

The Stranger

Get this it was announced here locally, yesterday, that a presitigious Boston law firm was announcing a 40% salary increase for ALL its associates at the firm. The drastic response was to competitors, mostly high tech and internet companies that offer stock options in their pay package. These associates start around 100k!!! Whew! No evil suppressors there! Or were they suppressing before the pay raise

SteveH

(02/09/2000; 09:23:37 MDT - Msg ID: 24783)

Compelling rise across the board

Market Mth Open High Low Last Change Date Time Ask Bid
Gold(CMX) Apr 301.7 313.5 301.7 311.4 +9.7 2/9/00 8:11
Platinum(NYM) Apr 515.0 527.0 510.5 526.0 +27.5 2/9/00 8:05
Palladium(NYME) Mar 578.00 598.00 570.00 590.00 +10.20 2/9/00 8:09
Silver(CMX) Mar 534.5 546.0 533.0 545.0 +11.0 2/9/00 8:11 530.0
Copper(CMX) Mar 82.00 82.50 81.80 82.10 +0.10 2/9/00 8:04
Market Mth Open High Low Last Change Date Time Ask Bid
Crude Oil(NYM) Mar 27.80 28.60 27.70 28.45 +0.43 2/9/00 8:11
Heating Oil(NYM) Mar 72.75 75.10 72.50 74.25 +1.41 2/9/00 8:10
Unleaded Gas(NYM) Mar 78.25 79.65 77.15 79.20 +1.72 2/9/00 8:10
Natural Gas(NYM) Mar 2.520 2.560 2.515 2.540a +0.045 2/9/00 8:08 2.540
Market Mth Open High Low Last Change Date Time Ask Bid
Coffee "C"(NYBOT) Mar 108.25 109.40 107.25 107.50 -1.05 2/9/00 8:11
Coffee "C"(NYBOT) May 111.00 112.25 110.00 110.40 -0.85 2/9/00 8:09
Coffee "C"(NYBOT) Jul 114.00 115.00 112.80 113.00 -0.85 2/9/00 8:09
Cocoa(NYBOT) Mar 767 783 767 775 +8 2/9/00 8:11
Cocoa(NYBOT) May 801 812 798 801 +5 2/9/00 8:11
Sugar #11(NYBOT) Mar 5.55 5.59 5.47 5.49 -0.04 2/9/00 8:11
Sugar #11(NYBOT) May 5.69 5.74 5.64 5.67 -0.02 2/9/00 8:10
Orange Juice(NYBOT) Mar 84.30 84.70 83.70 84.00 +0.35 2/9/00 8:11
Lumber(CME) Mar 353.0 355.6 351.0 353.0b -0.7 2/9/00 8:06 353.3 351.5
Cotton(NYBOT) Mar 55.20 55.60 55.05 55.30 2/9/00 8:09
Cotton(NYBOT) May 57.00 57.35 56.90 57.05 -0.03 2/9/00 8:10
Market Mth Open High Low Last Change Date Time Ask Bid
Live Cattle(CME) Feb 70.800 70.880 70.600 70.650b -0.180 2/9/00 8:11 70.700
Live Cattle(CME) Apr 71.900 72.050 71.730 71.830 -0.250 2/9/00 8:11
Lean Hogs(CME) Apr 59.550 59.600 58.800 59.200 -0.650 2/9/00 8:09 59.175
Lean Hogs(CME) Jun 68.300 68.350 67.850 68.050 -0.580 2/9/00 8:07 67.925
Pork Bellies(CME) Mar 87.500 88.200 87.400 87.900a 2/9/00 8:11 87.900
Pork Bellies(CME) Jul 86.850 86.900 86.500 86.900 -0.250 2/9/00 8:02 86.750
Feeder Cattle(CME) Mar 83.800 84.350 83.630 84.050 -0.200 2/9/00 8:11 83.850
Feeder Cattle(CME) Apr 83.700 84.200 83.700 83.930 -0.220 2/9/00 8:10 83.900
Market Mth Open High Low Last Change Date Time Ask Bid
Wheat(CBOT) Mar 258.00 260.00 257.00 259.50 +0.25 2/9/00 8:11
Wheat(CBOT) May 268.25 271.25 268.25 271.25 +0.25 2/9/00 8:10
Corn(CBOT) Mar 220.75 220.75 219.50 220.50 -0.75 2/9/00 8:10
Corn(CBOT) Dec 252.25 252.25 250.75 251.50 -1.25 2/9/00 8:00
Soybeans(CBOT) Mar 499.50 500.00 496.75 498.50 -1.75 2/9/00 8:11
Soybeans(CBOT) May 509.50 509.50 506.25 507.75 -2.25 2/9/00 8:07
Soybeans(CBOT) Nov 526.50 533.75 526.25 527.25 -2.00 2/9/00 8:11
Soybean Meal(CBOT) Mar 160.40 160.50 159.50 159.80 -0.70 2/9/00 8:10
Soybean Oil(CBOT) Mar 15.76 15.76 15.55 15.65 -0.11 2/9/00 8:07
Oats(CBOT) Mar 109.25 109.25 107.00 108.25 -1.00 2/9/00 7:51
Rough Rice(MCE) Mar 5.71 5.75 5.71 5.71a +0.02 2/9/00 7:34 5.74
GSCI(CME) Mar 204.25 206.30 203.80 204.25b -0.55 2/9/00 7:54 206.30
Bridge CRB Index(NYBOT) Apr 211.50 212.60 211.50 212.00 +1.00 2/9/00 8:10 212.60

Solomon Weaver

(02/09/2000; 09:42:59 MDT - Msg ID: 24784)

Goldy Locks Guy Here is the link for the Monex prices site

http://www.monex.com/prices.htmlhttp://www.monex.com/prices.html

This is a very useful page since it is a brief overview of spot prices at Monex....Customers of MK are free to use it as a reference point. I particularly like it because they give a breakdown between various forms of silver too.

Poor old Solomon

ss of nep

(02/09/2000; 09:45:02 MDT - Msg ID: 24785)

This guy should be US president

http://www.house.gov/paul/congrec/congrec2000/cr020200.htm

TownCrier

(02/09/2000; 09:52:20 MDT - Msg ID: 24786)

Today's Market Report

Market Report (2/09/00): Those participating in the market for the yellow metal these days seem to have finally absorbed the implications of recent announcements regarding several major gold producers and their changing positions on production hedging. After several days of volatile price movements in what could be called knee-jerk reactions--first, to obviously good news late last week (Gold Fields and Placer Dome); followed by disappointment early this week on news that itself was positve but fell short of the market's higher expectations (Barrick.) Fundamentally, the scaling back and shift away from hedging that was announced by these majors is a positive development for future gold prices, and market players seem to be recognizing that now. Spot gold has recovered a good share of its two-day retracement, currently up more than $12 from yesterday's lows seen at this time of day. One dealer in London told Reuters that the price rise came on what he perceived to be an aggressive producer-buyback working through the market. Meanwhile, an analyst told Bridge news that the overnight climb back above $300 "clearly looks as if there is bargain-hunting going on." However, we'll want to be wary of what happens when the London session ends and New York takes full control of the price-setting. One dealer warned, "It's possible a few players may have sensed that things were a bit shaky yesterday and want to test the downside again."

Barrick Gold Corp. apparently saw the market's negative reaction to their Monday announcement and concluded that it had been less-than artful in its presentation...so it tried again on Tuesday. In attempts at further damage-control, Barrick president Randall Oliphant said, "We are going forward with the reduced level of hedging and plan to fully participate in rising gold prices...we do not plan to increase our spot-deferred position based on today's gold market," as reported by Reuters. North America's second-largest producer stated that trimming its hedge position from 18.8 million ounces to 9.8 million ounces reflected its "positive outlook for gold," and that a further decrease in its hedged position remained "a possibility."

For those of you missing the often insightful musings of Michael Kosares in these morning reports (he is involved in a short-term project through February), you may be pleased to see these thoughts MK offered yesterday, which I plucked from the USAGOLD discussion Forum:"The one thing that is getting lost in all the discussion about Barrick is the rock bottom fundamental change in the carry trade/forward business. It used to be that all the majors were forced to play along with Barrick and the bullion banks as a matter of survival. Now the split between the quasi-hedge funds like Barrick and the traditional producers has widened to a public chasm. Barrick stands on one side of the chasm and Gold Fields, Placer Dome, Euro Nevada and to a certain extent Anglo stand on the other. Each will try to pull the other into the chasm in an on-going tug of war. At least now we have combatants -- that alone is a major breakthrough we all need to incorporate into our thinking. As physical gold owners we are no longer alone in this battle. We have recruited some stalwart public allies in the real producers and the European Central banks. Over the course of the past week, that fact of life has become evident to the chagrin of the bullion banks and the Bank of England, and to the delight of gold advocates all over the world."

Thanks MK. As we go to fetch this report to the server, gold continues its morning climb, now tacking on another $11 to yesterday's closing mark in NY, reaching above $309 per ounce. And here's some final food for thought...COMEX deliveries called-for on the February futures contracts have now reached 556,900 ounces due to change hands by month's end.

That will do it for today, goldmeisters. We'll see you here tomorrow.

Voyager

(02/09/2000; 09:56:07 MDT - Msg ID: 24787)

Platinum

In addition to owning Gold Coins, also own Platinum Eagles. It has been very exciting to watch the recent huge moves in spot pricing and increase in coin value.

Not much is talked about Platinum here, and wondered if this is a good time to take some profit, or if Gold goes higher, I assume that Platinum will move higher. Am aware that Russia has been out of the Platinum market, but planning to resume exports again. Will that cause serious downward pressure?

ORO

(02/09/2000; 10:15:44 MDT - Msg ID: 24788)

Cavan Man - Goldilocks Q from yesterday

In reality, goldilocks is the three bears. As long as the bears are outside the US, we see goldilocks. When they come back home, we will see them.

The point is that of a debt trap.

The debt trap supports the currency denominating that debt.

So long as general insolvency is avoided outside the US (via IMF loan packages and rollovers of bank investments into government guaranteed loans etc.) the debt trap continues. Extrication from the debt trap is very hard and results in further support of the currency denominating the debt until extrication is possible.

The result of the strong debt currency (dollar) - itself the result of the debt trap - is that the sellers of goods and services on the international markets will lower their prices as long as doing so increases revenues sufficiently to return the loans. Profitability is secondary to survival and all cost cuts lead to lower prices in the debt currency, not higher profits.

The low prices outside the US bring substantial import gains. As growth of consumption continues in the US, the goods imported become the main economic force. The economy booms because it is getting stuff for free.

The apparent productivity improvement of technology companies and that of technology users is a result of something completely different. (1) Offshore manufacturing brings up the apparent productivity of the local workforce because local jobs degenerate to warehouse and repackaging work and the capital intensive and labor intensive work is done outside the country. If there is an actual improvement in productivity it is limited to improvements outside of the US. (2) Labor and capital intensive transport/distribution and retail are the only things remaining in the US. Their productivity is significantly improved by information technology because of better inventory control. This contributed about 1% average increase of productivity to the US since 1995. The rate is at its highest now at nearly 2.2%. The rest of the productivity gains reported in Government statistics are jokes hiding the tragedy of reality.

The major statistical manipulation is the fictional equalization of computer power calculation. Computer power has the lowest marginal utility of any good one could ever imagine. If grain could be fed to cows and hogs when there is too much for people, excess computer power transforms from running a production plant to displaying pictures of your dog on the net. The marginal utility of a doubling in computer power is less than 10%. Meaning that each additional megabyte or megahetz or megaflops or MIPS is worth only 10% of what the power units were worth as part of the previous half. The government treats each megabyte as equal to the previous one.
The nominal sales of computers in the US were growing at 10%. Their power has been growing by a factor of 2 every year and a half or so and their prices drop by 25% every year of late. Price per unit power has been dropping by a factor of nearly 2 (which indicates a marginal utility of 2-5%, not even 10%). The sales of computer power are up 33% nominally over the last 3 years, but the quantity of power is up 650%. The government calculates the value added to GDP not as a 33% rise, but as a 650% AND a 33% rise, leading to a 1000% rise in contribution to the economy. Thus the technology sector rises from a small but noticeable part of the economy into one of the largest sectors, and the only one growing, outside of retailing and distribution.

The estimates from the government should be excized of the fictional computer figures. Once this fiction of hedonic calculation is taken out, there is only a tiny growth in production and services that is not attributable in whole to the improved dollar valuation affecting the GDP figures through import retailing.

Only 2-2.5% productivity growth is not related to importing productivity from abroad. Once the distortion of the computer figures is taken out, the productivity growth is very slight. If computers are takent out, the productivity growth in the rest of the economy is slightly negative.

There is no goldilocks without our three bears sent to pillage Asia and anyplace else where dollar indebtedness was accumulated.

Employment in computer making peaked in 1994 (the beginning of the series) and has been trending slightly downwards. The peak in the computer and office equipment group was in 1984 - the end of the emergence period for PCs.

60% of the quntity of stuff sold in the US is foreign made (up from 56% in 1998). The economy of the US consists of (1) transporting and selling these items, (2) assembling or finishing foreign made components to order, (3) design of items to meet US marketing needs, (4) technology design to raise the efficiency of marketing, design, transport and retail, (5) because most people don't need to make anything they can work on building and selling houses - which constitutes a huge chunk of US employment. (6) People can work in finance to rotate the funds leaving and entering the country because of the trade deficit.

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

Aristotle - I have some stuff for you regarding your grand design.

schippi

(02/09/2000; 10:16:39 MDT - Msg ID: 24789)

Hourly Gold Sector Chart

http://www.SelectSectors.com/agpm70.gif FSAGX & FDPMX hourly NAV's up to 11:00 AM

TownCrier

(02/09/2000; 10:41:55 MDT - Msg ID: 24790)

[spoof] The Fed added 2,160 tonnes of gold to the bullion banking system today

Using a combination of overnight, 60-day, and 90-day repurchase agreements, the Fed once again provided massive injections of gold into the bullion banking system in exchange for receiving collateral from the stressed banks in the form of gold derivatives such as futures contracts and options. Mining shares were also seen to be part of the mix in addition to gold-loan backed securities. [end spoof]

TownCrier

(02/09/2000; 11:01:32 MDT - Msg ID: 24791)

Now that I have your attention, today the Fed added $21.505 billion to banking system reserves today

http://biz.yahoo.com/rf/000209/r7.htmlIn continuation of an on-going trend, the Fed has been looked to as the lender of last resort, providing necessary reserves to the banking system to meet reserve-maintenance requirements, swapping funds in exchange for collateral held by the banking system. In the biggest operation in a long time, the Fed added $21.505 billion in the following breakdown:
$6.500 billion through overnight system repurchase agreements;
$6.015 billion through 60-day system repos; and
$8.990 billion through 90-day system RPs.

How does this make you feel?

Journeyman

(02/09/2000; 11:02:48 MDT - Msg ID: 24792)

Ron Paul for President = dejavu @ss of nep (2/9/2000; 9:45:02MDT - Msg ID:24785)

Well, Ron Paul did RUN for president of U.S. -- on the Libertarian ticket, in the late 80s, if I remember the approximate date correctly.

Regards, j.

Farfel

(02/09/2000; 11:32:20 MDT - Msg ID: 24793)

I am Sorry But I am NOT Impressed, SCREW BARRICK GOLD!!

Last I looked gold was up a puny little 7.00 while platinum is SOARING, up around 40.00. Seems like a bit of a discrepancy there?

That discrepancy has nothing to do with fundamentals but rather the continued manipulation of the gold market to the advantage of chronic gold shorting BARRICK GOLD and its overhedged partners in crime, aided and abetted by an ineffective CFTC, supported and asisted by the bullion bank gang led by Goldman Sachs, JP Morgan, Chase Manhattan, et al.

It is exactly as I predicted yesterday. If gold is ALLOWED to move up today, it will likely be some puny little upspike
since Barrick's "reaffirmation" of its hedge policy occurred in an empty room.

I read this little piece of brain-dead drivel over at KITCO, written most likely by sleazester Peter Munk or one of his paid whores under some kind of pseudonym (NETPI?):

----------------------------
Date: Wed Feb 09 2000 12:07
Netpi (OK Let's get down to business - Barrick Bashers - ABX has done it's part so we are
all in the same ) ID#389193:
Copyright � 1999 Netpi/Kitco Inc. All rights reserved
boat now. Barrick's action yesterday in no small measure has helped to contribute to today's move so
let's concede that we are all on the same side. That being said, notice how much play gold and gold
stocks are getting in the news and on TV. When was the last time gold got this much press. This is just
the beginning; the press is just starting to notice and this fact alone is recognition that there has been a
sea change in the way people respond to gold and gold stocks. Combined with disappointment in the
general market, investors will progress from simply noticing and scratching their heads to buying. There
may be a dip in gold stocks in the event of a large, general market sell off but we have turned the corner
finally.

----

He says "we are all in the same boat now."

I don't think so. Barrick shorts gold...gold investors buy gold to take advantage of expected price increases. Seems like two different boats to me.

He says "Barrick's action yesterday in no small way contributed to today's move."

DUUUUH? DUUUH? DUUUUH? What? Barrick was in a position on MONDAY to set the gold market on fire and force a half-decent $30 upspike in the price. Instead, they came out a day later with a limp-wristed announcement about hedging, made to an empty room. They have done NOTHING, ZERO, NADA, ZILCH, to fuel any upspike in the gold price and anybody who suggests otherwise is probably receiving a paycheque from the scamsters.

Then Mr. Netpi aka Munk's cutiepi ends his little cheerleader speech in support of Barrick Gold by warning us that "there may be a dip in gold in the event of a large general market sell-off." and in doing so reiterates the standard gold short spiel, namely what is good for the stock market is good for gold...what is bad for the stock market is bad for gold. Total absolute BS. Historically, gold has performed in negative beta to the stock market, it has proven to be a contrarian bet against a falling stock market.

Actually, maybe Mr. Netpi cutiepi is really Lenard Kaplan of LFG Bullion, who appears daily at KITCO to deliver that same "Beware a falling stock market!" message to goldubgs (actually, he's been hiding lately since his repeated admonition ad nauseum that gold would be lucky to see 300 this year has proved to be wrong).

Bottom line: today's action in the gold market is only mildly encouraging but nothing to write home to mom about.
Gold investors should not lose sight of who has harmed them, who has destroyed their bank accounts, simply because a couple of stale crumbs are thrown their way today.

Thanks

F*

Golden Truth

(02/09/2000; 12:00:32 MDT - Msg ID: 24794)

ASHANTI IN TROUBLE AND BUYING GOLD!!!!!!!!!!

Just heard on C.T.V NewsNet that Ashanti Gold mines in GHANA
is in finacial trouble and is buying some of there GOLD back, that they sold forward!
Thats exactly how it was reported by "Mike Eppel" on C.T.V
G.T

Journeyman

(02/09/2000; 12:02:59 MDT - Msg ID: 24795)

Levels of ignorance

Jim Steele from REVCO Securities, when asked, ~"How much further will gold go up?", responded, ~"Not a lot further because any higher price will trigger central bank selling." -CNBC, Feb. 9, 2000, 1:58PM EST

Does he know something we don't about the Washington Agreement - - - or does he just know _nothin_ about the Washington Agreement at all?

Regards,
Journeyman

phaedrus

(02/09/2000; 12:03:28 MDT - Msg ID: 24796)

Farfel, I agree

Barrick makes me sick. How disgusting is it when a gold mine has to take extra steps to convince people they have a legitimate interest in gold going up. It would be nice if buyers of gold companies could get together and boycott Barrick stock until Barrick gets its head out of its rectum.

Peter Asher

(02/09/2000; 12:22:19 MDT - Msg ID: 24797)

The not so friendly skies

This just in from Yourdan's Libertarian news-letter.

http://hv.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=002WPW
The crash of Alaska Airlines Flight 261 was caused by
non-compliant on-board flight control computers. The
main computer on the flight deck, which acts as the
central nervous system for the entire aircraft, uses
the current date and time (including GMT for some
functions). The autopilot and all computerized digital
electronics on the aircraft are of course networked
into the central system, and quite dependent upon it
in many ways. One of the smaller computers, which
receives its digital commands either from the pilot or
autopilot through the central computer, is of course
the digital servo drive unit, which then relays the
appropriate timed electrical pulses to the stabilizer
servomotors in the tail section of the aircraft.

As you can imagine, any plane with this type of system
(which includes nearly every commercial passenger
aircraft built within the last 15 years), is loaded
with all kinds of microprocessors, or embedded
systems. These microprocessors were designed to
intepret the digital instructions from the central
computer, and execute the appropriate functions. Most
of these microprocessors were programmed to receive
input from the central nervous system computer in
order to compute the required calculations needed to
execute their various functions. The programmed code
in some of them was written to utilize the date / time
parameter of the central computer, in order to
calculate and relay precisely timed instructions
(sometimes to the nearest millisecond) to the control
surfaces of the aircraft, including the stabilizers.

Somewhere in the link between the central computer and
the stabilizer servomotors, microprocessors were not
able to properly function when the current date and
time were referenced, becuase they were outdated,
non-compliant, and never properly tested. It may have
been a malfunction within the autopilot system, but
the most likely place where this error occurred is
right here, within the digital servo drive unit...

(probably not the exact same model, but similar in
function)

Some people are still confused about this. The
SERVOMOTOR is the cylindrical object in the lower left
corner of the image. It DOES NOT have any
microprocessors. The SERVO DRIVE UNIT is the
rectangular object in the right half of the image. It
DOES have microprocessors. It is also networked to the
central computer of the aircraft and the autopilot
system, in order to receive its instructions and
output its current status back to the flight deck. The
microprocessors in these systems can come from
different sources, some are compliant, some are not,
and that is why we have seen several cases occur in
the same aircraft, but not all aircraft. At the very
least, all MD-80's should be grounded until all faulty
units are replaced and the entire aircraft is
thoroughly tested.

The entire world should thank Ed Yourdon and all
forumites who tried so desperately to awaken the world
to the seriousness of the problem. We knew that people
would die if this issue were ignored, and they did.
Sadly, because of corporate greed and ignorance,
rather than an occasion to celebrate, we have an
occasion for grief and despair. Even more unfortunate
is the continuing lack of proper action in the
aftermath of this tragedy, and the apparent efforts to
conceal it from the public, leaving them at extreme
risk. We all hope that the true problem will be
revealed and repaired before any more lives are lost.

Asher's note: The DC-9 is the earlier version of the same aircraft before Douglas merged with McDonald. D became MD.

http://store.cadvision.com/accounts/news/h_a.asp
Emergency Landing

A Northwest Airlines DC-9 jet was forced to make an
emergency landing today at the Calgary international
airport. The plane, with 70 people on board, ran into
mechanical problems shortly after takeoff this
morning, but was able to land safely. The aircraft's
primary stabilizer was the cause of the difficulty.
That's the same problem that apparently caused the
recent Alaska Airlines crash off California. Today's
incident will be investigated by The Transportation
Safety Board.

Asher again: The horrifying aspect of flight #261 is they flew right by San Diego, Orange County and LAX, where they could easily have touched down safely. Why the pilots choose to take such a risk with the absolutely most essential controlling device on an aircraft is incomprehensible. Suicidal stubbornness over the thought of failure to complete the route? Corporate policy to attempt to avoid the costs of a detour and extra aircraft diverted from service?

Robin and I flew this fleet from Portland to Orange County on 1/3 and 1/20 respectively. After decades of fearless flying, my ESP buttons were suddenly acting up on both occasions. While waiting for her arrival I kept inexplicably wondering how they notified people waiting at arrival when disaster occurred. I was inordinately relieved when her MD-80 rolled up the gate. The possibility that we might have been on that very same aircraft days before the incident has been very disturbing. Back in late 1969 we were in LA, ticketed on United back to New York and I was getting a very bad feeling about the flight. Robin's Dad suggested we drive up to SF with him for a visit and I jumped at the chance for a different route. No rational, just emotion. --- One of the four possible flights we would have been on went into the ocean right after take off.

Strange world on the other side of those "Doors of perception."

Peter Asher

(02/09/2000; 12:26:56 MDT - Msg ID: 24798)

Journeyman (2/9/2000; 12:02:59MDT - Msg ID:24795)

Talks cheap, unless your promoting your "Book" or getting paid for spin doctoring.

Farfel

(02/09/2000; 12:29:45 MDT - Msg ID: 24799)

MORE about BARRICK GOLD THUGS...

Let me tell you something else.

When I wrote a letter back in '97 (published in the TORONTO GLOBE AND MAIL) attacking Peter Munk for shitting on the gold industry to the primary benefit of Barrick and its gang of scamsters and thugs, my wife received a call at my house (at my house, dammit!!!) from a sorry excuse for a woman named, MULLIGAN, who told me she was an attorney for Barrick, although her job title has something to do with investor relations.

The woman completely rattled my wife, who passed the phone over to me, and this sorry excuse for a woman proceeded to rip my head off for having the audacity to question the integrity of her beloved God and Savior, Peter Munk. She implied all kinds of potential legal action might be aimed my way. However, having grown accustomed over the years to encounters with neanderthal bullies like her, I gave it right back to her in no uncertain terms and she ended up hanging up in my ear.

These Barrick pigs deserve to rot in hell, nothing less. They pigged out at the trough of this nation's riches this past decade along with their bullion bank brethren, whilst miners, gold investors and contrarians ate shit. Barrick and its corrupt Clinton Establishment buddies (Hi, Vernon, did Monica suck you off too?) have worked solely on behalf of Wall Street special interests and Silicon Valley manipulators whilst leaving bankrupted real goods producers, like farmers and miners, crying in shame and despair.

Now they are throwing some stale crumbs over to gold investors today hoping that you'll get off their back and let them continue their carry trade scams and internet IPO con jobs in peace and quiet.

DON'T LET UP THE FIGHT AGAINST THESE GUYS!

Keep blasting the politicians, the gold company managements that betrayed you, and the media. Do not let these few stale crumbs satisfy you.

Thanks

F*

Blue Sky

(02/09/2000; 12:31:12 MDT - Msg ID: 24800)

The Stranger Re; Rail rates

The trucking industry has already raised rates. We do it in a different way, our rates are locked in by contract, so we add a fuel surcharge. My co. has added a $.05 per mile surcharge to those it can. I'm headed for Jersy City this PM, if the normal rate is $1.40, it now becomes $1.45. Not enough increase but better than a poke in the eye with a sharp stick.
Now on the return load we absorb a kick in the pants, too much competition for freight back to the midwest, $.90-1.00. This surcharge has been in place for 2-3 weeks already. If we can raise it more we will, though some shippers are squealing like piglets already.
The consumer is the one to pay in the end. I've seen a lot of price gouging east of Ohio. Enter into Pa and the price jumps $.40, I know the state taxes are not that much higher in Pa, NJ, NY, Ct, or Mass., $.20 maybe.
I could purchase diesel here in Iowa in for $.90, now it is $1.35. At 6 mpg the surcharge does not cover the added cost.
Oh well, there are good times, and times not quite as good.
Blue Skies to all, though your shades will cost more.

Aristotle

(02/09/2000; 12:49:10 MDT - Msg ID: 24801)

ORO's indication of comments--

Hi ORO, I'm glad to see you're already prepared to make some comments, but it might be best if I could convince you to hold back until the final part is offered--hopefully later this evening. It will hopefully address a number of the loose ends that have been brought forward in the four-part prelude to the forthcoming conclusion. (Other projects put me off my projected schedule of completion.)

Thanks for the endorsement, Journeyman. I'm confident you'll like this ending better than the rest of it that you've already seen.

As always, Gold. Get you some. ---Aristotle

JCTex

(02/09/2000; 12:52:39 MDT - Msg ID: 24802)

Farfel (2/9/2000; 12:29:45MDT - Msg ID:24799)

Farfel, I wish you would tell us what you really think. Am I correct in asuming that you do not care for these fine, upstanding people at Barrick?

regards

JCTex

(02/09/2000; 13:05:13 MDT - Msg ID: 24803)

BlueSky & Stranger

These increases in fuel and transportation costs are simply not important. You see, these additional costs must be filtered through the gummit statisticans, where they will find that these cost-increases actually cause the rpms per increase in cost to result in a figure which when multiplied by the square root of four, and divided by 6 will bring about a CPI & PPI figure which is less than last month's figure by 7 percentage points. All of this means that Mr.Clinton can pay off all of the National Debt with the negative Balance of Payments in just 2 years.

If you don't believe me, I bet that someone on PMSNBC will tell you the same thing, this afternoon.

Farfel

(02/09/2000; 13:05:57 MDT - Msg ID: 24804)

And Here's ANOTHER THING...

The next time I hear some whiny Silicon Valley-brain-washed SUV driver tell me about the awful oil companies gouging the American consumer, I will simply barf on their shoes.

Why is it so obscene for an oil company to increase its prices but it is perfectly acceptable for the American consumer to pay a 30% increase in the several hundred dollar rip-off price of Windows 99? Or a 100% increase in the rip-off price of a cable modem? Or a 40% increase in the rip-off price of internet service?

Who the hell do these guys think they're kidding?

I am no major fan of companies, yet when I hear of politicians in a huff about the oil prices, I just want to laugh. It doesn't take a rocket scientist to figure out who is lining their pockets.

Thanks

F*

Farfel

(02/09/2000; 13:07:13 MDT - Msg ID: 24805)

Should read...

I am no major fan of OIL companies, yet when I hear of politicians in a huff about the oil prices, I just want to laugh.
It doesn't take a rocket scientist to figure out who is lining their pockets.

SOS

(02/09/2000; 13:18:17 MDT - Msg ID: 24806)

JCTex. . .Now that was:

. . . really funny!!!

Cavan Man

(02/09/2000; 13:27:35 MDT - Msg ID: 24807)

Town Crier 24791

Is there a way to compare these types of transactions to historical data so that an analysis can be made; perhaps the first six months of '99? Sounds like big numbers consistently but can these "repos" be considered normal in any sense?

Farfel

(02/09/2000; 13:27:52 MDT - Msg ID: 24808)

GOLD UP a Crummy 5.00 on Spot...SELL BARRICK GOLD!

Exactly as I predicted, gold barely moved up relative to surging platinum.

Today's limp-wristed gold move = more stale crumbs thrown to gold investors, courtesy of Barrick Gold. Just enough to keep hope alive before Barrick and its bullion bank partners in crime slam the gold price down once again.

And Barrick lovers want gold investors to be thrilled???

Give me a break.

Keep selling this crappy Barrick gold company into the toilet, that's where it belongs.

Thanks

F*

Cavan Man

(02/09/2000; 13:29:17 MDT - Msg ID: 24809)

peterasher

Peter,

I fly in 9's and MD 80 series aircraft all the time. Is this report accurate? If so, how do we know (for sure)?

Believe me.....many thanks!

jaydeevee

(02/09/2000; 13:48:19 MDT - Msg ID: 24810)

Much harder to find 'great courage' . . . than a rising GOLD price!

http://www.usagold.comFarfel,

I posted the other day that I did not know you . . .

I'v just read your latest posts.

I feel like a fool.

If this whole thing turns around, if this heat on Barrick causes 'something to give' in this INTERNATIONAL SCAM that is GOLD; it will be because of people like you!

You show the most incredible COURAGE in your posts!

When I posted that I'v learned more about LIFE than GOLD from this site, you
'great teacher' are an example of what I mean!

WOW!

Solomon Weaver

(02/09/2000; 14:20:57 MDT - Msg ID: 24811)

Newmont call

I am a shareholder of Newmont. I just called Corporate Relations Department at 800 810-6463 and the nice sounding lady was able to have a very clear discussion with me on their hedging program. She said that Newmont's hedging structure was very carefully described at the end of the press release in late jan 00 which gave quarterly results. I encouraged her that it might be good for Newmont to issue a special press release this week, restating for the public record the minimal amount of negative exposure their program generates, and to reconfirm their interest in the return of an open gold market.

As far as I understand it, Newmont has about 2.5 million oz. sold forward but only about 0.5 million oz per year.

If others reading this forum were to also call, perhaps they would come out and make a statement too.

Poor old Solomon

BTD

(02/09/2000; 14:39:00 MDT - Msg ID: 24812)

Tell your gold fund to sell Barrick

I just sent this email to my gold fund:

To Mr. John Segner, Invesco gold fund manager:

I am a shareholder in the Invesco gold fund. According to the Invesco web site, Barrick Gold is one of your top ten holdings. I find this very alarming. Barrick's price has gone down in response to an improving gold price due to their inordinate use of hedging. There are currently consultations going on between Barrick shareholders and the Milberg Weiss Bershad Hynes & Lerach Law Firm regarding a potential class-action lawsuit against Barrick due to their harmful hedging practices (similar to the lawsuit just filed against Ashanti). Barrick shares should be sold and replaced by those of a company that is positioned to benefit from a rise in the gold price. On Monday, Barrick announced they are committed to continuing their hedging program. They claim to have reduced their forward hedges, when actually they have merely bought OTC call options that are cash settled while their forward sales require settlement in physical metal. They are still at risk. I urge you to sell Barrick immediately, especially as the price prospects for gold have turned decidely bullish with the ongoing hedge reductions of other producers. Please let me know as soon as possible what your plans are regarding your holdings in Barrick Gold. If you plan on continuing your support of Barrick and its anti-gold hedging practices, I will need to consider moving my money to a gold fund that does not hold Barrick shares. Invesco Gold fund has not been one of the better gold funds over the years, and if you continue to hold Barrick Gold, I cannot envision it being one of the leaders in the future.

Sincerely,

Bruce T. Dague

P.S. Barrick's Tuesday announcement that they would not add to their hedge positions does not remove their risk nor improve their prospects. It was a PR ploy to get their shareholders off of their backs without having to take concrete actions.

JCTex

(02/09/2000; 14:57:58 MDT - Msg ID: 24813)

Oil/Gasoline Outlook from www.ezboard.com

Downstreamer
Administrator
(2/8/00 6:05:50 pm)
Reply Oil market shortages are going to continue
--------------------------------------------------------------------------------
While none of the API weekly stock changes are any big suprises, why did refining runs drop another 3.3% from last week, putting us considerably below last year's deficient refining rates? Refiners aren't making any headway in addressing these product stock deficits, down at the lowest levels in at least 10 years, in fact they're back-peddling. We still have numerous maintenance turnarounds in front of us. Input to crude units dropped 500,000 barrels a day since last week and we're now lagging last year's crude processing rates by a big 948,000 barrels a day.

I don't see any way the refiners are going to build adequate gasoline stock levels by Spring. Iregardless of OPEC, SPR releases and crude fundamentals, unless these refining stats are seriously flawed, we're in for some gasoline supply problems by Spring.

Crude and product stocks have steadily slid for a year, from very high stock levels to record 10 year lows. The fundamentals that caused this stock slide haven't rebounded, they're getting worse.

Captain S
Unregistered User
(2/9/00 6:41:01 am)
Reply Mogas this Spring
--------------------------------------------------------------------------------
Not only are there low(er) stocks and refinery problems, but there is no incentive to store anything. CRude backwardartion is still over $0.50/month, while the April-June gas is at 3.8 cpg or $1.60/bbl/month. Not exactly an incentive to store.

The refinery run rates are a mystery. One would assume refiners would like to "make hay while the sun shines". There have been a lot of hiccups lately. Maybe all these mergers and refinery acq's "in waiting" have materially effected refinery worker morale, and its showing up in the form of poor operations.

R Powell

(02/09/2000; 15:10:05 MDT - Msg ID: 24814)

Farfel's bloodpressure

Great reading! Most people think of market research and economics in general as a pretty dry, unemotional field of study. You have certainly totally discredited this notion today. I always start from the bottom of the page, then read toward the most recent posts. I found myself hoping for more from you. I could almost see your bloodpressure rising. Enjoyed the reading and agree completely. You mentioned writing for the Toronto Globe and Mail, have you ever thought of freelance writing? Make some money and spread the word at the same time. Please remember to back any accusations with facts to avoid libel suits. Thanks for the good info.

Farfel

(02/09/2000; 15:15:26 MDT - Msg ID: 24815)

Powell, I only WISH the Pricks Would Sue Me

It would be one of my dreams come true as I would love to put the spotlight on this thing.

Thanks

F*

Strad Master

(02/09/2000; 15:23:31 MDT - Msg ID: 24816)

Airplanes and Y2K - off topic. Sorry!!

Cavan Man and Peter AsherLogic suggests that the Yourdon report is baloney. Every airline has MD 80's that fly all over the world every day, yet only that one Alaska Airlines jet fell out the sky, a month after the Milennium rollover. In the preceeding month it had been flying around without Y2K problems.

Peter Asher

(02/09/2000; 15:49:53 MDT - Msg ID: 24817)

Caven Man

This came from - http://hv.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=002WPW

The #261 disaster appears to me to be the combination of Stabilizer (Actually, Elevator) movement out of control, combined with a structural weakness in the hinges that led to failure due to the excessive operational stresses of the trouble shooting. The basic design of the horizontal tail surfaces mounted atop the rudder is intended to place that surface clear of wing and engine air turbulence. The downside is that this is structurally much more challenging then when those forces are contained by being attached to the fuselage itself. Add to the mix the threat of corrosion and metal fatigue and the laws of probability create higher risk.

It is obvious from the reports of load cracking noises in the tail section and the radar traces of an air stream supported decent of a piece of the aircraft, that the elevator surfaces (Movable part of the stabilizer) broke loose. This event would turn any aircraft into a powered flying brick!

The FAA order to inspect for corrosion by a date several months in the future is the underlying culprit. Something potentially that fatal to the survival of the aircraft should have been ordered as "grounded until inspected or remedied" IMO. But that would have been very expensive and disruptive. The Challenger was sent aloft, knowing the risks of the frigid "O" rings, but it was a big PR mission. Another infamous coverup of the truth!

Large numbers of D-9s and MD-80s are flying safely every day. BUT discretion is the better part of valor. The low odds don't mean a thing if it's you or yours that rides on the loser!

The scariest part of all is that they didn't bite the bullet and slip in to San Diego or Irvine when they had the chance.

What a waste!!

Peter Asher

(02/09/2000; 15:52:50 MDT - Msg ID: 24818)

Correction

2/9/2000; 12:22:19MDT - Msg ID:24797) came from that site, the copy just now is from me.

Golden Boy

(02/09/2000; 16:27:44 MDT - Msg ID: 24819)

To BILL MURPHY

Bill, I think your doing a great job with gold. I'd like to make two observations. 1) You mention in one of your write-ups today that as soon as gold reaches $319 that the writers will have to cover. That is wrong! Barrick ephatically stated that the settlement is a purely cash transaction. Delta hedging will be the only process that will effect the gold market. 2) Buying so-called gold options does not net out the increase in their forward contracts they purchased in Q4. Their forward contracts decreased by 400,000 oz. but they produced 1 million ounces, therefore they added 600,000 oz. They have not stated they will stop buying forward contracts, they have only stated their 'net' hedge position will decrease. You know that its the forward contracts that are killing the gold market because spot gold is sold to earn the contango. Normal call options also effect the spot market but Barrick is not buying normal call options. I would like Barrick to announce they will not purchase any more forward contracts, not net out their position with calls.

Anyways, keep up the good work. Your right when you say the juniors will dwarf the seniors when the gold rally comes

Canuck

(02/09/2000; 17:12:13 MDT - Msg ID: 24820)

@ Farfel

Any sense in shorting Barrick; that is to say if one feels its share price is going to drop?

Once a month or so, I believe, the National Post publishes
total net 'shorts'; Barrick often, if I recall correctly
around 1,000,000 shares short. It will be interesting on next publication.

Canuck.

Journeyman

(02/09/2000; 17:29:07 MDT - Msg ID: 24821)

A repost in lieu of Farfel's blood pressure medicine!

http://www.destiny-worldwide.net/rcg/newform/money.txt
A note on Barrick, Ashanti, derivatives, evolution, etc.
{Originally posted February 8, 2000}

@Aristotle, Goldfan, Farfel, Oro, 18Karat, ALL

One way to view Barrick and Ashanti is that these companies
are just in the early stages of an evolutionary path
peculiar to business organizations in modern fiat-based
economies. Bear (or for that matter, bare) with me a
little, I think you'll find this interesting, maybe even
useful!

Today we think of economies as being separate. Each
separate economy has it's own separate "national brand" of
fiat currency. As a result of no longer having a universal
standard of value, formerly provided by the old gold
standard, (there was no longer even a second-hand value-
standard once the connection of the dollar to gold was
broken and Bretton Woods broke down), each currency
fluctuates in value vs. the others on a day to day, even
minute to minute basis. Such fluctuations wouldn't happen
with a gold standard. But that's another story, right Ari?
;)

This ceasless fluctuation created problems for trade across
borders. Suppose you just bought a load of VCRs from Sony
of Japan to retail in the U.s. and agreed to make equal
monthly payments for these VCRs over the next year.

Sony doesn't want to be paid in dollars; it want's yen. You
don't have any yen and likely won't get any in the normal
course of your business. This means you'll have to go out
and buy yen in the foreign exchange markets. Over the next
year, if the yen goes up relative to the dollar, you'll have
to spend more dollars than you thought to buy those yen - -
- on the other hand, if the yen goes DOWN, you'll spend
fewer dollars to buy the yen and get an unexpected "windfall
profit."

But you're an electronics retailer not a gambler. You're
not really interested to speculate on such fluctuations, and
you don't know how to build such uncertainty into your
business equation.

Cut to ......

People now talk of the "real economy" and, separately, the
"financial economy." Just 15 or so years ago, the term
"financial economy" wasn't in common usage and at that time,
still existed mainly to service the needs of "real economy"
businesses doing cross border trades. These financial
economy organizations, mostly banks, quickly discovered that
most of their customers, just as the electronics retailer,
didn't want to gamble on currency fluctuations either.
These mostly banking institutions learned to take the
"gambles" for their customers instead - - - at a nice
profit, of course. This was a major expansion of "futures"
contracts and options, which have been growing and expanding
in all directions - - - and are now called, generically,
"derivatives."

Today what was the tail has become the dog. As of about
1989, economist Kenichi Ohmae estimated that only about one
dollar of every 32 traded in the foreign exchange (fourEX)
markets was traded to facilitate cross-border trade; the
other 31 of the 32 dollars, Ohmae thought, was traded in
various types of short-term speculations. Things have only
gotten more lopsided on the side of the "financial economy,"
read "gambling economy" since. Today for example, the total
world-wide notional value of all derivatives is estimated at
$80 trillion by the BIS (Bank of International Settlements.)
Clearly, if you consider the that the "real economy" is the
dog and the "financial economy" is the tail, the tail is now
wagging the dog - - - regularly and VIOLENTLY! Right
goldfan? ;)

What's this have to do with Barrick and Ashanti, etc.?
Well, banks weren't the only organizations to discover the
lure of the forex and derivatives casinos. Especially
businesses that had large overseas import/export operations
discovered them too, and some of them mastered the game.
For example, those special low-interest deals you get from
Ford (Ford Credit Corporation) and GM (GMC Credit) are based
on the "financial economy" arm of these erstwhile "real
economy" businesses. In fact, the economic viability and
competitiveness of these companies depends as much on their
financial operations as on their manufacturing prowess.

Some even more surprising evolutions from "real economy" to
"financial economy" were performed by companies like GE.
About 40% of GE's income is produced by the GE Credit branch
of the company. Why is this surprising? Because GE stands
for "General Electric" - - - which has divested itself of
it's electrical business to focus on the more profitable
financial division.

Possibly even more surprising is Primerica, now a purely
gambling, ah, financial economy company. Care to guess what
it started as? Did you guess it started as the country's
largest container company, American Can Corporation? Didn't
think so, but that's the correct answer.

Again you ask, what's all this have to do with Barrick,
Ashanti, etc.? Well, just as did American Can, General
Electric, etc., these companies are on the trail to
discovering they may be able to make more money gambling on
derivatives than in producing their primary product, in this
case gold. Barrick is further along in this discovery
process than Ashanti - - - Munk and his crew are beginning
to think they can beat the game. Ashanti is just a neophyte
sucker, but if they watch others like Barrick, they may get
the idea they can win too - - - or at least become a little
better at playing. Other miners just learned the game's too
tough and aren't so anxious to play anymore.

The problem is, of course, the "financial economy" games
(stock markets are the most visible and commonly played of
these games) are quite seductive. If you play right, you
can make big bucks and never have to get dirt under yur
fingernails. There are other apparent advantages too
numerous to mention, and that's why we've lost GE, American
Can, etc.

On the bright side however, the seductivity of these games
has kept a lot of money circulating in these "casinos" which
keeps it from bidding for "real economy" goods and services
- - - which keeps "inflation" in the "real economy" low (so
far) and has saved us (so far) from the massive general
currency depreciation which would almost certainly otherwise
occur.

The following clip is an excellent example of how these
games distract money from competing for many "real economy"
goods and services, thus slowing currency depreciation
(relative to these "real economy" goods and services at
least):

If there is a homey artifact of the bull market, it is
Bort Carleton's white 1989 Range Rover. Carleton, 54,
is a footwear consultant in suburban Los Angeles who
first got into the market five years ago. The Range
Rover, a present from his wife, is an object of
conspicuous practicality--just the thing for shuttling
around his {eight}-year-old twins. But lately he has
come to reconsider the vehicle. "I've had my Yuppieness
with it," he concedes. Now he has lost interest in
flaunting his wealth in a garishly expensive
automobile, especially when the money can go to a more
worthy cause. *"I'm going to sell the Range Rover," he
declares, "and invest the money.*" -John Leland,
Blessed by the Bull, Newsweek, April 27, 1998, pg. 51

I believe there were other examples cited on this forum - -
- the couple who bought an expensive new home but weren't
going to furnish it because they would have to take money
out of their stock investments to do so, etc.

A brain teaser for your consternation and edification: Can
the "financial economy" hoover so much buying power that it
drys-up the "real economy?" What are some of the symptoms
you might look for?

Regards,
Journeyman

P.S. The above URL link is an old post from my colleague, L.
Reichard White, that includes some direct quotations from
Kenichi Ohmae, etc. and from which I have liberally borrowed
in this post.

law

(02/09/2000; 17:32:40 MDT - Msg ID: 24822)

Canuck, Farfel

Canuck: Barrick is probably shorting their own stock thru a BB! With their integrity and credibility...just a facetious thought!

Farfel: You're on "roll"...I was dissapointed when your well executed tirade stopped. After 20 years of following the PM markets, I share your thoughts, feelings and sentiments. I admire your courage!!!

R Powell

(02/09/2000; 17:40:07 MDT - Msg ID: 24823)

Gold headed up

From crbindex at 19:27 ET, Gold at 312.6 +4.

zguy

(02/09/2000; 17:49:01 MDT - Msg ID: 24824)

Publish Barricks Major Stockholders!

http://www.sec.gov/edgarhp.htmI had an idea while I was reading BTD's Posting "Tell Your Gold Fund To Sell Barrick"

Why not Publish Barricks Major Stock Holders on this Forum so we all know who to Write Letters and Send Emails to asking them to sell their Stock if Barrick doesnt close out their Hedging Program?

If I remember correctly from back in the 1980's when Corporate Raiders were going in and taking over Public Companies once they accumulated a Certain Percentage of
Stock (5% maybe?) they had to file a Certain PUBLIC form with the SEC saying how much Stock they Owned. And then this information was available to anyone.

I got as far as the SEC's "Edgar" database of Information on Public Companies, (See Above Link) but stopped there because it got to Technical on the Retrival Instructions.

If Anybody out there cares to take a Stab at it just click on the Above Link.

I havent had time to visit here much lately so if this has already been done then please accept my apologies. In that event if someone could give me a Message ID # i'd really appriciate it.

Thanks

tedw

(02/09/2000; 18:11:13 MDT - Msg ID: 24825)

Junior Gold

http://www.usagold.com
I bought some more Gold Star Resources today, a good junior gold stock, very sensitive to the price of gold. I have a friend who is interested in junior gold stock but wants something other than GSR. Anybody out there have some good
stock recommendations? Either junior gold or silver mining?

koan

(02/09/2000; 18:13:17 MDT - Msg ID: 24826)

metals have made a major reversal, I think

Here is my take on the metals mkt. That and $5 bucks will get you a cup of coffee - lol. The metals last week made a key reversal. The spark was the PGM's, but the underlying cause was a convergence of variables that we have not seen in 20 years. There is rising inflation, a dramatically overvalued stock mkt and an unpredictable bond mkt. Where does one put there money. You can't go to the dollar because the dollars strength is dependent upon the strength of the bond and stock mkt. The metals are perfect, but first we had a psychological hurdle i.e. 20 years of technical damage . But the move by the pgm's jump started the meatals mkt and I think we are now on our way. Kaplan still doesn't like it and that worries me, but I think he will be proved wrong in this rare instance. Where else is one to put their money, or at the very least one will buy the metals as insurance against a very unpredictable future. I think the stranger has been saying this exact thing for about a month or more - I didn't see it too clearly until today - and I may turn out to be wrong. I was riding my bike in the middle of winter with 40 degree clear sky's and I live closer to the north pole than the south pole - we are having record warmth up here in the north country - no bears out yet but peoples bulbs are coming up. Cheers.

Long-Buddy-Go

(02/09/2000; 18:27:34 MDT - Msg ID: 24827)

tedw- junior gold

http://www.usagold.comLook at TVX, BMG, CALVF, GPXM, VGZ.

goldfan

(02/09/2000; 18:41:51 MDT - Msg ID: 24828)

ORO Help with your post on Japan demograhics

I need help ORO!

On your "Japan and some contextual background" I'm trying to fit your demographic information into my systems model of an economy and I'm having trouble following your description of the various economic periods in the life of a "worker� , and hence of the economy.

The demographic waltz: You describe 3 generations of workers, baby boomers, baby busters and echo boomers. In section 2, you say the baby boom is followed by a baby bust, implying the baby busters are the children of the baby boomers. However, in section 3, Mature population, you mention the sub-bay boom , the children of the baby boomers, even though they seem to follow the baby busters. Then, later you speak of the sub- boomers or echo boomers.

Quote: (my note in brackets)

"While the consumption of the mature is low ( the baby boomers), the busters are entering peak consumption and income ( I take it this is the stage after the entry stage It is the stage the baby boomers have just left) while the sub-boom or echo boomers are entering the work force and productivity of the overall labor force stalls since the two major components of early and end career far outweigh the mid career portion." ( so we have one period of actual time, in which three stages of career are stacked, echo boomers at entry level, busters at mid career high productivity, and baby boomers at end career low productivity, is that right?)

Section 4. Retirement ( I'm not sure if this is a phase beyond the mature population phase, a 4th phase?) Then you talk about echo boomers, and echo baby busters and I get lost!!!

I can't seem to relate these categories to the dates you mention. Inflationary period ending in 1976, peak productivity and consumption period ending in 1990, and the period between 1990 and now. Only three periods here, yet it appears the early analysis was presenting 4 periods, arrival in the work force, maturation, the mature work force, retirement.

Can you clarify this for me?

Maybe a chart of some sort;
time period 1..... ending 1976 2.....to ?? 3....to ?? 4...to 2000 Boomers entry maturation mature retirement
Busters entry maturation mature
Echo boomers entry maturation

Thanks, this is really exciting stuff!!

Goldfan

law

(02/09/2000; 18:56:14 MDT - Msg ID: 24829)

tedw

Producing: Developmental:
Franco Nevada FN.T Cumberland CBD.T
Glamis GLG.T Francisco FGX.V
Golden Star GSC.T Madison MNP.V
Miramar MAE.T/MAENF Minefinders MFL.T
Repadre Capital RPD.T Nevsun NSU.V
Rio Narcea RNG.T Pangea PGD.T
SW Gold SWG.T
West Pinnacle WPN.V

Exploration: Silver:
Corriente CTQ.T Apex SIL
General Minerals GNM.T Hecla
Queenstake QTR.T Pan American PAA.T/PAASF
Romarco R.T Silver Standard SSO.V

tedw: This is for educational purposes only--must do your own due diligence.
Virginia Gold VIA.M

goldfan

(02/09/2000; 18:56:35 MDT - Msg ID: 24830)

Steven Jon Kaplan Is he a phony?

Farfel or Nickel62 I'm sure you have the knowhow to expose this guy.

He says Barrick "closed out half of its hedged positions" when they did nothing of the sort as I understand it. Can a professional gold analyst stretch the words "closed out", speaking of a short sale of physical, to mean, "purchased a few calls to be settled in cash if it comes to it" without being either incompetent or a liar??

He claims here there is plenty of liquidity in the gold market, totally failing to say it is phony paper liquidity. He says Barrick could cover 100% of their hedges without moving the price. Does he have any idea what he is talking about? What abobut the bid/ask spreads on the POG, or the lease rates, don't they say something about the liquidity, even of the paper market?

From Kaplan, Feb. 7
>>>>>The Barrick announcement this afternoon was bullish in that it confirmed an industry trend toward less hedging at low gold prices. However, it was bearish for three important reasons: 1) Barrick clearly remains committed toward its hedging strategy, which it virtually invented, and must surely have been tempted by the recent price spike to add fresh hedge positions. 2) Far more important in my opinion, and virtually overlooked by today's media "analysis", the fact that Barrick was able to close nearly half of its huge hedged position in the fourth quarter of 1999 (a total of 280 tonnes of gold were closed out by Barrick in less than two months) without pushing the gold price up by even a penny must have come as a shock to a substantial portion of current gold long-side speculators, many of whom assumed that Barrick was "trapped" because it couldn't possibly lift its hedges
(so this argument went) without causing a sharp spike in the gold price. Now it seems clear that Barrick could cover 100% of its hedges if it wanted to without causing any significant change in the gold price. This demonstrates how thoroughly liquid the gold market is today, and how very close to true equilibrium, and most importantly, how immune gold is to a permanent price change without a fundamental economic realignment (such as a sharp correction in the Nasdaq or a U.S. recession).<<<

I'd sure like your comments

I feel we should find a way to expose these guys.

Goldfan

(02/09/2000; 19:09:18 MDT - Msg ID: 24831)

paradox

Hi All - Interesting times, no? Let's see. We have gold mines that lose money when the price of gold goes up and, we're told, are praying that the price of their goods goes down. In the meanwhile, the stock tanks for obvious reasons. I guess we should hope that GM and Ford begin hedging cars and trucks. Then, everyone could jump on the bandwagon and hedge the stuff they actually produce and that would take care of inflation, right? All the robber barons would be going out of their way to get the price of their goods down. We, the sheeple, would be able to buy these goods at below market. If we were smart sheeple, we'd get exceptional value for our hard earned paper.....at least for a while. Where would the turning point be? Well, probably when the robber barons began realizing that they were hedging themselves out of business.........ie BIG LOSES! Humm. Seems I've heard something about situations like this recently with some too bright to fail managers both in business and in the hedging brain trust, too.

When something is up-side-down and stays that way, something's wrong. Natural laws won't allow something to remain up-side-down forever. AG, GS, BOE, Barricks ++++ are running out of options/time to keep this up-side-down monstrosity airborne. The truth is on its way and there's not a thing that can be done to keep all the dirty little secrets under wraps. Yes, we can write and call and post. That, I believe, cuts the time to the truth. But we must remember that the truth is coming fast no matter what we do and it cannot be prevented from arriving by selfish human interest or action. This has nothing to do with Spiritual beliefs but rather with systems theory. It's the way it works.

Here's another little paradox. I've been a long suffering believer in gold as real money for 30 years. Two months ago, I was recruited to an Internet start-up as COO. This company looks like it might have a terrific future......if the truth doesn't arrive too soon. Truth, or over-valued IPO. That is the question. Either way, I'm covered. Unlike Barricks.

Best, DD

Quicksilver

(02/09/2000; 19:11:58 MDT - Msg ID: 24832)

Big Gun defends the Big Spoof

http://www.usagold.comGentlemen, you may be underestimating the power of the "spoof" going on here. As long as the chickens don't come home to roost, then the printing presses can keep rolling and nobody hears a squalk. Current accounting principles that shy away from asset based old fashioned standards to the modern "flows analysis" leaves us all in the dark when to comes to evaluating businesses in this country. So the Fed is watching the flows of money and ignoring the hyper-leveraged climate we live in. I don't think they really understand what is going on but it's always been reactionary crisis management techniques. I believe in "knowing the fundamentals" to determine the biases and where a stock is headed. The biggest bubble is not in stocks, but in real estate. When I can walk into a HUD office with three paycheck stubs and a $1000 and an OK credit rating and get a mortgage on a $100,000 property, that's insane leverage. There is little security for all this margin being used for stocks. Keynesian Theory says 100 bucks loaned out ten times has the pump priming power of 1000 bucks. OK I'll buy that but let's talk about it in reverse. Pulling out $100 from and account where the bank has to collect from John who has to collect from Mike who has to collect from Sally because each is leveraged to the max and has little cash on hand, shows the magnitude of the contraction -$1000. That money pulled out has the same reverse Keynesian effect, contracting power of 10X if it was leveraged ten times. This is why Mr. Greenspan has to attempt a slow deflate. For the Fed to maintain a cap on the POG they need to keep the dollar strong so oil princes can stay comfortable with the current system of payments. If the dollar gets weak, smart money goes into gold because look at their alternatives. The Euro is another fiat currency also backed by "spoof" and the European dis-union of socialists who can't agree on whose beef to eat, whose language to speak, or how to get the northern members to pay for the transition while the southern members get the jobs. Our unification occured in the 1860's with the North forcing its will upon the South. Deja View to you too, Hewz Vey Is Da Ridt Vey? Or "with our wine, cheese, and noodle beaches we will prevail". Southern European speakenze Deutsch?
The Yen, sumimasen, failure to develop any semblance of a democracy with an economy based on free market principles, leaves them with industries totally dependent on exporting products at a time when markets are saturated and the other tigers are cheaper and of similiar quality. So the yen has a tendency of lift off like at Cape Canaveral, that only is a byproduct of a functioning economy. High oil costs???Contracting markets??? China can devalue its currency just to keep unemployment down. That means China is always going to be your lowest cost producer and the other tigers get to fight over the leftovers. Is the Asian recovery so dependent on American's continuous importing? Yes it is. When we stop buying the gizmos and computer crap, then the toilets will back up in Singapore. So the Fed needs to wean the Asian puppies off the tired bitch that's running out of milk. I don't think it can do it because there is little proactive leadership in DC for Asia's problems. We'll send billions into a hole in Russia for fear of loose nukes. But do you think we're going to send troops to Taiwan if China wants to pick up their other island? So I think there are subtle alliances going on in Asia and in Europe that will lead them both to look at USA like the island of Dr. Moro. But we've still got the Big Gun. So that is your #1 spoof promotion, a cruise missile will hit its target. Sophistocated weapons promote belief in the US dollar. And the bully needs another loan lease on life. They can use paper gold to suppress the POG. They can shake down small countries to sell their gold. Dollars get stuffed in mattresses all over the globe. Strong dollar caps gold. The immigrants wire out their dollars or the drug dealers fly out millions and billions that stuffs more mattresses. The chickens can't come home to roost. That's the Fed's job and I'm sure they are very concerned that we can continue exchanging promissary notes for tankers of oil. Enjoy it while it lasts. If we loose the big gun, then gold could hit $2000 an ounce or much more with hyper-inflation. If the Euro gets backed by gold then we're looking at $1000+ gold. The dollars would come out of the woodwork. We'd be flooded with foreign held dollars. Microcap gold mining stocks would become dotcom mania. Gold Corporations do not want gold going up until they can cover more hedges. Barrick and PDG could end up like Ashanti I and Ashanti II. What we are in is a race to cover but no one had better run or else they'll all be so far underwater. What did you do as a kid when the teacher(Barrick) told you not to run? You waited till she turned her back and then you sprinted out the door for recess. This bouncing volatility with few definable technical patterns.....It's short covering. You'll burn many candles looking at the candles. Don't wait to buy the doji, a gap up has no pattern. Eventually the Fed may realize old gold supressing methods won't work with all this short covering panic. The masters of manipulation should let it come up slow in a controlled way, no $50 spikes, just lots of fives and eights. Result is the same no inflation panic. We really have little domestic inflation. The internet is a strong deflator as are super cheap imports. We export our inflation into the Big Float. So we've got the Big Gun (high tech accurate weapons) that gets us respect so we can promote the Big Float (foreign held dollars that never get redeamed in real goods). Everything you always wanted in a beer and less. The Eskimos of the frozen tundra and the artichoke pickers of Guadilahara and the steel workers of Chile......all want dollars buryed in little jars unless gold goes up fast and scares them out of their dollars. The achilles heel of the big gun is that it takes lots of bullets (dollars spent on defense) to operate. Watch what they do. They won't fix the old ships, they'll sell them off to 3rd world countries to finance new high tech V-22s. We're putting lasers in helicopters. Foriegn missiles melt in the air not in your hand. Anyway, what is up with MDG (Meridian Gold), very low debt, there were "believers" buying it up because it wasn't coming down like ABX and PDG when Barrick's announcement came out. Acting like a glider in a world of its own. I'm always in search of more pieces to the macroeconomic puzzle. Riddle me this stockjock. How come GSR is $1.25 when it used to be $10? Three doublings in that box of cheerios (as another forum member pointed out). You complain about the derivatives market? Derivatives are needed to soak up big float. What is it to me if Gold-In Socks wants to scratch off a billion dollar lottery ticket at my favorite 7-11. In the words of Datek "Can't short this stock today","Sorry, drink Coke, play again". All this compressing of the spring......all this overextension of compressing of the spring......their short money will be in the early long's pockets. Billions and millions baby.
And to all the starving daytraders who wish they were starving artists, it was easy when the IPO's had actual business models. It was easy when everything had upward bias. It seemed to be fun shorting till they ran a short squeeze on you and buried you 5 points in the 5 minutes it took to spread the peanut butter on the wonder bread. Well consider this the last stand in Dodge City. We've got these villans masquerading as financial institutions that stole our money, but we played the game and lost it making sandwiches. So the last game is the biggest one. How many doublings will it take to bring you back to even? Now stop reading books about intuitive trading BS and find out what a ore sample is worth. Which mining companies have the best high tech machinery? Who has reserves in politically favorable countries? Who sells the picks and shovels?Small cap goldy stocks, lock and load, keep your arms in the car at all times, this rollercoaster goes upside down for brief periods, but don't worry because all the engineering has been done by foreignors. Placer's little short squeeze could send the elephants into a stampede. I'm just a monkey waiting in a tree to jump down on the elephant's back. Hopefully, I can jump back up into a tree before they go over the cliff.

law

(02/09/2000; 19:28:22 MDT - Msg ID: 24833)

tedw

http://www.goldsheet.simplenet.comThat didn't quite work out the way I thought it would! Try this! Most of these are juniors!

Producing: Franco Nevada FN.T, Glamis GLG.T, Golden Star GSC.T, Miramar MAE.T/MAENF, Repadre Capital RPD.T, Rio Narcea RNG.T

Developmental: Cumberland CBD.T, Francisco FGX.V, Madison MNP.V, Nevsun NSU.V, Pangea PGD.T, SW Gold SWG.T, West Pinnacle WPN.V, Polymet Mining POM.V

Exploration: Corriente CTQ.T, General Minerals GNM.T, Queenstake QTR.T, Romarco R.T, Virginia Gold VIA.M

Unknown: Birim BGI.T, Greystar GSL.T, Battlefield BFM.V,

Silver: Hecla, Apex SIL (Soros), Pan American PAA.T/PAASF (Gates), Silver Standard

Remember...educational purposes only...do your own due diligence. Some of these may have nasdaq listings. If your interested in a larger listing...go to the link above. Hope this helps!

beesting

(02/09/2000; 19:47:57 MDT - Msg ID: 24834)

Goldfields (Nasdaq SC:GOLD) eyes rich Finnish PGM project.

http://www.barney.co.za/reuters/feb00/goldfields9.htmFrom Kitco:
Platinum-$560.00 and rising.
Palladium-$600.00 and rising.

Above URL is a press release from Goldfields concerning Platinum and Palladium.Some excerpts:
With an eye on soaring prices, the Worlds second largest Gold producer plans to spend 1.5 million.....
Significant discoveries(Platinum & Palladium) outside of Russia and South Africa...(Finland)

Comments:In My Humble Opinion this Stock(GOLD) is a steal at current prices( around 5 1/4).Remember this is the same major Gold mining company that first denounced Gold mine hedging.....FWIW.....beesting.

Solomon Weaver

(02/09/2000; 19:53:53 MDT - Msg ID: 24835)

paper is as paper does (Forrest Munk)

He claims here there is plenty of liquidity in the gold market, totally failing to say it is phony paper liquidity. He says Barrick could cover 100% of their hedges without moving the price. Does he have any idea what he is talking about? What abobut the bid/ask spreads on the POG, or the lease rates, don't they say something about the liquidity, even of the paper market?
-----
Goldfan....this comment is true in his frame of reference....the forward sales that Barrick have made are paper contracts in their own right...if his company were to go bankrupt, and not be able to honor those contracts by mining and delivering gold. In a morose way of looking at it (and Farfel, please forgive me here) his forward sales contracts are more valuable to the counterparty because his company mines enough gold to be in the position to deliver (eventually). Not that any of this creates real shareholder value.

Now, suppose he has a sold forward position of 15 million ounces, comes out to about 500 tons. In a heavily trading market which is moving more than 1000 tons of paper gold..he can do this if he finds a seller to buy his contracts back from.

The great fiasco with the gold market is that in order to function like a currency market, it trades close to 100 times the amount of paper as it moves real metal...the nature of the beast in paper is removed from the nature of the beast in metal...the papers have their own reality. This is why FOA/A have predicted that when these two realities bifurcate, Gresham's law will drive physical off the exchange and the paper markets will collapse.

These actions at Barrick remind me of the story where two morons are trying to get across a large river at night. A local farmer informs them that they are at least 10 miles from any bridge. Then the farmer suggests that he shine his flashlight out over the river and they can climb up on the beam and walk across. The first moron (Barrick) says "let's try"...the second moron (Ashanti) says "wait a minute, how do we know that when we get half way across, you won't turn off the light??"

Poor old Solomon

Cavan Man

(02/09/2000; 20:01:49 MDT - Msg ID: 24836)

Summers wants more balance in global growth.

http://www.prudentbear.comIMHO, this is really insightful analysis.

"The inate conservatism of both the ECB and BOJ might militate against either region developiong strongly sustainable, cumulative economic expansion. This means that their respective economies would remain highly vulnerable to any external shocks such as the bursting of the US stock market bubble. Then, their economies would decline along with that of the US, creating powerful deflationary forces across the globe which may only be ended WHEN THE CENTRAL BANK ORTHODOXIES OF THE PAST TWENTY YEARS ARE COMPREHENSIVELY ABANDONED."

The caps are mine. Let's see; Japan is making a herculean effort to stimulate the domestic economy (consumption). Has Japan made significant and sustainable progress? Anybody?

In Europe, the Euro is born. Rates seem to be moving up.

Both Japan and Europe are very conservative. Only in America do people think like Americans (circa 2000 anyway). h
What am I missing? I am trying to be objective.

Cavan Man

(02/09/2000; 20:07:05 MDT - Msg ID: 24837)

Solomon

I think we are beginning to see some of what we have been warned about by our mysterious friends. While I do not believe all will unfold according to their projections, I think even gold stock owners (such as myself) would be advised to keep their index finger on the sell button.

The higher the POG, the more paper deals go under water.

I sense a definite strength in the market at this point FWIW.

Solomon Weaver

(02/09/2000; 20:07:12 MDT - Msg ID: 24838)

Hey Quicksilver, do you ever have more than 1 thought at a time?

Solomon Weaver

(02/09/2000; 20:12:14 MDT - Msg ID: 24839)

Yes Cavan Man...my worry about Jr golds...

is that in order for them to really be worth something, many of them still need additional capitalization and time to "develop" those rich finds, time to get the gear in and the leaching equipment, (and learn how not to spill cyanide into rivers), .....

Well, if we find ourselves in some kind of financial meltdown, then who is going to want to put their money into companies who still need a year of two or more to develop a site?

To those who have the appetite for junior golds...they should consider talking to MK about some numismatic coins...because the "real wealthy" who are likely to still have some net worth to protect, are the types who will sell their art work and buy up nice old coins again.

Poor old Solomon

Hipplebeck

(02/09/2000; 20:12:39 MDT - Msg ID: 24840)

quicksilver

I sure enjoyed that

Cavan Man

(02/09/2000; 20:23:08 MDT - Msg ID: 24841)

Solomon

BTW, I really enjoy your comments!

You know, I try hard to sift through all the information I do not have time nor can make time to sift through everyday in order to make financial decisions. Please pardon the poor grammatical structure of that last sentence.

While I am a real "hard asset" type of guy, I really do believe in equities and wish I was better at picking them. Heck, I can't even pick mutual funds! My point is, I try hard not to put myself in a position where I am agreeing with something I've read just because it is comfortable and fits my paradigm. Know what I mean?

The quote from PB; I mean, that really makes sense IMO. I just have a real bad feeling about the markets. What the author of that piece says about Japan and Europe is extremely accurate! Certainly, there are mitigatoing factors. However, it is close to the mark.

Cavan Man

(02/09/2000; 20:26:19 MDT - Msg ID: 24842)

mrci.com

Equities column showing lots of negative, red arrows.

Solomon Weaver

(02/09/2000; 20:30:31 MDT - Msg ID: 24843)

Survival of the fittest

Survival of the fittest is a concept which was popularized by Charles Darwin. Modern evolution theorists who use mathematical programs called genetic algorithms, are able to "breed" thousands of "digital organisms" in "cyber-ecosystems" and create a mathematical understanding of the parameters which drive evolution (to me this is less out there than Goldfans chaos stuff). One of the amazing, but not completely unsurprising things they have found is that the rate of evolution of a species is accelerated if a new species is put into its environment which competes for the same resources in a way which causes the first species to restructure its approach.

For the last years, one of the largest mining companies in the world created a new strategy of collateralizing their in ground reserves and becoming a hedge fund...this caused a slow but dramatic shift in the "ecosystem" in which other gold miners had grown fat. Suddenly, with the gold prices falling in dollars, as the dollar inflated over time, these companies were forced to "shift gears" to stay alive. Poorly performing mines were closed, new methods were introduced, sites in lower cost countries were developed, sales and administration costs reduced, etc. Even the most stalwart and strong wound up selling part of their soul to the devil as their cash flows dried up...but by then, they were used to living in drought conditions.

The greatest tragedy at Barrick is, not only have they been caught gambling, they MISSED THE CHANCE to CHANGE THEIR MINING HABITS to FIT A LOW GOLD PRICE. Now, all those other, more honest companies, have honed their real mining skills... as gold prices climb again, Barricks cash flow is getting flushed into the gold toilet paper markets, while the rich new cash flows of their competitors are available to create "alliances" with younger companies who have been waiting to develop the hottest new mines.

Poor old Solomon

harold

(02/09/2000; 20:36:18 MDT - Msg ID: 24844)

AU Mining Stocks

Could any of the fine sirs on this site please suggest some sound AU equities(including any small cap) that should benefit from what most here agree to be a forthcoming rally in the POG (Pardon me - a continuing rally in POG). Forgive me, but w/ the exception of one trade 10 years ago, I have traded nothing but the derivatives market for fifteen years. I have been playing "what if" with some colleagues, and believe if the POG does indeed rally strongly, the unwinds are going to make some of the past decade's derivatives debacles look "plain vanilla". Specifically, I'd like to find some of the smaller cap shares that would not either blow up, nor be hindered in any small way by increase in POG. I have been a lurker and trust the minds of this site. I do not have the time imediately to research myself. For what it's worth, I have encouraged every family member and friend to buy Au. Some report back that their brokers are "adamantly" against such "foolhardiness". They are brain.com washed. Thank you all in advance and for the valuable posts everyone here takes the time to give us.

Solomon Weaver

(02/09/2000; 20:41:14 MDT - Msg ID: 24845)

Cavan Man

Don't feel bad about not being able to pick equities...If you are able to keep up with what is being said by the great minds on this web site, you have developed the mind you will also need to read some annual reports and go for a stock...

One disclaimer for the times we are in now....stocks are not following the rules....accountants have prostitued shareholder value....

I know a guy who spent 20 years as a stock broker. Although he worked his way up to Sr. VP, his big love was value hunting and managing a nice set of semi-wealthy clients. 2 years ago he quit that side of the business to become a day trader at a big firm. Said that nobody is looking at value stocks any more...its all momentum.

Gold bugs and hard money guys are not contrarians...they are value hunters....many of the newly joined are those who see the compelling reward/risk in the PMs and PM mining companies today.

Poor old Solomon

Cavan Man

(02/09/2000; 20:54:55 MDT - Msg ID: 24846)

FOA 22768

This in the heat of our misunderstanding......

"Cavan Man, I used your thoughts as a measurement of what I was doing."

As Curly Joe would say, "Hey, wait a minute, I resemble that remark!"

FOA, I could have assumed you were paying me a left handed compliment but did not. Now, here we are my friend but, where are you? Please complete your projects and do not wait for the creation of an additional page to enlighten this forum further. Your Thoughts are needed here Thanks....CM

Solomon Weaver

(02/09/2000; 20:58:58 MDT - Msg ID: 24847)

DD as cyberCOO

Here's another little paradox. I've been a long suffering believer in gold as real money for 30 years. Two months ago, I was recruited to an Internet start-up as COO. This company looks like it might have a terrific future......if the truth doesn't arrive too soon. Truth, or over-valued IPO. That is the question. Either way, I'm covered. Unlike Barricks.
---
Hey DD There is nothing wrong with internet companies...the best are those that have serious COOs who will help them to stay solvent and not take the money of their shareholders for granted.

James Davidson of Strategic Investment appears to have jumped onto the internet bandwagon (fits his theories of cyber communication as being a metapolitical shift which will shift power from nations to individuals). His take on the "value" of these companies is that they are staking claims on cyber territory (real estate).

Poor old Solomon

Solomon Weaver

(02/09/2000; 21:07:22 MDT - Msg ID: 24848)

why don't they buy gold???

Silicon Valley psychiatrists have identified a new malaise that affects the new millionaires who earn their money through the Internet.

Sudden Wealth Syndrome entailed a deep identity crisis, anxiety, guilt and dysfunction, the psychologists said.

The mental health specialists have even set up a new clinic, the Money, Meaning and Choices Institute, to help the millionaires of malcontent.

Silicon Valley has tens of thousands of new millionaires and some estimates say 64 new ones are created every day.

But once the initial euphoria wears off, many face troubling feelings.

"There's a sense of denial. There's a sense of shock. There's a sense of 'I don't deserve it'," said psychologist Joan DiFuria.

------
These guys will get their antidote soon.

Poor old Solomon

elevator guy

(02/09/2000; 21:13:47 MDT - Msg ID: 24849)

@Farfel, my esteemed teacher and brother in gold.

My, what BIG NASTY TEETH you have!

All the better to bite the shorts with.

You sir, are an honorary devil dog. In WW2, the US Marines fought with such verve and determination, that the Germans coined a phrase to describe them, "Devil Dogs". They chomp down hard, to the bone, and dont let go, no matter what.

Go man, go.

elevator guy

(02/09/2000; 21:21:07 MDT - Msg ID: 24850)

@Chrusos

Thank you, Sir Chrusos, for your acknoledgemnet.

There seems to be a sea change afoot with gold, eh? No thanks to Barrick, who is sandbagging, grandstanding, and dragging their feet.

Sell Barrick, sell ABX.

If anyone owns Barrick stock, they have a knife in your back, while they smile and shake your hand.

Get free of them, sell em off, and follow in the footsteps of giants, like world reknowned author and GATA supporter, Arthur Hailey.

Golden Truth

(02/09/2000; 21:25:42 MDT - Msg ID: 24851)

TO Cavan Man

Have a look at our new poster that nobody here seemed to notice except me? "Trail Guide" Msg:I.D 24775.
Very short and to the point also did not introduce themselves as a new poster. I bet it is our True Trail Guide! What do you think?
G.T

Solomon Weaver

(02/09/2000; 21:31:31 MDT - Msg ID: 24852)

GT and TG

Golden Truth

If you are right, we should remember to nominate that first posting to the hall of fame.

goldfan

(02/09/2000; 21:47:06 MDT - Msg ID: 24853)

Cavan Man (2/9/2000; 20:01:49MDT - Msg ID:24836)

Sir Cavan Man I'm enjoying your exchanges with various here, Caught your question re Japan progess (utter lack of same!) ORO had a very fine piece on which I'm looking for a third seconder for the HOF as follows:
ORO (2/7/2000; 1:08:34MDT - Msg ID:24565)

leMetropole Cafe has a piece by Neville Bennett titled Funny Finance in Japan.
Also there is this article I found in the Toronto Star.

Danger signals sounded for Japan
Wasteful spending, national debt could wreck world economy, academics warn

BY SCOTT STODDARD ASSOCIATED PRESS

TOKYO�Japan's national debt made worse by wasteful public works spending, is a time bomb that could wreck the world economy, two Japanese academics say.

"We are looking at a danger signal blinking near and bright," said Akio Ogawa, a lecturer in the Graduate School of Public Policy at Tokyo's Chuo University.

Ogawa and Takayoshi Igarashi, a professor of law at Tokyo's Hosei University, spoke at the Foreign Correspondents' Club of Japan Friday about the need to slash both public works spending and the debt if Japan is to regain its economic might.

Attempting to jump-start the economy, the government has lavished funds on bridges to sparsely populated islands, concrete linings for rivers and roads to nowhere, the two academics said.

Rather than helping the economy or the people, the spending mostly benefits an "iron triangle" of powerful politicians, bureaucrats and businesses Ogawa and Igarashi said.

The second-richest country in the world is also the world's most indebted.

Japan's public debt exceeds 600 trillion yen (about $8 trillion), or 130 per cent of gross national product, Ogawa said.

Worse, the government may be hiding 100 trillion yen (about $1.5 trillion) in debt from a special coffer that the Ministry of Finance uses to make loans to public corporations for infrastructure projects, Ogawa said.

A ministry official declined to comment on the figure.

He did say that none of the loan recipients is in danger of defaulting.

Japan racked up debt mostly over the past decade as the government urged on by the United States, tried to spend its way out of its longest economic slump since World War II.

In 1997, Japan spent more than the equivalent of about $6 billion on roads, bridges, ports and other public works projects: more than the United States, Canada, Germany, France, Italy and Britain combined, Ogawa said.

Anger over high spending on public works boiled over last month when 90 per cent of voters in Tokushima, in western Japan, rejected a government plan to spend the equivalent of almost $1.5 billion to dam a river.

Opponents say the project would destroy the ecosystem. Construction ministry officials say it's necessary to stop possible flooding. The government says it will proceed despite the vote.

"Now we face a dire choice between huge tax increases or hyper-inflation to help reduce, if not wipe out, the debt that has already got out of control," Ogawa said.

But the last time the government raised taxes, in April, 1997, the economy sank into recession and dragged down the rest of Asia.

The alternative, printing more money, would reduce the value of savings and force up prices, hurting consumer demand and ultimately the economy.

From Toronto Star, Feb 6, 2000

Good reading, scary stuff

Goldfan

Mr Gresham

(02/09/2000; 21:49:17 MDT - Msg ID: 24854)

POG Amulets

Just got back from a week out of country -- no Internet access on Caribbean island.

At the airport first things I check: 1) POG at kitco graph, 2) is FOA back here? All ri-i-i-i-i-ght! 2 for 2!

I go away for a week and POG jumps, what, about 20?

Anyway, remember Peter's backyard campout last summer? And what happened immediately after that? I would say he's our number one good luck charm.

But if Peter isn't willing to host another pre-spike party, I'll be on call as backup amulet for another out of country trip, say, in a few months, OK? Should we start the kitty now? :) :) :) Hey, we can hope, can't we?

It sounds pretty exciting just skimming today's posts, and I searched enough of yesterday's to find FOA's announcement of eventual return. Whew!

Looking forward to catching up on reading the past week after the family's tucked in bed!

Elwood

(02/09/2000; 21:49:22 MDT - Msg ID: 24855)

Trail Guide? hehe

Golden Truth, I think you may have something there. Who else tells us that he'll be back when he has more time?

Elwood

Ulysses

(02/09/2000; 21:57:59 MDT - Msg ID: 24856)

TedW

http://www.usagold.comTry US GOLD. They have a 40% interest in a mine in Nevada with exploration funded by Agnico.The mine already has proven reserves and I believe it is on the Carlin Trend.

Golden Truth

(02/09/2000; 22:01:22 MDT - Msg ID: 24857)

TO Elwood

I,am glad you took the the time to notice, i didn't want to spell it out for Cavan Man. I,am looking forward to our new Trail Guide (Big Smile)
G.T

ORO

(02/09/2000; 22:02:14 MDT - Msg ID: 24858)

goldfan - demographics

The idea is that a demographic spike, such as that created by a large scale and prolonged war, ripples through the future generations with many implications. The spike and ripples go like this:

1. The baby boom. War is over, folks want stability, the young are hurt and "battle tested". Within a year or two of the point where 50% of overseas soldiers return, a huge crest of babies being born starts. The boom continues for a few more years as people have second and third children. The peak comes at 5 to 15 years later depending on living conditions. If they improve steadilly, as was the case in the west and Japan, the boom will continue further.
These are the children of the war fighting generation and the generation that grew up during the war.

2. From the point of peak birth rates we measure the baby bust. The generation is usually quite a bit smaller and they are the progeny of those who were young children at the end of the war and of the oldest of the baby boomers. These are the children that were born when having babies was less fahsionable (married with children ring a bell?). (in the US this is Gen X)

3. The broader birth boom that is longer and ends with a larger population than the previous boom are the children of baby boomers. Therefore the term "echo boomers". (in the US it is Gen Y) These children are born when having children is fashionable. The Japanese call these the "New People" and these are totally different in character from the previous generations in outlook.
THC can probably fill us in with a better feel for this and the previous generation (that I can't recall the Japanese mentioning).

Stages of economic life. 4 in number

1. Young - early career and "pre-career".
Productivity - low
Earnings - low
Spending - much higher than earnings would imply
Debt - growing
Savings - "when I pay off my credit cards", "when I have enough for a down payment on a new car".
Business - "cool idea, let's try it"
Investment - wha? (actually some participate in momentum type speculative investing)

2. Maturation.
Productivity - high
Earnings - growing - peak at end of phase
Spending - as high as earnings would imply, occasionally a bit higher
Debt - starts high, falls steadilly
Savings - start low and grow at a rather slow and steady rate.
Business - "looks like a good return" and later - "if it doesn't work out will you buy me out?"
Investment - Many start investing and slowly learn their way, often go from conservative in the beginning to somewhat speculative later.

3. Maturity
Productivity - stagnant, begins high and ends where it started or below
Earnings - high but falling or steady - peak at the beginning of phase some will go part time later in the phase
Spending - significantly lower than earnings would imply, declining over time - more spending on experiential stuff like travel and sophisticated entertainment
Debt - starts low, falls steadilly to 0
Savings - start reasonably high at a 3-6 months of earnings and grow at a rather quick rate as spending abates.
Business - Pretty much reserved for those with "super skills" and those who had no choice
Investment - Rather experienced and have learned their way - know what their risk tolerance is, will move from aggressive to low risk as time progresses towards retirement.

4. Retirement
Productivity - rather outdated, make for good mentors, usually don't work much
Earnings - very low - often fixed,
Spending - slightly lower than earnings would imply, declining over time - more spending on familly and through wealth transfer - insurance and health care spending rise
Debt - none. Some may collect debt at the end of their life
Savings - negative, many try to conserve an estate by avoiding spending.
Business - wise old men advising behind the throne and on the board, some fuddy duddies who just would not go away, and the attorney who dies at his desk
Investment - will move from low risk to near cash as time progresses towards death.

Will this do it?

goldfan

(02/09/2000; 22:05:29 MDT - Msg ID: 24859)

Solomon Weaver (2/9/2000; 19:53:53MDT - Msg ID:24835)

Hello Sir soomon I like all your little references (Or are they digs?) to my stuff on chaos and the need to attempt some systems theory, I have done thatrecently you may have noticed. Anyway, I want to push this thing about Steven Jon Kaplan again. Is it really permissible for a professional gold analyst to say "closed out their positions, when what they did, was hedged their hedges??

He says Barrick "closed out half of its hedged positions" when they did nothing of the sort as I understand it. Can a
professional gold analyst stretch the words "closed out", speaking of a short sale of physical, to mean, "purchased a
few calls to be settled in cash if it comes to it" without being either incompetent or a liar??

If this is ok, no wonder nobody but a goldbug wants to invest in gold. The language, as the Red Queen said ( or was it the Caterpiller?) means exactly what I choose it to mean, and nothing else. Furthermore, I can make up six new meanings in a night, more if I feel like it.

Goldfan

Golden Truth

(02/09/2000; 22:10:08 MDT - Msg ID: 24860)

To Soloman Weaver

Yes i agree, T.G first post to the H.O.F, actually they really all belong there, but i think, our new Trail Guide is to modest for that.
G.T

goldfan

(02/09/2000; 22:12:19 MDT - Msg ID: 24861)

Boomers and Busters and Echoes

Thanks ORO that's what I needed for now.

Goldfan

Chris Powell

(02/09/2000; 22:20:59 MDT - Msg ID: 24862)

Market instability hints of explosion

http://www.egroups.com/group/gata/373.html?Latest "Midas" from GATA's Bill Murphy.

andrew

(02/09/2000; 22:28:26 MDT - Msg ID: 24863)

A general feeling of optimism

From the posts seen today and over the last couple of days it would seem that we have finally turned the corner. However how many times has this happened before. In Australia the POG is up $6 and the gold index up 4%. This wasn't much of a rally because people are still scared like me of jumping in too soon. If we can stabilize at 310-320 then we will have had another nice leg up.

Golden Truth

(02/09/2000; 22:44:15 MDT - Msg ID: 24864)

ASHANTI's BANKS MIGHT BE STARTING TO BUY BACK 10,000,000 oz?

I mentioned earlier today that Ashanti was in trouble,heard it on the news. For a really good update on this developement. You should read "GoldTeck" over on Kitco I.D#432286 Wed Feb9/2000/23:56
G.T

ORO

(02/09/2000; 23:23:06 MDT - Msg ID: 24865)

Solomon - Aristotle - Gresham's law

Gresham's law normally works the "other war round".

It is a result of two contradicting forces and the balance between them. Consumers - want the hard money for savings. Business - less sensitive to money longevity because the funds are either reinvested in business or flipped to the suppliers till they meet a point where hard money is demanded.

Consumers will continue to use the funny money even during its hyperinflation stage. However, they will not hold much of it. Their needs for cash balances will first move to "real assets" such as real property, goods and equity in business. They will then move to hard money when they are "full up" on the latter items that are within their means. The less well off will hoard goods and whatever hard money is within their reach.

The "good money" is hoarded and the bad money is used in commerce till parity does not hold any longer.

Behind them is either a government or powerful bank cartel set on getting something for nothing if they can get away with it. To this purpose, legal tender laws are passed to force acceptance of the currency at par with its stated value. If not stated in terms of gold or silver, it is often stated through wage and price setting. In any case, a parity is established. Without a parity there is no application to this part of Gresham's law.

The legal tender law remains more or less effective as long as the rate of funny money creation is never high enough to displace all the hard money or fixed price goods from the marketplace - whatever it is that the currency is set to par with. As more funny money or fiduciary money comes to market, prices of non-fixed items rise relatively slowly and steadilly.

When the cash and cash equivalents of hard money are all gone from the markets, and fixed price goods diverted to other uses where more is received, the situation turns suddenly sour. The currency is openly traded at a discount to par and its purchasing power drops like a rock. The hard money rapidly rises to command a smart premium till enough of it comes to market.

Outside the country are those who have a choice as to what they will take as payment and so they take hard money as payment. In a reserve currency system the government issuing the reserve currency will see a steady stream of real assets and hard money leaving the country or changing ownership to foreign hands so long as the funny money currency can be converted to hard money.
At times, an arrangement can be made, where a fiduciary form of hard money can be used to trade for funny money. Thus the life of the currency is extended. When the issuers of fiduciary media come to near insolvency, heavy "players" will accumulate the hard money while selling the fiduciary forms accumulated before.

The hard money breaks from the funny money abroad first. When conversion of of the currency of the fiduciary money becomes difficult, the first stage is that payment in currency is accepted at a discount. Later the currency exchange is just too expensive and it is steeply discounted.
As prices of imports start rising, the currency starts losing purchasing power at home. Once the trend is noticeable, the currency accelerates its decline.

Finally, the only accepted form of payment is the hard money.

If a funny money is not tied to anything in particular at a parity, then the currency will just erode as more is issued. The erosion occurs in bouts of "panics" as people repeatedly get indebted and are caught in debt traps just to find the value of the currency suddenly drop as soon as they pay off the debt or declare bankruptcy.

ThaiGold

(02/09/2000; 23:41:40 MDT - Msg ID: 24866)

Barrick Will Self-Destruct

==========================================
While I agree 1,000 PerCent with everything
that Farfel has written and urged us to do
regarding our hated nemesis, Barrick, it
seems to me that they will simply solve the
problem automagically, like Ashanti & Cambior:
They will self-destruct. And soon.!.
After all is said and done, their charade is
still one of paper, covering more paper, when
their monumental short selling blunders come
home to roost. As always happens, sooner or later.
Hence, I feel, Patience is Golden.

ThaiGold...
Got Some.?. ... Get Some.!.
==================================================

ThaiGold

(02/09/2000; 23:46:08 MDT - Msg ID: 24867)

1st sentence missing from previous post

Once again, something glitched the first portion
of my previous post...
That 1st sentence should have read:

"While I agree 1,000 PerCent with everything that
Farfel has written and urged .... etc...."

ThaiGold...
..etc..

gidsek

(02/09/2000; 23:47:27 MDT - Msg ID: 24868)

Quicksilver

I think Quicksilver is actually Dennis Miller. :)

gidsek

Black Blade

(02/09/2000; 23:57:48 MDT - Msg ID: 24869)

tedw and Harold - Try the link provided for a detailed search

http://www.stockscape.com/mininghq/index.cfmThese are not recommendations but rather are a good reference point to start your search for PM equities:

tedw: Since you asked about juniors, these may be worth a look:

Gold Mining:

Great Basin Gold Ltd (GBGLF): New large-high grade, near surface gold discovery on Carlin Trend, NV, between Barrick's Betze-Post mine and Franco-Nevada's Ken Snyder Mine.

Madison Enterprises (MDSEF): High-grade deposit near Placer Dome's Pogera Mine in New Guinea, lot of potential with local endorsement from population and government. These same people were involved with what turned out to be Homestake's Eskay Creek mine a few years ago.

Silver Mining:

Apex Silver (SIL): Major position held by billionaire George Soros. Have very large San Cristobol deposit near El Asiento, Bolivia. Much more exploration work to be done, but is a definite go!

First Silver Reserve (FSR.T): No debt, small nimble miner that is and has been profitable even during these most recent trying times.

PGM Mining:

Idaho Consolidated Metals (IDO.V): Has claimed lands parallel and subparallel to Stillwater Mining's land. Has some encouraging exploration results.

Harold, since you asked about Au stock in general, here are a few, as well as, a PGM miner:

Harmony Gold Mines (HGMCY): unhedged S. Africa producer, just acquired RANGY, and will produce well over 1 million ounces this year.

Durban Roodeport (DROOY): hedged S. Africa producer with excellent leverage to gold price.

Battle Mountain Gold (BMG): Pheonix deposit at Battle Mountain, Nevada looks better all the time, very weakly hedged.

Franco-Nevada (FN.T): unhedged, no debt, most of income comes from royalties, all goes straight to the bottom line. Have a small very high-grade underground gold mine (Ken Snyder Mine) at Midas, NV.

Newmont (NEM): Lightly hedged (but have learned their lesson?), several good mines and well situated to a good upturn in POG. Mine in Yanacocha, Peru is very low cost.

Stillwater Mining (SWC): PGM miner, near Nye, Montana, tripled reserves with E. Boulder deposit that will go into production this year.

Black Blade

(02/10/2000; 00:15:23 MDT - Msg ID: 24870)

tedw and harold see link for PM equities research, also msg 24869

http://www.stockscape.com/mininghq/index.cfmHope this works for you. As always our host MK can provide the ultimate PM insurance. Good luck - Black Blade

ThaiGold

(02/10/2000; 00:22:16 MDT - Msg ID: 24871)

PM's to Crash, Along With Black Gold.?.

PM's to Crash, Along with Black Gold.?.
=====================================================================
It appears that soaring Crude Oil prices may abruptly retreat.
This could be disruptive to the soaring PM's, Platinum, and sister
Palladium. Especially if Russia's (anticipated) spring deliveries
begin to materialize. For us GoldBugs, that means there would be
no CoatTails to sustain this current Gold Rally. Maybe Barrick,
et al know something that we don't.

Read it for yourself, and decide...

The Link:
http://pub3.ezboard.com/fdownstreamventurespetroleummarkets.
showMessage?topicID=488.topic
The Article:
February 9, 2000 5:43am
Source: Reuters
By Richard Mably
LONDON, Feb 9 (Reuters) - Leading oil producers now are agreed that oil
markets have swung too sharply against consumers and that extra crude
is needed soon to douse prices, sources familiar with talks between the
three countries said.
The sources said Saudi Arabia, Venezuela and Mexico are negotiating a
strategy aimed at letting the market down gently to achieve lower
average prices over the remainder of the year.
But the trio, the architects of output reductions over the past two
years, face difficulties in convincing their fellow producers, keen
to keep prices high, that supply limits should be eased any time soon.

Tough negotiations over how to share out extra supply among 10 OPEC
members plus Mexico and Oman and a reluctance to be seen reacting to
pressure from the United States might also delay an agreement on higher
supply, the sources said.

``Plan A is to get extra oil to the market, preferably soon, by April
or May,'' said one Latin American official familiar with ministers'
telephone talks in recent weeks.

``The amount and the mechanism for distribution have still to be decided
-- there is a lot of work left to be done in a short time. If there are
difficulties then things might get delayed a few months.''

A non-Saudi official with a Gulf producer said: ``The Saudis are now
concerned that inventories are getting too low and that prices could
stay too high for too long.''

``There would be an impact on the world economy and the long-term
interests of producers would be put in jeopardy,'' he added.
AIM IS FOR LOWER AVERAGE PRICES
The sources said the aim of the three producers was to allow oil
prices to ease lower after averaging $25.50 a barrel for London
Brent futures and $27.20 for U.S.light crude so far this year.
Venezuela and Mexico this year both have budgeted for the equivalent
of $19 U.S. crude.
``I think it is obvious that prices are very high and they will not
stay this high. I would look at the budget estimates to tell the true
story much more than suggestions about extending output cuts,'' said
another senior Latin American oil official.
``If we actually intended to maintain quota into September we would
be talking about a much higher average price.''
Brent last year averaged $18 and U.S. crude $19.25, gains of 35
percent from the lows of 1998, after suppliers agreed to target
supply reductions of some five million bpd that expire at the end of
March.
The oil ministers of Saudi Arabia and Venezuela and Mexico now are
working against the clock if they want to convince the remainder of
the OPEC cartel to lift supply when it meets on March 27 in Vienna.
Policy on output has been orchestrated over the past two years by the
three ahead of formal OPEC conferences where Mexico attends only as
an observer.
Ironically, if prices fall from recent highs in the coming weeks,
that would reduce pressure on OPEC to act and might allow supply
curbs to be maintained beyond their end of March expiry.
Venezuela's Oil Minister Ali Rodriguez and Luis Tellez of Mexico
are expected to meet with Saudi Arabia's Ali Naimi in Europe in the
coming weeks. A date has yet to be set.
Two long-scheduled diary items, a meeting of Gulf Arab oil ministers
on February 23 and U.S. Energy Secretary Bill Richardson's visit to
Riyadh on February 25-26, also have assumed added significance.
Richardson is considering loaning oil to U.S. companies from the
state Strategic Petroleum Reserve to counter shortages and Gulf
producers will not want it to appear that Washington is dictating
policy.
``The U.S. visit may serve only to aggravate the situation,'' said
an OPEC oilman in one Gulf country.
Gulf OPEC producers the United Arab Emirates and Qatar are understood
to sympathise with the Saudi position that extra oil may be needed as
soon as April. Fringe OPEC player Indonesia, which rarely speaks out
of turn, also this week said it wanted OPEC to agree to a slight
increase in supply to bring oil back into the $22-$26 bracket.
OPPOSITION FROM PRICE HAWKS
Opposition to any strategy to lift volumes after March is likely to
come from the three countries that met in Tripoli last month -- Libya,
Algeria and Iran.
Traditional price hawks keen to maximise revenues, they will be joined
by Kuwait in arguing that, with the oil price collapse of 1998 still
fresh in the memory, producers cannot risk causing a plunge in prices.
(c)REUTERS

Thai Gold...
Got Some.?. ... Get Some.!.
======================================================================

ThaiGold

(02/10/2000; 00:27:06 MDT - Msg ID: 24872)

RePosting missing 1st Paragraph:

Sheesh.!.
Everytime I post something, the first part of
it gets clipped.
Here's the missing 1st Paragraph from my previous
post, regarding Falling Oil and PM prices:

"It appears that soaring Crude Oil prices may abruptly retreat.
This could be disruptive to the soaring PM's, Platinum, and sister
Palladium. Especially if Russia's (anticipated) spring deliveries
begin to materialize. For us GoldBugs, that means there would be
no CoatTails to sustain this current Gold Rally. Maybe Barrick,
et al know something that we don't.
Read it for yourself, and decide:"

ThaiGold ...etc..

Black Blade

(02/10/2000; 00:47:39 MDT - Msg ID: 24873)

Thai Gold and Price of Oil

I heard yesterday that Venezuelan oil workers were set to go on strike today. The price of oil may just be set to rise if a strike is not averted. Heard this on Bloomberg, but haven't search out any other sources of info on this yet. BTW, seen some excellent 24K chain and ring jewelry a couple of weeks ago, better than that 14K garbage.

ThaiGold

(02/10/2000; 00:55:41 MDT - Msg ID: 24874)

Like Hillary's Cattle WindFall.?.

...All...

I've been wanting to post/pose this question
for some time now, but never got around to it...

Question:
Who's BUYING all that Gold that's being SOLD
short into the market.?.

I mean, when a Future's Contract is SOLD onto
the COMEX floor, there has to be a BUYER of it
too, or are those things sold to phantoms that
don't even exist. I think-not.

Is it, perhaps, the OilShieks.?.
As some kinda behind the scenes Oil-for-Gold
deal. As alluded-to by FOA/A, etc.?.

And would'nt that be similar to Hillary's
WindFall profits awhile back, in Cattle Futures.?.

Just asking...

ThaiGold...
Got Some.?. ... Get Some.!.
======================================================

nickel62

(02/10/2000; 03:26:24 MDT - Msg ID: 24875)

Harold You requested several gold mining stocks.

I think Newmont Mining is probably the safest large gold with an almost unhedged position. I would use that as a core. I also like a South African gold company Gold Fields(GOLD). Medium producers Meridian Gold has a lot of upside with their Chilaen mine and solid management (MDG),Agnico Eagle is also a solid choice for a very lightly hedged Multi-metal producer with a heavey gold content(AEM),I think Freeport McMoran Copper and Gold (FCX), Offers a tremendous value at these prices in spite of the substantial political risk of Indonesia where its only mine is located.Homestake (HM)offers significant upside leverage and solid management.For the more speculative Goldcorp (GG.A)Has a very exciting mine located next to Placer's mine in Campbell Red Lake,Ontario. They currently have a strike problem and are not set to finish their mine development until this fall but the mine could be a jem going forward.

ThaiGold

(02/10/2000; 03:28:02 MDT - Msg ID: 24876)

Need Archive copy of Thai KickBoxer Article

... Leigh ... or ... Anyone ...

I've been trying to find the Archive copy of
my first-post into this Forum, Spring of last year.

It was an article I wrote about Thai KickBoxers,
relating their fascination and need for Thai Gold.

For the life of me, I cannot locate it in the
Forum's archives...

If anyone has a copy of it, please e-mail it to
me, or RePost it. Or something.

I thought it would be fun to share that post with
newcomers to this RoundTable.

Thanx.

ThaiGold...
ThaiGold@OperaMail.Com
======================================================

Aristotle

(02/10/2000; 03:37:44 MDT - Msg ID: 24877)

Part Five "Building the Perfect System by Capitalizing on Gresham's Law" --starting at (2/7/2000; 7:15MDT - Msg ID:24589) from link below

http://www.usagold.com/cpmforum/archives/720002/default.htmlWho's to Blame When the System Fails?

Perhaps it would be clearer if I rephrased that question. "The System" as I've defined it is the ever-changing monetary principles, policies, and practices seen in the course of satisfying the real demands of conducting business and commerce among real people. At any given moment, the System is undergoing change from one form to another, generally smooth and gradual, but occasionally abrupt and painful. But never in the largest sense can the System itself be said to "fail," although parts of it certainly prove troublesome and are altered from time to time as economic efficiency dictates. Did the old Gold Standard era System "fail" when there was a bank run at one institution or another? Well, if you were a depositor who didn't get your deposits out before that particular bank closed its doors, you might indeed be inclined to say that the System failed. But more specifically, it failed YOU. Meanwhile, your contemporaries who lived half a continent away might say that the bank closure was a healthy adjustment to the system, weeding out a weak bank. As such, System "failure" might be viewed as any time YOU were legitimately dissatisfied with its performance. Therefore, it would probably be more appropriate to ask this question instead: "Who is to blame when the System disappoints you?" An important thought to consider in this regard is whether any conceivable System could please all of the people all of the time.

Let's briefly examine the dissatisfaction of the typical Goldheart. In his mind the System has failed because he is dissatisfied all the time--so long as Gold is not the circulating currency, apparently. How irrational is that? Romantic, to be sure, but completely irrational. This superficial desire will never be the impetus for a change to the System as we know it. Even in the "good ol' days" the coins quickly gave way to bank notes as the circulating equivalent. There simply must be more at stake than the whimsical preferences of an individual in order to inspire change.

Something to rally around...

Here's the key factor as detailed earlier in this commentary which ultimately argues forcefully for the proper role of Gold in the monetary system's architecture. In what has been revealed as a misplaced goal, with Gold as the circulating currency, artificial inflation of the Gold supply is the unavoidable consequence because money will always be lent by somebody to somebody else who wants to borrow. As a result, under any past System architecture, there has never been a truly satisfactory means to safely and reliably escape the ravages of inflation and deflation. Having Gold attached either directly or indirectly to the circulating currency (or Gold itself subject to being lent independently as we see today), the proper valuation of Gold is always understated by the market due to the perception of of an increased (artificial) supply. Truth be told, it is this element that gives rise to my own dissatisfaction--that Gold is not at all points in time held near to its honest physical-based monetary valuation as it should be. This is true at nearly all points in time except for those brief and historic moments when the adjustment inevitably comes and Gold reaches an entirely new price plateau. This proves unacceptable for those who live in the interim periods as they strive to protect their personal wealth...those holding Gold during these past 20 years, for example. (Although make no mistake, the extent of currency depreciation in various non-OECD nations would paint a more normal looking picture for citizens holding Gold within those countries.)

As the number of people increases who are dissatisfied with the System's performance at any given moment in time, the greater the pressure mounts to effect some degree of change. Similarly, the greater the level of dissatisfaction, the greater the impetus to effect some rectifying change. For those who are yet clinging to the notion that we need a Gold Standard with fixed convertibility of the currency, please forgive me as I verbally try once again to shake you out of your mental stupor. Under a Gold Currency-based system, any time someone borrowed money they would in essence be participating in a Gold loan (much as we see happening today--an act that is ill-tolerated by those who can rightly recognize its depressing effect on the value of that same Gold/Money.) For the hundredth time, because people will always have a desire to borrow money to meet their business or personal needs at one point or another, you would always be dissatisfied by any Gold Standard that allowed these (Gold-) loans to occur. Meanwhile, everyone else would be dissatisfied by such a Gold Standard System that specifically pleased you in which money (which would be Gold) could not be borrowed as needed.

Accepting the constraints of the real world...

Any properly functioning monetary system in the real world must accommodate those seeking to borrow funds. And if I've made no other point but one, we should all see from the extensive commentary (bludgeoning) presented earlier that such a system cannot sustainably coexist with a Gold Standard which has a fixed convertibility. Inflation is always a consequence, and then so are bank runs, a phenomenon unique to any such Standard of fixed convertibility. There can be little denying that those bank runs are the ultimate monetary catastrophe experienced on an individual basis. Think about it. If you were among the depositors left with unhonored deposits of metal on account at a failed bank, you might just as well be located in a modern-day Third World nation when its currency loses value...your life's savings have been wiped out through no fault of your own.

Examining this case of a bank run, everything was working fine for you and your currency-units yesterday, but then suddenly your world fell apart today. In truth, to witness that a bank run was "justified" by the bank's obvious (after the fact) shortfall of Gold necessary to honor all of the deposits reveals with abundant clarity that a goodly portion of the system's funds were actually "unbacked" currency. And since these same unbacked currencies were seen to be functioning well prior to the pain of the bank run, it makes little sense to those left holding the bag in a bank run. And as hard as it is for these unfortunate citizens to fathom fundamentally why these currencies could work yesterday but not today, it is even harder for them to grasp why the same currency could function properly at the front of the bank line, but not for those in the back end of the line. It is this kind of pain, especially when bank runs become an epidemic, that compel significant changes to be made to the System architecture. History reveals that a natural starting point to ease this pain is national regulation of the scattered and various independent private banks.

This leads to a united-we-stand, divided-we-fall solution in which resources are managed among the banks so that individual hemorrhages can be addressed without leading to domino-style bank failures. But ultimately, the whole system is put at unacceptable risk from bank runs inspired by the realization that the bank-money inflation has rendered a currency value that is less than the metal value in the system's few coins. Again, the institutional thinking goes, "Since all this unbacked paper worked yesterday, let's just get rid of the inspiration for bank runs--the Gold coins." Those finding themselves in the back of the lines certainly would welcome this. Their currency would not only remain just as good as the currency held by those in the front of the line, but it would also be not significantly different than it was yesterday.

OK, so who IS to be blamed for our disappointment with the System as it is?

The lesson to be learned is not to blame the push for fiat currency upon "the few and powerful" men of wealth of the world. While inflation can be bad even under a Gold Standard (along with the pain of bank runs for those who fail to rescue their deposits), inflation has the distinct opportunity and track-record to be much worse within a system built upon a fiat currency. The truth is, inflation hurts those with money (it erodes their purchasing power), and helps those with debts (it makes loan repayment easier.) David Ricardo said it eloquently: "The depreciation of the circulating medium has been more injurious to monied men...It may be laid down as a principle of universal application that every man is injured or benefited by the variation of the value of the circulating medium in proportion as his property consists of money, or as the fixed demands on him in money exceed those fixed demands which he may have on others." He said further that the farmer "more than any other class of the community is benefited by the depreciation of money, and injured by the increase of its value." This is likely for the dual reason that farmers as a general rule were often in debt to begin with, and because their annual creation of crops (from thin air!) could then be sold for more currency units in each subsequent year, even if the net real-world value of the product being offered remained entirely unchanged.

Don't waste energy on laying blame...

And so we can see, with more people in society having common wealth than uncommon fortune, it is distinctly the case that democracy proves to be the greater threat to a convertible Gold Standard than does even the unmanageable expense of war. I faintly recalled some historical figure who made the astute observation that in a democratic society, when the people come to realize that they can vote "largess" for themselves from the public treasury, they will do so, and hence bring about their system's collapse. And in researching this matter further (thanks Journeyman, ji, and RossL for your help) it seems that there actually have been a number of figures echoing this same sentiment through time. But regardless of the precise citation of this quotation, one look at the growing national debt in America (serving as the substitute for the taxes that would otherwise be necessary to fund our chosen social programs) gives credence to this assertion. Simply put: the people (the masses) get what the people want--and the people want easy money. Even outside of a democracy, over time, the forces of the population always win out over the forces of the few men of power. And in the end it matters not which group is on the side of good, and which is destructive--the many prevail over the few.

So, what is the proper role of Gold in the monetary system architecture?

At this point, the staunchest Gold supporters are likely gnashing their teeth and forming a posse to hunt me down for a proper lynching, I'm sure. After all, I have made no bones about the need to cut Gold out of any ties whatsoever with the various national currencies. Due to inflation and deflation that naturally arise through variations in the rates of borrowing, payback, and growth of the economy, currency fluctuations lead to bank runs which are frankly too disruptive and are not to be tolerated. Fortunately, they are rendered completely meaningless under a fiat currency regime. National fiat currencies allow governments to manage their own national economies to the extent that that are able, and to take whatever efforts needed to avoid falling into those most destructive currency deflations that wreak havoc on economies.

Gold must be removed from these currencies so that governments are not tempted to manipulate its perceived value in order to give a boost to their own currency. The goal would be that sudden value shocks will be avoided because at all points in time the currencies will be fairly valued against Gold--there won't be an inevitable and recurring "day of reckoning" in which the pent-up false perceptions are unwound amid calamity and crisis of confidence. Gold must also be removed from any element of the monetary system that would seek to make loans using Gold because, as we've seen, these confound Gold's ability to reach its true physical-based fair market value. Gold derivatives must also be done away with for the same reason. Gold must remain a pure monetary asset, bought and sold and owned outright--nothing else would be allowable. National fiat currencies will ably serve the market's various needs to borrow funds...after all, that's how fiat currency is born in the first place.

Although I've seemingly cut Gold out of the monetary system, that is not the case at all. Gold qualifies as the only true money; being able to function as a unit of account, as a medium of exchange, and as a store of value. A fiat currency only meets the first two elements, but they fail as a store of value. Therefore, Gold will be be the money of savings, while national currencies will be the currency of commerce. They will all float relative to each other, and constantly seek out their proper value. Kept with special status as an independent and unlendable currency, Gold will be the ever-rising North Star of the monetary system. Central banks would be inclined to hold only Gold in reserves of any significant size--because Gold is not the liability of any other nation, and its real-world value would continue to grow over time. As said before, quantities held in other national currencies would be done only to the extent that they facilitate trade between active partners. Individuals across the Earth would also choose to hold Gold as their savings; their life's productivity forever protected from inflation and deflation, and from reliance upon another person's (or nation's) liability.

The beauty of reserving Gold as an unmanipulated monetary asset is that individual local currencies can still be "managed" by the government in whatever manner is seen befitting that specific country, without having an adverse effect on the meaningful wealth held in reserves (in the form of Gold savings) among other nations and local citizens alike. No single national currency need ever be held by another nation as a reserve currency (which "unfairly" allows the nation that issues the reserve currency to export its inflation.) However, a nation might choose to hold another's currency in a quantity simply because it makes for expedient trade.

The reassurance of Gresham's Law...

Perhaps a short lesson is in order for those new to this realm of thought. In 1558, Sir Thomas Gresham made his observation that whenever there was latitude in tendering payment (as could be seen in the major medieval cities where coins from many lands came together in the course of trade--as we covered in the case of Amsterdam,) inevitably the money of poorest quality was offered while the better money was retained. In describing the circulation of currency, Gresham's law says that bad money drives out good. (The inferior money circulates, while money of superior quality is held.) In our new system herein described, paper currency will circulate while Gold money will be saved.

Pause for a moment to fully consider this practical notion of saving Gold on one hand, while on the other, borrowing and spending paper just as we always have in our lifetimes (and know of no other reality from personal experience.) This is in perfect tune with Gresham's law. Given our own limited history, this accord with Gresham's law provides a very comforting reassurance for predicting the success of this system. Why? Because Gresham's law is arguably the only economic law that survives beyond challenge--an echo of the universal and enduring truth that given a choice, people will choose the option that serves their own needs best. Gresham's law predicts that the world's supreme currency, Gold, would not actually circulate in a conventional sense, though it would move from the hand of one saver to another as individual circumstances might require. Sure, you could use it outright as money if you insisted, but nodding to Gresham's law, wouldn't you rather keep your Gold for the rainy day and spend your paper instead? This system will enhance the transparency of national economics and financial positions, rewarding those with good fiscal policy and balanced budgets, and giving none an exorbitant privilege over another through reserve currency status. It will allow the citizens a natural avenue to protect themselves against depreciation of the national currencies (which will inevitably inflate until the end of time,) and to actually gain a no-risk real "return" by simply holding the metal without the self-defeating aspect of lending it out for interest.

Gold. Get you some. ---Aristotle

Black Blade

(02/10/2000; 03:55:37 MDT - Msg ID: 24878)

Brits to continue with Au auctions despite rumours

LONDON, Feb 10 (Reuters) - Britain said on Thursday it had not changed or halted its gold sales policy. ``We have not in any way changed our gold sales programme,'' a Treasury spokesman told Reuters.
Rumours of an imminent halt to British gold sales had earlier swept financial markets in Sydney, underpinning the value of the Australian dollar. Britain last month sold 25 tonnes of gold at the fourth of a series of auctions aimed at cutting its gold reserves to 300 tonnes from 715 tonnes.

Black Blade

(02/10/2000; 04:06:37 MDT - Msg ID: 24879)

AngloGold sees demand for gold, hedge fears linger

CAPE TOWN, Feb 10 (Reuters) - AngloGold Ltd, the world's biggest gold producer, said on Thursday that bullion's push above $300 an ounce underscored the improving sentiment for gold and it expected favourable demand to continue. The Johannesburg-based gold miner also said investor concern over the hedge positions of certain gold companies persisted despite more stability in the gold lending market.

A rally in the gold price to $338 an ounce in September after European central banks agreed to restrict official sales had a negative effect on physical demand for the metal in India and the Middle East, the most price-sensitive of markets. "As the spot price returned to $300 an ounce, so sales of bullion scrap from the Middle East declined and buying interest returned. Overall, we expect that final demand figures for gold for 1999 will show a continued encouraging trend,'' it said.

The announcement by the European central banks, coming on the heels of the International Monetary Fund's pledge to avoid selling gold on the spot market,``eliminated the kind of scaremongering which so affected this market in recent years.'' But the company said in a statement that the market remained concerned over hedging activities of some producers. ``Volatility in the gold price during the final quarter was increased by uncertainty in the market as to the credit positions of certain gold mining companies with large gold price hedges in proportion to their actual production,'' it said.

``While the gold lending market has returned to stability, there remains concern about those companies with credit difficulties brought about by the nature and size of their hedge positions,'' it added.

AngloGold said it would continue to deliver into its hedge in 2000, signalling lower levels of hedge cover going forward. The company's price hedges today represent cover for 11 percent of reserves and less than two years of production. For 2000, the company has in place price cover for half of its annual seven-million-ounce production, with the balance of 3.5 million ounces fully leveraged to the spot gold price.

The marked to market value of the company's hedge book at February 9 was 298 million rand ($47 million) based on a gold price of $296/ounce and a rate of 6.31rand to the U.S. dollar. The company's net hedge position for the year to December 31 was 418,042 kg at a forward price of 81,517 rand per kg.

``Going forward, approximately half of the forward positions have gold lease rates fixed through to maturity. The gold lease rate is fixed in all open option positions,'' the company said.

Black Blade

(02/10/2000; 04:18:44 MDT - Msg ID: 24880)

More of same.

http://finance.individual.com/display_news.asp?doc_id=RTB10a0898reuffOther mining firms likely to commit to no hedging policy.

Black Blade

(02/10/2000; 04:24:11 MDT - Msg ID: 24881)

Kitco graph is broken, use this link.

http://www.quoteline.com/irtmecoe.aspAu up +$5.30 to $312.50, Pt down -$15.00, Pd down -$12.00, Ag up +$0.03. PGM's retracing from overnight highs, Au strong.

SteveH

(02/10/2000; 04:35:31 MDT - Msg ID: 24882)

Letter to a friend called Leroy

...and a repost of GATA material. Good job Aristotle and Chris Powell and Bill Murphy:

Leroy,

I too sense the gold market is tightly wound. Too much is happening from all quarters. Bond market woes, stock market lows, and record volatility earmark the day. Oil is at near record highs and that appears to be bringing about talk of shortages and use of strategic reserves. Platinum group metals or PGM are on a run and with them gold is feeling the heat as its traditional relationship to PGM is leaving a widening gap for it to make up. Silver is seeing renewed interest and the XAU or index of mining stocks on the Philadelphia exchange was up over 2 points yesterday as was other key PM (precious metal) indices. The ESF or Exchange Stabilization Fund would appear to be feeding gold and who knows what else into the market in order to 'stabilize,' but I contend, in order to manipulate for those to big to fail.

In addition, the EU (European Union) seems to be sueing Microsoft, hackers are attacking high tech companies' web sites, and dark forces invariably seem to be moving in the shadows for what may prove to be an even more eventful future. And all of this since the Euro was born early in 1999. Could there be a relationship?

In all, high stock market mania, extremely low precious metal holders, spells opportunity of a lifetime, perhaps, in select gold investments, be it physical, major (non-hedged) or independent or JV (non-hedged) juniors. Below are the recent GATA posting to the net.

SteveH

10p EST Wednesday, February 9, 2000

Dear Friend of GATA and Gold:

Here's tonight's "Midas" commentary by GATA Chairman
Bill "Midas" Murphy at www.LeMetropoleCafe.com.

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

* * *

MIDAS COMMENTARY

By Bill Murphy
February 9, 2000
www.LeMetropoleCafe.com

Spot gold $305.50, up $6.90
Spot silver $5.35, up 9 cents

It's Midas ramble time.

Quite the day.

Barrick Gold's surprise press release spurred on the
gold market, as it reversed course just when most
everyone in the mainstream financial community had
turned bearish again.

This morning on CNBC a woman commentator did a very
good job of explaining what was going on. Amazingly,
she noted that "investor and analyst" pressure
influenced Barrick to commit itself more to the bullish
camp. The company did so, she said, and noted that the
gold market was moving up nicely, $13.20 at one point.

The close was not a good one -- $5.40 off the highs.
But none of that may matter in this market because gold
could open $50 higher on any given day and it can come
out of nowhere, as you have heard me say so often.

The gold market is unstable. That is why there is so
much volatility all of a sudden. Specs are buying.
Producers are covering. Who is selling? Very simple, as
you know: The forces that have been capping the gold
price for years. For the most part, it is certain
bullion dealers in combination with the U.S.
government.

Without those forces, the gold price might have shot up
$30 today -- and should have with the bullish
announcement by Barrick and the unexpectedly strong
opening.

On top of that, events outside the gold market were
almost all bullish as they related to gold. The CRB
closed up 2.31 points and finished at 212.69, right off
its recent highs. Included in the big commodity day was
a new high close in crude oil, with March closing at
$28.77 per barrel -- up 75 cents on the day for a new
contract high close. Silver has turned back up while
platinum and palladium are headed for the moon as the
Cafe's John Brimelow predicted for you.

The dollar lost ground against the Yen and Euro.

But the big surprise was the bond market pulling its
own boomerang. The yields on 30-year Treasuries are now
back up to 6.31 percent, as they could not penetrate
and close above their 200 day moving average. Part of
that was due to the results on the 10-year note today.
The demand was the worst in 17 years. A disaster.

Stage left enter, Treasury Secretary Lawrence Summers!

The treasury secretary had the financial community
talking to itself this afternoon. Late last week I
related to you that Frank Veneroso had said that all
Summers had to do to alleviate some of the pressure on
the yield curve inversion was to make an announcement
that to reduce U.S debt along the entire curve, meaning
that any bond buybacks would be along the entire yield
curve, not just for the 30 year Treasury bonds. Icarus
said that would mean Summers would have to "eat crow"
and lose face.

When the 10-year note auction went so badly today, the
yield curve inversion was about to get wider, causing
more pain for those investment firms caught going the
wrong way. So Secretary Summers did what Frank Veneroso
said he would do and "lost face" by making that
announcement, which further stunned unsuspecting market
participants. The long bond dive bombed. The stock
market was especially rattled, as all the indices
headed lower and the Dow broke its 200-day moving
average to the downside.

This bond development and Summers turnabout has got to
hurt the secretary's reputation with the financial
community. He has credit market traders doing hoola-
hoops. One day "this," one day "that," one day
confirmation of "that," the next day a retraction of
"that."

All this is setting up an explosive gold and silver
market. I can't say "precious metals markets" because
platinum and palladium have already exploded. You know
where I come from in all of this: $600 gold and $12
silver. Those are my calls.

When might all that happen? Any day, any time. My guess
is one day we come in and find that the gold price is
up $35 right from the get-go, and then Katie, bar the
door.

The gold market explosion is an accident waiting to
happen.

Maybe the catalyst will be the Ashanti hedge book
finally blowing up.

In a strange development today, a Ghanian court froze
the assets of Ashanti, Africa's third largest gold
producer, which was threatened with bankruptcy late
last year when its hedge trading strategy backfired.

The press reports out of Ghana today were particularly
harsh:

"Accra, Feb 9 (Reuters) -- A court in Accra on
Wednesday ordered Ashanti Goldfields Co Ltd to convene
in an extraordinary general session to consider the
composition of its board in a ruling which Ashanti
lawyers said could destroy the company.

"They were particularly worried by the court's order to
Ghana's biggest company to refrain from new financial
undertakings until after this meeting, which must be
called within 21 days....

"Ashanti has been in negotiations with its bullion
banks for more than four months now. The only known
result of the negotiations so far is this court order
resulting from a group of shareholders led by Adryx
Mining & Metals who are trying to get Chairman Sam
Jonah and Co. out because of their disastrous hedging
losses."

When this announcement was made today, Reuters reported
that Ashanti representatives in the courtroom were
visibly shocked by the decision.

With frightening good reason. The other gold producers
are covering shorts, and Barrick Gold has 9 million
ounces of gold calls that someone is liable for at
$319+. That is when they go in the money. Ashanti is
reported to be still short 9 million ounces of gold in
its hedge book, which bullion dealers have on their
books. Between the two of them, that is 18 million
ounces or about 560 tonnes of gold.

Yearly world mine supply was around 2,559 tonnes for
1999.

That is some gold exposure right above the market --
and that represents only two gold corporations. The
hedge funds like George Soros' must know this. What if
they come in with a bull market raid and Barrick's
calls go in the money? A portion of that call exposure
has been hedged, but not nearly all of it.

As a matter of fact, word to me today was that the
bullion dealers sold the Barrick calls they wrote to a
big option player who at first failed to hedge them.
That is, he was naked and exposed financially to gold
prices moving higher. The Hannibal Cannibals know this
and we heard they bought the gold market early today,
causing this option dealer to come in finally buy and
cover part of his exposure. The Cannibals sold him
futures on the rally -- up to $314 -- and then drove
the price down again so he would have to sell. It is my
understanding that this happened twice today. More
collusion by the same slimers.

Of course the manipulation crowd does not want gold to
go above $319 to $330 because then the rally might not
stop until $400 or $500 or $600. Who knows?

Meanwhile back at the ranch, press reports indicate
that Ashanti's hedged gold position has been frozen. In
my experience markets don't stop because of the Ghanian
courts. Man, could this gold market go ballistic. Just
like that!

By the time the court order is vacated so the shorts
can cover, gold might be $365 bid.

The XAU finished the day today showing a bit of
strength, as the stock market was battered. The XAU
finished at 67.59, up 3.97. Yet it still trails the
performance of bullion by a noticeable degree. Last
summer, with gold trading down in the $250s, the XAU
traded around 65.

There are still few believers that gold can really make
a run for it. That is understandable, as generalist
portfolio mangers are fed disinformation by the bullion
dealer crowd.

Take Lehman Brothers. Their target for gold in
September was $200. Now they are just looking for gold
to make new lows. Most of other mainstream analysts
tell fund managers that if gold really gets going it
might reach $325. No wonder they don't want to buy the
gold shares.

Combine that with gold company hedge book disasters and
a press presentation like Barrick Gold just made and
one can understand why the gold shares are doing so
poorly.

THAT WILL CHANGE AND WITH A VENGEANCE.

The market cap of all the gold companies is about that
of ICG, an Internet incubator company. This is a good
one I got from Frank Veneroso today. ICG is a holding
company for Internet startups. The companies backed by
ICG had revenues the past year of only $20 million --
not earnings. All the Internet startups lost money. The
accountants have given them inflated asset values of $4
billion. And yet ICG has a market cap of $48 billion,
or about the market cap of all the gold companies
combined. This also means that ICG is valued at 2,400
times revenues.

Mindboggling! What mania?

When the generalist money managers finally realize that
they have been misinformed by the mainstream gold
analysts about the gold market (as in this Lehman
comment two days ago: "The risk/reward ratio for gold
stocks remains unfavorable"), they will all try to get
in the gold play at the same time. There just won't be
enough supply to fill that instant demand. The move in
the gold shares will be more astounding than that of
the Internet stocks. What a kick that is going to be!

A quid-pro-quo for all our tough times inflicted by the
manipulation of the gold market.

It blows my mind how few gold industry people really
understand the gold market. They have no clue that the
gold market has been manipulated, that the gold loans
are 10,000 tonnes or more, that there is a monthly
supply/demand deficit of 100 tonnes or more, and that
the market could rocket sharply higher at any time.

What a pity.

My favorite gold stock, Golden Star Resources (GSR on
the Amex) finished at 1 7/16 today, up 3/8, as longer-
term and tired shareholders continued to sell into its
advance. Boy, are they making an investment mistake of
a lifetime.

Just got off the phone with Frank Veneroso. Soon he
will be coming out with new gold loan numbers that are
a good percentage greater than his10,000-tonnes
estimate. That means the shorts are even more desperate
that even we thought they were. They cannot cover; they
are trapped. Frank also says it should surprise no one
if all of a sudden there is a peculiar announcement
that will creates negative gold sentiment -- like
another Bank of England-type of announcement. If it
does come, the effect might be dramatic, but he thinks
very short-lived.

That will give further credence of U.S. official
sector involvement in the manipulation of the gold
market. Desperate people call for desperate measures.
If that does happen, the calls for a full-scale
investigation of U.S. Treasury Department and Exchange
Stabilization Fund gold trading activity will build to
a crescendo.

The gold market is becoming more and more unstable. No
matter what happens to the price of gold in the short
term, Frank and I believe that gold is headed for $600
per ounce and it could do so in ONE day.

Seem like a stretch? Check your quote machine. April
platinum: $529.60 up $31.10. March palladium: $590.15
with a $598 high today.

What an amazing time for the gold market. The producers
are reducing their short positions, gold is spiking
higher in robust fashion and there is little spec
excitement. The open interest on Comex is a puny
153,976 contacts. That leaves room for 80,000 contracts
of new spec longs that could enter before the gold open
interest would be a little big for its britches.

This is a spectacular bullish setup, as gold has
rallied $25 off its recent lows, just weeks ago, and so
few players are long.

How many gold companies will blow up when the gold-
buying panic kicks in? Cambior is one that is still
living a nightmare because of the last one.

Cambior was caught in a vise when gold spiked to
$339/oz last October. The company took a US$33-million
hit when it was forced to buy back gold on the open
market. Debt swelled to $212-million and a group of 13
lenders took control. All options were on the table,
including the potential sale of the company's key
asset, the Doyon gold mine in northern Quebec. The
company's search for a new identity became a funeral
wake.

Aur Resources Inc. is bidding for Cambior at a fire-
sale price. Aur's bid is Cambior's only option at the
moment and the mood is somber at this once highly
regarded gold producer.

>From the oil market:

"Spot horror stories still dot East Coast; record
prices paid.

"Feb. 8. Spot prices for heating oil and diesel may
calm down a notch in the next 48 hours, but supply
sources stress that widespread outages and dislocations
of product are rampant along the East Coast. Some
incredible numbers were paid by buyers desperate to
find oil in front of this past weekend."

Sure enough. Oil set back a tad before roaring today.
You know how bullish I am on the oil market. Looks like
a go.

A Hannibal Cannibal comment from Bridge News after the
Placer Dome announcement last week:

"In a briefing note to its clients yesterday, Credit
Suisse First Boston noted that Placer's 2 million
ounce, or 62-tonne, drop in its hedging book was
`dwarfed' by the anticipated 500 million tonnes of
official sector sales that we can expect in 2000."

More bearish spin by the bullion dealers. Like a broken
record.

South Africa's Anglogold Ltd. (AU), the world's biggest
gold miner, said Monday it has been consistently
reducing its hedge book over the past few quarters.

Kelvin Williams, Anglogold's marketing director, said,
"We have been in a process of trimming our hedge."

The gold world will be waiting to see what Anglogold
has to say about the gold market, hedging, etc.,
Thursday morning at 10 a.m. EST.

After the Barrick PR fiasco this week, it is hard for
me to imagine Anglo not coming out with positive
remarks on its hedging plans. Anglogold is at the top
of the industry. The gold industry needs more and more
leadership and positive reinforcement. Anglo can
deliver tomorrow. Let us hope they come through.

To wrap up tonight, I want to thank so many of you for
the email and faxes you sent to Barrick protesting its
announcement on Monday. And what a spectacular result
you helped to effect. Great effort!

I also would like to thank you for the many kind words
you sent my way and to Chris Powell. The Gold Anti-
Trust Action Committee Inc. is a year old. Right from
the beginning we planned to create this sort of
"shareholder revolt." It was laid out in the
"enveloping horn" battle plan fashioned after the South
African Zulu warrior chieftain, Shaka. The right flank
of that "enveloping horn" was to try to influence the
gold companies to support GATA, to urge them to reduce
their hedges, and to encourage a shareholder revolt
against those that continued unreasonable forward sale
programs.

It is now obvious that the tactics of the "right flank"
of the GATA army have been very effective and have the
manipulation crowd bewildered a bit, in modest retreat.

GATA will not let up until they are in full retreat and
then surrounded again by the rest of the GATA army.

There were so many wonderful emails that I thought I
would share a few with you. This one is from Navy
George C:

"Excellent pep talk! But you probably have guessed by
now that I made the decision to `hang in there til the
last horn blows when I sent you the $99 check, which I
consider already a much more than fair exchange. The
price/performance of your organization is a first in my
travels. I didn't need the two-week trial; I needed
only two days to decide that this was a skirmish that I
would enjoy observing. If I were to lose my total
investment in this ball game, I could come away saying,
"At least I had the excitement of entering the fray.

"Because of your data, it's very easy to look at the
down blips in the curve and not spook-out, because you
allow us to understand what is happening. Without your
continuous info I possibly would have spooked after the
initial spurt in the gold market receded. I have had a
number of juniors for quite a few years. And I have
picked up on several new ones because I continue to
feel that this is a battle that David will most
probably win. And the most beautiful part of all this
is that when David achieves his win, an incredible
number of folks will benefit from David's win.

"Should you have any doubting Thomases out there who
might be spooking, you have my agreement to share these
thoughts with them if you think it might assist them
and your team."

>From another Cafe member:

"I sincerely hope that you and Chris receive full
credit someday for the incredible work you have done. I
am a lifetime HSLM, and you are an asset to the world
investment community.

"One big comment regarding the actions of Barrick
Monday 2/7 and Tuesday 2/8. Obviously I would never be
a Barrick shareholder, or want to be. But I do think
something has been missing from everyone's focus.

"You, along with the help of people like Arthur Hailey,
have nailed them, and they know (and feel it) !

"They are caught in the trap. If they had completely
changed their hedge program, their book is so big that
it would have propelled the price of gold so high that
it would wipe them out. They now need to unwind, as
best they can, to minimize the damage.

"I sure wouldn't want to be in their shoes right now!

"Their actions over Monday and Tuesday were so
incredibly bullish for gold. We are soooooooooooo
close!

"A million thanks."

And from an Australian Cafe member:

"Interesting observation. In Australia the share price
of the vast majority of gold majors is in a tailspin
with the odd spike up, but at the small end of the
market, the share prices of the good unhedged gold
producers and explorers are trending up well.
Conclusion --shareholders who want to benefit from a
rising price of gold are voting with their feet. I
wonder how long it will take before the more hedge fund
than gold-producing Aussie majors wake up. This is a
brilliant tactic of yours and all goldbugs. Keep at
it."

-END-

Mr Gresham

(02/10/2000; 06:54:18 MDT - Msg ID: 24883)

ORO: Found a good economist for ya!

http://skybluemonthly.freeservers.com/sbm/sbm.htmThis guy (Mervin Yeung) writes in English! And it sounds like he's having fun watching for the bubble to pop.

"A relation is reflexive if and only if x --> x for every x. The symbol "x" can be any event. However, only a few events are able to feedback on itself. Examples are "interest", "panic selling", "run on bank", "margin call", � etc. If a person is heavily in debt, he is unable to pay credit card bills on time and pile up interest charges. Unpaid interest will bring more interest charges. With compound interest, the interest is found by calculating the interest on all past interest as well as on the original principal. Hence, "interest" --> "interest". Panic selling is another good example. During a stock market crash, when the panic starts, it will soon become a one-way street because panic selling induces more panic selling, and then the market drops like a rock. Hence, "panic selling" --> "panic selling". A run on a bank is similar. Once the run occurs, it is almost impossible to stop without outside help mainly because "run on bank" is reflexive. "Margin call" is similar. If a large speculator has 600 short positions in coffee, suddenly, a frost wipes out a significant amount of Brazil's coffee crop, then coffee price rockets up. The speculator faces margin calls. He gets out 250 of his short positions to meet the margin calls and still intends to hold the rest because of "hope". The fact that he is covering causes coffee to go up even more. As a result, he faces margin calls again in the rest of his positions. He is forced to liquidate the remaining 350 short positions. Forced liquidation is reflexive. (We start to think about cash redemption in mutual fund industry. Oh, don't! We shall not think about this. It is a sin!) "

lamprey_65

(02/10/2000; 07:15:53 MDT - Msg ID: 24884)

A few thoughts...

Interesting week in the gold market. It appears to me that a concerted effort is being made to paint the entire blame for the multi-year gold bear on producers. Once again, Barrick leads the way with their botched announcement and re-announcement. The media is full of stories of how producer hedging (supply) is what has held gold down.

Now, I understand that over-hedgding is one of the main causes of the decrease in prices, but I continue to maintain that based on the CRB, gold never should have fallen much below $280 and should now be trading near $335 - all of this without the short positions and manipulation. The BOE sales plunged the price to an oversold condition -- the gold shorts and shaky U.S. equity situation make the upside potential much greater than most expect.

I do agree with Thai Gold that the possibility of a collapse in oil prices (after March?) and the resumption of Russia's platinum medals supplies could take the legs out from under POG, but only for a short time. I'm hoping $300 would hold in this scenario. Seems to me that the upside for the short term could be the heavy resistance found at $335. Of course, if the large short position still exists, anything is possible. I do believe that Barrick's calls at $219 beginning March 1st will go into the money...my take on the calls is that a bullion bank "owed" the company, wink-wink...and that Barrick is expecting higher prices now and the cash from the call settlement. The bullion banks know POG is going up, they just hope to contain the rise.

Lamprey

lamprey_65

(02/10/2000; 07:18:42 MDT - Msg ID: 24885)

Correction

Those calls are in the money at $319, of course.

L.

Solomon Weaver

(02/10/2000; 07:36:14 MDT - Msg ID: 24886)

ORO this is about what I was thinking of in Gresham's law in the COMEX

ORO (2/9/2000; 23:23:06MDT - Msg ID:24865)
Solomon - Aristotle - Gresham's law
Gresham's law normally works the "other war round".

It is a result of two contradicting forces and the balance between them. Consumers (goldbugs) - want the hard money (gold) for savings. Business (bankers) - less sensitive to money longevity (day traders) because the (paper contracts) funds are (physical delivery) is demanded.

Consumers (those who want real gold) will continue to use the funny money (futures and options) even during its hyperinflation stage (inflation as described as money supply or number of open contracts, not price). However, they will not hold much of it. Their needs for cash balances (safe savings) will first move to "real assets" such as real property (numismatics), goods (bullion coins) and equity (gold stocks) in business. They will then move to hard money when they are "full up" on the latter items that are within their means. The less well off will hoard goods (silver spoons) and whatever hard money (junk silver in their attic coin collections) is within their reach.

The "good money" (bullion) is hoarded (held and not sold) and the bad money (gold paper promises) is used in commerce (trading on the exchange) till parity does not hold any longer ( as I stated in my note " when these two bifurcate, meaning divide, meaning no more price equivalence).

Behind them is either a government (ESF Fund) or powerful bank cartel (Goldman, Deutsche, BoA) set on getting something for nothing if they can get away with it. To this purpose, legal tender laws (forced margin calls and threat of immediate cash settlements) are passed to force acceptance of the currency (paper gold) at par with its stated value (in gold bullion). If not stated in terms of gold or silver (dollars), it is often stated through wage and price setting (counter swaps with other hedgebook inventories like oil contracts). In any case, a (perceived) parity is established. Without a parity there is no application to this part of Gresham's law.

The legal tender law (open and free wheeling actions of the exchange) remains more or less effective as long as the rate of funny money creation (increase in naked put and call options) is never high enough to displace all the hard money (gold) or fixed price goods (futures contracts which can call for delivery in the month) from the marketplace - whatever it is that the currency is set to par with (that being in our case the idea that there is gold metal traded under the paper). As more funny money (contracts) or fiduciary money (margin) comes to market, prices of non-fixed items (longer term futures and options) rise relatively slowly and steadily.

When the cash (gold bars) and cash equivalents (valid claims on remaining vault gold) of hard money are all gone from the markets (exchange), and fixed price goods diverted to other uses where more is received (options are dropped because they cannot be used to opt for delivery), the situation turns suddenly sour. The currency (remaining contracts) is openly traded at a discount to par (bullion) and its purchasing power drops like a rock. The hard money (the real stuff) rapidly rises to command a smart premium till enough of it comes to market (back to the exchange to claim profits).

Outside the country (exchange) are those who have a choice as to what they will take as payment and so they take hard money (gold metal) as payment. In a reserve currency (cb-bb moderated system) system the government issuing the reserve currency (lending gold as needed) will see a steady stream of real assets (their real gold) and hard money leaving the country (cb-bb-gov vault) or changing ownership to foreign hands (arab, chinese, european) so long as the funny money (worthless gold contracts in an exchange which has allow excessive issuing of short paper) currency can be converted to hard money (any last bars of gold still around in the vault).
At times, an arrangement can be made, where a fiduciary form of hard money (oil or oil contracts) can be used to trade for funny money (discounted gold paper contracts). Thus the life of the currency (gold paper contracts) is extended. When the issuers of fiduciary media (oil parties who want cheap gold) come to near insolvency (at least fearing to ever get their real gold), heavy "players" (those who deliver oil tomorrow in very large ships) will accumulate the hard money (real gold off the exchange) while selling the fiduciary forms (oil and gold paper contracts) accumulated before.

The hard money (value of real gold) breaks from the funny money (value of paper gold) abroad (outside the the exchange) first. When conversion of the currency of the fiduciary money (paper contracts on paper contracts denominated in fiat currency) becomes difficult, the first stage is that payment in currency (paper gold) is accepted at a discount. Later the currency exchange is just too expensive and it is steeply discounted.
As prices of imports (getting more real gold back into the exchange) start rising, the currency (gold paper contracts) starts losing purchasing power at home (in the exchange they were issued). Once the trend is noticeable, the currency accelerates its decline.

Finally, the only accepted form of payment is the hard money (real gold).

If a funny money is not tied to anything in particular at a parity, then the currency will just erode as more is issued. The erosion occurs in bouts of "panics" as people repeatedly get indebted and are caught in debt traps just to find the value of the currency suddenly drop as soon as they pay off the debt or declare bankruptcy.

Poor old Solomon

leonard

(02/10/2000; 08:03:02 MDT - Msg ID: 24887)

AMERICAN CENTURY one of the worst last year LOST 3%

The 32 GOLD ORIENTED FUNDS Mutual Funds manage $2.2 Billion in Net Assets. With a <0.9>% composite Net Return earned year-to-date. GOLD ORIENTED FUNDS Funds ranks 188th among the 107 Fund Groups.
(Ratings based on YTD Returns through February 9, 2000. Other fund data is reported weekly and is current as of February 3, 2000.)
--------------------------------------------------------------------------------

Rating: All-StarStarABCXAll Funds
Order by: Size Name Symbol YTD Ret. 1 Yr. 3 Yr. 5 Yr. 4 Wk. Rating
GOLD ORIENTED FUNDS Symbol Rating Fund Name Fund Family Assets
(MM) YTD
Ret. 1 YR
Ret. 3 YR
Ret. 5 YR
Ret. 4 wk.
Ret.
FGLDX INVESCO GOLD INVESCO CAPITAL MGMT $96.0 +4.1% -3.2% -30.1% -9.9% +7.8%
SGGDX SOGEN:GOLD FUND SOGEN FUNDS $16.1 +3.4% +9.6% -12.9% -6.4% +7.0%
INPMX AXP:PRECIOUS METALS;A IDS GROUP $47.9 +2.6% +4.8% -19.4% -2.0% +7.9%
INPBX AXP:PRECIOUS METALS;B R IDS GROUP $10.4 +2.5% +3.9% -20.1% N/A +7.7%
SCGDX SCUDDER GOLD FUND SCUDDER FUNDS $111.3 +2.3% +12.6% -16.6% -1.3% +6.1%
FKRCX FRANKLIN GOLD FUND;A FRANKLIN TEMPLETON FUNDS $228.2 +1.8% +27.4% -7.7% -3.0% +6.2%
FRGOX FRANKLIN GOLD FUND;C R FRANKLIN TEMPLETON FUNDS $28.9 +1.8% +26.5% -8.4% N/A +6.1%
EKWAX EVERGREEN PRC MT;A EVERGREEN $65.3 +1.6% +7.8% N/A N/A +7.1%
EKWBX EVERGREEN PRC MT;B R EVERGREEN $13.2 +1.4% +6.7% -16.3% -7.8% +6.9%
OPGSX OPPENHEIMER GLD & SP;A OPPENHEIMER $82.7 +1.2% +17.0% -6.6% -1.7% +4.9%
GOLDX GABELLI GOLD FUND GABELLI FUNDS $14.1 +0.3% +12.0% -19.1% -8.6% +7.2%
LEXMX LEXINGTON GOLDFUND LEXINGTON GROUP $72.6 -0.3% +8.3% -14.7% -6.7% +4.8%
USAGX USAA GOLD FUND USAA GROUP $88.3 -0.3% +7.0% -11.0% -4.7% +3.5%
FSAGX FIDELITY SEL GOLD R FIDELITY $200.0 -0.7% +9.5% -14.4% -2.7% +3.5%
RYPMX RYDEX:PRECIOUS METLS;INV RYDEX SERIES TRUST $37.4 -0.7% +1.8% -17.5% -9.2% +4.8%
FDPMX X FIDELITY SEL P MTLS XR FIDELITY $132.1 -1.1% +7.8% -15.5% -7.3% +2.9%
USERX X US GLBL:GOLD SHARES US GLOBAL INVESTORS $34.2 -1.9% -2.7% -33.3% -29.2% +2.8%
BGEIX X AMER CENT:AC GL GOLD;INV AMERICAN CENTURY/BENHAM $201.8 -1.9% -3.8% -19.7% -10.6% +2.6%
UNWPX X US GLBL:WORLD GOLD US GLOBAL INVESTORS $81.1 -2.7% -13.0% -23.4% -8.2% +2.7%
INIVX X VAN ECK:INTL GOLD;A VAN ECK GLOBAL FUNDS $143.6 -3.0% -12.0% -20.3% -14.5% +1.3%
VGPMX X VANGUARD GLD & PRC MTL R VANGUARD $381.7 -3.0% +23.5% -8.5% -4.1% +1.7%
GRFRX X VAN ECK:GOLD/RES;A VAN ECK GLOBAL FUNDS $39.4 -4.8% -11.0% -21.3% -11.4% -0.4%
PPMAX X PIMCO:PREC METALS;A PIMCO ADVISORS $2.1 -6.5% -12.1% -23.5% -14.6% -1.5%
PPMCX X PIMCO:PREC METALS;C R PIMCO ADVISORS $9.8 -6.8% -13.5% -24.4% -15.5% -2.1%
MIDIX X MIDAS INVESTORS BULL & BEAR GROUP $5.0 -7.9% -11.9% -35.1% -20.9% -3.2%
MIDSX X MIDAS FUND R MIDAS FUND $71.8 -11.0% -17.7% -37.0% -15.4% -4.7%

Mutual Fund data provided by Lipper
Fund ratings and Best/Worst rankings compiled by Stock Smart

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Generated on FEB 09, 2000 08:53 pm EST

leonard

(02/10/2000; 08:09:46 MDT - Msg ID: 24888)

mutual funds check performance

http://www.stosksmort.com

nickel62

(02/10/2000; 08:10:29 MDT - Msg ID: 24889)

Summers Greenspan et all. are on the tube rambling again,

This time about how bad it would be if we regulated the dirivative markets. Are these guys just saying they don't want anybody to be able to see the games they are letting the large banks and investment firms do with the tax payer backed deposit money and too big to fail taxpayer backed investment risk capital. And if so why isn't one of the people they are talking to asking the right questions? Or am I just too cynical? I seriously don't know anymore.

rsjacksr

(02/10/2000; 08:11:05 MDT - Msg ID: 24890)

Pictures of a Stock Market Mania , Running Low on Buying Power

http://www.cross-currents.net/charts.htmBy: Alan M. Newman
Editor, HD BROUS & Co., Inc.'s CROSSCURRENTS
Technical Market Analyst, HD BROUS & Co., Inc.

Markets can't be sustained. More money is coming out than going in and it's all been borrowed.

leonard

(02/10/2000; 08:19:22 MDT - Msg ID: 24891)

THIS IS A GRATE SITE

http://www.stocksmart.com/lf_AU.html

Journeyman

(02/10/2000; 09:53:00 MDT - Msg ID: 24892)

What's a poor regulator to do? @nickel62, ALL

Hi Mr. Nickel,

Re: nickel62 (2/10/2000; 8:10:29MDT - Msg ID:24889)
Summers Greenspan et all. are on the tube rambling again,

The only important reason given for them not trying to "regulate" derivatives is that if they did so, the derivative users would move "off-shore," out of US grabit legal jurisdiction. In this electronic money age, this is not only feasible, it would be easy. And since grabit "regulation" would raise the costs of using derivatives, used to try to offset the economic fluctuations caused by the later stages of "lack of gold standard," the derivatives markets would indeed move "offshore."

The problem all these delusional "regulators" have to solve is how to keep themselves from bailing out derivatives losers. As Alan Greenspan has observed, even about the banks, if it weren't for the FSLIC type of government insurance involvement in the banking industry, there would be no need for government involvement or regulation in banking at all.

Such involvement causes what the central bankers like to call "moral hazard." As Greenspan and others point out, "moral hazard" is inherent in all "insurance" type situations. For example, a study showed awhile back that uninsured motorists in Philadelphia were, per capita, much less likely to be involved in auto-accidents than were insured motorists. The explaination: Becasue uninsured drivers know they are personally responsible, rather than an insurance company, they drive more carefully.

But there is an even more pernicious level of "moral hazard" illustrated by the following scenario:

I have a team that plays blackjack (with an edge) for money. There are very specific bank roll requirements to play this game without some expectation of going broke. But I know you're a "soft touch." In fact, despite no formal agreement to do so, when other teams have gone broke, you've bailed them out because of all the people depending on the income from these teams. You said they're "too big to fail."

I've looked over the stats, and my team meets your criteria for "too big to fail." So when I calculate my bank roll requirements to play, I lower them somewhat because I figure there is a percentage probability if I do go broke, you'll bail me out and "make me whole." Thus I take increased risks based on my perception that I might have defacto access to some of your money. That is, I'm gambling with your money because in previous cases, you've been unable to stop yourself from giving money to other similar big players.

So-called "regulators" (ones with at least a lick of sense) certainly don't want to get involved causing "moral hazard" in what someone just testified is now $83 trillion of already risky derivatives bets. But can they stop themselves? Can they kill the perception that they will?

The answer is probably no.

It's obvious if you're going to bail out my blackjack team, you'd like to have some control over how I operate, even if the reason you're going to bail me out is that you can't control yourself. I, of course don't want this interference with my operation -- it's not my fault you lack this type of self contrl -- and what's more, I can and will move out of your jurisdiction if you mess with me.

What's a poor regulator to do?

Regards,
Journeyman

P.S. Thanx for your posts! Particularly the one revealing the inside workings of stock-price setting in ways that favor the "insiders" is a classic, and parallels some of my experiences in OTHER gambling fields.

nickel62

(02/10/2000; 09:53:53 MDT - Msg ID: 24893)

Talk about being behind the curve.

If the various risk capital funds whether hedge funds or bank proprietary trading operations or investment bankers are going to be declared too big to fail when something goes wrong shouldn't they be regulated after we bail them out? What is this new concept of whatever they do is okay and we the US taxpayers will bail them out of any problem. Isn't that why we segregated the insured bank deposits from all other banking operations for the last seventy years so that the banks wouldn't use insured deposit money to speculate in the markets.Now it seems we are allowing that. In addition we declare through the too big to fail concept anyone who does screw up to be covered as long as we think they should be. Well fine but were is the accountablity? Shouldn't we be regulating a different type of behavior as a prerequsite for bailing them out in the first place. All Greenspan seems concerned about is the dirivative business will be drawn off shore if we dare to ask them to tell us what their exposures are. Who is kidding who the access to the enormous US market is why these guys are here restrict that access and they won't take their business off shore. Maybe the clearer way to look at it is that they want our national taxpayers to subsidise the dirivative activity of the banks so that they can continue to pretend that they are in control.

TownCrier

(02/10/2000; 09:53:54 MDT - Msg ID: 24894)

Today's Market Report: Gold holds its gains

Market Report (2/10/00): An early spike in gold price on Australian buying set the tone for overnight trading, which successfully held the $310 level through the London AM fix at $311.25, up from $306 on Wednesday. The price early in the session found additional support as traders flirted with the rumor that the UK government had suspended its gold auction program. The UK Treasury denied that there had been any change to plans. The next 25 tonne auction is scheduled for March 21st. The squashed rumor did little to dampen spirits, and FWN reported sources saying that current volatility was "keeping everyone guessing," with market players described as "very bullish at the moment." One dealer told Reuters, "We expect gold to trade to the higher end of the range and see some good potential for a break through $320.00."

The world's largest gold miner, Anglogold of South Africa, today confirmed its indications Monday that it would begin delivering into its hedges to reduce the position going forward. It also announced that it had reduced its net hedge position by 10 tonnes since the start of the fourth quarter, 1999. One Swiss dealer told Reuters "We expect one or two major mining companies to issue similiar statements reflecting the industry's market confidence," and in fact, another South African gold miner said that it had closed out the next two years of its forward sales. Nice work, Western Areas, Ltd. Meanwhile, the hedging/gambling inspired woes of Ghana's Ashanti Goldfields continues to plague Africa's third-largest gold miner. The Associated Press today reported that analysts have said a failure by Ashanti would force its bank creditors into trying to buy back approximately 10 million ounces of gold to settle Ashanti's outstanding position. In commenting on this latest rise in gold, and notably the producer buybacks, Bill O'Neill, senior futures strategist for Merrill Lynch, told the AP that he remained cautious about calling this the start of a super bull market: "I don't think this rally in gold is a monetary or economic event, or a proxy for inflation, or is being driven by concerns about some financial houses. This is a structural gold issue." Well, we think that's just fine...imagine the additional fireworks when the market DOES finally get around to pricing in various monetary events, inflation, and those concerns about the stability of some financial houses. Thanks for that good perspective, Bill.

We also have word from Bridge News that Deutsche Bank is calling for a more optimistic outlook for the price of the yellow metal. Deutsche mining and metals analyst Don Maclean told an African mining conference that "$350 seems necessary to encourage further growth," otherwise further reductions in companies' budgets for exploration would be likely. "Gold is rarer than we thought," Maclean said, noting that growth of mine supply was nearing zero as "most new projects' output will simply offset declines in existing production," which looks set to fall after 2002.

And finally, there is one other note worth passing along. They are kicking up their heels and dancing in the streets in Prague. Bridge News reports that the Czech Republic has received a 56% jump in the level of gold reseves held by the National Bank. A long-standing property dispute with Slovakia has finally been resolved, and approximately five tonnes of gold were officially freed as a result to be included on the bank's books. On that happy note, as we go to fetch this to the server we see that gold has climbed yet higher, now reaching $312.

That will do it for today, goldmeisters. We'll see you here tomorrow.

Elwood

(02/10/2000; 10:00:58 MDT - Msg ID: 24895)

Reply to Aristotle

Aristotle wrote in (2/10/2000; 3:37:44MDT - Msg ID:24877):
"For those who are yet clinging to the notion that we need a Gold Standard with fixed convertibility of the currency, please forgive me as I verbally try once again to shake you out of your mental stupor. Under a Gold Currency-based system, any time someone borrowed money they would in essence be participating in a Gold loan (much as we see happening today--an act that is ill-tolerated by those who can rightly recognize its depressing effect on the value of that same Gold/Money.) For the hundredth time, because people will always have a desire to borrow money to meet their business or personal needs at one point or another, you would always be dissatisfied by any Gold Standard that allowed these (Gold-) loans to occur. Meanwhile, everyone else would be dissatisfied by such a Gold Standard System that specifically pleased you in which money (which would be Gold) could not be borrowed as needed."

Elwood replies:
Aristotle, I think your 5 articles are based on a fundamental misunderstanding on the role of money in a market economy. I would refer you to a book by Ludwig von Mises, "The Theory of Money and Credit" which is available from www.mises.org. There is also the website of Dr. Frank Shostak. His feature articles may be helpful, especially the ones dealing with the Asian crises and the one entitled "Inflation, Deflation and the Future". It is at:
http://www.ords.com.au/frankshostak/

In short, a monetary system based on debt, which all fiat systems are, will always have this boom/bust cycle characteristic. It is the credit expansion which drives interest rates below the true market rate of interest and leads to a boom in economic activity. These lower rates cause entrepreneurs to make "errors" when determining the prospective rate of return on their investments.

This manipulation of the true rate of interest is only temporary however and, thus, requires more and more credit be thrown into the system to keep it going.

Mises stated, "The boom can last only as long as the credit expansion progresses at an ever-accelerated pace. The boom comes to an end as soon as additional quantities of fiduciary media are no longer thrown upon the loan market. But it could not last forever even if inflation and credit
expansion were to go on endlessly. It would then encounter the barriers which prevent the boundless expansion of circulation credit. It would lead to the crack-up boom and the breakdown of the whole monetary system."

Regards,

Elwood

TownCrier

(02/10/2000; 10:14:12 MDT - Msg ID: 24896)

Same ol' same ol'...the Fed adds $4.25 billion to the banking system today through overnight repos

http://biz.yahoo.com/rf/000210/zv.htmlDon't look here...the vital info is in the headline.

Cavan Man

(02/10/2000; 10:24:19 MDT - Msg ID: 24897)

lamprey and Thai Gold

If you were an oil rich country, why would you sell your resources for less of something (dollar) that is increasingly depreciating? The Richardson visit is a high stakes negotiation. Oil holds a very strong hand. What concession will the US make? What does oil want?

If you were that same nation and "concerned" in 1987 after the crash, how much more concerned would you be now?

Granted, it is in the long term interests of oil nations to facilitate and not damage oil consuming economies. However, what is the price for continued economic cooperation? There is a price.

Sorry for the rambling.

nickel62

(02/10/2000; 10:35:40 MDT - Msg ID: 24898)

The price for continued cooperation from the Sauidis is

the 101st Airborn in case Saddam decides to consolidate the oil fields a second time. That is why we never went into Bagdad in the Gulf War after all. So we could continue to constantly point out how necessary we are. While Richardson clearly doesn't get much even he probably knows how to play that card. The question is would the American people tolerate another fake war with Clinton in office? Or rather would the politicians even bother to ask us if we cared?

Cavan Man

(02/10/2000; 10:46:28 MDT - Msg ID: 24899)

nickel62

Perhaps the people in that part of the world have reached an understanding of sorts. That would be surprising but, not impossible. I just can't believe OIL will agree to reduce their price without a major concession. Enter the EURO?

Henri

(02/10/2000; 10:47:07 MDT - Msg ID: 24900)

Elwood Msg 24895

It seems to me that these barriers to further monetary expansion were encountered and then circumvented by wholesale bundling of Mortgage Debt and sale to Fannie and Freddie allowing a whole new slew of massive credit/Debt$/liquidity to be unleashed. The massive increase in financial derivatives in the last few months also contributed by pouring gasoline on an already raging inferno. The resulting conflagration seems to have obscured exactly who owes who what and more importantly when.

I am beginning to think that the tag team interventions of the fed and treasury in the bond markets were deliberate with the intent of breaking loose the shackles of the derivatives traders and the rate-swap players. If only one or two levels of leveraged derivatives are allowed following the holocost now in progress and anything deeper prohibited, perhaps things might not get so out of hand...Nah.

Henri

(02/10/2000; 10:51:43 MDT - Msg ID: 24901)

Cavan Man Msg 24897

By the same token, If you were a gold rich country with partners that tried to bilk you out of the game altogether, would you just stand by and let them do it or just nationalize the entire asset base and start over? If I were King...

nickel62

(02/10/2000; 10:51:52 MDT - Msg ID: 24902)

This poster from kitco has the real bottom line on the timing of the market.

Charles Keeling (THE POG HAS POWERFUL ALLIES) ID#159199:
Copyright � 1999 Charles Keeling/Kitco Inc. All rights reserved

The Republican party MUST allow the light of day to shine
on the MANIPULATION of GOLD.

If Demos can hang on for 9 more months, the equities
crash and gold manipulation can be blamed on the
REPUBLICANS...Slick Willie will have escaped and stuck
it to the Republicans who will then be forced to answer
to the voters.

It must come out before the November election!!!

The equities bubble has to pop, and the gold corner has
to be exposed.

Chickens must come home to roost, or WJC will exit office
with a big smile on his face as the bubble bursts and the
dollar sinks into oblivion. This would be his version
of flipping a bird to all of his tormentors.

WAKE UP GOP....Do your thing!

nickel62

(02/10/2000; 10:59:06 MDT - Msg ID: 24903)

Henri I have often wondered in the last week if Summers wasn't sticking

it to his prior masters as he whipsawed the bond swap market last week. I have thought maybe one of our victims such as Europe or Japan or one of the Asian erstwhile Tigers might have decided they needed a few more 30 year treasuries in order to stick it to Goldman et all. but maybe it was just Summers who having survived a bout with cancer figures maybe he would try and regain the soveriegn control of the US financial markets.Sort of like Paul Songa's noble run for President a few years ago. But then I woke up and nah! He is just an amateur standing for a few minutes in the big time and screwed up. most likely the latter.

Al Fulchino

(02/10/2000; 10:59:54 MDT - Msg ID: 24904)

THE TRUE VALUE OF GOLD WILL ULTIMATELY PREVAIL

I am an expert in nothing, let me start by saying. However over the years a lesson has been taught to me. A lesson I was not always interested in learning, I might add.

I, like most, if not all people in the world, prefer to have my own way in everything. Especially, if it made me very important in the eyes of others or in my own mind . Usually, I would be pretty successful. But for some strange reason, in the end, I would end up having some type of inner conflict over my successes. Things seemed right on the outside. The inside would often be different.

The conflict, I would come to learn was actually conflict with the truth. The truth about my pride and that ultimately is selfishness. Where did this conflict come from? My answer, if I may be so bold, is the Ultimate Ego, our Creator. So, the pain of the truth, or my conscience if you will, was actually what I needed. Sort of a humbling idea if you have followed me so far. Nevertheless, as I said I needed the clarity of the truth pointed out to me about my lack of being the all knowing one. Just like a child needs to be told that cookies fill but are not what your body needs. No matter what I constructed, whether it be in my mind or physically with material things, it was never enough. The same will be true with what I call God's physical representation of money. Gold.

The authorities which we have put in power, to serve us and to say what we want to hear, represent our selfishness. We correctly blame the manipulators of our currency. But we collectively don't look deep enough. Collectively we have placed these people in power. They satisfy our culture. They feed our egos. They keep the attention away from looking at ourselves. They even degrade our money so that they can do what they want with seemingly no consequences.
In reality, WE WANT them to tamper with the money, so we can try to have what we do not need or is good for us. Unfortunately, we never have been able to create something from nothing, (in truth very fortunate),and that is a good thing, which we will eventually be reminded of. When, it fits God's Will, I feel, we will see God's earthly money retake its proper, or as near proper role as serves his purpose. We will be reminded. No need for anxiety for those who see this. No need to check the quote pages each day. Those of you who see this, as I have stated on other occasions, have already found your chair in this game of musical chairs. The players who deem themselves smart or those who played with blindfolds on will be the ones scurrying.

As our good friend Aristotle says, Gold, Go get you some.

Henri

(02/10/2000; 11:02:39 MDT - Msg ID: 24905)

Cavan Man Msg 24897

Golden Truth

(02/10/2000; 11:43:00 MDT - Msg ID: 24906)

OIL!!!!!!!!!!

Oil at $29.36 over at Bloomberg and GOLD my favorite at
$317.90/oz Go GOLD or go Home, buy physical Now, before it's all gone, GOLD is going to the "Moon"

G.T

BTD

(02/10/2000; 11:43:14 MDT - Msg ID: 24907)

Invesco Gold Fund refuses to sell Barrick

Here is Invesco Gold fund's response to my email yesterday (see Msg ID:24812) asking them to sell Barrick:

Dear Bruce Dague and Daniel Bunce,

Thank you for visiting INVESCO.COM!

I spoke to the analyst for our Gold fund who works closely with Mr. Segner.
We intend to continue holding Barrick in our Gold fund for a number of
reasons. Barrick is the largest company in the industry and represents a
sizeable portion of Gold indices. Because of their size, they are both well
positioned to take advantage of upswings in the Gold market and large enough
to avoid margin calls and other problems that their hedging program might
cause. While they are not immune to risk, their purchase of call options
reduces the risks caused by their hedging program and positions them to
better take advantage of an increase in Gold prices. Barrick's hedging
program has been highly profitable for them. If you haven't visited their
website already, you can view their financial results and web cast at
http://www.barrick.com.

On a another issue, our Gold fund has a large stake in Placer Dome, which as
you are probably aware, recently announced that it was ending it's hedging
program. As a result, Placer Dome stock increased which benefited our fund.

While I probably have not swayed your opinion on Barrick Gold, it is only
fair that I tell you that our fund manager intends to continue holding
Barrick Gold. Barrick Gold currently represents about five percent of our
fund. If you believe that this investment does not suit your investment
goals, you might consider other options.

If you have any further questions, feel free to e-mail or call
1-800-675-1705. We will be happy to answer your questions.

Sincerely,

Will Robb
Internet Client Services
William_Robb@den.invesco.com

Journeyman

(02/10/2000; 11:48:00 MDT - Msg ID: 24908)

30 year US bond auction goes VERY badly

- 30 yr. US bond auction results: 6.34% yield, bid to cover 1.33 [This is the lowest number of bids per bond in the history of the 30 year bond.] (normal is about 2.3%) -CNBC, 00/02/10, 1:38:13 PM

Regards,
J.

Journeyman

(02/10/2000; 11:56:30 MDT - Msg ID: 24909)

30 yr bond auction goes VERY badly -- corrections

30 yr. US bond auction results: 6.34% yield. Bid-to-cover ratio: 1.33 [This is the lowest number of bids per bond in the history of the 30 year bond -- normal is about 2.3 bids per bond. -j] -CNBC, 00/02/10, 1:38:13 PM

Apologies, j.

Elwood

(02/10/2000; 12:09:27 MDT - Msg ID: 24910)

To Henri (2/10/2000; 10:47:07MDT - Msg ID:24900)

Henri wrote:
It seems to me that these barriers to further monetary expansion were encountered and then circumvented by wholesale bundling of Mortgage Debt and sale to Fannie and Freddie allowing a whole new slew of massive credit/Debt$/liquidity to be unleashed. The massive increase in financial derivatives in the last few months also contributed by pouring gasoline on an already raging inferno. The resulting conflagration seems to have obscured exactly who owes who what and more importantly when.

Elwood replies:
I think the barriers to expansion that von Mises was referring to are related to the refusal of the public to use the fiduciary media as money at all. This occurred during the Weimar hyper-inflation in which the monetary system broke down and transactions were based on barter of goods rather than use of money. It also occurred during the early 5th century in the Western Roman Empire after a few hundred years of monetary debasement by the Emperors. The Chinese, who invented paper money, also experienced this.

The government sponsored enterprises you reference are not engaging in money-creation at all. They are merely borrowing and lending that which is created by the banking system. I think there's a guy named Noland who writes on the Prudent Bear site that propounds this idea that the GSE's create money. I think he's wrong.

What we're about to face is merely the follow-through of Gresham's Law. That is, it's true that good money is driven out by bad money, however, bad money eventually ceases to be money at all.

Regards,

Elwood

Golden Truth

(02/10/2000; 12:11:51 MDT - Msg ID: 24911)

SPOT UP $9.70/oz

YAAAAAAAAHHHHHHHHHHOOOOOOOOOOOOOOOOOOOOOOOOOO!
GOLD the only real money, isn't it time you traded in some toilet paper for real money, before its to late??????
GO GOLD and die all you Gold shorting scum! The truth is getting out and you're going to lose control on the P.O.G
P.S Have a nice Day :-)))))))))))))
G.T

schippi

(02/10/2000; 12:14:58 MDT - Msg ID: 24912)

Select Hourly Gold Chart

http://www.SelectSectors.com/agpm70.gifFSAGX & FDPMX Gold Sector Chart( looking Good!)
http://www.SelectSectors.com/agpm70.gif

Golden Truth

(02/10/2000; 12:35:12 MDT - Msg ID: 24913)

SPOT CLOSES AT $314.60

Good boy Spot, next jump $360 not to high not to low :-0
G.T

Golden Truth

(02/10/2000; 13:10:05 MDT - Msg ID: 24914)

Kitco buying prices

Check out Kitco buying prices they are paying more for "Recognized" 1oz Bars @ $313.45 than they are for Maples,or Eagles @ $311.45
This would indicate to me that people(Buyers) just want the bulk Gold and do not want to pay the premium.
HELP i've been ripped off again, if it's not one thing it's "Another"
G.T

JCTex

(02/10/2000; 13:13:49 MDT - Msg ID: 24915)

BTD: Invesco Gold Fund refuses to sell Barrick

BTD,
Thanks for that update on Invesco Gold Fund. What BULL---!!That saves me the trouble of having to analyze them. If I owned any of it, today, I would sell it.

MidEastGold

(02/10/2000; 13:35:46 MDT - Msg ID: 24916)

Esmeralda Exploration -Australian Gold firm will be sued for cyanide leak

http://news.bbc.co.uk/hi/english/world/europe/newsid_638000/638286.stmWho does Esmeralda belong to?

JCTex

(02/10/2000; 13:37:13 MDT - Msg ID: 24917)

This poster from kitco has the real bottom line on the timing of the market.

nickel62 (2/10/2000; 10:51:52MDT - Msg ID:24902)
This poster from kitco has the real bottom line on the timing of the market.
Charles Keeling (THE POG HAS POWERFUL ALLIES) ID#159199:
Copyright � 1999 Charles Keeling/Kitco Inc. All rights reserved

The Republican party MUST allow the light of day to shine
on the MANIPULATION of GOLD.....
---------------
nickel62,
This one is dead-on correct!!!! We will see if the Republicans can see this or not, very soon [they must act sooner rather than late on this one].

However, we must remember: The Republican Party has always had the uncanny ability to snatch defeat from the jaws of victory.

oldgold

(02/10/2000; 14:15:26 MDT - Msg ID: 24918)

Gold Stocks

Gold stocks way underperformed gold today. Not a good sign for anybody expecting another good day tomorrow.

Canuck Gold

(02/10/2000; 14:47:03 MDT - Msg ID: 24919)

oldgold (2/10/2000; 14:15:26MDT - Msg ID:24918)

I would suggest that the gold stocks are lagging the price of gold at the moment because there have been so many false starts, that people won't believe the price is going up until it stays up for more than a few days. Once they're convinced the price movement is here to stay, hold onto your hat.

CG

Phos

(02/10/2000; 15:28:40 MDT - Msg ID: 24920)

Fed adding Repos

TownCrier - this is from B.Larson at Longwaves - supposedly the reason the Fed is adding repos at a high rate. I must admit that I don't know why after all the activity prior to Y2K. You would think that would have been enough. Or have they taken any of that injection back?
--------------------------------------------------
Yes its a seasonal add need. According to MCM,"The Fed faces a large and growing add need in the weeks ahead. The last of the year-end long dated sys RPs runs off today and there will be a seasonal rise in the demand for currency
as well as large mid-quarter intrest payments by the Tsy and Fed. The add need in the current maintenance period is almost $20 Bln/day and it grows. This is why the Fed executed 2 more long-dated Sys RPs on Wed totaling $15 bln. The long-dated Sys RPs do not rule out more coupon passes in coming days. There is still a good-sized residual add need and it is rising The Fed will still want to inject some more permanent reserves and there is plenty of room."

nickel62

(02/10/2000; 15:29:03 MDT - Msg ID: 24921)

The pressure mounts1

U.S. Bonds Plummet After Weakest Demand at Auction
Since at Least 1983
By Perri Colley McKinney and Al Yoon

U.S. Bonds Plummet in Weakest Treasury Auction Since 1983

New York, Feb. 10 (Bloomberg) -- U.S. notes and bonds plunged
after the Treasury's $10 billion auction of new 30 1/4-year debt
received the weakest bids in at least 17 years, completing the
final part of a $32 billion government refunding.

CoBra(too)

(02/10/2000; 15:40:01 MDT - Msg ID: 24922)

XAU - Phila Gold Index - lost its lustre -

American Barrick, Ashanti and Anglo - the first three names you read on XAU-(Philadelphia Gold Mining Index) make up almost 50% of the Index - All the great hedgers still represent 50% of "the gold mining index" - Don't short the town - short the hedgers - and rename the index: XAU'u*
*unhedged -cb2

Farfel

(02/10/2000; 15:59:58 MDT - Msg ID: 24923)

XAU Non-Performance

Seems that with huge hedged golds like Anglogold and Barrick forming a MAJOR part of the XAU...and with more gold funds and gold investors NOT desiring to invest in hedged golds...it is only logical that the XAU is not soaring with a rising gold price. In fact, Barrick closed FLAT for the day, so no wonder the XAU was weak.

So we may be entering a New Era for the XAU. It will no longer serve its traditional role of forecasting a rising gold price.

Makes complete sense. Just as many traditional guideposts have no longer applied to the new Wall Street bull market, then the traditional guideposts between XAU and gold price should collapse too, if in fact gold is moving into a new bull market.

Another reason why Kaplan's traditional COT analysis may no longer have any application to a New Era Gold market.

Finally, as part of a New Era gold market, we might finally begin to see gold investors who BUY AND HOLD, instead of gold investors who trade in and out of every little move.

Just imagine a New Era gold market where gold investors finally develop the courage of their convictions instead of acting like scared little kittens seeking some kind of divine guidance from "guru technicians."

Thanks

F*

CoBra(too)

(02/10/2000; 16:12:25 MDT - Msg ID: 24924)

TC- your "spoof" - Just coming to grips with the tiny "u" -

FED adds billions in repo's - "spoof" bullion's in 'nepo's'- (not ever proven openly)- 'u' wanna know, cb-too.
cb's-ps: As the $ ceased to be as good as gold, gold had to look worse as the $ - some may say it's the equivalent of mob(b-iliz)ing the gold reserves.
Watch your Ft. Knox vault - 't may be late in t'e day!

CoBra(too)

(02/10/2000; 16:19:22 MDT - Msg ID: 24925)

Hello F*

-Coincidence- thanks for your stand up words over the last while vs hedge(-hogs)! Cheers CB2

Hill Billy Mitchell

(02/10/2000; 16:40:03 MDT - Msg ID: 24926)

Selling on the way up?

If I were to tell you that I had come up with this great way of making money through investing would you listen. If I were to tell you that the wealthiest people in the world had recently come up with this method would want to "walk in the footsteps of these giants"?

Well here is the deal. Hold your non-performing assets until they finally hit bottom. Sell out as follows:

1) sell 5% of your holdings at the bottom

2) then sell another 5% every month on the way up until
you have 45% of your holdings left.

3) decide what to do with the rest of your holdings when
you get to this point.

Most amazing. I anyone who understands anything about investing would laugh me out of my misery if I were to tell them that my plan was to begin selling at the bottom and sell on the way up.

Now what we have here is a perfect description of what the Bank of England has unveiled and apparently intend to follow through with. Now you and I know that this is not exactly what is going on. Without a doubt the gold which is being sold by the Bank of England is going into the hands of some very astute, very needy hands via a proven method of getting wealthy. Whoever is buying this gold is buying at the bottom and averaging on the way up. Who might that be. The very same investors who control the bank? This is going to make some insiders very rich or at least prevent them from becoming very broke.

HBM

Cavan Man

(02/10/2000; 16:49:40 MDT - Msg ID: 24927)

oldgold

Hello. For AU stocks I don't think you can beat NEM and GOLD ( Newmont & Gold Fields). In a volatile sector, these are two of the best. Both were up today. (IMHO)

Farfel

(02/10/2000; 17:19:48 MDT - Msg ID: 24928)

New Members of the BANKING INDEX soon?????

I've been in contact with the Philadelphia Stock Exchange and strongly suggested that Barrick and Anglogold both be removed summarily from the XAU and placed in the BANKING INDEX with all their good buddies at Goldman Sachs, Chase, Lehman, Deutsche, JP Morgan et al.

After all, when the price of gold is falling, THEY all usually prosper together.

Makes a helluva lot more sense!

Thanks

F*

Jason Happy

(02/10/2000; 17:20:50 MDT - Msg ID: 24929)

Buy and Hold...

Farfel, speaking of the "buy and hold" strategy... I was thinking of how Gold is/has a world market, and that the Indians have among the largest personal holdings, about 30,000 tons or so estimated? India imports about 800 tons a year? I have read how the people in india stopped buying jewelry on the last spike. And much is made of that by the "supply/demand" analysis people. However, no mention is made on whether or not they started to sell!!! Hmmm....

I suspect their selling price is far more important to the POG than the average U.S. goldbug. I wonder what their price would be??? And what would they want for their gold, which is their form of tangible, hidable, portable wealth full of additional historic, religious, cultural, and family importance? Paper? LOL!!!

CoBra(too)

(02/10/2000; 17:34:42 MDT - Msg ID: 24930)

BKX:XAU = 1:100-F* (Farfels low leverage indicator)

If zero equals zero - go to Vegas - the only place in Nevada
for fool's gold. - Otherwise 2/3's of US gold is now mined in the "Silver" State... you'll find more ounces of au than an ounce of rare sirloin.

Quicksilver

(02/10/2000; 17:35:32 MDT - Msg ID: 24931)

"Red Fire Ants Devour Large Predator" details at 11

http://www.usagold.com Another happy day goldfans. So we don't see gold stocks as gaining anything near general acceptance by the investment community yet. We know the excessive volatility in equities is caused partly by mutual fund managers being allowed to turn and burn large blocks of stock like daytraders beating them at their own game. If you can't beat em join em. So you drop 10,000 or 20,000 shares everytime the MM lifts his bid. That's right you interject excessive volatility in paper equities and eventually all the bantum weight daytraders are going to leave. Can't sail on a choppy sea. Gold stocks are gapping up nice each morning, fundamentals like fertilizer for the money tree of gold. We see nice stair step patterns for gold stocks we all wondered if they'd go under. If any significant number of fairly large daytraders decide to declare these stocks to be kosher, then the large predator investment houses are in for a run. Like Guliver and the lili-pewshons. He took a knap and ended up all tied up. I'm watching the sizes of the orders for PDG and GSR, mostly large orders going down, not lots of 100s like when daytraders are biting. So I give it about a week of "everything else going down nasty after the open" and the "crash after 1 " and disillusionment is setting in. If the big boys aren't buying then why am I here? It's a flight to quality first,and we are seeing that. What happens after the "quality" gets bid into the stratosphere? The fifty won't be so nifty. Big boys will sell out first. Whatever is left of what the "once flush" daytraders had is going to run for cover. First it's small cap breakout stuff. But if you noticed there are failing handles on alot of pans that shouldn't have failed. Can't cook with a pot with a broken handle. Failed broken patterns, PE's in the sky with diamonds, and the "really ready to go" breakout stocks blinking red all day long on the Datek streamer. Long shadow hammers sitting there like some one turned out the lights. Well, rambling back to the point, the collective effect of a few hundred thousand millionare (middle weight) daytraders plus all the little guys trying to escape from blue-collar life......it's weight in the market my friend, specially when it keeps going in the money. Gold stocks for daytraders will be like Dairy Queen to the little league. They're going to go there! One more week of market mush.....Wow it's up, Hey it's down, woe now it's really down. Man how much of this crap did I buy? The numbers are good, pattern looks strong, how about the bias????? Did anyone ever consider the laws of supply and demand? For every 100 shares sold to the MM he has to sell 150 shares to end up with stock shortage. Stock shortage is what drives a bid up high, with serious demand. So your wonderful tech stocks that trade in volumes under 50,000 for the day, do you know the result when some Internet Fund decides to sell??? It's going to crush the price down. If the MM can't unload what he has at the end of the day then He'll gap the stock up a little and fake a rally start to unload it. Then the price plummits while the MM has little stock. Because its now "techy crap" and nobody wants it. Most of these cool high prices are based on few people buying and very few selling. They went up real fast right. But no super EPS growth along with it, just lots of hope that rhymes with hype. So when they come down, are they going to come down slow? Only if the big boys decide to milk it and sell slow. You as a private investor are no more significant than a shrimp among a school of hungry giant tuna in a fight. Daytraders only affect things when they hit all at once. We're like mackeral, better get out of the way. Collectively we can move a market if popularity snowballs. Don't get whipsawed into oblivion shorting "#1 Hedged US producer" because you think a certain CEO is gong-show material. No be creative and shrewd. Get the 1-800 numbers of all the Gold Funds and be sincere say "I was thinking of investing in the near future( you may actually make money in gold now) and you want to know if that particular fund is restricted to lo or no hedged producers", say you must know because of the Ashanti Collapse. Say that company's name that you disdain and ask her if she would invest her hard earned dollars into a company that is rigged to go bankrupt if gold rises over 400. Really make an impression, you're not a nobody, you're choice clientele. Then when you get time call another. If you want sharks to attack a certain company you need to put some blood in the water. And Mackeral Chum which is all a lone daytrader amounts to, is not going to do it. So they come out with more useful propoganda.....expect that. Numbers don't lie.
Placer and Barrick are like two brothers planning a camping trip. They spill out their gear one the floor and realize they are missing some important stuff. So one says to the other "But we only need rain gear if it rains", the other agrees and says,"But what about the lack of food, I'm not carrying all these cans now". Placer says "We're cowboys and we can live off the land". So they set off. Fairly soon that pack of dried apricots starts looking mighty precious. It starts with counting what they have, accountants mulling over the numbers, lots of meetings. Eventually the campers learn like anyone who decided to live off the land, that good food is hard to get and you'll pay sky high prices at the corner store when you're done camping. They're going to need gold like Outback Steakhouse needs A-1.
So I'll link the lilipushons to the fire ants to the mackeral to the daytraders. Here goes....They all are small and laughed at but collectively they can bring down large predators. All except the mackeral he's too small he just gets eaten alive.
Now for something completely different. George Washington traded his gold and silver for guns and powder to establish freedom to use a fiat currency to pay back English debts written for gold backed promissary notes. So the very half-assed democracy you'd like to see torn apart with your $2000+ gold spike and market meltdown was established because a brave soul knew the Continental Dollar was backed with the resources of the land. Them thar hills are still filled with soft coal locked up from EPA restrictions. So they allow a little air pollution and we manufacture again. One volcano goes off and wipes out years of environmental progress. It's environmental regress having a breathalizer put to your muffler. Your Continental Dollars are worth what they are redeamable in, and it isn't much at this point. Ok so this ramble has a reason. Commodities are going up because foreignors can redeam big float for hard assets. That is a corner to the puzzle.
You should see the prices Nasdaq after hours is putting on goldstocks, and PDG bid and ask size is 10x1
He wants stock paying 10 3/4 (so he lets on). It's fun to throw your offer between their bid and ask to see which one they'll move, in a slow market.
And to all you out there who can read but have fear to post, have some guts....it's what we live for. Post something relevant and half way intellectual you read in a book. Nobody wants to know your name we just would like to visit your favorite financial website. -Willie Learnit

Jason Happy

(02/10/2000; 18:07:07 MDT - Msg ID: 24932)

Gold marketing

Can you imagine what would happen if Oprah had a few special guests on her show, say from GATA?

Just a thought... one can wish, right?

Maybe, instead of emailing members of congress, who do nothing...
Maybe, instead of emailing board members of Barric, who have already made their bed...
Maybe, if we all emailed oprah, and urged her to do a show...!!!

http://www.oprah.com/

Show ideas...
http://www.oprah.com/tows/intheworks/tows_works_main.html
Click on:
How Money Affects a Family

St. George

(02/10/2000; 18:08:09 MDT - Msg ID: 24933)

Kaplan Fans and Bashers

Whether one agrees with Kaplans analyses/prognoses is of little import. The real indicator as to what is happening which he gives daily is the number of hits on his web site. It is up to 4750. I remember when it was less than 1100.

Quicksilver

(02/10/2000; 18:15:46 MDT - Msg ID: 24934)

Gold Funds are sleeping olympic athletes.

http://www.on24.comLeanard, so you lack belief in gold funds. The funds were down because the metal was down most of the year. I don't think the gold funds would be so much for shorting gold which was the way to go till Sept. heh heh Don't you shop at one store instead of another BECAUSE ITS CHEAPER and YOU GET MORE. So it is with funds. Buy the great internet tech funds now???? No more fireworks in the bag pal, stuff has all been shot off already.
The virgin has been inside her house for 20 years now. She is going to take awhile to get to know. Give her a break. Internet whore just makes fun of her says she doesn't know how to party. Well she probably won't party but I'm sure she can cook. Kissing wears out cooking doesn't.
Subnormal returns in a down market are no indicator for an up market when most other funds will be so dismally poor after the "market correction" the girl from the Schwab ad mentions.
If you read all the books forced on you at college, how about reading about the great panics and speculative manias. SOUTH SEA BUBBLE and the TULIP BULB MANIA
1929 isn't on the map compared to those two. Actually what happened in Oct 1987 is more relevant because it shows what a computer set to SELL does to liquidity. And they hung up the phones a let their computers sell to save their own hide. Next one will be where daytraders won't be able to log on to sell. Have you ever tried calling that radoi station to be the 10th caller to get the prize. Yeah the 1-800 number is there it looks nice on the sticky memo hanging on your computer. Don't go west young man go short or go gold.
Did you know there are hawks in Japan that can sing??? That's right there are some hawks in a prefecture of Tokyo singing "Lets get physical, physical, lets get into physical (gold) let us hear these dollars talk".

Jason Happy

(02/10/2000; 18:17:02 MDT - Msg ID: 24935)

Oprah! Oprah! Oprah!

Email Oprah general show suggestions:

http://www.oprah.com/email/reach/email_reach_suggest.html

tedw

(02/10/2000; 18:18:12 MDT - Msg ID: 24936)

Miscellaneous

http://www.usagold.com
First of all, I nominate Al Fuchinos post #24905 for the
Hall of Fame, isnt that where truth belongs?

Secondly, Black Blade thank you for your post on stocks.
Its appreciated.

Thirdly: I noticed today a newspaper article saying that the Saudis are unhappy with the recent Israeli bombings in
Lebanon. I suspect we may hear OPEC say something like :
well, oil is not really too high, just look at the precious metals. And when the US officials press for more production I think they may be told: not until you reign in Isreal.

Trouble is, I dont think Isreal is going to be reigned in.
Another mideast war on the horizon. And this time Isreal may be forced to use nuclear weapons to survive.

What price oil and gold then?
they

nickel62

(02/10/2000; 18:21:43 MDT - Msg ID: 24937)

XAU remember most of the world doesn't understand as much about this

stuff as we do. The XAU index is composed of stocks the bankers want in there and there is no way they are going to kick their best customers out. The stocks of the companies benefit by being in there because every computer driven model when they notice gold going up will mimic the indexes that track that asset and automatically buy the stocks that comprixe the index in the same weighting as the index. Thus our favorite (SIC) stock ABX with the largest market capitalization will be helped the most by the computer driven buying that will come automatically as soon as the generalist portfolio managers see something starting to cause them to underperform. That is probably just beginning by the way after the last three days. Remember these guys are not that bright and the computer indexes that are filled automatically are stone stupid.

nickel62

(02/10/2000; 18:22:53 MDT - Msg ID: 24938)

XAU remember most of the world doesn't understand as much about this

schippi

(02/10/2000; 18:32:03 MDT - Msg ID: 24939)

XAU Vs HUI Chart

http://www.SelectSectors.com/xauhui.gif Interesting comparison

CoBra(too)

(02/10/2000; 18:35:17 MDT - Msg ID: 24940)

Late and last post...

Since we're all starting to enjoy a new era (in gold, or real hard money)- and as my rather poor "lingo" capabilities may have had the effect to denigrate the wisdom expressed on this site, and as all Austrians are now enjoying a quarantine (for being democratic in the face of 90% of socialist EU), I would like to express my gratitude to MK and all the learned contributors to this web site and apologize for any remarks, which may have been construed as derogatory or, worse, biased.
From here on, I'll be content to follow the golden trail ... as I have done (to the detriment and ridicule of many and most friends in my real life)... as a silent, though interested lurker.
Thank you all for your great education - we're miles in front of mainstream - and may the good lord be with you and with your challenges!
A golden future - CB2

Leigh

(02/10/2000; 18:58:43 MDT - Msg ID: 24941)

CoBra(too)

Dear CoBra: I hope you don't really mean you're going to stop posting! What will we do without our European correspondent? You're the only person I know in Europe, and every time I hear about something happening over there I think of you. Even if you stop posting (hopefully temporarily), I'll still think about you and wonder if you're reading and thinking about all of us. Best wishes always, Leigh

andrew

(02/10/2000; 19:01:09 MDT - Msg ID: 24942)

gold down Australia

Gold down $2.10 to $313.00 at midday in Sydney on Friday. Gold stocks languishing. Friday is usually the day Hannibal & Co work hardest to bring gold down.

Just Weight & Measures

(02/10/2000; 19:03:18 MDT - Msg ID: 24943)

@Quicksilver

Enjoyed your post. Lots of interesting food for thought presented in an entertaining manner. Thanx.

I noticed the internets went up today and gold stocks didn't inspite of the rise in gold.

Perhaps gold stocks didn't move up because there is not enough liquidity out there to support both the internets and golds. I'de say people are running out of buying power even though the fed is running their paper machines over time. Gold stocks go up when the rest of the market goes down because selling internets frees up digital wealth to move into something else . . . . say gold stocks.

nickel62

(02/10/2000; 19:22:25 MDT - Msg ID: 24944)

The thing I find so maddening about this gold market is that you always have to

remember that it is manipulated. Which by definition means the manipulators are constantly sending you the messages they want to send. This I think is the biggest challenge to day to not let them sucker punch us all one more time. The reality of the last several rallys has been about the time when if it was a free market we would expect to see it break out they orchestrate a collapse in the paper price by flooding the market with their dirivative derived virtual gold to bring the quoted price down. We all have seen this happen a million times. My fear is that they are setting us up again. And of course since you know someone is after you it is difficult to tell if you are paranoid, overly cautious or just being silly. Perhaps it is time to let them drive it down and then finish our buying,let them know that we expect them to manipulate us. After all they are barely bothering to hide it anymore. Why should we expect the market to behave in a different fashion than it has in the past? They are like Clinton perfectly able to judge our reactions to their moves. Well I for one am sick of acting like a dancing doll,jerked around by their amateurish market head fakes. The game we are allowing ourselves to play is one where they control most of the cards. They decide which stocks are in the index, they have the talking analysts mouthing the "research", and the portfolio strategists telling us what is a good area to invest in,they tell us what the right amount to pay for growth is, and then with the collusion of their accountants define falsely what are earnings. We are so entranced with the possiblity that we may pick up enough crumbs at the table that we too can be rich,we let them lead us around by the nose.Well I'm sure that the time has come to stop letting them set the agenda. From now on we are going to state that this is a bull market that is going to have corrections and that is normal but they are going higher.Does anyone here really think that we are going to make a new lower low. If the answer is no than the bear market is over and the time has come for US TO START EVIDENCING THE CONFIDENCE OF THE BULL. We expect the shorts to use their superior position but we don't have to allow them the satisfaction of watching us squirm. Sell down your leverage on this rise and reduce your margin and wait until they lower the price again to depress the enthusiasm-then buy again. We have passed alot of information at this forum and much of it can now be used to unshackel our pre-programed responses to their manipulation. The game after all has been won. We just haven't had the vanguished leave the field yet. They are hanging in their hoping they will be able to cover their own shorts in the selling they hope to cause by crushing our enthusiasm one more time. Screw them! The market has turned and it is their asses not ours that are now looking at getting reamed. Follow the White Metals to $600 and beyond and forget that you have ever been a slave.

Jason Happy

(02/10/2000; 19:23:25 MDT - Msg ID: 24945)

Gold Stocks DID go up today... sheesh!

Just because DROOY went up 30% on Thursday of last week, doesn't mean that today's gain isn't important...

3% a day (NOT compounded daily because I don't have
the calculator for it), 3 x 5/7 x 365 = well over 1011% a year. That'll outperform the paltry 86% gain for techs in a year. Yeah, I know the gold stocks should have moved more today, but let's show some excitement here... They'll pop up again, even moreso as gold marches on. It's inevitable.

DROOY
1.94
+0.06 +3.33%
HM
7.56
+0.06 +0.83%
ABX
18.44
0.00
HGMCY
7.19
+0.50 +7.48% !!!
PDG
10.81
+0.31 +2.98%
GOLD
5.25
+0.09 +1.82%
FCX-B
23.19
-0.31
GSR
1.56
+0.12 +8.70%!!!!

Solomon Weaver

(02/10/2000; 19:36:48 MDT - Msg ID: 24946)

Farfel, if you really called the Scrapple boys in Phila...

Farfel (2/10/2000; 15:59:58MDT - Msg ID:24923)
XAU Non-Performance
Seems that with huge hedged golds like Anglogold and Barrick forming a MAJOR part of the XAU...and with more gold funds and gold investors NOT desiring to invest in hedged golds...it is only logical that the XAU is not soaring with a rising gold price. In fact, Barrick closed FLAT for the day, so no wonder the XAU was weak.

-----

Ted Butler, in his essay's exposing hedging has used the "definition" that any company which is selling more than 1 years worth of production short, is not hedging. If are earnest about having made that call to ask for corrections in the XAU...I suggest you call again and encourage them to set up a definition of hedging....I think that given the fact that Ashanti's assets are now frozen, and in principle their hands are tied (in front of the firing squad??) that you have a "good case" for getting them to "temporarily" delist Ashanti from the XAU...and probably state at the same time that they are "analyzing" the case at Barrick. I think you are really on to something here..perhaps you can get Bill Murphy into the game as well....Here is a situation where a few people can get a lot of leverage if they are able to convince the wardens of the XAU that some of their biggest caps are not "geared" to "earn" from gold, but rather "geared" to "lose" and until they correct this on their books they will counterperform gold....

Give me a name and number and I'll call too...

Poor old Solomon

R Powell

(02/10/2000; 19:41:40 MDT - Msg ID: 24947)

kaplan's COT analysis

I've been wondering like everyone else where gold goes from here and why only Kaplan, from those whose opinions I highly regard, predicts a short lived rally. I think Farfel has given me the answer in (Msg ID 24923). HE states there that Mr. Kaplan's views come from "traditional COT analysis" which is the position (number of future contracts) held (both long and short) by hedge funds, commercials and small speculators. I don't think I would judge or predict any market especially gold! by the COT numbers. Most of the hedge fund mangers know little to nothing about what's really happening and some freely admit that fundamentals don't predict market movements - charts do. These guys talk of support and resistance at certain levels (prices) and moving averages for X number of days and 30, 60, 90 day cycles and multi-year cycles and advances and retractments in terms of %s and magic numbers and fazes of the moon and sunspots and yadda yadda yadda. Most of these guys are playing with hugh sums of money and make money by betting on the market trend, if the chart shows prices increasing they buy and vise-versa. Then they trail their position with stop orders, let profits increase until stopped out. They usually get out immediately! of any positions that go against them. Their correct bets might not tally many more than losing ones but they try to make more on wins than is lost on losers. Most who trade this way are probably gun shy and dumbfounded by gold about now. They care not for supply, demand,manipulation,fair play,politics,facts,fundamentals,--they just follow the trend. Since last Sept they have reversed their position from net short to long numerous times and with big bucks they do move the markets but I don't think their position is going to be a hugh factor in gold considering the amazing events we've enjoyed unfold since Sept. 26 last. All this is of course just one man's opinion but for what it's worth I think the fun has just begun!

Zenidea

(02/10/2000; 20:05:40 MDT - Msg ID: 24948)

email from Le Metropole.

Sources close to the Cafe tell me that a bullion dealer is in trouble and there will be announcements of layoffs.

The Gold price could explode at any time.

The shorts are in big trouble .

R Powell

(02/10/2000; 20:10:26 MDT - Msg ID: 24949)

Re Nickel 62's (Msg ID 24944)

Great! Reminded me of the movie "Network",, "I'm mad as hell and I'm not going to take it anymore". If need be, I believe Farfel can recommend some good bloodpresure medicine.

AllanC

(02/10/2000; 20:35:15 MDT - Msg ID: 24950)

Joe Battipaglia's article

http://cbs.marketwatch.com/news/current/battipaglia.htx?source=blq/yhooHey Aristotle, keep posting. With FOA absent, you're the only substitute.

With gratitude, here's my unedited version of the above article, FOR YOUR EYES ONLY

SAN FRANCISCO (CBS.MW) -- Last week, the U.S. economy entered its longest expansion phase ever. It will continue forever. (at least until I sell my own portfolio)

The Federal Reserve should shortly abandon its effort to temper the economy unless inflation data demonstrates real evidence of pricing pressure. The price of oil has plunged to $29 per barrel, gold is going down along with other commodities and interest rates are allready in a free fall with the long bond trading at 6.4%, an extremely low rate.

At 107 months, the current cycle is now longer than the 1961-1969 cycle that previously held this record. Unlike the prosperity of 1960s, which met its demise during the 1970s, I believe this expansion is structurally different and less prone to the imbalances experienced thirty years ago. (I just know this because it sounds so good to say it.) After all the internet will continue to provide us with all the services we'll ever need. And foreigners will keep giving us all the cheap goods we need in exchange for our currency, which they use to purchase oil at these ridiculously low prices to make more cheap goods for us. Forget the trade deficit, it only shows foreigners how strong our economy (demand) is, and they will reciprocate by demanding US dollars.

Furthermore, with a core rate of inflation under 2 percent (and rising) and a Federal Reserve pumping liquidity into the economy at unheard of levels, I believe the stage is being set for an extended cycle of strong business activity. (That sounds good too!) And with everyone margined to the hilt to get into the stock market, as long as the stock market does'nt head south, the wealth effect will remain intact. (When it turns I only hope I get out in time)

Near term, I believe the economy will remain well balanced with continued strength in consumption and investment despite a series of marginal rate increases by the Federal Reserve. (How did I conclude this? Well, I pulled it out of thin air! Neat isn't it?) Along with high levels of consumption and investment, there will be a further shift toward investment spending on such items as network infrastructure, software, research and development and technological development. Remember the 1920's? Why all that investment in efficient transportation (automobiles), radio, telephone and mass production gave us the roaring thirties! So productivity will be going to the sky!

Rising business activity abroad will also prove additive to domestic strength as exports rise and U.S. multinationals show improving results. And when exports do rise, they will "bid down" the price of our goods and inflation will remain subdued. (Isn't that a neat trick?)

Rate hikes will have minimal impact

The Federal Reserve's attempts to temper the economy's growth will have minimal impact given the economy's momentum and consistency. And that momentum is being driven by the stock market wealth effect, unheard of consumer borrowing levels and our increasing thirst for cheap foreign goods. Remember that the rate increases of 1994 gave way to five years of strong financial market performance and when interest rates rise that's allways good for the economy. The Federal Reserve should shortly abandon its effort to temper the economy unless inflation data demonstrates real evidence of pricing pressure. While recent data on auto sales, home sales, and manufacturing figures show continued signs of strength, there remains little evidence of excessive wage or inflation pressure. And the recent spikes in employment and producer cost index indicate inflation will remain subdued. (I hope you're all taking this down)

Focus on earnings growth

Earlier last fall, I stated that investors should focus on earnings growth as the driver behind equity prices in the absence of declining interest rates. (After all interest rates should not be factored into any stock valuations. Stock momentum is the only criteria) We have seen this play out through the powerful performance of the Nasdaq as 70 percent of companies report 20 percent improvements in year-over-year results for the fourth quarter, 1999. And with current pe multiples of 200 or more, we recommend investors continue to buy dips. (After all, any pe multiples of 150 or more are a downright bargain!) And investors should continue to focus on the retreating advance decline line of recent years as an indication of continued strength in select issues. (Remember my stock recommendations are allways right)

Therefore, I continue to recommend that growth-oriented investors remain fully invested in equities. (Mortgage the house but continue to buy so my portfolio can keep getting fatter) I remain over-weighted in the areas of technology, telecommunication and telecommunication equipment, financial services, pharmaceuticals, media, as well as consumer durables and non-durables. (Boy I love talking my book, I only hope they don't get wise before I get out)

Joe Battipaglia is chairman of investment policy at Gruntal & Co.

Solomon Weaver

(02/10/2000; 20:58:15 MDT - Msg ID: 24951)

I am sending this letter to Newmont tomorrow

If any of you out there are shareholders of other companies in the XAU, perhaps you would like to be inspired to act similarly.

If there is anyone out there who has access and brain power to analyze the Barrick balance sheet to see if they spent the money they got from forward sales on mining or on something else...we could begin to make our case as to pushing to get Ashanti and Barrick off the XAU until they become mining companies again.

------

To Newmont Mining Corporation
Corporate Headquarters
1700 Lincoln Street
Denver, CO 80203
(303) 863-7414

Ronald C. Cambre (Chairman, President and Chief Executive Officer)
Wayne W. Murdy (Executive Vice President and Chief Financial Officer)
W. Durand Eppler (Vice President , Business Development and Strategic Planning)

Gentleman,

2 years ago, after investigating the promise of being a gold owner and gold mining shareholder, I chose to devote 50% of the assets in my IRA account to Newmont. I did this because I was very impressed by the way your company was doing business and because I was very impressed by the courage you showed in your own management, and the belief you showed in the real value of your primary product. I was really impressed by your refusal to hedge any production. Since I also understand the need of all corporations to manage cash flow, and I understand that Newmont had some exciting new investments, which needed ongoing funding, it is understandable that you eventually took on a modest hedge program, as the price of gold reached its recent historic low. My investment in Newmont has obviously far underperformed other holdings in that account which play into the computer technology field. But I have refused to sell a single share of my core Newmont position because I never lost faith in the fact that you gentlemen were making the best possible in a very difficult environment for gold.

You brave gentlemen have done a wonderful job of trimming down costs and streamlining production, and I believe that a low gold price has made you even stronger. But now, it seems with many mainstream financial investments (DOW, NASDAQ, T-bills, etc.) showing a weakness, and with many recent events in the gold markets pointing to restriction on the supply side, as well as the ever-increasing public awareness of the almost scandalous amount of short selling in the paper market (to which your spot prices are marked), there is a great change of sentiment in the precious metals.

It is my personal opinion that the gold banking world has caused you much pain in 1999 and many of the younger companies in your field, who did not have the wits to understand esoteric derivative contracts have been fleeced. I think it is a very good time for Newmont to step up into the public light, restate their strong belief in the return of gold, clarify in simple words how small your hedging program, and point out that mining companies should be in the business of producing real gold, not printing paper gold. There is a very large number of people out there who will not read your older press releases but will notice when you come out in this new environment with a new press release. YOUR SHAREHOLDERS WANT TO HEAR YOUR VOICE OUT THERE. This recovery is young and we need to make the message clear that the only logical way for short sellers to act in this market is to buy back their contracts. Otherwise, there is just a growing volume of paper shorts that completely hide the real market value of your product.

There is another very important point, which I would like to bring to your attention. Your company is listed on the Philadelphia Gold Mining Index � XAU. This index is used by the investment public at large as a primary measurement of the gold mining industry. It has historically correlated with the price of gold and plays a very important role in helping general fund managers determine where gold is and is going, and eventually their belief in the timeliness of adding XAU stocks to their institutional buying programs . But there is currently a big problem in this index. Barrick, Ashanti, and Anglo, who make up almost 50% of the capitalization are all still holding massive short positions which put them at danger in an environment of rapidly rising gold prices. Ashanti in particular appears to have just recently had their financial freedom dramatically restricted (in the USA this is usually called chapter 11). Barrick, who as a short in sheep's clothing has probably done the most damage to gold prices in the last two years, has tried to convince the world that they are reducing their hedge. They have reduced their financial exposure but not their obligation to deliver gold they still have in the groud, which means that gol is not really available to the free market as true supply. But the problem still remains: how can the XAU index be an accurate measure of your industry when so much of the capitalization is in companies who are a best geared for "flat" performance in a high gold price environment?

As a key component in this index, I believe you have the right to call the people who create (regulate) this index and explain to them this problem. Ashanti should at the present time not be on this index because they are simply a time bomb programmed to blow up at gold over $350. Barrick should be evaluated as to whether they are a mining company or a hedgefund, and only remain on the XAU if they are a mining company. What is a good criteria to use in deciding who is mining and who is speculating? Let me suggest that as an outside limit, any company which has forward sold more ounces of gold than they can produce in one year, should be considered as a speculator, particularly if the proceeds of those sales are invested in non-mining subsidiary activities or other financial vehicles. The use of "percent of in ground reserves" is a popular way to look at this, but I suggest that it is not accurate because the "number of in ground reserve ounces" is usually restated periodically as the market price of gold changes. Thus, a doubling in gold price, which causes a large increase in stated reserves, has the appearance of reducing the amount of forward sales if expressed only as percent of reserves. The XAU should have strict guidelines in place to assure that they really have mining companies who will rise with the gold price.

Great leaders of Newmont, the financial world is overheated and much foolishness abounds. Gold and the industry which supports it are a primary base where a true world asset is created. You gentlemen have the moral responsibility to speak out against the collusion which has affected some of the big players in your industry (miners and bankers). It is not about finger pointing, it is simply about reeducating the common citizen about the strength and honesty of your profession, and the need for clarity and openness in the trade of your goods in public markets. If you are still writing your 1999 annual report, there is a great chance to strongly state your opinion, because that report will be written in an historic year for future historians of gold and world finance.

For your reference, I am posting this letter on a public internet gold forum and there will therefore be many who silently share my opinion, and will look forward to your actions in the near future.

A devoted and encouraging shareholder.

Poor old Solomon

Bonedaddy

(02/10/2000; 21:04:05 MDT - Msg ID: 24952)

Al Fulchino

You have wonderful insight Al. There are others that feel as you do. Isn't it great to really feel "at peace" with all the crazy goings on?

R Powell

(02/10/2000; 21:07:45 MDT - Msg ID: 24953)

CoBra(too)

I wish to echo Leigh's sentiments. I sincerely hope your absence doesn't extend very long. Live long, prosper and return soon. Regards RPowell

BTD

(02/10/2000; 21:12:38 MDT - Msg ID: 24954)

Homestake Mining to begin hedging

This is an excerpt from Bill Murphy's editorial at Le Metropole Cafe tonight:

"A banner day. Almost. For some inexplicable reason Homestake Mining CEO, Jack Thompson, took this moment to announce that Homestake, which is mostly unhedged, "would engage in hedging." What could he be thinking of? The gold market is responding very positively to all these reductions of hedging announcements and he goes the other way at exactly the wrong time. Homestake is known for staying away from hedging and is popular because of that. Didn't Jack Thompson learn anything from Randall Oliphant, Barrick CEO, whose Monday mamby pamby press release did not go far enough for the market about its future hedge plans and sent the gold price plunging? Barrick had to back peddle and put out another more positive press release on Tuesday.

Bummer, Jack. Get with the program. 100 years of practically no hedging and just when the anti-hedging tide is on a roll, your company is going to roll over. Not good, not good at all."

Canuck

(02/10/2000; 21:21:38 MDT - Msg ID: 24955)

@ Quicksilver; @ All

Quicksilver,

Interesting message(s); scary in fact. Momentum and confidence are shifting (or at least poised to shift).
I am little shrimp, played the 100 share daytrader too,
and am thoroughly convinced of the play at hand.

All,

I have been at this forum since Nov. '98. What brought me here was fate; an intuition of the final outcome of gold.
Be it whatever the outcome, but gold will prevail. I cannot describe the feeling, nor can I possibly convince anyone in technical, political, or economic terms that gold will claw its way out of near 20 year lows, but it will.

To this end I will accumulate gold from this day forward because it is real, has true worth and its final liability will be mine, for better or for worse ... amen.

nickel62

(02/10/2000; 21:22:58 MDT - Msg ID: 24956)

Okay who is it with the blood pressure medicine?

Farfel I think I need a shot. The melodrama is starting to get to me.

Solomon Weaver

(02/10/2000; 21:25:27 MDT - Msg ID: 24957)

(No Subject)

BTD

There is a legitimate use of hedging....let's say that Homestake has a need to capitalize a mine equipment expansion which would cost 1/4 of a years total corporate equity ounce production to finace at today's gold prices. By agreeing to "repay" today's borrowing in gold ounces, rather than in dollars, they eliminate both upside and downside dollar effects, simplifying their budgeting. This is the real purpose of hedging, farmers use it to help get enough money to but seed and fuel to plant.

I do agree that in the current environment, this will sound very bearish...is there any way to call them and get to the bottom of their reasons????

Or perhaps they are being blackmailed about their credit rating.

Poor old Solomon

nickel62

(02/10/2000; 21:38:02 MDT - Msg ID: 24958)

New piece from Reg Howe

February 10, 2000. Who Sold Barrick the Calls?

[Note: This commentary, originally posted February 8, is in process of substantial extension, revision and rewriting. Another important feature of
Barrick's new purchased calls is that reportedly they are cash settlement only, meaning that they do not even net physical against its written calls.
Anyway, the revised version will focus on more than just Barrick, and the working title is The New Dimension: Running for Cover.]

Yesterday Barrick made its much anticipated announcement on hedging. As of the end of third quarter, as reported at its website, Barrick had 14
million ounces of gold sold forward and had written long-term call options on another 4 million ounces. According to yesterday's release, it has:
(1) reduced its exposure on call options written to 2.7 million ounces; (2) stretched out the delivery schedule on its its spot-deferred contracts,
which now cover a total of 13.6 million ounces; and (3) engaged in "an important new dimension" by purchasing call options on 6.8 million
ounces. It adds that the new purchased call options "cover 100% of production from March 1, 2000 through 2001," at strike prices of $319/oz.
in 2000 and $335/oz. in 2001. Thus Barrick's hedging program, according to the release, "has been reduced from 18.8 million ounces at the end
of the third quarter to a net 9.8 million ounces at year-end 1999."

While the numbers do not fully jibe with the prior quarter, the net reduction in its hedge book of some 9 million ounces consists of 400,000
ounces delivered under forward contracts, a reduction of 1.3 million ounces in written calls, and the purchase of new calls for 6.8 million ounces.
Yet here is how this announcement was interpreted by one gold analyst:

[T]he fact that Barrick was able to close nearly half of its huge hedged position in the fourth quarter of 1999 (a total of 280 tonnes
of gold were closed out by Barrick in less than two months) without pushing the gold price up by even a penny must have come as
a shock to a substantial portion of current gold long-side speculators, many of whom assumed that Barrick was "trapped" because
it couldn't possibly lift its hedges (so this argument went) without causing a sharp spike in the gold price.

If Barrick had closed out its forward contracts by the amount of its new purchased calls (6.8 million ounces or 212 tonnes), it most certainly
would have caused a spike in gold because Barrick would have had to buy physical gold. That is not what it did. It bought paper gold -- virtual
gold -- from someone who is either crazy or possessed of deep pockets and a strong desire to cap gold. Frankly, under current circumstances in
the gold market, it is difficult to imagine anyone but the ESF willing to backstop call options on over 200 tonnes at strike prices from $319 to
$335. What a day the sellers of those calls must have had last Friday! As for investing in Barrick, my advice would be to identify the
counterparties to those calls first. For every $100 over the strike price, they are looking at a $680 million loss.

In this connection, it has been reported that the astute John Hathaway asked Barrick, in the course of yesterday's conference call, who the seller
of the call options was, and that Barrick claimed the information was confidential but that it was one or more bullion banks. No self-respecting
bullion bank is going to sell naked call options, particularly in these amounts and given the current excess of gold demand over new production.
There has to be a backstop, very rich or with a lot of gold or both.

THX-1138

(02/10/2000; 21:38:22 MDT - Msg ID: 24959)

I need a bit of advice

I have the opportunity to help a start up penny stock gold company raise $10,000 cash and pay for the paperwork and filing of a bank bond to get a loan and start mining.

I would be able to purchase 100,000 shares for about $700.

Only problem is I spent most of my paycheck last week buying some gold coins.

I can just about scrap together $550.

I have some gold coins and silver coins and bars.

I need about another $100 or so and the money needs to be mailed to the company by Monday.

Should I sell a gold coin and hope to be able to repurchase it next Friday on payday at lower price or sell some silver?

Solomon Weaver

(02/10/2000; 21:45:54 MDT - Msg ID: 24960)

time for a mini gold loan

THX-1138

You should give the "company" a one ounce gold coin, tell them that it is worth $300 and that they can hold it as collateral until you get back with the $150 you owe them to reclaim it.

On one hand, you avoid transaction costs. On the other hand you can test the companies willingness to accept real money in lieu of paper...I mean they do hope to get rich by pulling the silly stuff out of the ground...

Poor old Solomon

Solomon Weaver

(02/10/2000; 21:50:39 MDT - Msg ID: 24961)

or else you could...

If that strategy doesn't apply logistically, try to get a friend to loan you $150 and let them hold a $300 gold coin as collateral...afterall what is the world coming to if a gold bug can't pull off a simple little deal like that with a trusted friend.

Perhaps so doing, will you create a new gold bug to swap news with.

Poor old Solomon

Chris Powell

(02/10/2000; 22:08:00 MDT - Msg ID: 24962)

Bill Murphy's "Midas" commentary for Thursday

http://www.egroups.com/group/gata/374.html?The news is still strong for gold.

Chris Powell

(02/10/2000; 22:11:02 MDT - Msg ID: 24963)

"Midas" commentary for Thursday

http://www.egroups.com/group/gata/374.html?News is still strong for gold, GATA's Bill Murphy says.

THX-1138

(02/10/2000; 22:13:20 MDT - Msg ID: 24964)

RE: solomon

I am pooling my money together with a bunch of my engineering friends at my Air Force base.

The guy who is organizing getting the money together needs a cashiers check by Monday.

Anyway, the company needs the money to fly the bank person out to Nevada to sign all the paperwork, and also pay for the bond.

My problem is in deciding on which to sell...gold coin or some silver to make up the difference in what I am not able to scrap together.

Which would you sell to get some quick cash together?
Given the way the markets are behaving, which metal has the best chance of falling (manipulated) in price by Friday so I can get it back at a reasonable price to what I will have to sell at?

Gandalf the White

(02/10/2000; 22:17:05 MDT - Msg ID: 24965)

TXH-1138

Advice:
CAUTION !!!!!
Bad vibes.
<;-)>>

Goldy Locks Guy

(02/10/2000; 22:34:09 MDT - Msg ID: 24966)

kaplans website???

Someone mentioned that Kaplan had a website...can someone give me a link???

Thanks...goldilocks guy

Elwood

(02/10/2000; 22:48:34 MDT - Msg ID: 24967)

Homestake Hedging

If Jack Thompson is hedging I'd think there's a good reason for it. He's not the type to take a flyer and damage the future of his company and the industry.

Elwood

(02/10/2000; 22:55:38 MDT - Msg ID: 24968)

Barrick's Call Options

Does it "strike" anyone (besides me) as odd that Barrick would choose the unusual strike price of $319 for their call options? hmmm

Quicksilver

(02/10/2000; 23:07:00 MDT - Msg ID: 24969)

Of Speeches Read from Index Cards

http://www.LeMetropoleCafe.comSo I see a few goldfans are a little down and out thinking our wonderful little spike up is so short-lived. Oh contrar my friend. Shall we dare examine the fundamentals. They have included social services in the figure for GNP whereas GNP is actually the things you produce tangible or intangible that you can trade to foreignors to redeam your notes. Selling bonds reduces big float and a bond is a futures contract on so many dollars to be delivered it a future date plus interest. So redeaming bonds will add to big float. Subtract social services from GNP and you are left with Manufacturing's portion of GNP. Manufacturing can be software as long as you can sell it. Manufacturing is being jettisoned away in favor of deluxe social services, computer craze. So every one gets "connected" their won't be many foundational industries left who can use it. Why? Because consumer debt burden leaves consumers with zero discretionary income. Banks are going nuts trying to find the last not-maxed-out credit card holder who just needs one more card. You're going to have an internet economy with everyone surfing and scanning but no one buying because they're what I call functionally broke. Leveraged out and paying last months bill with the next card. So to back track to the point, they altered the quantities to measure to produce the cute numbers they need. Consumer spending they call growth. Because consumer spending represents 2/3rds of the economy at this point. Pure BS. Manufacturing is productivity and profits are growth. A nation of nail care parlors and pizza shops and auto parts stores and government jobs is not manufacturing. No retail shop represents manufacturing, it's a point of sale location. There's no one in the back hammering out fenders. All internet sales companies do not add 5 cents to GNP they are point of sale locations. The malls do not add to GNP. Why do we need GNP? To trade in barter for all the currency we hold. We can sing all is well with my soul in America as long as the dikes hold and big float doesn't wash back in and flood us out. $33,000 per ounce gold is no biggie, that is also a weeks wages for a skilled worker going way back (an ounce of gold pegged at a $20 double eagle). You can back domestic float with services which they do a sly job of but you can't soak up big (foreign)) float with domestic services. Paranoid rich people with today's rabid legal climate are not going to set up manufacturing industries within our borders except in old world honesty microcosims where judges are judges. This is really sad and nothing to gloat over. Japan and Germany only want our resources, not things we make unless its of a higher quality than what they can make themselves. Trim the concept down to a personal level, Yearly Personal Product. Some other time huh. Big float is suspended in the casino of derivatives markets and as each country sees us and wants to follow along like spineless lemmings to the piper's tune of Keynesian Economic Theory. They're going to want their own stock exchanges. More casinos for float. Computer services sold overseas do add to GNP. And for them to all get "so connected" they will be trading back to us some of the big float you worry about. But the non-educated people our schools turn out (everyone gets a c- but too many F's could damage the psyche). Tech Zone can't hire illiterates so we pull a brain drain on the rest of the world. Pulling top notch students from foreign countries does skew the curve in our favor by a longshot. But then not many foreignors really want to stay here if they can live like kings in their homeland. Anyway, GNP growth can equal monetary growth with zero inflation. But under Reagan and Bush they soaked up big float with bonds to give away money to the masses in America. Carter didn't borrow so much he had it printed. Your gold went up then you got laid off and went fishing. So keeping the dikes well sand bagged is why we need Mr. Greenspan. Redeaming bonds shows good will toward holders of bonds but it's another angle of the mirror. Sending out dollars for bonds increases big float on a nasty scale. So they issue more ten year's. If I can divide that's three ten year bonds for every thirty. Simple enough except for one problem. Trade deficit due to dysfunctional GNP (we don't make stuff they want)increases big float and redeaming bonds is not soaking up any float. As foreignors redeam portions of big float it's inflationary because too much paper chasing too little pizza and nail care. I guess we are going to export cd roms to stupify their youth. The average spoiled brat American consumer is not going to cut back until you stop sending him checks for $10,000 to consolidate. Consolidate is another word for releverage. Spending is not growth. So it's a house of cards that's a real job to protect. Bread and a circus that's want Emperor has got to give. Who is worse the preacher who teaches smooth lies for doctrine or the congregation that only wants smooth lies? Americans don't want a real economy they want to scratch each other's backs and exchange funny money to go home and say they "worked". What goes around comes around. So don't worry about Barrick and the biggie big big investment barons because their whole life is money and when the music stops their won't be enough chairs. They'll meet their maker dying in their sins after they hit the pavement. The rest of us will meet at shantytowne and rig some tackle to catch dinner. Do you really think Placer and Barrick will cover. They will become lax about it if gold weakens and go crazy if gold spikes up 50 and stays up. Everyone wants to cover in their own sweet time that's their motto I get mine as you get yours in turn nobody butting. But king the other castles have holes in their walls too and we hear there could be a shortage of rocks. Well we'll have to make friends with them untill we can rebuild. DO THEY WANT TO BE FRIENDS WITH YOU!!! Anglo and Goldfields plus all the minor scrappies. Every bidder waves his own number in a free market. Are ya skeered? Big money will gravitate to help bail out a mining corp. that is already mostly covered. They have equity. You're big and bad but are you covered? Attitudes will change at different price points and durations of time the price stays above or below them. As I see it everytime gold dips low some one will run in and buy. So how is it going to crash and stay down? Every "investor" will soon enough feel the bite of the exodus of money into bonds. And they don't want bonds they like stocks. Hence we have a new listing for the nifty gold fifteen. Well this small index represents the more focused core of the XAU.
Talking about the XAU do we have a pan and am I waiting on a handle? Soon we'll be cooking with gas. They will try to heavily short the stocks if they fail to cap the price with shorting. But when the metal soars to 100 under platinum (so-so)then John Q. Public going to point click and buy like 10,000 fire ants that all attack at the same time.

THX-1138

(02/10/2000; 23:08:16 MDT - Msg ID: 24970)

Re: Gandalf

I know it's a risk, and is one I am willing to take.
One of my engineering friends visited the mine site in Nevada and reported the company as legit.

Half the engineers in the office own over a million shares together. Total public shares of the company are only 25 million. If it was a con, the company would be releasing news articles to boost the stock for a quick pump and dump. They haven't. My friends are some of the original investors in the company.

Lafisrap

(02/10/2000; 23:26:17 MDT - Msg ID: 24971)

Ashanti article from Panafrican News Agency

http://www.africanews.org/west/ghana/stories/20000210/20000210_feat2.html
[first two paragraphs]

Ghana
Ashanti Goldfields Said To Be In Deep Financial Crisis

Panafrican News Agency
February 10, 2000

Accra, Ghana (PANA) - An Accra High Court has ordered Ashanti Goldfields Company, Ghana's multi-national gold mining firm, to convene an extra-ordinary general meeting within 21 days to remove and replace the existing board of
directors.

Presided over by Justice Richard Apaloo, the court also restrained the directors or any officers of the company from contracting any loan on its behalf before the convening of the meeting.

Lafisrap

(02/10/2000; 23:36:36 MDT - Msg ID: 24972)

POG getting nearer to $319

From Reuters:

Bid 0314.50, Ask 316.00, 6:28 GMT / 11 FEB 2000

Zenidea

(02/10/2000; 23:41:17 MDT - Msg ID: 24973)

Hi Lafiscrap

I dont suppose you have reuters addy please :)

Black Blade

(02/11/2000; 00:04:47 MDT - Msg ID: 24974)

Just a little early reading - Au slightly lower, Taipei increases Au imports.

http://www.crbindex.com/news/story2203.htmlAsia Precious Metals Review: Australian producers' selling caps gold
Tokyo--Feb 11--Spot gold edged lower Friday in Asia on some selling from Australia amid the absence of buyers after prices were capped at US $320 per ounce overnight, dealers said. Platinum and palladium stayed in a narrow range as the Tokyo market was closed for a national holiday, they said. (Story .2200)

S Africa's W Areas closes out forward sales for next 2 years Johannesburg--Feb 10--South African gold mining company Western Areas said Thursday it has closed out its forward sales of gold for the next 2 years at a cost of 19 million rand. The company said in a statement that forward sales for the remaining 8 years of the company's hedge book total 654,000 ounces, representing 18% of attributable production over the same period and 2% of attributable reserves. (Story .12954)

Ashanti Goldfields seeks clarification from courts
New York--Feb 10--Ashanti Goldfields Co. said it currently is holding discussions with a number of its stakeholders and financiers to seek clarification from the Courts on a number of issues. The company will make another announcement early next week. --Priscilla Fusco, Bridge News (Story .22107)

.................................................................
OF INTEREST:

Taiwan Jan gold imports 8.989 tonnes vs 5.308 tonnes in Jan '99 Taipei--Feb 11--Taiwan's gold imports totaled 8.989 tonnes in January, compared with 5.308 tonnes in January 1999, a statement released by the Ministry of Finance Friday indicated. (Story .6016)

BTD

(02/11/2000; 00:13:58 MDT - Msg ID: 24975)

Goldy Locks Guy - Steven Kaplan's website

http://www.goldminingoutlook.com/You asked for Steven Kaplan's website, here's the link.

Farfel

(02/11/2000; 01:18:08 MDT - Msg ID: 24976)

ABOUT GATA: A Clarification...

Recently, during a tirade I posted aimed at Barrick, I happened to throw a dart at GATA.

A poster by the name of ELEVATOR GUY chose to divert everybody's attention from my attack against Barrick to my one sentence dart tossed at GATA.

So I am writing this post as a clarification about my feelings for GATA PLUS I am writing the post to underscore that I will NOT allow anybody to sow dissension amongst goldbugs. NOT Elevator Guy, NOT Netpi-cutiepi, nobody!

That particular day, I was enraged by Barrick's puny two paragraph attempt to extract itself from the hot water of its severely OVER-hedged situation. Since Bill Murphy had provided some positive, conciliatory remarks in Barrick's direction, I threw a dart his way.

HOWEVER....it was a single dart and an exception to the mostly warm feelings I feel toward this organization.

I want to underscore that I believe GATA has been doing an OUTSTANDING, thankless job in changing the status quo in the gold market, from a condition of pathetic cowering nervous goldbugs who are raped and screwed daily by indulgent, self-serving gold producer managements and their bullion bank Lords and Masters...to confident, strong investors who believe in their convictions and take daily actions to repel and conquer the anti-gold shorts and the Wall Street bubblemeisters who so often masquerade as "one of us."

Murphy, Powell, Howe, Veneroso, etc. take their valuable time to educate gold investors who so often have been left sinking in a swamp of disinformation and absurd propaganda by those financial powerhouses that desire to see gold (as a contrarian investment) completely destroyed.

GATA started out as a tiny pimple on an elephant's ass and, over time, it has grown into a powerful information machine and hurricane force to be reckoned with. GATA is true proof that potent original ideas can carry far more punch than the fattest bank account owned by somebody who has no conception of how to use it.

Although I am not directly involved in the GATA organization, I certainly respect it and have done what I can via personal contacts in the political arena to help out.

Ironically, those people who regularly disparage GATA appear to be mostly precious metals TRADERS. These people look at a market solely as a medium to make profit. They do not like an investment to have ideological overtones, they do not wish to consider the politics or the global ramifications of any investment decision.

Most of these traders are technical theorists and, as far as they are concerned, trading gold is essemtially no different than trading platinum or copper or oil or pork bellies or
orange juice or guns or any other physical good that stands to make them money. Moreover, they do not give a damn whether they buy a commodity or short it. It's all about money.

GATA is certainly about profit too...but it is also about JUSTICE. It is the latter pursuit that seems to be the primary motivator today for that organization. When you read a column by Murphy, you can feel the fiery passion behind each and every sentence, you just know that this man jumps out of bed every morning with an intense drive that aims to bring back justice to the American marketplace.

Of course, the cynics will ridicule this post and I can already hear the sarcastic comments pouring forth from the KITCO website.

However, those cynics no longer anger me. I simply feel sorry for them because I know who they are. They are uni-dimensional people, lost in some fantasy that money and money alone will take care of everything and make them feel good about themselves and life in general.

Fellas, it's got to be about more than money, and GATA is leading the way.

Thanks

F*

Zenidea

(02/11/2000; 02:22:28 MDT - Msg ID: 24977)

Silly question time ,my masterful mathematician friends.

If I had an ounce of gold (troy). and wanted to turn it into Au leaf 7cm by 7cm according to traditionally guaged microns ? how many sheets could I make ?.

ORO

(02/11/2000; 03:31:47 MDT - Msg ID: 24978)

Quicksilver - look at the numbers

Your post put things very well, though you seem to throw some baby with the bathwater. Fortunately, unlike our current administration, you do not consider the bathwater to be Chateau Lafite.

Cavan Man asked of the numbers so here are a few:

Industrial production ex computers, semiconductors and telecom equipment is stuck at 0 growth for nearly three years. See Bureau of Labor Statistics and Federal reserve for data, or look it up on www.economagic.com.
The only growth period for this figure is from 1993 to 1996. During this period there was a growth of 11%. Since then, Nada. Figures have started trending down again - probably due to the strong dollar.

My GDP equivalent calculation for the economy ex technology shows that real growth stalled in the 3rd quarter of 1997 and has not been up significantly since then.
The figures are very harsh because the actual drop in per unit prices of PCs and other Tech products is not included in the calculation. The actual data showing the reflation in appropriate terms would be substantially better. An approximation I calculated shows growth to have been accelarating into Q1 1999 where it peaked at a Y/Y value of 6% and started falling to what is 2%.
Under these terms, the growth since 1991 is 18% or just under 2% per year. The 2% per year are the result of the Chen/Woods distortion of the economy through import's bogus contributions to GDP.

A realy wierd side effect is that the big growth surge in the non-tech economy has been happenning in the 1st quarter of every year since 1992. The growth of the dimensions of this surge seems to come from the stock market, where tax and tax year effects are very strong and where both bonuses and ESOP payoffs happen.

It is interesting that once the statistical inflation of the government figures are taken out, price inflation rates grow to a current figure of 6.3% in the last 2 quarters, and the recalculated inflation index (GDP deflator) shows that only the period Q1 1998 through Q1 99 were deflationary. The recalculated values correspond very well to what we have seen in the commodities.

Productivity values fall accordingly to near nothing. Bringing into question the value of computer technology and communications in lowering the costs of services and products. It has been a long standing observation of mine, that the bulk of tech related productivity growth ocurred in the late 80s and early 90s and that it has crawled at near 0 since 1993. This is when management structures were flattened and white collar people were thrown out en-masse. Most of the applications of computer tech and comm since then have focused on increasing flexibility and decreasing response time, customizing products, and reducing inventories.

The internet has yet to have the bulk of its deflationary effect in the real economy. I would bet that most of it will have ocurred by the time we reach the point where we notice it in our work. The main effect would be in lowering the value of low end sales people and raising the value of relationship managers.

Another stock market issue is the odd correspondence of the advance decline line to the broad fall off in real economic growth in the non-tech non-import-distribution economy since Q2 1997, and that it has turned to the worse. Soon the numbers of clients of tech companies who will reduce expenditures will grow to the point of lower end users and clients in the SOHO sector not being able to pick up the slack.

SteveH

(02/11/2000; 04:48:31 MDT - Msg ID: 24979)

A comment, a link, a repost in that order...

www,kitco.comComment: oil wants gold, gold is danger of non-delivery, oil rises, dollar screams, gold rises.

Date: Fri Feb 11 2000 06:31
rhody (@Nick, your 4:31, Yes, I agree with your observations/conclusions.) ID#410367:
Copyright � 1999 rhody/Kitco Inc. All rights reserved
This whole gold market manipulation is all about the USD.
The only way a nation that has the responsibility of managing
the world reserve currency, but prints that currency with
no discrimination to buy its way in the world, can continue to
operate this paper scam is to sell down physical assets.
That is what the gold carry is all about. Borrow gold and
convert it to cash for paper investments. The constant selling
sells down the real money and raises confidance ( prices ) in
the paper. This is the real game, and it goes on in all the
metals, lumber, food, and oil. Prices in USDs for real goods
must be kept down lest people perceive that the paper assets
are declining, and rush to convert. This has created untold
misery in the world where people attempt to operate real economies
that produce real goods, but are forced to sell them for
worthless pieces of green paper, that are then used to pay
interest on debt denominated in the green paper that they were
encouraged to borrow from the printers of that green paper.
Madness! It looks to me that the only way out is to inflate
away the debt, and that means the USD must fall.
Congratulations on an excellent, sensitive post.

April gold now over $320 at $320.40.

ORO

(02/11/2000; 04:58:34 MDT - Msg ID: 24980)

Aristotle - Monetary structures

Aristotle, your efforts of late are well noted and appreciated, however, you are mixing some apples and oranges and falling into many "western" conceptual traps and some of the social-democrat neo-fabian thinking.

A few comments should be put up here.

The myth of gold being deflationary

Gold standards are not deflationary. Gold is a cash money and can not cause deflation. I have detailed long ago how closely the improvements in gold mining/extraction/refining technology has allways been to the technology improvements in the economy. When economic producctivity increases in the broad economy, it increases in the gold mining arena in lock-step. Therefore, price stability, is the characteristic of a gold standard - banks and convertible 100% backed currency included.

What is inherently deflationary AND inflationary is a certain type of bank system characterized by the participation of government in either bank regulation or in issuing currency.

Gold banking in a free banking environment is by far more stable than any alternative ever attempted. As your own readings of the Dutch banking history indicate, it is not banking itself that is the problem, but the cartel imposed by government.

Under a monetary regime of free gold banking there are a few rules:
1. The bank that goes on a limb by expanding credit at a higher rate than its competitors without garnering a higher rate of return on its lending gets clipped. Bankers know it. This still happens today, but the failed banks get bailed out at the expense of everybody else.
2. During economic crisis no more than 4-5% of banks go under.
3. The free banking system does what banks are supposed to do - aggregate capital and lend it.
4. What they can't do is issue excessive ammounts of credit to the point of causing inflation - and therefore can't form deflation either.

Where inflation and deflation come from:
They come from bank cartels. Cartels in services are only possible through government regulation. Two sets of purposes meet in the formation of a cartel: Government - the purpose of the system is to allow government unlimited borrowing for purposes that the public DOES NOT SUPPORT. Banking - the purpose of the system is to eliminate competition among banks and thus lift the natural limits on credit creation that the competition causes. The banker's goal is multifold (a) lower reserves to increase profits - from 40-60% without a cartel to less than 3% with a cartel and with gold or less than 1% without gold. (b) Fleece depositors by transfering their gold into the bank's owner's pocket. (c) Capture goods with no cost by collecting interest on non-money. (d) Transfer the cost of fiduciary responsibility to the public. (e) Force people to deposit money with the bank - because the inflation causes the cash holder to lose purchasing power if he does not collect interest. (f) Force people to borrow - inflation puts housing and investment outside people's reach without borrowing. (g) The one-time profit from deflation is an uncommon opportunity, but when it is too big an opportunity, the banker will pull the rug. It will then bag the security people and businesses put up for the loans.

Neither inflation nor deflation are the result of banking itself. They are results of government participating in the banking cartel - without government rule making, the banks simply can not inflate significantly. Because that is the case, the banks can't deflate either.

Popular preference:

People do not like loose money, neither does business. They like hard money for their own holdings. They like soft money for their obligations. Without the inflation of the government sponsored bank cartels there is no lending in soft money, and there is only the preference for hard money on the part of cash savers and lenders.

In an inflationary system, the "real" interest rates are much higher than they are in a free gold banking system. This is because banks and people holding deposits want to retain purchasing power, and the only way to do that is to over-compensate for inflation. In reality, the yoke of credit costs is higher under inflation than in free gold banking.

People are aware of this. What people have a problem with is that their current obligations were taken under the inflationary system. Therefore, any stabilization in the value of money would make it more difficult for them to repay their contracts.

I suggest that you rethink the structures with this in mind:

The perfect monetary system is that in which there is no central planning and in which government plays no role.

1. No central bank
2. No national currency at all
3. No government guarantees
4. No government insurance
5. No regulatory bodies over banking
6. Tight laws on fiduciary responsibilities
7. Tight laws on truth in lending
8. No licensing requirements or regulation
9. No capital control laws
10. Government does not define money. Whatever is used as money it must accept in payment and must provide in its own disbursements.

This would lower costs of doing business by 15% and allow the natural interest rates to prevail - 1% shor term, 2% intermediate term - 3% long term. This would lower costs further - perhaps by another 10%.

When analyzing historical precedents you will see clearly that all banking disasters are a direct consequence of government obstruction and elephantine intervention of the markets.

The gist of Gresham's law is not that bad money drives out the good - but that good money drives out the bad. The common error is that the special case of parity is the one all remember.

Only when a legally enforced parity is imposed on markets between the near worthless and the precious, that your interpretation is appropriate. The source of the trouble is the imposition of an unjustified parity. Only then are people prevented from excercizing their judegement to distinguish between the trash and the treasure.

SteveH

(02/11/2000; 05:58:21 MDT - Msg ID: 24981)

a comment, a link, a repost in that order... (redone)

a Comment: oil wants gold, gold is danger of non-delivery, oil rises, dollar yells, gold rises, oil is in danger of non-delivery, Euro with gold-backing starts looking better than dollar, Euro long term bonds look better than US long-term bonds, US bond market looks bad, dollar looks bad, then what...?

a link:

http://dailynews.yahoo.com/h/nm/20000210/bs/energy_oil_1.html

a repost:

Date: Fri Feb 11 2000 06:31
rhody (@Nick, your 4:31, Yes, I agree with your observations/conclusions.) ID#410367:
Copyright � 1999 rhody/Kitco Inc. All rights reserved
This whole gold market manipulation is all about the USD.
The only way a nation that has the responsibility of managing
the world reserve currency, but prints that currency with
no discrimination to buy its way in the world, can continue to
operate this paper scam is to sell down physical assets.
That is what the gold carry is all about. Borrow gold and
convert it to cash for paper investments. The constant selling
sells down the real money and raises confidance ( prices ) in
the paper. This is the real game, and it goes on in all the
metals, lumber, food, and oil. Prices in USDs for real goods
must be kept down lest people perceive that the paper assets
are declining, and rush to convert. This has created untold
misery in the world where people attempt to operate real economies
that produce real goods, but are forced to sell them for
worthless pieces of green paper, that are then used to pay
interest on debt denominated in the green paper that they were
encouraged to borrow from the printers of that green paper.
Madness! It looks to me that the only way out is to inflate
away the debt, and that means the USD must fall.
Congratulations on an excellent, sensitive post.

SteveH

(02/11/2000; 06:04:16 MDT - Msg ID: 24982)

Euro

www.stratfor.comSTRATFOR.COM
Global Intelligence Update
11 February 2000

Diplomatic Blitzkrieg: The West Responds to Russia's Assertiveness

Summary

European Commission President Romano Prodi said Feb. 10 that the
European Union (EU) would extend absolute security guarantees to
all of its members. This statement in a single stroke redefines
Russia and the West's struggle for the countries of Central Europe.
No longer will Russia have the luxury of viewing EU expansion as a
harmless process. Prodi essentially announced de facto NATO
expansion under the guise of EU security guarantees.

Analysis

European Commission President Romano Prodi surprised his Latvian
audience Feb. 10 by declaring that "any attack or aggression
against an EU [European Union] member nation would be an attack or
aggression against the whole EU, this is the highest guarantee." If
implemented as stated, this marks a quantum shift in EU policies
from the purely economic into the security realm - a change that
Russia cannot afford to ignore. Now Russia will feel just as
threatened by EU expansion as it has by NATO expansion. Prodi's
announcement intensified the ever-escalating race to establish a
new frontier between Russia and the West.

At the Jan. 24-25 Commonwealth of Independent States (CIS) Summit,
[http://www.stratfor.com/SERVICES/giu2000/012100.ASP] Russia
compelled its fellow CIS members to participate in tighter security
measures [http://www.stratfor.com/CIS/commentary/c0001260125.htm]
to combat terrorism and Islamic fundamentalism - Moscow's code
names for Chechen militants.

Until now, the West has responded to Russia's new assertiveness
with piecemeal measures. First, there was a tug-of-war for
Georgia's loyalties [http://www.stratfor.com/CIS/commentary/c0002030025.htm] over joint
Russian-Georgian border patrols. Then, the United States directly
challenged Russian interests in the Persian Gulf
[http://www.stratfor.com/MEAF/commentary/m0002040010.htm] by
boarding a Russian tanker that was evading U.N. sanctions. Russia
responded to these challenges by strengthening its ties with old
Soviet client states [http://www.stratfor.com/SERVICES/giu2000/020800.ASP]
such as Iraq, North Korea and Vietnam. Now, the West has seized the
Russian gauntlet. High-level delegations are taking off to entice much of
Central Europe to fully join the Western fold.

Russia cannot help but take this diplomatic blitz seriously. Among
the delegations are the European Commission president, NATO's
secretary-general and NATO's supreme commander. Their target
audiences include an array of states traditionally within the
Russian sphere of influence: Estonia, Latvia and Lithuania border
Russia; and Christian Orthodox Romania and Moldova share religious
ties. To underscore the completeness of the Western response, NATO
even dispatched a delegation Feb. 9 to Russia's Caucasus neighbor,
Georgia.

But it is Prodi's statement that will truly shock Russia. The fact
that the proclamation came from the European Commission's president
- the highest non-rotating position within the EU superstructure -
indicates that the intent to implement security guarantees is no
mere trial balloon, but new EU policy.

However, Prodi's promise of an explicit security guarantee cannot
be supported by current EU capabilities. Even if the Eurocorps
functions as Prodi envisions, it will have a scant 60,000 troops at
its command. This is just barely enough to handle a Kosovo-style
operation; it would do little to deter a large-scale attack from a
hostile power. Even the defense establishments of Europe's larger
countries would be hard-pressed to project sufficient power to
Europe's eastern fringes in times of crisis.

Only the United States could possibly provide the level of force
that Prodi envisions. Prodi's wording itself sounds remarkably
similar to NATO's Article V security guarantee: "that an armed
attack against one or more of them shall be considered an attack
against them all." This indicates that Prodi - the steamroller of
EU reform [http://www.stratfor.com/services/giu2000/012800.asp] -
is either bluffing his way through Central Europe or has plans to
integrate NATO into the EU in order to produce a militarily
credible Europe. Prodi's assurance of security to all EU members
extends NATO guarantees to the countries that will be on the EU's
new eastern border. Suddenly, Russia's perception of the EU becomes
much less benign.

What makes the announcement more dramatic is Prodi's choice of
audiences - Latvia. Of all the former communist states, this small
Baltic country has had the most venomous relations with its former
master. Prodi's statement and the locale in which he made it
indicate Prodi's willingness - even enthusiasm - to stare down
Russia over issues of importance to Europe.

Russia may have the advantage in the race for Caspian oil routes [
http://www.stratfor.com/CIS/specialreports/special20.htm] and in
the contest for Central Asia
[http://www.stratfor.com/CIS/specialreports/special13.htm], but
Prodi has firmly set his mind on the EU fully absorbing all of
Eastern Europe - Baltics included. Now he has shown a unique
willingness to use NATO to achieve that goal. It remains to be seen
how the rest of the Union will respond to this sudden policy shift.
Prodi will have his plate full convincing the EU's four neutral
states to militarize under any common banner. Persuading France to
allow the United States an even more prominent position in Europe
will prove thorny as well.

If the EU fully adopts Prodi's plans, it would conjure a nightmare
scenario for Russia. A soft-power EU and hard-power NATO would
become formal partners in Western expansion. Traditionally neutral
countries such as Austria, Finland, Ireland and Sweden would be co-
opted into a NATO-EU military structure. An economically powerful
EU, backed by a militarily powerful NATO, would dig in along vast
lengths of Russia's eastern border. Russia's acquiescence to EU
expansion will rapidly come to an end, and what little is left of
the Russia-West "friendship" may be completely gone.

(c) 2000, WNI, Inc.

__________________________________________________

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SteveH

(02/11/2000; 06:10:24 MDT - Msg ID: 24983)

Protecting gold

http://www.saf.org/EmersonAll.htmlAll,

The above site lists many if not all the amicus curea (written by interested parties and accepted by the court) briefs submitted in the current US v Emerson case that stands to reaffirm the Second Amendment as an individual right (although I always thought it was). Of special note is the newly re-written US brief that was originally too long. It seems the government totally rewrote it to counter all the other briefs that were turned in after the first but before the last.

PRO-GUN OWNERSHIP BRIEFS

THESE GROUPS SUPPORT THE
SECOND AMENDMENT AS THE
FOUNDING FATHERS DRAFTED IT

A. Emerson's Defense Brief.

B.1. SAF's Brief. B.2. Author David Young's letter to SAF on Emerson

C. Citizens Committee for the Right to Keep and Bear Arms Brief (html version).

(PDF format) Download free Acrobat Reader Now!

D. Independence Institute's Brief.

E. Doctors for Responsible Gun Ownership and Independent Women's Forum Brief.

F. Gun Owner Foundation's Brief.

G. Congress of Racial Equality's Brief.

H. Ethan Allen Institute and Heartland Institute's Brief.

I. Law Enforcement Alliance of America's Brief.

J. Texas Justice Foundation's Brief.

K. Texas State Rifle Association's Brief.

L. Academics for the Second Amendment's Brief.

ANTI-GUN OWNERSHIP BRIEFS

THE FEDERAL GOVERNMENT AND THESE
ANTI-GUN ORGANIZATIONS CLAIM THAT THE
SECOND AMENDMENT NO LONGER EXISTS

A. NEW! Government's Reply Brief 1/27/2000.

B. Government's First Brief!

C. Center to Prevent Handgun Violence/Handgun Control's Brief.

D. Potomac Institute's Brief and Related Materials on Emerson.

E. David Yassky's Brief.

F. Domestic Violence Network Brief.

G. Ralph Brock's Brief.

H. Education Fund to End Handgun Violence Brief in PDF format.

SteveH

(02/11/2000; 06:12:36 MDT - Msg ID: 24984)

repost

www.kitco.comrepost:

Date: Fri Feb 11 2000 06:06
John Disney (hedge trimming ..) ID#24148:
Copyright � 1999 John Disney/Kitco Inc. All rights reserved
You may recall a shrill voice crying " SA is leaking gold like a
sieve " .. then it said the rand is weakening to nothing ..
well a guy here in Bidness day explains it all on page 11 ..
as you would expect .. the truth is the opposite of what Tzadeak
says .. SA is ABSORBING gold like a sponge .. they are unwinding
hedges .. and purchasing gold .. When a souf afwikan hedges .. he
sells gold in dollar .. then buys rand .. puts in on short term ..
.. when he unwinds .. he SELLS rand .. buys dollars ( rand goes down ) ..
.. buys back gold .. reduces gold debt ..
.. anglos results are in and nothing to write home about .. they
have reduced hedges from a high of 2 years production 6 months
ago to 1.8 years .. so thats about 14 million oz .. they said
they would continue delivering gold into their hedge for the rest
of the year .. WAR announced they closed out its forward sales for
two years at a cost of 19 million rand.

Henri

(02/11/2000; 06:13:17 MDT - Msg ID: 24985)

Farfel Msg 24976

I forgive you Farfel, for throwing a spurious dart in what appears to be quasi frustration...but you must forgive yourself as well.

Only one point, when you said:
"GATA is certainly about profit too...but it is also about JUSTICE. It is the latter pursuit that seems to be the primary motivator today for that organization."

If you believe that GATA will profit...I have to disagree. Individual gold and gold stock shareholders (I hope) will profit. Bill Murphy is obviously one of them. The organization, GATA, I'm afraid, will probably always be just in the red. If you are a gold investor you should support their efforts. Is it not enough that Bill and Chris and the numerous contributors to the Cafe donate their time...must they also continue to donate their money as well. Sure it is for them perhaps an investment that may pay off in higher gold/goldshare price, but when push comes to shove, there are legal fees and propaganda (or should I say "truth sharing") costs to accomodate. Please become involved with a monetary contribution. They are fighting for us all. Let's help them materially as well.

If you meant that GATA is about profiting from a rebound in gold...I apologize for voicing disagreement, but the organization more properly stands for the recovery of incredible loss at the hands of unscrupulous power mongers who use false money and debt as a means to attain it (Power that is). Bankers are always such.

I do agree that GATA is about Justice. But it is also about the recapture of the concept of fiscal accountability by the creators of credit. That they not be bailed out at the direction of a corrupt administration with the taxpayer bearing final settlement. If GATA wins the gold battle, they should not rest until a stake is driven through the heart of Vlad for he is certain to rise again.

SteveH

(02/11/2000; 06:14:32 MDT - Msg ID: 24986)

platinum leading again

Description Last Change Percent Change
Palladium 593 +13 +2.24 %
Platinum 520 +2.1 +0.41 %
Copper 85.15 +0.2 +0.24 %
Silver 542.5 0 0 %
Gold 317.8 -0.9 -0.28 %

SteveH

(02/11/2000; 06:23:36 MDT - Msg ID: 24987)

Oil leading the way...

Market Mth Open High Low Last Change Date Time Ask Bid
Crude Oil(NYM)(Access) Mar 29.42 29.85 29.35 29.77 +0.34 2/11/00 4:59 29.82 29.78
Heating Oil(NYM)(Access) Mar 74.50 74.95 74.45 74.95 +0.49 2/11/00 4:50 74.95 74.75
Unleaded Gas(NYM)(Access) Mar 81.95 82.25 81.75 81.80 +0.05 2/11/00 4:53 82.70 82.25
Natural Gas(NYM)(Access) Mar 2.595 2.635 2.595 2.629 +0.037 2/10/00 16:00 2.629 2.621

Black Blade

(02/11/2000; 06:37:29 MDT - Msg ID: 24988)

Interesting.....hmmmmm

http://www.crbindex.com/news/story2203.htmlLBMA January daily gold turnover at record low, silver higher
London--Feb 12--The London Bullion Market Association said average daily cleared turnover for gold in January fell to a record low of 22.2 million ounces, down 22% from December and 23% from January 1999. The number of transfers fell from 952 to 774--the first time there have been less than 800
transfers during the month. (Story .13714)

Black Blade

(02/11/2000; 06:51:11 MDT - Msg ID: 24989)

Platinum analysis, dated, but may be worse....can't deliver what you ain't got!

ANALYSIS-Politics behind Russia precious metal
dearth

By Sebastian Alison

MOSCOW, Feb 7 (Reuters) - Russian exports of platinum group metals are being held up mainly because of political infighting between different interest groups in the domestic metals sector, resulting in massive price hikes, analysts said on Monday. Palladium hit an all-time high fix of $540 per ounce in Europe on Monday on lack of Russian supply and uncertainty on future deliveries. Platinum touched its highest level since 1989, and related metals rhodium and ruthenium also soared. Russian exporters of the metals maintained a characteristic silence and the lack of information was seen as further contributing to
the price strength.

Russia supplies around 70 percent of world palladium needs in normal times and some 20 percent of Platinum but so far this year palladium supplies have been extremely patchy and platinum non-existent, and markets await news in vain. `They're trying to tighten up the information flow because what's happened in the past is that Norilsk Nickel , the central bank and all the others have made conflicting comments and the perception in the West is of uncertainty,'' analyst Ross Norman of Precious Metals Research told Reuters.

There are five main players in Russia's platinum group metals sector, and all have different interests. Norilsk Nickel is the largest producer and wants export revenues. The central bank and Gokhran, the state precious metals and gems reserve, hold stocks of the metal, which are shipped by the sole exporter, Almazjuvelir export. The fifth player, and perhaps the most important, is the Kremlin, which is seen as directly behind the current dearth of platinum as Acting President Vladimir Putin has yet to sign an export quota, without which deliveries cannot begin.

Norman said he doubted the decision to withhold news was a deliberate strategy to push prices higher. "What we're seeing is not the result of some Machiavellian plot to talk the price up, but really the result of infighting amongst disparate groups. Yevgeny Ivanov, a vice-chairman of Rosbank, which controls Norilsk, agreed political jockeying was a key factor in supply disruptions. `Supplies from stocks are strongly governed by politics. And there is a rivalry in this between the government and the central bank
which sometimes gets very acute,'' he said recently. A Russian economist based in Moscow agreed the silence was not a deliberate ploy to keep markets in the dark and keep prices high, but rather reflected central bank secrecy over how it used its reserves. ``There is talk, as I understand it, that the central bank's palladium is not accounted properly on its balance sheet,'' he said.

All information on production and exports of platinum group metals is officially a state secret in Russia, and Norilsk only ever announces production data in terms of percentage changes from the previous year, without giving absolute numbers. Even Norilsk chairman Yuri Kotlyar, one of few highly placed officials willing to discuss the possible resumption of platinum exports, admits he can only guess at when they will start, despite the fact that a draft decree has already been prepared.

``Now the draft is at the top echelons of power and one can only guess at how secretaries operate with secret documents,'' he told Reuters last week. The impact of the uncertainty, while ostensibly a boon for Russia if it means high prices when its metals finally appear, is likely to damage the country in the long term, Norman said. ``Further uncertainty is only undermining the future role of these metals in industry,'' he said, adding that the car industry was already looking at ways of replacing palladium in catalytic converters, one of the main uses of the metal. At sole exporter Almazjuvelir export, which alone would know if exports have been unblocked or likely to be, the request for news on Monday met the response that, like every day for the last two weeks, the only authorised spokesman was not available.

ORO

(02/11/2000; 07:05:28 MDT - Msg ID: 24990)

E gold account growth

http://www.e-gold.com/stats.htmlE gold has seen a great surge of account opening activity in the last 3 weeks. 40% of accounts were opened in the last few weeks.

Anybody notice any increased interest on the part of bullion buyers in the stores? Michael, notice increased activity in your business?

Al Fulchino

(02/11/2000; 07:24:22 MDT - Msg ID: 24991)

Ted and Bonedaddy

Thank you for the kind thoughts.

Cmax

(02/11/2000; 07:45:48 MDT - Msg ID: 24992)

The BOMB of the week: Skolnick hits gold manipulation where it really hurts..

http://www.sightings.com/politics6/goldbush.htm As the following content is so heavy, I must add that I am simply reposting this absolutely incredible information, to be scrutinized by the others, to determine it's veracity. Jeff Rense obviously saw sufficient credibility to post it to his site, including scanned copies of the evidence.
If true...this will get real hairy.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Greenspan Reportedly Bribes & Aids Bush In Gold Swindles
Part 1
by Sherman H. Skolnick
2-10-2000

More than three hundred reportedly authentic secret Federal Reserve wire transfer records show how the Chairman of America's private central bank has apparently bribed and aided in corrupt deeds George Herbert Walker Bush and his family, all over a period of time. Later, Greenspan reportedly jointly with Bush and a swarm of major financial entities, derived a horrific benefit in a major gold swindle.

In clandestine meetings, over a period of months, the reportedly genuine documents were turned over to our research and investigation group by government officials clearly in an inside position to possess and confirm such data.

A conversation at one such meeting, "Tell Sherman, if you or he ever reveals our identity, we are all dead, everyone one of us. Also in jeopardy of life and limb would be more than eight others in key government and financial positions." Some of the records purport to have the wire transfer signature of A. Greenspan whose term as Commissar of the Federal Reserve was renewed in the new century. Because he is like a corrupt Soviet dictator, answerable to no one, we coined the term, "Alan Redspan".

The document delivery team were assured of confidentiality by our past record. As the founder/chairman of our group, Citizen's Committee to Clean Up the Courts, since 1963, I have been imprisoned some eight times in four decades, not for committing crimes, but for so-called "contempt of court", for refusing to reveal the identity of long-reliable sources of high-level corruption data turned over to us on the sly. Our sources, cross-checked with others, and backed up by over one million documents already in our possession, have enabled us, over a period of decades, to set off, what some describe, as the biggest judicial bribery scandals in U.S. history.

Briefly stated, this includes the downfall we caused in 1969, of Illinois' highest tribunal, the Illinois Supreme Court, with half the high court being put to the wall. In the 1970s, our work led to the jailing for bribery of the highest level sitting federal judge in U.S. history, a federal appeals judge in Chicago who had also been former State Governor and his aide, former head of the Illinois Department of Revenue, the tax collectors. 7th Circuit Federal Appeals Judge Otto Kerner, Jr., went on all the media and said "Skolnick is a liar". Kerner died an ex-convict, convicted as I accused him to his face, as is our long-time policy. From 1983 to 1993, our work set off a series of scandals, by which 20 local judges and 40 lawyers were sent to prison for bribery, including the Chief Judge of the Traffic Court, who in a taped interview said, "Mr. Skolnick, you are imagining things, there is no corruption in this courthouse."

The Federal Reserve wire transfer data, which is also corroborated by matters already in our possession, among other things, confirms the following:

[1] That George Herbert Walker Bush, starting back at the time he was Vice President and continuing long thereafter, reportedly corruptly benefitted from Billions and Billions of dollars transferred at the behest, of among others, Alan Greenspan, to private corporations worldwide, in which the Elder Bush apparently has a beneficial interest, and/or is a major stock or bond holder, and/or is a kingpin therein, in other capacities. Included are enterprises in Saudi Arabia, North Korea, Hong Kong, Denmark, England, Red China, Taiwan, Japan, and Germany, among others. Some of the purported secret wire transfers of massive amounts were jointly for the Elder Bush and his brother Prescott, a financial broker in New England. According to published accounts, Prescott Bush arranged vast, unsavory deals with the Japanese mafia, the Yakuza, as well as dictator-types in Red China including reportedly with the top officials of the Red Chinese Secret Police [who also operate greatly in North America].

[2] Holding as well a large beneficial interest, and/or as major stock or bond holder in those accounts has been Jackson Stephens, the Little Rock-based bond broker, largest such operation outside of Wall Street. Stephens, tied reportedly to the ethnic Chinese gangsters like the Riady family interwoven with Clinton and Ollie North and the dope traffic, has been a major backer of Sludge Willie. The nefarious worldwide reputed corrupt deals of the Stephens family have been covered up by Alan Redspan and what some call the highly secretive, conspiratorial Federal Reserve.

[3] Some of the firms and enterprises to which the massive wire transfer assets were sent, are reportedly CIA proprietary operations set up by Bush as the head and former head of America's secret political police. [Now a Chicago-based bankruptcy expert, William A. Brandt, Jr., has been a worldwide expert in quietly terminating CIA proprietaries once their espionage function is completed, as shown by documents released under Freedom of Information by the U.S. Justice Department. Brandt's activities overlapped those of the Elder Bush.]

[4] Some of the billions and billions of dollars of reputed wire transfers went for the beneficial interest of the Elder Bush, and his son Neil, an official of a CIA proprietary, disguised as Denver-based Silverado Savings & Loan Association. The S & L went under and Neil Bush should have been sent to prison for causing the downfall by reportedly misusing large amounts of federal-insured thrift agency funds. On the other hand, as accused in stories in the press in Spain, the Elder Bush and his sons George W. Bush [Texas Governor] and Jeb Bush [Florida] Governor and Jeb's wife, a native of Columbia, are reportedly incriminated through huge money laundering of dope proceeds through banks owned by criminals in Spain. Dope proceeds reportedly from Columbia, Morocco, Portugal, and Italy. We publicized the quiet arrest in Chicago in January, 2000, of the reputed Bush family cocaine bank money laundry wizard, Giorgio Pelossi, a prominent Swiss accountant. Visit our website: http://www.skolnicksreport.com for the details.

The Elder Bush has been with the CIA since at least 1959, when he helped set up Zapata Petroleum Co., later called Zapata Offshore, with upwards of 600 branches worldwide in international hotspots for the reported purpose of gathering intelligence for the spy agency. Some news sources have contended that Zapata's offshore drilling rigs, located beyond the U.S. jurisdiction limit, are reported centers for transferring large quantities of illicit drugs and other contraband.

[5]Some of the reportedly huge secret wire transfers were for, or with the Elder Bush jointly with the Queen of England, through her accounts in the British Monarchy's Coutts Bank, London. The secret account numbers are contained in some of the more than 300 apparently authentic Federal Reserve wire transfer records. The British Monarchy has long been accused as being worldwide kingpins in the narcotics traffic, going back 150 years starting with the Opium Wars in China.

[6] Others of the more than 300 documents, relate to a situation started in the 1970s, when the Elder Bush arranged to overthrow the Iraqi government by political assassination. Bush helped install Saddam Hussein. Others of those and other documents relate to the decade, 1980 to 1990, when the Elder Bush was a secret private business partner of Saddam Hussein in extorting billions of dollars per year from the weak sheikdoms in the Persian Gulf---oil industry kick-backs, to supposedly assure security. A little-known Federal lawsuit in Chicago dealt with the secret partner of Saddam Hussein, namely George Herbert Walker Bush. I and my associates were the only journalists attending the federal appeals court hearing. I later did an exclusive group of interviews with the participants, confirming that Bush and Saddam were private business partners in extortion of the sheikdoms. Only one populist paper dared publish the details in 1991 of my interviews on the federal case.

In a typical sort of falling out of business partners, Bush suckered Saddam Hussein into seizing a portion of Kuwait long challenged by Saddam as being a Iraqi province and part of Saddam's oilfields. Bush used a top U.S. official to mislead Saddam into thinking the U.S. would not intervene in this local quarrel with the former British colony. Bush was the one, on behalf of U.S. oil drilling interests, that helped develop the Kuwaiti oilfields, following the 1961 relinquishing of British sovereignty. In its simplest form, the 1990-91, Persian Gulf conflict was a falling out of private business partners.

The result of this treachery? Great loss of life of ordinary soldiers. Upwards of 150 thousand young Iraqis died in the conflict, some buried alive by U.S. war bulldozers. President Bush ordered U.S. warplanes to shoot in the back, the retreating Iraqi soldiers proceeding under a white flag of surrender. It was the most horrendous murder of surrendering troops in world history. The German massacre of some 80 U.S. troops surrendering in World War 2 during the Battle of the Bulge, was a small matter by comparison. [Our public access Cable TV Program in 1991 was about the only TV Show in America that dared discuss this matter.]

Following the Persian Gulf War, some 15,000 U.S. troops died from the mysterious malady, called Gulf War Syndrome, which the Pentagon denies is happening. Ex-GIs continue to die from the strange ailments, and the total deaths and debilitating diseases amount to more than 20 per cent as casualties of all the Americans serving in the military in the Persian Gulf 1990-91, more than 100 thousand American soldiers as casualties.

Having been apparently massively bribed and aided in corrupt deeds over a period of years, the Elder Bush owed Alan Redspan and others important favors. Bush has been a potentate in one form or another, with Canadian Barrick Gold. The Bank of England, jointly with the Queen of England who reportedly shared accounts with the Elder Bush at Coutts Bank, London, and three or more major financial entities, orchestrated a vicious attack on gold in 1999. Together, they drove down the price of gold to about 252 dollars per ounce, more than 30 dollars per ounce BELOW THE COST OF PRODUCTION of the most efficient gold mines, such as in Canada.

Reportedly helping this unlawful attack on gold, gold mines, and gold mine workers, forbidden by U.S. Anti-Trust Laws, have been the following among others:

===Goldman Sachs, one of the world's largest bond and gold trading houses. Cynics, knowing these facts, call them "Goldman Sucks". Goldman Sachs has been so much into short selling deals of gold, that in the October, 1999 gold crisis, they were reportedly considering invoking the contract provision called "Force Majeure", used to avoid complying with a contract because of wars, hurricanes, revolutions, and such. The Federal Reserve has through various dirty tricks bailed out Goldman Sachs repeatedly.

===Bank of America, big in foreign exchange trading, called ForEx, [long ago called Bank of Italy, in America] they were reportedly part of the "knock down the price of gold" group.

===Bank of England, jointly with the Queen of England, offering for auction or sale gold that neither one apparently really owns, but is actually a huge gold horde stolen upon the downfall of the Soviet regime and whisked away to Dutch custody at a Swiss airport for speedy transport wheresoever requested. Bank of America is owned jointly by the Vatican, the Jesuits, and the Rothschilds. Joining them in recent years as major owners have reportedly been the Japanese mafia, the Yakuza, big in the U.S. dope traffic, and owning most every bank in California.

The purpose of the gold attack was to drive down the price of gold, among other things, to help bail out six hedge funds that have been more than a trillion dollars underwater in derivatives gambling, that is asset swaps. The bankrupt hedge funds, when gold is low-priced, can obtain gold loans for as little as one per cent interest. Were the hedge funds disaster scenario to be more public, it might set off a melt-down of the financial system of the Western world.

Reportedly at the behest of Bush, Barrick became part of a complicated trick of forward leasing of gold. A sort of short selling of gold. Thus sold short has been more than ten thousand tons of gold, more than four years of total world gold production. Gold has been called by some, "The Killer Yellow Metal", for the type of situations it can cause. In February, 2000, Barrick, Bush, and the anti-gold gang, reportedly again sought to stop the precious metal from going up to a more fair market price, such as 600 dollars per ounce.

The disclosures of the reputed secret Federal Reserve wire transfer records could torpedo the pirate ship of which Alan Redspan is a treasonous Captain joined by reputed super-crook the Elder Bush and his family and others in their gang. All together, they are part of the big gold swindle of the new century.

Click the links below to view a few samples of the more than three hundred apparently authentic Federal Reserve secret wire transfer records that tend to incriminate Bush, Redspan, the Queen of England, the Bank of England, and others.

FEDERAL RESERVE 1
FEDERAL RESERVE 2
FEDERAL RESERVE 3

Since 1958, Mr.Skolnick has been a court reformer. Since 1963, founder/chairman, Citizen's Committee to Clean Up the Courts, disclosing certain instances of judicial and other bribery and political murders. Since 1991 a regular panelist, and since 1995, moderator/producer, of one-hour,weekly public access Cable TV Show, "Broadsides", Cablecast on Channel 21, 9 p.m. each Monday in Chicago. For a heavy packet of printed stories, send $5.00 [U.S. funds] and a stamped, self-addressed business sized envelope [4-1/4 x 9-1/2 #10 size] WITH THREE STAMPS ON IT, to Citizen's Committee to Clean Up the Courts, Sherman H. Skolnick, Chairman, 9800 South Oglesby Ave., Chicago IL 60617-4870. Office, 7 days, 8 a.m. to midnight, (773) 375-5741 [PLEASE, no "just routine calls]. Before sending FAX, call.

SIGHTINGS HOMEPAGE

This Site Served by TheHostPros

Cmax

(02/11/2000; 07:49:36 MDT - Msg ID: 24993)

Wire transfer evidences: (Boy, and I thought things were corrupt here in Venezuela)

Scanned copies of the wire transfers: http://www.sightings.com/1.imagesA/fed1.jpg
http://www.sightings.com/1.imagesA/fed2.jpg
http://www.sightings.com/1.imagesA/fed3.jpg

Journeyman

(02/11/2000; 09:17:12 MDT - Msg ID: 24994)

BRAVO! Aristotle & ORO (02/11/00; 04:58:34MDT - Msg ID:24980)

I couldn't have put it better myself, ORO. In fact, I could have put it only about half as well.

I may have a few coroborrating points later, but, well just great, as usual.

Aristotle, this DOESN'T detract from your work. You've raised many good points that need to be addressed, and raised them well. That's just what I've been looking for, and it's necessary to further the economic "education" that happens here at USAGOLD.

For too long the bankster/government inflationists have held ideological sway, and till the arguments they crafted are aired, the gold-bugs amongst us are fighting fog. You have ably aired many of them. And, of course, it's always possible the inflationists COULD be right. To have as staunch a gold supporter as yourself partially incorporate some of their positions gives me reason to more closely examine my preconceived pro-gold prejudices.

My personal thanks to you both, Aristotle and ORO, for helping me hone my own perceptions!! I salute you both!

High regards,
Journeyman

OK gold bugs, our ideational challenges are growing, but they're becoming more clear! Onward ---

P.S. Elwood & Henri, WELCOME!!

Farfel

(02/11/2000; 09:32:11 MDT - Msg ID: 24995)

@HENRI...Clarification of a Clarification...

You Wrote:

If you meant that GATA is about profiting from a rebound in gold...I apologize for voicing disagreement, but the
organization more properly stands for the recovery of incredible loss at the hands of unscrupulous power mongers who use
false money and debt as a means to attain it (Power that is).

----

I Respond...

"That is exactly what I meant by the term, PROFIT! I should have more properly defined the term, but you have done a great job doing so."

Thanks

F*

Trail Guide

(02/11/2000; 09:49:21 MDT - Msg ID: 24996)

The Gold Trails

Thank you Aristotle!
A fine work that's worth a long study, my friend.

ALL:
Many writers today offer nothing less than a philippic discourse about the flaws in today's fiat systems. Always looking backwards, they are lost to grasp how what was considered "hard money policies then",,, "eventually failed then",,, as these same interacted within the economy. Truly, a hard financial structure trying to blend with a soft, flexible "human nature". In a larger degree, how much more could it not work in today's modern world. Once implemented today, these same policies would again "crash and burn" in response to the demands from "real people" living a "real life ".

Aristotle, your five part series is trechantly written and offers readers a glimpse into a future that must be. Will be!

My thoughts on a deep subject:

If the modern banking system has mislead us at all, it mislead by supporting a view that our wealth, our things, were not money. They implied that "paper settlement money" was our real wealth and only it could be as such. Truly, as we walk and breathe, human's things have always existed as both money and wealth. Side by side by side they walked with us in our financial life, in both modern and past context. Yet, in our modern "Western World" of thought, the largest portion of one's personal asset holdings now reside in the form of "paper money". Worse, the majority in it's "contract derivatives" forms. Gold included.

No longer do we hold our greatest portions in real forms that transcends the peaks and valleys of fiat money value ,,,, a variable fiat money system that our "changeable nature" demands. No, we option to ignore the true purpose of this paper money system and cast the entirety of our resources into it. Never stopping to understand that this money is but an "economic need" "to process a trade". Not an "economic product" and therefore wealth itself.

Through out recent time, fiat money has responded well to human nature, flowing like a river as it expands and contracts to our wants and desires to buy and sell things. From drought to flood it is the channel of our trading system, as it moved the "end product water" that flows within it's wide banks.

Today we use the remains of this dying "dollar settlement system". It continues a natural death, as society struggles to use a currency that can no longer represent our financial structure. A changing structure in a world that marches on. The dollar's debt load has aged it and brought it to the end of it's time line.

Only today, the end of this "time line" will find many holding their wealth in this same system, for a purpose it should never have been intended to perform. That being, to represent one's life long accumulation of real wealth as their money wealth things. Most will understand the impact of this well after the fact as we are indeed in transition to yet another paper system. One we must have, requested and will use. Just as everyone used the old one to their own private advantage, we will indeed grasp the next one. Just as you point out Aristotle, fiat exists more so because it does "what societies economic function wants", not because it's a function of "what society is forced to do"! Still, some will bark against this in a effort to stop people from following human destiny. Fortunately, relative to our lifetimes the world evolves quickly, with or without our agreement.

In this period however, we will return back in time much further than many can see. This time gold will be pulled away from it's strained attachment with "fiat contracts of currency" and again take it's place as the ages old "wealth money holding" it always was. It will occupy it's rightful place on the shelf with all our other "wealth things". And here it will, "for the first time in modern context" show it's true value in relation to modern paper settlement money. A value no one today will believe!

Should one risk financial assets based on this series (Aristotle's) alone? Never! On the contrary, no one should believe what he has written. Rather, we as a society should "study" his fine work and seek to understand it's meaning. Once fully understood, I think most would then agree with it's inevitable outcome. Indeed, a "free gold market", based only on physical holdings would impact the world economic system unlike anything seen before it. And Yes, it's impact on the relative value of gold will make that metal the monetary wealth investment for the next thousand years!

This my friends is why so many today, "Walk In The Footsteps Of Giants". They walk a trail that takes them further and further from derivatives of gold and the present currency it's (gold) priced in.

From Yesterday, through Today and onward into Tomorrow" ,,,,, we say buy Physical Gold for your future ,,,,,,, doing so will write your personal history in the palm of your hand!

"Soon, we will all hike the "Gold Trails" and see all there is to see ,,,,,,, over the mountains and through the valleys ,,,,,,, across rivers and plains ,,,, looking near and far as we stop along the way ,,,,,,, Truly, we will view the value of gold as modern mankind has never seen it before ,,,,, join in, it will be a journey in life, that's well worth taking.

thank you again Aristotle ,,, Trail Guide

Note to all: please study these fine works
Aristotle (2/7/2000; 7:15:24MDT - Msg ID:24589)
Aristotle (2/7/2000; 8:10:15MDT - Msg ID:24593)
Aristotle (02/07/00; 10:52:39MDT - Msg ID:24602)
Aristotle (02/07/00; 13:14:18MDT - Msg ID:24610)
Aristotle (2/10/2000; 3:37:44MDT - Msg ID:24877)

Jon

(02/11/2000; 09:50:37 MDT - Msg ID: 24997)

Skolnick data on gold manipulation

This may be what we have been waiting for! Suggest that all available evidence be forwarded to Drudge.

SM. Sporny

(02/11/2000; 09:59:59 MDT - Msg ID: 24998)

(No Subject)

Farfel, with your permission, I would like to open my library of " Farfels ".
You provide a great amount of insight, as well as entertainment, for which I am thankful. GATA IS about justice. And your description of Bill Murphy's writing articulates the concept that I have felt many times upon reading his columns, but have been unable to put into words. May I suggest that you consider teaming up with (Midas ) Bill Murphy to create a powerhouse of spokesmen for the gold industry. The pen is mightier than the sword.

TownCrier

(02/11/2000; 10:01:26 MDT - Msg ID: 24999)

Today's Market Report: The bigger picture...

http://www.usagold.com/jewelry/treasure/spanish_main.gifMarket Report (2/11/00): Sometimes we all get so caught up in the details of the moment that we need an occasional reminder that there is a forest beyond the tree that our nose has been pressed against. We tend to lose sight that the gold market is more than a day to day event in which we ask our yellow metal "What have you done for me since yesterday?" And while writing these daily reports it is natural to focus on the price performance and events of the past 24 hours, it is healthy to pause long enough to consider the gold market as a continuum...trading around the clock and around the world, with official markets resting only on the weekends. For that reason, Friday seems as good a day as any to step briefly out of the moment, and look at the bigger picture.

While a moment to moment assessment would tell us that gold traded higher overnight, said to be capped out by producer selling in Australia, but nonetheless reaching a morning fix in London at $316.50, up $5.25 from Thursday's AM price fix, that wouldn't help us get our arms around the market, would it? Neither would the revelation that the price has subsequently been driven lower in New York to levels near $308. What is important is that a short 6-months ago the price of gold had reached the low $250's, the lowest prices seen in twenty years--and that doesn't factor in "constant dollars" (the economist's tool to account for inflation.) That's right. Gold could be bought with weak (inflated) modern dollars in 1999 for the same price paid in 1979 with stronger (less inflated) 1979-era dollars. To convince yourself that our modern dollars are truly weaker, compare the prices today with those of 1979 for such similar items over time as shoes, clothes, food, and cars.

That's a long road. Coming closer to home, following the low prices of last August, attitudes of many European central bankers were made more transparent by the late September announcement of official curbs on future lending and sales of gold. In typical knee-jerk reaction, the price of gold blasted nearly $80 higher, but ultimately settling into a post-Y2K trading range of $280-$290 that looked to form a firm floor under potential for higher prices going forward. The price one week ago was near $283 as major producers started to come forward with new attitudes toward the practice of hedging...finding decidedly against the practice which tends to flood today's market with tomorrow's gold...paper gold, that is. So while the gold price blasted higher once again on significant news, subject to volatile daily adjustments from the technical traders and hedge funds, the bottom line is that despite gold currently trading $7 lower than it did at yesterday's NY close, it is in fact a solid $25 higher than it was one short week ago...and the long term market fundamentals of supply and demand remain solid.

In talking with Reuters from London, Frederic Panizzutti, vice-president of strategy and research at MKS Finance in Geneva said "The mining companies have reiterated their confidence in the future price outlook and that gives a very positive signal to the market but also to the final consumer and private investors." And what do the consumers think these days? Looking over to Taiwan, we see through Bridge News that the Ministry of Finance today released figures that Taiwan's gold imports for this past month of January were just shy of nine tonnes (8.989 to be exact.) That is up sharply from the figures one year ago in which Taiwan imported 5.503 tonnes for the same month.

The good citizens of the world are getting theirs. Are you getting yours?

That will do it for this week, fellow goldmeisters. Have a golden weekend!

HLS

(02/11/2000; 10:01:50 MDT - Msg ID: 25000)

March Comex gold options expire today

Good reason for the degree of pressure on Gold today ...march options expire! From the mid-day low on Tuesday to the late Thursday high ..mid-point retracement would be 309.5 (basis April futures) ...the market is currently dropping with 4 times the momentum of that Tues-Thurs rise. Ideally, the current sell-off should end around 12:30pm central time today (or hopefully sooner). While a correction is healthy for a market ..it's not always welcome. I would have preferred a blow out to the 330's instead (yesterday was fun to watch).
This weakness might be a good time for producers to do some buy-backs ..before next weeks rally!
I enjoy the posts here ..a wiff of truth is always refreshing. ..This is my first post here but not my last.
Best Regards ..HLS

Strad Master

(02/11/2000; 10:13:41 MDT - Msg ID: 25001)

Farfel

Sliver liningDear Farfel: As you know, I agree wholeheartedly with your assesment of the evil power-mongers who have manipulated the POG for their own ends. However, isn't it also true that by knocking down the POG so drastically they have made it possible for little guys (like me) to purchase a bit more of it than we might otherwise have been able to do? No doubt people have lost their shirts by thinking and hoping that the POG would rise sooner and/or not go down further (I also fall into that category) but isn't that true of every commodity to some extent? Now that good organizations like GATA are in the game, the likelihood of a big breakout to the upside grows increasingly probable so all of us who have a bit of the yellow metal will ultimately be rewarded for our patience, no? I may be all wrong (and you can enlighten me) but perhaps there is "silver lining" to all the dark clouds. that we shouldn't lose sight of. Give my best to your lovely wife. Regards, Strad

goldfan

(02/11/2000; 10:15:56 MDT - Msg ID: 25002)

Black Blade (2/11/2000; 0:04:47MDT - Msg ID:24974), ALL

Sir Black Blade or anybody who knows about futures and options trading.

I have asked this question twice already here and got no answer. Here it is again.

Is it common in the business to use the words "closed out its forward sales" when what they have done is buy calls to hedge the forward sale, in currency, not the physical?? A currency hedge, on a physical short?? And if the bank from whom the miner bought the calls, can't delvier the Au, then the miner is sitll on the hook for the physical??

What's the truth here? 19 million rand is only about 1.3 million dollars. They didn't buy 15 tonnes of physical with that!!

How can I or anybody else get educated if we can't get the language straight!!! And if we can't get educated, what's the point of all this jabbering???

http://www.crbindex.com/news/story2203.html

Johannesburg--Feb 10--South African gold mining
company Western Areas said Thursday it has closed out its forward sales of gold for the next 2 years at a cost of 19
million rand. The company said in a statement that forward sales for the remaining 8 years of the company's hedge book
total 654,000 ounces, representing 18% of attributable production over the same period and 2% of attributable reserves.
(Story .12954)

A frustrated

Goldfan

goldfan

(02/11/2000; 10:35:23 MDT - Msg ID: 25003)

Black Blade (02/11/00; 06:37:29MDT - Msg ID:24988)

http://www.lbma.org.uk/clearing_charts.htmThe link above is a chart that shows the LBMA has been going out of business since Jan 1997 with only a short blow-off blip between Aug97 and Apr98. Just as FOA/Another predicted, this to me, along with the obvious drop in COMEX gold open interest, tells the tale that the paper market is disappearing, at least from public view. I wonder when we will see obvious signs that the paper is being discounted in order for the "shorts" to save whatever they can?

FWIW

Goldfan

Bill

(02/11/2000; 10:56:25 MDT - Msg ID: 25004)

To All RE: Cmax Posting below

We often wonder about the validity of conspiracy theories. When I read what was posted today by CMAX, I read with interest though it seemed far fetched. When I read the portion on how Iraq troops were treated, this report lost all validity. While I of course, cannot speak with firsthand knowledge about all incidents in Desert Storm, I can speak of some and about the general orders we were given during that time. Surrendering troops were not gunned down in any way, shape or form. In fact, talk to anyone who was there and you will find that they were treated with dignity and given conveniences that many of us didn't have.
I guess in many cases I appreciate the carelessness of those who try to sell these conspiracy theories. It makes it much easier to dismiss them as wild ramblings.
Bill

SteveH

(02/11/2000; 11:02:35 MDT - Msg ID: 25005)

Trail Guide and FOA

One and the same?

SteveH

(02/11/2000; 11:05:20 MDT - Msg ID: 25006)

Yep...has to be

One and the same?

Mr Gresham

(02/11/2000; 11:21:12 MDT - Msg ID: 25007)

Trail Guide (02/11/00; 09:49:21MDT - Msg ID:24996)

Welcome, Trail Guide!

Isn't it funny -- as a new poster arrives, I find myself thinking about one of my boyhood TV shows, The Lone Ranger. And how there was always some bad guy who wanted to take off LR's mask and see who he really was. Somewhere in there, even as a 6-year-old, I couldn't figure out just what they would accomplish by seeing his real face. But I was with him anyway, for him to keep his chosen identity the way he wanted it.

You're a good reminder to me, Trail Guide. Now that my "physical" investment program is in place, it's time to get out hiking in those beautiful physical mountains near where I live. Spring is coming, and my internet-fattened middle-aged body has to keep up with a growing little one.

WELCOME, FRIEND!

lamprey_65

(02/11/2000; 11:27:18 MDT - Msg ID: 25008)

Farfel

Yep, you're right -- watching the weak-kneed gold mining shareholders sell on a little pullback in SPOT. This bull needs some vitamins!

Lamprey

Henri

(02/11/2000; 11:31:03 MDT - Msg ID: 25009)

Quicksilver Msg 24931

Loved the "Red Fire Ants"! Anyone who has stepped in a nest knows that first the ants deploy along the major limbs and then on signal all bite at once!

Journeyman-Thanks for the hearty "Welcome"

Still reading Aristotle

nickel62

(02/11/2000; 11:35:37 MDT - Msg ID: 25010)

Homestake convincingly denies that it has changed it's hedging strategy!

The confusion of Homestake changing its low hedging strategy seems to have arisen from a Bridge News story that was misinterperted. The companie's position appears to remain unchanged with hedges being looked apon as a neccessary evil when bank financing is required for capital projects and mine development.

Henri

(02/11/2000; 11:35:54 MDT - Msg ID: 25011)

Franco-Nevada

Interesting that FN has been a non-starter during the recent run-up in POG. Is it possible that the Hannibals have taken a new tack and started selling down shares of unhedged concerns? The purpose? To make gold shares appear unattractive to new players brought in by the recent surge. If they are selling it down, I'm in the mood to pick up a bargain...anyone with me? Maybe there is something I am missing?

TownCrier

(02/11/2000; 11:44:38 MDT - Msg ID: 25012)

The Fed provided the banking system with another $2.75 billion through use of 13-day RPs

http://biz.yahoo.com/rf/000211/sm.htmlThey did.

Henri

(02/11/2000; 12:10:31 MDT - Msg ID: 25013)

Paper Gold/Paper oil?

There seems to be something peculiar going on between oil and gold lately. Yes, yes it all makes sense given the writings of Another's (Thoughts), however; it occurs to me that GATA may have uncovered something larger than gold carry collusion. The oil industry equivalent of the XAU is the "Goldman Sachs Index" is it not?

Wasn't it about a year ago (when GATA reared its shining dome) that we could not believe oil was so cheap? $10/barrel?!? We heard a tale similar to the Bullion Bank's cry that the world was awash in gold why shouldn't the price be low. What we heard was that the world was awash in oil! There were a few articles saying "...but it was only paper oil", very little of it resulting in actual delivery. I didn't care because I was paying less at the pump. And I guess I too am thankful to GS for allowing me to scoop up the gold they left by the side of the road cheaply.

Is it possible that GATA has stumbled onto a much larger game than just the gold market. Perhaps the oil manipulators (Same guys?)had an existential moment at the appearence of GATA and gained a visionary "wake up and smell the coffee" common sense. The low oil prices may have been the result of all manipulators trying to get out of the paper oil market before some upstart organization like GATA started asking embarassing questions about THEIR activities.

Perhaps they were having such huge success in manipulating oil that they felt they could use the same techniques on the gold producers. Perhaps it worked for awhile, but the gold industry is so much smaller that their shenanigans did not escape notice. By pulling the rug out from under the "hannibals" GATA may have alerted a stodgy and slow moving oil business that they too have been taken advantage of by the exact same "hannibals" in the exact same way!

Well the OPEC guys have to be madder than hornets when their nest is dug up! First GS and their ilk rob them blind with their paper oil games and then when the gold carry trade goes sour, they realize they are unwittingly thrown into the game of musical chairs for gold delivery.

The sheiks had recently visited Venezuela...I wonder what they talked about? No wonder there is precious little oil in NY harbor.

TownCrier

(02/11/2000; 12:15:27 MDT - Msg ID: 25014)

FOCUS-Ashanti talks to banks, shares at new low

http://biz.yahoo.com/rf/000210/bmu.htmlIn this Reuters report, who has whom over the barrel?

"Ashanti has to persuade two overlapping groups of banks -- its creditors and hedge counterparties -- not to pull the plug."

Clearly, the entity capable of producing new gold has the ultimate upper hand. And consider this, are these hedge counterparties truly after the cash payday from the moment in time last Autumn when the hedge position went "their way," or are they truly interested in having the gold delivered at the prices they had locked into? And why was there never much fuss over the financial position of these "mysterious hedge counterparties" as the price of gold declined over the years in slides and falls, and yet when the direction turns, the losing side (the shorts such Ashanti) suddenly attracts so much attention? Here is why...it is easier to acquire gold over time if you don't complain about better and better prices being offered. You continue to take what is offered in this manner until the world wakes up to a new reality.

ORO

(02/11/2000; 12:31:46 MDT - Msg ID: 25015)

Trail Guide - welcome

Welcome Trail Guide to your home.

We have kept it warm for you, awaiting your reincarnation.

Missed you badly.

Thank you for your return.

Elwood

(02/11/2000; 12:39:23 MDT - Msg ID: 25016)

Mises on the Gold Standard

http://www.mises.org/humanaction/chap17sec19.asp

goldfan

(02/11/2000; 13:42:28 MDT - Msg ID: 25017)

Stock Market Rigor Mortis

I'm reminded by today's drop in the "indices" of all US markets that if we get a real market crash, it will happen without warning between one day and the next, and that any who want to change anything to do with their accounts or their portfolios will not be able to get their broker on the phone, or by fax, or personal vists. Neither will the web site respond as usual, or even at all. The broker could go bankrupt, before ever you get to him, and all your shares and money will belong to his creditors. Mutual funds will be jammed for years, their back office administration will be deep in mountians of paper, and computer glitches from the overloads. Getting your money out of a mutual fund, before it declines to zero, will probably be impossible.

Take care

Goldfan.

Cavan Man

(02/11/2000; 13:44:08 MDT - Msg ID: 25018)

Trail Guide

Welcome Sir Trail Guide. I am hoping this is a "gravy" train, er, trail we are on.

There are reports Mr. Richardson will soon be jawboning with a certain group of very important persons in an attempt to lower the cost of energy. Do you think he will have any luck? Can oil be priced in both $USD and Euro?

ORO

(02/11/2000; 13:59:00 MDT - Msg ID: 25019)

Aristotle and Trail Guide

What is to stop the gold markets to regroup and form a new gold banking system?

I would think that -
if there is gold there is also someoned to lend it and someone to borrow it.
If there is new gold mined, it will be contracted for future delivery.
If there is gold of many players in a number of vaults, the gold will stay in the vaults and the title to the gold will trade electronically.

I still say that there is no economic reason, no justification for central banks at all. There is no economically useful purpose for national currencies. I will go further and state that the purpose of central banks holding gold is so their people remain beholden to the state and the bank cartels it has chartered. The best thing for the CBs and treasuries to do is to unload their gold and cease participation in the financial markets. Individuals and private organizations should hold their gold and trade its receipts, to lend and to borrow it.

The amount of gold and other PMs can not be insufficient in quantity to for the basis for the volume of trade settlement. It is precisely the point that the quantity of gold matters not. What matters is that it grows with the economy that trades it as money.

The myth of a living and breathing fiat system.

Many have proposed that there is some need in trade and business for the flexible money that fiat allows. I contend that there is no such flexible money, as its cost in trade and to business far outweighs the benefits of flexion.

Fiat currencies do not expand and contract as the markets need. Their mere existence forbids healthy interaction in the markets. The seekers of the conversion of income into wealth and those who must convert wealth into income are forbidden from setting the rates of conversion by the existence of fiat currencies.
The necessary precondition of a fiat currency is the existence of a monetary authority that controls the quantity and the rate of conversion - the interest rate - at which both monetary and "real" wealth coverts into income.

They introduce the same centralized decisionmaking that we decry in cleptocratic Russia and in its predecessor's failed and dishonest social and economic planning.

The quantity of money and the interest rates are set by the monetary authority to fit the needs of those who run it. These bear no relationship to the needs of the participants in the markets. Indeed, it is with the purpose of favoring particular interests that monetary authorities are set up, not at all with an eye to service the markets.

The first necessary and indelible mark of a fiat currency system is that of the obliteration of the market's process of finding the correct wealth/income conversion rate - interest rate - that clears the markets. It sets a source of funds for borrowing other than the holders wealth. This source - the central bank - lends at a reduced rate to a favored cartel of banks so that their cost of funds is below that which is necessary to cause conversion of real wealth into income. When the pendulum swings to the conversion of income to wealth, the central bank inevitably intervenes by raising the conversion rate so that income converts into less wealth. We call the first inflationary policy and we call the latter fighting inflation.

The main point is that in the interest of the cartel the interest rates are moved upwards and downwards AGAINST the market's needs. The purpose is clearly thievery. It is in the interest of self-serving government and those who have purchased its services to effect the sale of economic priveleges with which to fleece the public at large - those who hold wealth or earn substantial income. As we cheer the fleet footed economic managers when we enjoy their largess, we stare blind-eyed at the brazen lies these authorities author. When we benefit, we are benefiting from the sharing of the spoils of plunder. We are but economic canibals eating each other's wealth.

As the plunder goes on, we find that our turn comes up to be butchered, cooked and served for the "higher purpose" of satisfying the ravenous hunger of the fattest man and the scrawny flea bitten dogs that keep him company and share in his leftovers.

Wherefore is the justification, economic or otherwise, for national currencies? for fiat money at all? for the existence of a central bank? for the charters of banks? for the regulatory body that forces all banks to collude?

I claim there is none such justification. That any reason provided we would immediately recognize as a fraud or theft perpetrated upon us or an offer to join in its perpetration upon others.

Skip

(02/11/2000; 14:05:35 MDT - Msg ID: 25020)

goldfan (re: Stock Market Rigor Mortis)

If what you say is correct, what will happen to gold stocks that we might own through accounts such as Datek, e*trade, etc., as well as through traditional brokerage firms? How would it be possible for creditors to force them to sell our gold stocks? If I own the stock and the brokerage firm only holds it for me, I do not see how they could legally sell MY gold stocks to pay off a creditor... otherwise that seems to me to be illegal. And if for some reason it was legal, wouldn't WE, the stockowners, be first-in-line as creditors (or owners) of those stocks? If there are any brokers on this forum, clarification would be GREATLY appreciated!!!
--Skip

Solomon Weaver

(02/11/2000; 14:10:22 MDT - Msg ID: 25021)

(No Subject)

This is from the recent posting of Reg Howe....
----
Barrick had 14 million ounces of gold sold forward and had written long-term call options on another 4 million ounces. According to yesterday's release, it has:
(1) reduced its exposure on call options written to 2.7 million ounces;
2) stretched out the delivery schedule on its its spot-deferred contracts,
which now cover a total of 13.6 million ounces; and
(3) engaged in "an important new dimension" by purchasing call options on 6.8 million
ounces. It adds that the new purchased call options "cover 100% of production from March 1, 2000 through 2001," at strike prices of $319/oz.
in 2000 and $335/oz. in 2001.
-----
Did anyone stop and think of the implications of this???? Some big gorilla has decided to take all of the upside risk for Ashanti above $319 for several million ounces, let us say half of the 6 so 3 million. What does this party get in return???? An up front premium?

Now this big 800 pound gorilla isn't gonna wanna see someone walk off with a hundred million worth of bananas, just because gold went to a paltry $400/oz. So you can bet he'll just sit there and swat at the POG everytime it gets too high above $320 for his tastes....if he does it in fits and bouts, he can probably convince those bands of long armed chimps to leave some bananas laying around when they scurry off as the POG gets smashed.

Barrick gets the added benefit that with this bid bully sitting at the door, they do not have to worry about defending the rest of their short position.

So, the great bullish action of Barrick, to reduce their downside risk, turns out to be a highly publicized derivative contract which literally guarantees that the POG will have major problems sustaining levels above $320 in 2000 and $335 in 2001. Maybe it would have been more honest of Barrick to just come out and say "OK all you traders out there, here are the newly agreed upon target prices for the next two years...we believe they are levels which will allow most mining companies to stay in business without making the bullion banks go out of business. Anyone who trades on expectations that prices will exceed this level, does so at their own risk."

Poor old Solomon

SM. Sporny

(02/11/2000; 14:17:25 MDT - Msg ID: 25022)

Henri I am with you re: Franco-Nevada

Interesting observation on FN. I have been watching the trading pattern and it is most unusual for stock. I think you are on to something. Especially considering the price of platinum.

Elwood

(02/11/2000; 14:18:06 MDT - Msg ID: 25023)

ORO (02/11/00; 13:59:00MDT - Msg ID:25019)

Hear! Hear! I second ORO's thinking and hereby nominate this one for the Hall of Fame.

JCTex

(02/11/2000; 14:18:23 MDT - Msg ID: 25024)

Homestake Mining / correction about hedging

Le Metropole members,

It pleases me to tell you that a wire service took
the recent comments by Jack Thomson, Chairman
of Homestake Mining out of context.

One of GATA's most ardent supporters and a
significant Homestake shareholder spoke to the
chairman today he was so upset about the wire
service headline.

Our GATA supporter told me that Jack Thompson
was one stand up guy, could not have been nicer
and was very bullish about the price prospects
for gold.

Some highlites of what Jack Thompson had to
say today to him:

 The day of reckoning for the shorts is accelerating

 A tremendous amount of selling or liquidity
has been absorbed by the gold market buyers. That
liquidity is going to dry up and buying gold
in size will be much more difficult without
having to pay up for it.

 Homestake is lightly hedged and will stay that
way. The amount of hedging that Homestake does
amounts to about the ROUNDING ERROR of their
competition.

Good news for the gold market and for all you
Homestake shareholders!

Le Metropole Cafe

All the best,

Bill Murphy
Le Patron
www.LeMetropoleCafe.com

zguy

(02/11/2000; 14:25:57 MDT - Msg ID: 25025)

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

SAUDI'S TO CUT OIL EXPORTS TO U.S. BY 25% IN MARCH!This is from the Time Bomb 2000 BB:

RICHARDSON CALLS SAUDI OIL CUT TO US IN MARCH "FIRM STEP IN THE WRONG DIRECTION"

WASHINGTON, Feb 11 (Reuters) - U.S. Energy Secretary Bill Richardson criticized Saudi Arabia's decision to reduce its crude oil deliveries to the United States by 25 percent in March, saying on Friday that it was a move in the wrong direction.

"First, from a volume standpoint, this is not a major change from what the Saudis have been delivering," Richardson said in a statement. "Having said that, this action by the Saudis represents a firm step in the wrong direction."

-- Possible Impact (posim@hotmail.com), February 11, 2000
Answers

Saudi Arabia's decision to reduce its crude oil deliveries to the United States by 25 percent in March
WHAT IS GOING ON HERE!(caps intended...)

"First, from a volume standpoint, this is not a major change from what the Saudis have been delivering"
How many barrels per day?
How long will this policy stay in force?

-- Possible Impact (posim@hotmail.com), February 11, 2000.

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

Wow,

The Implications of this move by the Saudis is Staggering!

Thanks for the article P.I.

Got Oil Futures?

-- Zdude (zdude@hotmail.com), February 11, 2000.

Skip

(02/11/2000; 14:29:38 MDT - Msg ID: 25026)

Caledonia (CALVF)

I notice that Caledonia Mining (CALVF; CAL.TO) has shown very good upward movement in the last week. During the first gold spike last fall, CALVF didn't do much. What is different this time? If Caledonia's past prices are any indication of its future potential, this could be a grand slam waiting to happen. Even at 20% of its 5-year high, that would be over a ten-fold return of its current value. What am I not seeing here?
--Skip

JCTex

(02/11/2000; 14:37:07 MDT - Msg ID: 25027)

Trail Guide

Very nice to see you back. Believe there are a few questions waiting for you...hope your day-job doesn't get in the way.

Journeyman

(02/11/2000; 14:37:44 MDT - Msg ID: 25028)

Upstaged!! @Elwood

Boy, the Austrian School competition around here is getting fierce :)

Re: Elwood (02/11/00; 12:39:23MDT - Msg ID:25016) Mises on the Gold Standard

Dangit Elwood, I was just excerpting that :( Well, maybe a good excerpt job will still be appropriate. Later.

Shucks, I didn't know there were this many Austrian oriented people in the whole world!!!

Regards, j.

Cavan Man

(02/11/2000; 14:37:50 MDT - Msg ID: 25029)

Solomon 25021

I must admit to not understanding Howe's analysis very well at all. Can he be right? Is there no way for POG to rise these next two years?

There must be circumstances that would conspire against Barrick and company. What do you think?

Cavan Man

(02/11/2000; 14:40:57 MDT - Msg ID: 25030)

zguy25025

I note the reuters reference but is any reason given for the cut? Where can the entire story be found? Thanks.

zguy

(02/11/2000; 14:45:03 MDT - Msg ID: 25031)

LINK TO REUTERS STORY ON SAUDI OIL CUTS

http://www.moneynet.com/content/MONEYNET/MktSnapshot/NewsStory.asp?ID=SF-02/11-anWBT020876@NEWS-P1&HEADNEWS=TRUE
Here is the link directly to reuters on the Saudi Oil cutback article below.

I've read so much about the relationship of Oil to Gold on this forum and I'm curious what you think this might do for
Gold? My gut instinct is that it will strengthen the Bull
market for Gold now forming.

Any Opinions?

Mr Gresham

(02/11/2000; 14:48:56 MDT - Msg ID: 25032)

Steve H

Dammit, I hate it when I post in a hurry and drive off somewhere and first thing hits me is I think of something I wrote that could hit somebody I didn't mean to, in a way I wasn't intending. My silly little story wasn't aimed at your post which I happened to see right under mine after I hit the button. You're much appreciated by me, brother. There's a lot to celebrate this week and I'm glad to share your good company.

I probably didn't have to write this message, either, since you're smart enough to figure out just about anything that goes on here. But in this collegial cyber-RoundTable we share, we are judged by what we write, and it seems to magnify both the bad and the good that we contribute, so I just wanted to be sure.

Cavan Man

(02/11/2000; 14:53:56 MDT - Msg ID: 25033)

zguy 25031

Welcome. Maybe Trail Guide could comment on this one. That's a hot new item now isn't it.

Perhaps they would rollback their plans to reduce exports to the US if their product was priced in Euro? I dunno.

Journeyman

(02/11/2000; 14:58:04 MDT - Msg ID: 25034)

HOF for ORO (02/11/00; 13:59:00MDT - Msg ID:25019 @ Elwood & Trail Guide

I second Elwood's nomination of ORO Msg ID:25019 to the Hall of Fame.

I also ask especially our new Trail Guide to address the issues raised by ORO in this post - - - otherwise I'm afraid I'll lapse back into my former ID as an inveterate gold standard advocate.

By the way Elwood, I believe since you made the nomination, yur supposed to sheppard the thing through, keeping track of the seconds, to make sure Town Crier doesn't miss any. Sorry buddy, but thems the rules.

Regards,
Journeyman

R Powell

(02/11/2000; 14:59:01 MDT - Msg ID: 25035)

Goldfan in response to Msg ID 25002

You asked earlier how to interpret a party that has "closed out its forward sales. I believe there are only two normal ways - either by buying them back or by making delivery. Barrick bought call options from someone (??) and I believe, also "bought back" some gold.(offset forward sales) Word has it that the calls will be paid if in the money only with currency- not physical! As I understand this you are right thinking that this is "a currency hedge on a physical short". It won't provide the physical but will provide cash which is probably what Barrick will need to cover most of it's forward sales because most futures contracts are settled in currency. However, those forward sales can be and must be settled in physical if the holder of those future contracts desires such. Until this happened, I didn't know it was possible to write (sell) calls redeemable ONLY in currency. Whoever wrote these calls obviously doesn't want to be stuck having to deliver that which they don't have or don't want to give up. Almost like saying Take my money but please,please don't take my gold! I not a broker or a floor trader but I think this is how this works, if not someone who does trade like Mr. Koan or Stranger, please correct me. Thanks

zguy

(02/11/2000; 15:02:37 MDT - Msg ID: 25036)

RICHARDSON CRITICIZES SAUDI OIL CUTS TO U.S.

http://abcnews.go.com/wire/Business/reuters20000211_3172.html[Fair Use: For Educational/Research Purposes Only]

Friday February 11, 4:23 pm Eastern Time

Richardson criticizes Saudi cuts in oil to U.S.

WASHINGTON, Feb 11 (Reuters) - U.S. Energy Secretary Bill Richardson criticized Saudi Arabia's decision to reduce its crude oil deliveries to the United States by 25 percent in March, saying on Friday that it was a move in the wrong direction.

``First, from a volume standpoint, this is not a major change from what the Saudis have been delivering,'' Richardson said in a statement. ``Having said that, this action by the Saudis represents a firm step in the wrong direction.''

This is the strongest language Richardson has used in public so far to criticize Saudi Arabia -- the most influential member of the Organization of Petroleum Exporting Countries (OPEC). His remarks come amid pressure from Congress for the Clinton administration to get tougher with OPEC and its policy of lower oil output.

``The U.S. market needs more (oil) supply, not less,'' Richardson said. ``I urge -- in the strongest terms -- that all oil producing nations recognize that the world needs more oil, not less, and needs it sooner rather than later,'' he added.

Richardson said the European Union also agreed that world oil production should be increased, and he pointed out that Mexico's energy minister Luis Tellez ``recognizes that there is a legitimate concern in the U.S. that high (oil) prices affect economic growth''.

Richardson is scheduled to travel to Mexico next week to discuss volatility in the oil market. He will then begin a trip to the Middle East, where he will stop in Saudi Arabia and Kuwait to hold similar discussions.

His planned trip next week to meet Venezuela's oil minister Ali Rodriguez has been cancelled, an Energy Department official said. The official did not provide any reason for the cancellation, or whether Richardson's visit would be rescheduled.

ORO

(02/11/2000; 15:07:05 MDT - Msg ID: 25037)

Big garilla for Solomon Weaver's gold calls

One may take it as a given that the central banks behind big garilla stand ready to bail him (them) out with massive lending. If necessary, there will be an "ungold" asset who's price will be manipulated so as to provide the necessary profit to cover the losses stemming from an upwards move in gold.

I need only say this: the profits on the bank's books need not be real in order for it to survive indefinitely. It needs only to be able to settle its liabilities. Japan has kept the bulk of its insolvent banking system afloat in a semicomatose state for the better part of a decade. See the future and weep.

goldfan

(02/11/2000; 15:08:23 MDT - Msg ID: 25038)

Skip (02/11/00; 14:05:35MDT - Msg ID:25020) Brokers!!

Skip Hi. I'm repeatang what I have been told about previous market crashes and lwhat I can foresee in this one with the addition of enormous virtually unregulated Mufunds all trying to get out at the same time. Normally, stock you leave with the broker is registered in "street name", its not registered in your name. That means, you are an unsecured creditor of the broker. Secured creditors, get first dibs at what's left if anythng. These are the banks that loan the broker money who loans it to you as margin..

Margin loans are the highest by far they have ever been, so brokers are way out on a limb now too.... Your cash is of course totally unsecured. If you want to be safe you get the broker to send you the share certificates registered in your name, and put them in your sock drawer or wherever...

FWIW

Goldfan

SteveH

(02/11/2000; 15:09:35 MDT - Msg ID: 25039)

ORO third and that puts him in

Mr. G.,

Not a problem.

TC let's get that ORO post in the HOF, he has got three nominations. Better yet, set aside all his posts too in a special section along with a special for FOA and Another, eh?

Solomon Weaver

(02/11/2000; 15:09:37 MDT - Msg ID: 25040)

call girls for Barrick

Here is my neophyte view...of Howe's analysis.

Barrick either needs money to make expanisons (or is greedy and wants money to play with in other speculations) So, along with the advice and consent of their bankers, they start selling millions of gold short, getting the money and "investing it" in order to protect the transactions, they get their banker to agree that they can deliver future production at a price which allows them a small reward (not much after they pay all the years of interest and such).
Then, the shareholders wake up and realize that no matter how high or low the gold price goes, these guys are going to get the same payment for most of their gold. By locking in a good price now, they lock out better prices in the future.
The next problem they have is that it will take them 2 years to deliver all of that gold, but they will also need money to run their business...so whatever use they made of the proceeds of those sales they made, they will need to redeploy that money into the business to cover operating expences. In the event that any of those proceeds have been invested in risky assets outside of their core business, they run the chance of not having enough money to run their business.

They already made those sales. And they were paid cash for them. The only way to "unwind" those "positions" is to:
1. Buy back real gold at today's prices and return it to their BB lender. (Probably this gold would have to come from a leasing program CB and a BB who was willing to do the deal....in this day and age????
2. Produce enough new gold above their cost of doing business to have surplus gold to return to their lenders. Just because they produce 8 million ounces a year does not mean they can cover there open sold forward position that fast. They need to spend a lot of the money on keeping in business.

So, what do they do? They go out and buy some out of the money call options with strike prices at $318 and $335. So, for example, if the POG were to go to $330, they could call the option and claim $12 for each option closed. Obviously, the counterparty to the options has made some agreements with them about "what conditions really allow a call". But what will look good to shareholders is that those calls can roll into the money as the POG goes up, and by the new mark to market rules will show up on the balance sheet...nice and clean..increase in shareholder equity. The balance sheet of the counterparty will look worse...but since it is probably a massive derivative banker, they can bury the details in hundreds of billions of interest rate swaps. And being confidential, nobody knows where to look for it any way.

I am inclined to agree with
Henri (02/11/00; 12:10:31MDT - Msg ID:25013)
Paper Gold/Paper oil?
That perhaps this little gold game is just peanuts compared to what is going on in oil, and to some big gorilla, it might be worth absorbing even a few billion in losses to keep Barrick looking like the "best mananged" gold company in the world.
------
On a different note. If any of the speculations posted today on Bush and massive wire transfers are true (not withstanding some grandstanding by the authors of the document), and this story starts to get out in an election year where Bush Jr. is out front, and if people start to wonder how clean Greenspan is....well there is not telling how far this all could go.

Poor old Solomon

Solomon Weaver

(02/11/2000; 15:18:58 MDT - Msg ID: 25041)

(No Subject)

If you want to be safe you get the broker to send you the share certificates registered in your name, and put them in your sock drawer or wherever...

prefer to use a fire proof safe.

hey Goldfan or others...can we also do this with shares which we have in an IRA account???

Poor old Solomon (with all his stocks in the IRA)

Elwood

(02/11/2000; 15:19:56 MDT - Msg ID: 25042)

To Towncrier RE: Hall of Fame post

To TownCrier:

Under the rules for induction to the USA Gold Hall of Fame we have a nomination and 2 seconds for the following to be placed there for all to view and bask in its truth and serenely pure reason.

Inductee: ORO (02/11/00; 13:59:00MDT - Msg ID:25019)

Nomination: Elwood (02/11/00; 14:18:06MDT - Msg ID:25023)
Second: Journeyman (02/11/00; 14:58:04MDT - Msg ID:25034)
Third: SteveH (02/11/00; 15:09:35MDT - Msg ID:25039)

TownCrier

(02/11/2000; 15:29:07 MDT - Msg ID: 25043)

Sir Elwood

Thank you for the excellent bookkeeping. According to the house rules, a nomination must be "second"-ed by at least three others to gain entry into the Hall of Fame. We will keep our eyes open for the arrival of the remaining "second."

And to all others with nominations, please take note of Sir Elwood's good example as the original nominator...keeping track of the the status in the most perfect of fashions. It is doubly preferable that when the fourth knight voices support for HOF status, that the summary information be e-mailed to the ol' TownCrier at sitemaster@usagold.com (that will ensure it isn't overlooked.)

Sir Cavan Man, yours is in the works.

Henri

(02/11/2000; 15:33:10 MDT - Msg ID: 25044)

Skip Msg 25026

I own some of this which I obviously paid too much for. Wasn't aware that they had any PM holdings left. Whats up with that rise???

goldfan

(02/11/2000; 15:35:50 MDT - Msg ID: 25045)

Journeyman (02/11/00; 14:58:04MDT - Msg ID:25034)

Yes!! I add myself as third seconder to the request to put ORO's latesd in the HOF.

And I want to f\remind others that we need one more to get his post on Japan and
the relation of demographics to fiats into the HOF.
ORO (2/7/2000; 1:08:34MDT - Msg ID:24565)
In fact I PROPOSE that all ORO's stuff be automatically put into the HOF as also FOA's and Trail Guides.

Goldfan

Voyager

(02/11/2000; 15:38:42 MDT - Msg ID: 25046)

Black Blade

Thank you for the Platinum update. It is hard to find much discussion on the subject. My Platinum Eagles are now up about 35% from cost. What are your near term views. Doesn't sound like Russia is going to get its act together soon.

Trail Guide

(02/11/2000; 16:01:51 MDT - Msg ID: 25047)

Changing times!

Thanks ALL! I'll leave these two posts to tell the truth for me. When (?) the new Trail page is up FOA will set a tough pace to keep up with, believe it! He has too, the preasure of oil is building fast.

ORO, I'll be arriving here soon, in debate mode no less. Your (and others) good post are noted.

ORO (02/11/00; 12:31:46MDT - Msg ID:25015)
Trail Guide - welcome
Welcome Trail Guide to your home.
We have kept it warm for you, awaiting your reincarnation.
Missed you badly.
Thank you for your return.

SteveH (02/11/00; 11:05:20MDT - Msg ID:25006)
Yep...has to be
One and the same?

SteveH (02/11/00; 11:02:35MDT - Msg ID:25005)
Trail Guide and FOA
One and the same?

Henri

(02/11/2000; 16:08:04 MDT - Msg ID: 25048)

Further Skip Msg 25026 CALVF

http://www.caledoniamining.com/Hey Skip, what doyaknow I found that in Nov 99 they had a private placement. What that usually means is that either someone has a project for which they need their (Choke)expertise or they found a good project which they needed funding for. Warrants are convertable at $0.1 in 2001 so whatever it is is on the fast track. Most buyers lately think it is worth a plug nickel or less as evidenced by the recent action after the PR Volume is spiking quite nicely though for something that traded for $9 originally. I think my basis is around $5. One day I woke up and it was trading at $0.15 Naturally i didn't pay much attention to it after that. Was expecting a white slip on it from my broker...I have a shrine of sorts papered with them...you know the ones.

HLS

(02/11/2000; 16:09:07 MDT - Msg ID: 25049)

Less than sutle hint??????

The bombing in New York at 4:00am this morning was at a building that houses some of J.P. Morgan's brokerage operations ...Yesterday J.P. Morgan was a strong buyer in gold futures ..they are (maybe past tense??) part of the selling club of Goldman, Mitsu, etc..
The profile of a suspect ..yellow hard hat and construction jacket does not smack of a angry "day-trader" ..but rather, it smells like a professional job ..to make their a point.
This is pure speculation ..but there's a lot of money at risk ..on both sides.
Go with flow. If it goes lower buy some ..if it goes higher buy more!
Best Regards ..HLS

Harley Davidson

(02/11/2000; 16:24:33 MDT - Msg ID: 25050)

@ORO, In your message ID:25019 you wrote...

"Wherefore is the justification, economic or otherwise, for national currencies? for fiat money at all? for the existence of a central bank? for the charters of banks? for the regulatory body that forces all banks to collude?"

I feel your pain, brother. The central bank is the brain-child concept "of the people" and "for the people" except that the "people" are the bankers that stand to gain by having the cost of their indiscretions and greed, when things go bad, transferred to the common people in the form of government bail outs so they can continue their plunder! While we hear talk of financial institutions that are "too big to fail" I can't help but wonder what happens when the cost is too great to save them when they do fail!

Thomas Jefferson was an ardent opponent to the central bank. He pointed out that the Constitution did not grant to Congress the power to create a bank or anything similar. In other words, such power is reserved to the states or to the people.

He also said:

"No one has a natural right to the trade of money lender, but he who has money to lend."

"A private central bank issuing the public currency is a greater menace to the liberties of the people than a standing army. We must not let our rulers load us with perpetual debt."

"I have ever been the enemy of banks, not those charging interest on loans of real money, but of those foisting their own paper into circulation, and thus banishing our cash. My zeal against those institutions was so warm and open at the establishment of the bank of the U.S. that I was derided as a Manic by the tribe of bank-mongers, who were seeking to filch from the public their swindling and barren gains... Shall we build an altar to the old paper money of the revolution, which ruined individuals but saved the republic, and burn on that all the bank charters present and future, and their notes with them? For these are to ruin both republic and individuals. This cannot be done. The Mania is too strong. It has seized by its delusions and corruptions all the members of our governments , general, special, and individual."

Edward Griffin's Creature from Jekyll Island is a well-documented account that lays it out in very readable detail (for a common man as myself) from the very beginning of banking in the US. And it is infuriating!!!

USAGOLD

(02/11/2000; 16:40:35 MDT - Msg ID: 25051)

HLS...All...Morgan Stanley

I hadn't heard about the Morgan Stanley bombing. If memory serves, Morgan headquarters were bombed by an anarchist in 1929 the summer before the crash. If I remember right Morgan didn't have the building repaired for a number of years thereafter -- leaving it a monument to Morgan tenacity and a reminder to all that passed by that this great investment bank was capable of taking a hit and never closing its doors. Interesting that Wall Street would begin to show some cracks in its armor this day over 70 years from that fateful summer -- particularly the drop in Microsoft which probably more than any other business represents this bubble market.

goldfan

(02/11/2000; 16:44:51 MDT - Msg ID: 25052)

Elwood (02/11/00; 15:19:56MDT - Msg ID:25042)

Sir Elwood you actually have a 3rd nominee for ORO's post. Myself re msge goldfan (02/11/00; 15:35:50MDT - Msg ID:25045)

Goldfan

goldfan

(02/11/2000; 17:12:37 MDT - Msg ID: 25053)

Solomon Weaver (02/11/00; 15:18:58MDT - Msg ID:25041)

Hey Sir Solomon I think your IRA partly belongs to the US Government, since it is tax deferred and so , there is likely a trust company holding the shares specifically for you so the gummint can get its share when you sell. so they are safe from the brokers creditors. But the mess will be so great IMHO that the trust co itself may "lose" the records. Better to forget the savings on taxes ( who know what will be the future) and go after the certificates now. IMHO.

Can you begin to fathom how bad it will be when 8000 mufunds records are all gone crazy, millions of people on the phone, all the office doors closed with a sign saying , try again in ten years. You will sue!! Who will you sue? THey sold your shares and went to Venezuela...Get in line, you and ten million others!! Which Russians were able to trust their brokers and their bankers to take care of their records??
Which Russian courts would hear their pleas??

Sir Solomon you asked me this once before. Maybe I'm wrong, but you can't go wrong by assuming I'm right and acting on this priority Monday morning. Let me know next June if you did the right thing...It's maybe already too late...

FWIW

Goldfan

RossL

(02/11/2000; 17:19:57 MDT - Msg ID: 25054)

Franco-Nevada

http://www.euro-nevada.com
I don't know why FN isn't doing better. I heard a rumor last year, sometime around the time of the merger, saying they were going to be listed on the NASDAQ sometime soon. I don't know the status of that rumor, but until they do, FN won't get much attention in the USA despite the impressive list of assets...

Trail Guide

(02/11/2000; 17:21:28 MDT - Msg ID: 25055)

A different view?

ORO (02/11/00; 13:59:00MDT - Msg ID:25019)
Aristotle and Trail Guide
------
What is to stop the gold markets to regroup and form a new gold banking system?
------
Q:
Please define "gold markets" in the context you use? We need to know exactly what this market is before one can "bank on it"!
----
I would think that - if there is gold there is also someoned to lend it and someone to borrow it.
---------
Q: Why use gold to create a lending contract? Would society use gold as a "lend able" account unit if it freezes any further function of their money asset? To date, the history of the past gold systems points that such a function creates gridlock in the banking system. Doesn't this contradict the first purpose of gold: to act as a pay as we go medium, under no contract risk?
---------
If there is new gold mined, it will be contracted for future delivery.
----------
Q: Again, Why must gold be used? And why the illusion of future delivery in contract form? If society places a high enough value (currency price) on it, a" no collateral financing" would easily create a pay as you go operation, NO?
-------------
If there is gold of many players in a number of vaults, the gold will stay in the vaults and the title to the gold will trade electronically.
-----------------------------------
Q: Tell me, do we pay for our gasoline with "stock certificates" of IBM? Or any other ware - housed asset. Would not real estate titles also trade electronically? In this period of high speed trade, digits of anything could do the trick, no?
-----------------

I still say that there is no economic reason, no justification for central banks at all. There is no
economically useful purpose for national currencies.
-------------------
Observation: Years of history and the nature of modern society say you are wrong, no? Our use of digital currencies for trade always flows like a river that's strong and wide,,,,, and it always flows to it's end in the sea. The water takes it into the air and rains it again upon the headwaters for another trip,,,,,a new currency starts again. All the while gold is held from it's value as officials grapple with it's position on the currency river,,,,,,,,,, stopping it's use as a wealth asset held by all.
--------------------
I will go further and state that the purpose of central banks holding gold is so their people remain beholden to the state and the bank cartels it has chartered. The best thing for the CBs and treasuries to do is to unload their gold and cease participation in the financial markets. Individuals
and private organizations should hold their gold and trade its receipts, to lend and to borrow it.
-----------------
Observation: Again, society has proven that any and all currencies and moneys that are lent and borrowed,,,,,'soon become corrupted. Even gold itself,,,,,many times! Let gold become an asset of real wealth,,,,,and it will shine as the best background money this modern world has ever seen,,NO?
-----------
The amount of gold and other PMs can not be insufficient in quantity to for the basis for the volume of trade settlement. It is precisely the point that the quantity of gold matters not. What matters is that it grows with the economy that trades it as money.
----------------
Q: What will you do today that is different from yesterday? Can we pass laws that remove human nature?
----------
The myth of a living and breathing fiat system. Many have proposed that there is some need in trade and business for the flexible money that fiat allows. I contend that there is no such flexible money, as its cost in trade and to business far outweighs the benefits of flexion.
------------------------------
Observation: We want and use this "flexion" today. Is not the only thing missing,,,,,,,,,,a way to shield
our wealth from the effects of this "flexion"'s inflation ,,,,
--------------------------------
Fiat currencies do not expand and contract as the markets need. Their mere existence forbids healthy interaction in the markets. The seekers of the conversion of income into wealth and those who must convert wealth into income are forbidden from setting the rates of conversion by the
existence of fiat currencies. The necessary precondition of a fiat currency is the existence of a monetary authority that controls the quantity and the rate of conversion - the interest rate - at which both monetary and "real" wealth
coverts into income.
------------------------------
Perhaps: But no one ever said that wealth was digits? no? A Western view of a world that's always going mad?
-----------------

(smile)
thanks Trail Guide

elevator guy

(02/11/2000; 17:23:33 MDT - Msg ID: 25056)

@Farfel

Farfel, you make an erroneous allusion to me sowing disention amongst gold bugs. I never disparaged anyone, nor hurled darts, nor said anything against any of my brothers in gold.

How dare you mention my name in the same sentence with Nepti.

You seem to be willing to mix the truth of what I said with your personal life and feelings. Very disapointing.

Jason Happy

(02/11/2000; 17:28:11 MDT - Msg ID: 25057)

Aristotle & usury

There is a certain liberal (I mean liberal in a bad way) argument that goes like this:

People are going to do X (insert vice here) anyway, so why not make it both legal, and safe, even providing information and assistance?

For example,

1. People are going to get abortions anyway, so let's legalize them, avoid the back alleys, and even provide taxpayer money for poor mothers, since "abortion is a right"...

2. People are going to use IV drugs anyway, so let's institute a needle exchange program so that they can shoot up safely, and reduce the risk of AIDS.

3. Kids are going to have sex regardless of what we tell them, so let's give out condoms to all High School kids.

4. There are always going to be homeless people, and single mothers, so let's give them welfare.

5. Since people are going to gamble, let's have a state sponsored lottery so that the proceeds can benefit the schools and the state?

6. Prostitution will always be around, so why not have "brothels" where the girls can work and be safe? In other states where brothels are not permitted, we can hand out pamphlets on how to be a street walking prostitute safely.

I can go on and on, but the basic theme is that this argument is a very poor one, as tolerance and subsidies for evil never does society much good.

And thus, I'm very disappointed to hear Aristotle, in his latest, use the argument:

People are going to practice usury and particpate in loaning money or borrowing at interest, and are going to do it anyway, so we need to accomodate for it in the "perfect monetary system"...

I'm sorry, but usury is wrong. It's evil. I know it not just because the Bible tells me so, but because all manner of rational thought, and evidence declares it to be so.

This isn't just naive thinking idealism... Islamic nations, with the introduction of the new gold coin, the dinar, are attempting to create a monetary system where lending at interest, usury, is banned completely.

If "OIL" is headed in this direction, why can't we follow their lead? After all, this precept, "no usury"
is common to all three: Judiasm, Christianity and Islam. So, in fact, if you consider the fact that the U.S.
came from Christianity, they are actually following our lead!

A strong and great leader doesn't say, "Well, the South was going to declare their independance anyway, so we might as well let the Union break in half..." or "Well, Germany was going to invade England eventually, so we might as well transfer the nation over to Hitler..."

A great leader leads the people to do the right thing, even if the path seems hard at the time, knowing that the benefits in the long run, are better for everyone. Which is why God says, "no usury."

goldfan

(02/11/2000; 17:31:27 MDT - Msg ID: 25058)

R. Powell and Sir Solomon R Powell (02/11/00; 14:59:01MDT - Msg ID:25035)

R Powell (02/11/00; 14:59:01MDT - Msg ID:25035)
and Barrick the call girl

Thanks R. for your note on "close out the position". I notice that Howe is quoting Kaplan as the gold analyst. I think it is time we really examined the language being used by the cabal adn by ourselves.A person is not a gold analyst becaue they claim to be o ahve a following of equally uninformed investors. Or becasue they get lucky in few knee-jerk trades. A miner is not closing anything out when they just add another hedge. Clearly, the market is beginning to notice these, like Kaplan, et al. that they are just armchair analyst, never traded an option or a futures contract in their lives, don't even know any traders of same.

But in fact it doesn't matter, the stuff that's coming down in the pike, in the failure of the markets for bonds and stocks, is so big it will bury all their little games. The problem then will be to find a person from whom you can buy gold at any price. All the markets will be closed up gone kaput. Look at LBMA and Comex, they are going out of the gold and silver business, tis right in their charts.Faster and faster. If I were in a position to bet, I say they're gone in a month, way it looks right now.

And everyboody here and the other sites, spreading the word, is speeding their end..

FWIW

Golffan

Aristotle

(02/11/2000; 17:46:56 MDT - Msg ID: 25059)

ORO and Elwood, and Trail Guide & Journeyman

Thanks for all of your comments; for the criticisms where you deemed them necessary and for the compliments where warranted.

Uncharacterisic of me, I shall now try to offer SHORT posts as time allows to address some matters that were raised.

ORO, I hope you are smiling as you read this, as I am as I type. A friendly exchange of ideas is good for everyone and makes for entertaining reading; agreement has the distinct look of a blank page or a silent room.

With that said, where can I get admission to the world you are living in? It is surely a more perfect version of the one I have found myself in all these years.

Remember, my goal was to lay out the "perfect" system for an IMPERFECT (real) world. I took on the project with no preconceived notions one way or another. Going in, I was a charter member of the Goldhearts club, and I emerged even more excited about the prospects of Gold than before. The future for Gold is bright, and it is rapidly approaching in the manner I laid out, if I'm reading the signs correctly.

I working on this project, I was personally shocked when I discovered that we absolutely NEEDED paper currency in order to set Gold free. In the perfect world you lapse into in your comments, everything you say is well and good. We don't live in that world, however. My biggest challenge in piecing together my proffered solution was to accept what this real world had to offer and avoid foisting my own preferences onto the world like a square peg in a round hole.

Looking back at the finished text, I see that I could have opted for another method of presentation that would likely have been offered up immediately for canonization, rather than the form I chose that was met largely with...nothing. This was done for a purpose. I wanted the commentary to have a decidedly real world brutality to it to establish its credibility among those (not here) who don't understand Gold. Had I written it for the pure pleasure of those gathered here, I would have written it from back to front. In short, it would have looked like this:

**Gold is the only real money there is--fiat currency is not money--so only Gold should be used as currency.

**Fractional reserve lending destroys a currency's value in trade, and therefore must not be allowed.

[time for concessions to the real world]

**People will always want to borrow for the things they want to have beyond their current financial means.

**Spending Gold into the marketplace, whether by the owner or by a borrower, would tend to result in prices for goods that weigh more--costs more Gold.

**As ever more Gold is borrowed out of other people's savings to be spent into the economy, the Gold's purchasing power is lessened from what it otherwise would be...hurting those who have elected to hold their Gold instead of risking it by lending it out as a source of income.

[notice in the above that we have all the bad devaluation effects without a single bank entering the equation!]

**For Gold to find its truest value, all savers must retain their Gold for their own use. Its properly retained value will more than make up for the foregone interest income. Gold must not be lent!

**With Gold as the only money, people will not be able to get loans. [In the real world, this is hard to imagine!] As an alternative, they will work up complicated contracts for the item they desire (new home or car?) in which they promise to deliver a certain level of their future productivity against a pledge of real wealth collateral.

**These contracts for the delivery of future man-hours would eventually be organized into their own market, and quantified into standardized units (called something like "manos") functioning as a currency. Everyone would know what the price for a loaf of bread would be in "manos," and they would all revel at the high price of Gold as quoted in "manos".

**As more future productivity is brought forward into today's market, we would see this "manos" currency-supply inflate, and each pledge of future manhours would be seen as less and less valuable when compared to real goods.

**Someone holding Gold in savings who needed to get some work done or to buy goods could purchase it directly with Gold. They could also sell a quantity of their Gold on the free market to buy the Man-hours they needed to get the job done. There will always be people with an excess of "manos" that will want to move them into this supreme monetary asset--Gold.

**Such a system is not prone to shocks (bank runs and currency crises, etc. are like earthquakes where pressure builds and then is suddenly released) because at all points the assets may freely come into balance against each other in the free markets of the world.

There is little difference between a manos in Bangladesh and a manos in Canada where one manos is taken at a moment in time as the work equivalent to a healthy man shovelling sand with a spoon into a soda bottle. Who cares if one manos is actually called one, ten, or 27.34 rupees in one dialect while in another language it is called one, two, or 6.45 dollars? Its really just a mathematical exercise. Whose to stop the real world from pursuing such a system? Its basically what we have now, except the evolution took another route!

The key is that Gold must be assisted in towards its own final and perfect destiny through the straightforward mandate (whether social, governmental or religious) that Gold shall not be lent as it has been, or otherwise attached to various financial derivatives. You can work for it, mine it, buy it, and sell it. You can't borrow it. Monetary perfection for an imperfect planet.

Gold. Get you some. We are moving in this direction faster than you imagine. ---Aristotle

Elwood

(02/11/2000; 17:47:44 MDT - Msg ID: 25060)

Here's the news item on this morning's Wall Street Bomb

http://www.washingtonpost.com/wp-srv/aponline/20000211/aponline114733_000.htm

http://www.washingtonpost.com/wp-srv/aponline/20000211/aponline114733_000.htm

Chris Powell

(02/11/2000; 18:15:56 MDT - Msg ID: 25061)

Homestake still among unhedged good guys

http://www.egroups.com/group/gata/375.html?Dispatch from GATA Chairman Bill Murphy.

Aristotle

(02/11/2000; 18:19:20 MDT - Msg ID: 25062)

Jason Happy, to accommodate your convictions I wish I hadn't offered the example of usury in my commentary

Indeed, I could have left it out and the substance of the post would have remained the same. Please see my latest comments to ORO where I again stress that much of what we often call "bad" and attribute to "banking" could effectively be brought about through other channels that aren't so easily demonized. With the system I described, I have slayed not only "demons," but the root of the problem as well. If I haven't, then I sadly missed my mark.

Gold. Get you some. ---Aristotle

Elwood

(02/11/2000; 18:26:25 MDT - Msg ID: 25063)

Response to Aristotle and Trail Guide

http://www.ords.com.au/frankshostak/feature_articles/paper_money.pdf
I offer the above on the nature of money, and why our current system can't be reformed into a lasting system based on a Euro/Gold combination.

I would add that the lending at interest is a beneficial thing because time itself is a scarce economic resource. Free market interest rates are the mechanism by which the division of labor progresses through investment.

Elwood

Cavan Man

(02/11/2000; 18:33:56 MDT - Msg ID: 25064)

Connecting the dots....

We know from published reports that Bill Richardson is going to the ME and that the topic is the price (too high). He is talking to all OPEC members. The US wants the price down say maybe $10/bbl or so. Saudi Arabia announces its plans to cut back oil exports to the US by 25%. SA knows they will make up those exports; they are not sacrificing revenue only "revenue" that is not on their terms. SA also knows the US will find additional supply from some other source. SA is telling the world in advance of Richardson's meeting that they will take less $USD/bbl because they must and in return offer less volume to the US because of their lack of confidence in the settlement currency (implied). I'll wager their accomodation of Euro settlement will be more friendly. Like any other vendor of any product or service, you have the choice of competing in the marketplace on your own terms. SA can afford to name their terms I bet!

Does anyone else share this analysis or have anything else to add? I think the next volley has been fired across the bow. Thanks and sorry for the rambling.

Cavan Man

(02/11/2000; 18:35:53 MDT - Msg ID: 25065)

Aristotle

Sir Knight, you are a wise man indeed.

Cavan Man

(02/11/2000; 18:36:37 MDT - Msg ID: 25066)

Town Crier

Thanks very much.

Jason Happy

(02/11/2000; 18:38:45 MDT - Msg ID: 25067)

Elwood and interest

Cavan Man

(02/11/2000; 18:46:47 MDT - Msg ID: 25068)

To Jason

We live in an imperfect world that will never be made perfect until The One who left us here returns and all Holy Scripture is fulfilled. In the interim, while not disagreeing with you, I humbly submit that the type of system Ari describes is not only a step in the right direction, it is evidence of positive incremental progression towards the type of system you might feel more comfortable with. IMHO, the world we live in requires debt, lending bankers etc. It is not the "system", but rather, the operators of that system that cause so much pain. The real problem is you and me and everyone around us. Seek theosis first, illumine yourself and then, those around you. That is what is important. That is what this world needs desperately. That my friend, is the (very) hard part.

Enjoy your thoughts!

Farfel

(02/11/2000; 18:48:48 MDT - Msg ID: 25069)

Elevator Guy, you're doing it again: SOWING DISSENSION.

elevator guy (02/11/00; 17:23:33MDT - Msg ID:25056)
@Farfel
Farfel, you make an erroneous allusion to me sowing disention amongst gold bugs. I never disparaged anyone, nor hurled darts, nor said anything against any of my brothers in gold.

How dare you mention my name in the same sentence with Nepti.

You seem to be willing to mix the truth of what I said with your personal life and feelings. Very disapointing.
----------------

Elevator:

Cut out your crap! You disparaged me and your slanderous message found its way to Bill Murphy who contacted me in great concern.

Rather than discuss the various insufferable transgressions of Barrick Gold in the world of precious metals, you wrote a post discussing Farfel and his alleged "negative" feelings toward GATA. That's called "shifting the argument away from the primary topic."

As my previous post indicated, I have fond feelings for GATA so go crawl back inside your hole along with your good buddies at Barrick.

In my mind, you're worse than Netpi. At least he seems to have determined finally that his silence is better appreciated than his incessant praise of Barrick.

Thanks

F*

Harley Davidson

(02/11/2000; 19:02:41 MDT - Msg ID: 25070)

Cavan Man

Your first sentence says it all... if only people would listen to it. Well done.

Gandalf the White

(02/11/2000; 19:07:22 MDT - Msg ID: 25071)

TC -- Some Unfinished Biz -- Thanks

Gandalf the White (2/2/2000; 21:30:28MDT - Msg ID:24178)
"HoF" Nomination for Post # 24162
This golden gem should be mounted at the ENTRANCE to the "Hall of Fame". -- What say you all ? -- Seconds ?
<;-)
++++
Skip (2/2/2000; 23:25:15MDT - Msg ID:24191)
2nd for "HoF" Nomination for Post # 24162
Gandalf the White (2/2/2000; 21:30:28MDT - Msg ID:24178) submitted "HoF" Nomination for Post # 24162.
I second that nomination.
--Skip
++++
beesting (02/05/00; 17:01:09MDT - Msg ID:24452)
I second Gandalf the White's msg.#24178 concerning USAGOLD msg.#24162--Addition to required reading of forum guide-lines.We need one more second for it to pass....anyone??
+++++
SHIFTY (02/05/00; 17:37:47MDT - Msg ID:24454)
second
I just got here but I will second it.
***
<:-) nomination, plus three Seconds !
===
USAGOLD (2/2/2000; 19:08:32MDT - Msg ID:24152)
admin
In case anyhone has any doubts about the previous post, it was me. Hit the wrong code. MK
===
admin (2/2/2000; 19:01:05MDT - Msg ID:24151)

===

Gandalf the White

(02/11/2000; 19:11:42 MDT - Msg ID: 25072)

#24162 for all to see again ! < ; - )

USAGOLD (2/2/2000; 19:58:54MDT - Msg ID:24162)
Follow-up...
While I'm venting, let me make another point. The purpose of this Forum, believe it or not, is not simply to generate profits for Centennial Precious Metals. It is also to promulgate an idea -- that idea being in its simplest frame of reference -- Sound Money. As we are all learning there is a whole universe of thinking that attends that concept. Centennial will get its share of the gold market whether or not this Forum exists. At the same time, I will not in the least bit underplay how important its been to the current and hopefully future fortunes of this gold firm. Have you ever noticed though how many times I have failed to respond to questions from the Forum that would have been considered an excellent sales opportunity by any investment broker? (Stranger, you know what I'm saying.) Have you ever wondered why I do not run any ads here? Why we only lightly toot our horn from time to time? Have you wondered why I haven't commercialized this site? Don't get me wrong. We have done fairly well over the past few years and God-willing we will do well in the years to come.

This Forum was originally created as a place where people of a like mind with respect to gold could have a place to gather and discuss their views, their opinions, their lives. I consider that and that alone to be of extraordinary importance and I am proud to be able to provide it. USAGOLD is a dream realized. Up until places like this existed, people who felt as we do about the nature of money, economics and politics were completely shut out from the public discussion. The fact that FOA and Another were around to help launch the site was a happy circumstance for me and the rest of us who first gathered here. At the same time, they were the catalyst. It was their acceptance of my invitation to post here that made it all possible. It was even a happier circumstance for me to see the intense level of thinking, interest and ideas that evolved here as a result of their presence right up until some of the strong posts from this afternoon. (I wish I could name names but I am sure I would leave out a shining star. I don't want to do that.) Do I agree with everything FOA and Another espouse? No, I do not. Anyone who has read the posting carefully can see that. But I do revel in the level of discussion among highly intelligent people that come here simply because these two teachers have decided to camp here for awhile. I have this strange notion that the pen is indeed mightier than the sword and this Forum is my testament to it. So in this way I am in all of your debt. You have made this more than I ever thought possible. This place was created for the gold investor and that's the way it will stay. Thank you, my friends and fellow goldmeisters. Let us hope that we ALL continue to walk this road together. And may this Mighty Oaken Table, like the subject discussed over it, never lose its luster.

RossL

(02/11/2000; 19:15:50 MDT - Msg ID: 25073)

Sir Aristotle

One question please. How do you prevent gold from being lent?

What if I, in a private transaction, lend 1 ounce fine gold to my neighbor for improvements to his house. He then pays me back 1.1 ounces fine gold at a later date. This is a voluntary contract to all persons involved.

What law have I broken? Where is the victim?

RossL

(02/11/2000; 19:17:15 MDT - Msg ID: 25074)

Sir Aristotle

OK that was more than one question

Elwood

(02/11/2000; 19:18:27 MDT - Msg ID: 25075)

Jason Happy in post (02/11/00; 18:38:45MDT - Msg ID:25067) states:

Elwood, I believe you are making two false assumptions.

1. You are assuming that, over time, money becomes worth less. Not necessarily so. As a society progresses, money buys more and more. Today, people on welfare live better than Kings who lived 300 years ago. Air conditioning, more food choices, better sanitation, etc. Thus, the time factor works to the advantage of one who is repaid the same ammount of money in the future, (as long as there is no corruption of the gold).

2. You are assuming that investment will not take place without "interest". False. In fact, the reverse is true. No bonds, no usury, actually means more investing in business. If there are no "bonds" or lending mechanisms available, then the ONLY way for money to receive greater returns in the future is to either hold it, or invest it directly. Thus, there is only savings (all agree is a good thing) and direct investment (all agree is a good thing).

Elwood replies:
Money is a present good as well as the medium of exchange. As the medium of exchange it can be traded directly for other present goods. The fact that our civilization has progressed from the days of the horse and buggy and before to the present day is not related to the changing value of money but, rather, the degree to which our laws and institutions promote the division of labor.

Because man is a mortal creature, an individual's time on this earth is limited. This fact gives rise to a difference in man's valuation between present goods and future goods. That difference, in any economic system is the true or real interest rate. Mises called this the originary rate of interest.

If there is no economic incentive for a person to forego present goods in order to gain the same present goods in the future there will be no such forbearance. You appear to be arguing that if I, or anyone, has saved a sum of money then I would be willing to lend that sum to another and risk losing it in a business venture without some kind of compensation other than a promise to return my money at some point in the future. If you believe this then we'll just have to agree to disagree on the issue.

Elwood

Farfel

(02/11/2000; 19:27:57 MDT - Msg ID: 25076)

@Solomon: A Hypothetical Scenario Worth Considering.

Solomon, I found your thoughts to be of interest concerning Reg Howe's analysis of Barrick's huge purchse of calls options.

The presupposition is that since some very wealthy entity (entities) took the opposite side of Barrick's call position, then it (they) will not allow gold to move above 3 this year or 330 next year. In your mind, it is inconceivable that this entity (ies) would risk so much simply in exchange for the call premium.

Well, what if it is an investment bank that is sinking rapidly under the weight of a failed 30 year bond position?
What if that investment bank is leveraged to the hilt already owing to its super-heavy exposures in the bond and stock markets? What if it is receiving all variety of margin calls on its failed 30 yr. bond position?

Then, as luck would have it, the same investment bank takes a meeting at around the same time with a "buddy" from Barrick Gold.

At that meeting they learn that many Barrick shareholders are giving literal hell to the company on account of its huge hedged position in gold. Threats of class action litigation are in the air on a daily basis. Barrick tells the investment house that they intend to begin closing those hedges as quietly as possible.

Of course, the investment house in question does not want to see those hedges closed since the same house is holding a large short gold position in its own account and for other clients.

At the same time, Barrick appears as a Godsend because if they have enough money to begin closing hedges, then maybe they might wish to part with some of that surplus and help the beleaguered investment house out of its immediate margin call problems in the bond market.

So the shrewd house persuades Barrick to refrain from closing its gold hedges en masse. Instead, the house will sell them a HUGE load of call options @320 this year, @330 next year.

Net result: Barrick can placate (dupe) its increasingly hostile shareholdes by revealing a hefty LONG position in the gold market (even if its is only a CASH long position).

The investment house gets a nice infusion of cash to meet margin calls in the bond market while simultaneously protecting its real gold short position in its own account plus the accounts of certain clients.

Of course, here is the problem: the investment house, having managed to survive CRISIS #1, now must figure out how to ensure that those gold call options never go into the money (potential CRISIS #2).

Of course, the house will do everything in its power to influence Central Bank clients and gold producer clients to continue to sell gold. They will continue to downgrade certain unhedged golds and persuade others to increase their hedges. They will propagandize regularly to media contacts about impending doom and gloom for the gold asset.

HOWEVER...

Just because they are a big investment house does NOT mean they will succeed this time. In other words, the core thesis here is that they wrote the call options in a state of desperation rather than in a state of calm, cool control.
In their minds, they probably determined to solve the immediate liquidity crisis, then figure out later some strategy to knock down the POG.

Solomon, its a hypothetical scenario but there is a compelling logic to it given the increasingly stressed nature of ALL financial markets lately.

If there is even 50% substance to my hypothesis, then those call options are not held in very strong hands right now.
A savvy group of wealthy powerful opportunists could wreak havoc right now if they can push the POG up over 330 ASAP. In doing so, it could send a teetering investment house and notable nefarious player in the gold carry trade, right over the edge.

Thanks

F*

Harley Davidson

(02/11/2000; 19:28:28 MDT - Msg ID: 25077)

@Aristotle

I enjoy your thoughts and struggle in the effort to gleen from your intellect.

It seems to me that rather than looking for the perfect banking system in an imperfect world, there might be something to be learned from perfect banking systems that existed, in the past, in an imperfect world. I offer the following examples that where successfult for hundreds of years for your consideration:

The Bank of Venice, where abuses had reached such a point that the Venetian Senate passed a law forbidding any other commercial pursuit other than the primary purpose of holding coin, exchanging currency, handling the transfer of payments between customers and notary services. The bank thrived because its paper receipts were widely accepted and, as a matter of fact, instead of being discounted for exchange in gold coin, enjoyed a premium because of the confidence in their value over the wide variety of coins circulating at the time, some of dubious quality.

The Bank of Amsterdam, of which I think you are familiar.

And, The Bank of Hamburg which for over two hundred years adhered strictly to the principle of safe deposit.

The common denominator of all of these, once honest and successful, banks turning to failure is fractional reserves lending and perhaps that is where we should turn our attention. When looking at where things go wrong, it seems that fractional lending sows the seeds of all that follows. Perhaps because it is simply immoral.

Thanks for your thoughts...

Farfel

(02/11/2000; 19:33:55 MDT - Msg ID: 25078)

@Strad Master...

Your thoughts about the cheap accumulation of gold certainly make sense for those whose primary goal is accumulation of the physical.

For others who are in the paper gold markets, to put it simply, "life is short.' They would rather see an end to gold market subversion sooner than later since there are simply too many gold producers on shaky ground at these low prices.

Also, thanks for your good wishes. My wife is feeling great and I send the best wishes to you and your family (special hello to "A" the Terrible")

Thanks

F*

Solomon Weaver

(02/11/2000; 19:42:50 MDT - Msg ID: 25079)

Of IRAs and short sellers

goldfan (02/11/00; 17:12:37MDT - Msg ID:25053)

Sir Goldfan

What you present in your version of the coming crash is 8000 mutual funds going belly up...this implies a complete and catastrophic collapse of the market and all trading. For this type of outcome, I am assuming that my gold and silver coins will preserve enough of my wealth to get a good head start.

There is a milder scenario which goes something like a year long bear market where phones ring on most days, and shareholders get more and more tired of losing and slowly bail out month after month until the market goes back below DOW 1000. If this is the case, I may be glad to have some funds in an IRA to be a buyer down at the bottom.

No insult to you kind Sir, but as much as you believe in your gold, there are many who believe that wealth is created by hard working people who show up every day at Fortune 500 companies (and smaller ones too). That no matter how hard it falls, the Phoenix of stock value will rise again from the ashes.

But, what I WOULD find rather unfortunate is if in a bear market, the potential stupidity of some VP or daytrader at my broker could cause a counter party to seize MY shares. For example, if I AM NOT ALLOWED BY LAW TO HOLD CERTIFICATES AT HOME FOR STOCKS IN A TAX DEFERRED ACCOUNT (which I still do not know) BUT HAVE TO LET THEM BE HELD BY THE AGENT OF MY BROKER, SHOULD THAT NOT IMPLY THAT MY BROKER IS NOT ALLOWED TO LOAN THEM TO A SHORT SELLER?

Goldfan. Sorry I asked twice...but I will probably ask again.

Poor old Solomon

Cavan Man

(02/11/2000; 19:49:55 MDT - Msg ID: 25080)

Farfel

Your series of posts these last couple of weeks has just been teriffic.

In your honor, we are serving farfel here, tomorrow!

Solomon Weaver

(02/11/2000; 19:51:57 MDT - Msg ID: 25081)

(No Subject)

Farfel (02/11/00; 19:27:57MDT - Msg ID:25076)

Farfel Thank you for the very interesting analysis...I certainly hope that "you" are right. Either way, I think that your story line make a better plot for a mystery novel than my 800 gorilla defending his bananas...don't forget, I almost got thrown off the forum a while back for daring to say that "only by convention was gold worth more than composted banana peels".

To the entire forum...I now realize what was wrong with that quote...what I should have said then was "only by convention is a GOLD CONTRACT worth more than composted banana peels."

Poor old Solomon

Solomon Weaver

(02/11/2000; 20:01:37 MDT - Msg ID: 25082)

(No Subject)

Cavan Man (02/11/00; 18:33:56MDT - Msg ID:25064)
Connecting the dots....

----

not too bad not too bad well have to wait and see....my assumption is that oil might not trade directly in Euros so soon (the soft approach). I think the Europeans are wise enough to wait until there is some type of derivatives crash where the world needs a big band-aid and then they step in an say "well to get Europe moving again...we are opening the following exchanges, where quotes will be in Euros and here are the new rules regarding collateral..."

There was also some rumor a while back that SA had worse problems with y2k than was being said....although no credible news seems to have really come through.

Poor old Solomon

TheStranger

(02/11/2000; 20:16:28 MDT - Msg ID: 25083)

With Hat in Hand

Please forgive me if any points I raise here have already been made.

So now we have the spectacle of Energy Secretary Bill Richardson, with hat in hand, throwing his poor suffering United States at the mercy of The House of Saud. I suppose it is like the Clinton administration to try and wriggle their way out of another tight spot. Still, this time, I am afraid, glib diplomacy and sanctimonious pleas for mercy will not succeed, nor should they.

By current reserve estimates and world oil consumption rates, all the petroleum on this little planet will be gone before another century turns. As such, what could possibly be more repugnant to the rest of the world than 300 million Americans driving around in gas-guzzling SUVs and crying poverty over oil prices? Never mind that gasoline costs us no more today than it did in 1979 and that, in the meantime, nearly everything America exports has more than doubled in price.

I think Opec finally grasped an important concept in 1999 that won't be forgotten for a very long time. To wit: Give the rest of the world two percent more oil than they want, and you will be on your knees; give them two percent less, and they will be on theirs. Were the tables turned, things would be no different.

schippi

(02/11/2000; 20:17:57 MDT - Msg ID: 25084)

Gold Sectors Four Year Chart

http://www.SelectSectors.com/gldresit.gif This Chart gives a good picture
of where we have been, and where
we are going.

Cavan Man

(02/11/2000; 20:21:14 MDT - Msg ID: 25085)

To Jason

Will you admit that liquidity is required for economic development; that in order to advance the material circumstances of mankind at a needed pace, the monetary system must be flexible? Leave out greed and consumerism. Forget the history of the USD and how it has fortunately benefited (a few) this country and its citizens. "Debt" is just a means to an end. It can be a useful tool. For example, the church I belong to borrowed $1MM originally to finance the building fund. "Debt" too has been corrupted by the world in which we live.

For example; John Smith borrows (Visa) $1M to buy an inverter for a mission in Haiti that requires its use for pumping potable water. His brother Tom borrows a like amount to bid for and purchase a complete set of Ben Hogan Apex woods and irons in mint condition on ebay; never been played. Now, while Tom probably paid too much by half, which brother was a good steward of "debt"? Thanks for considering.

Solomon Weaver

(02/11/2000; 20:21:33 MDT - Msg ID: 25086)

The first paragraph of a good read....

http://www.gold-eagle.com/gold_digest_98/butler111498.html"A practical definition of the word shortage as it pertains to a tangible commodity would evolve around supply being insufficient to meet demand. A more precise definition would refine the meaning of that insufficiency to apply to the inability of current production to meet current demand. Since all commodities have some sort of inventory, any imbalance of current demand exceeding current production will automatically necessitate a draw down of inventories, almost always by increasing prices."

-----

Isn't it funny how this does not seem to have applied to gold?

Poor old Solomon

Cavan Man

(02/11/2000; 20:30:14 MDT - Msg ID: 25087)

Solomon 24082

I agree. Further, knowing this all has been thought out well in advance by very intelligent people, I'll wager there are a small number of operational plans for moving their agenda ahead. They may not choose to wait upon a disaster although that option might be best. Perhaps a sudden financial mishap is part of the plan too. I only believe that people act in their own interests. To me, having followed all the oil/gold theory closely, it is easy to see the trail markers. It just makes too much sense.

TheStranger

(02/11/2000; 20:35:31 MDT - Msg ID: 25088)

4:17AM Mountain Standard Time

I happened to be watching when Bloomberg Business News interviewed Barrick's beleaguered Randall Oliphant this morning. Perhaps the time slot was intended to make a point about the poor man's popularity these days. I don't know.

The questioner was well aware of the current controversy surrounding Barrick's hedging policies, and he pressed Oliphant pretty hard to get at the truth. But Oliphant was adamant: Barrick is now situated to take full advantage of the higher gold prices which they see coming.

"How much higher?" asked the questioner.

"Well", Oliphant didn't want to put a price on it, but "A LOT HIGHER!" he said, and then he repeated it for emphasis. "If gold goes to $400, Barrick will get $441. And if it goes to $500, we will get $541," he averred.

That's more like it Randall. Now, let's all make some money!

Cavan Man

(02/11/2000; 20:37:57 MDT - Msg ID: 25089)

Stranger

Well said. If we had good leadership or should I say any leadership in high office going back many years, we would have, at some point, made a strategic about face and began developing alternative energy sources and MADE them economical. I respect the House of Saud. They have played a smart and wise hand.

Peter Asher

(02/11/2000; 20:47:42 MDT - Msg ID: 25090)

Aristotle -- Michael

Aristotle (02/11/00; 17:46:56MDT - Msg ID:25059)

This is an excellent train of logic you have laid out, a very valuable building block in the structure of understanding money and fair exchange that we endeavor to create here.

Consider this an HOF nomination but please help me track the seconds, I'm very tapped out for even reading time at the moment. You, ORO, Ellwood, Solomon, Goldfan, Journeyman, and Trail Guide have been doing an incredible job of inspirational analysis of late, aided and abetted by "Give 'em hell" Farfel.

Michael: your Forum child is attaining manhood as we speak. Congratulations on an superb job of parenting.

TheStranger

(02/11/2000; 20:48:28 MDT - Msg ID: 25091)

Poor Old Soloman

I like reading your posts, Sol, and I will be happy if what I say here clears up a question you have.

Under law, IRAs cannot use margin, and securities in accounts which are not specified as margin accounts cannot be loaned for short-selling or pledged by the broker as collateral.

Before long, stock certificates will be going the way of the buggy whip anyway, I am afraid. They are too easily lost or stolen. Plus, people have a way of dying and leaving old ones behind that can be hard to trace.

Just Weight & Measures

(02/11/2000; 20:56:52 MDT - Msg ID: 25092)

@Farfel's interesting hypothosis re: the source of Barrick's calls.

My My Farfel. I see you have an undying faith in the integrity of Barrick and the un-named investment house. Surely you wouldn't suggest that Barrick or others would act in such an unwise manner. Is not Barrick gold one of the largest if not the largest gold producer in the world. The health of the gold markets must indeed be something very near and dear to the hearts of those at Barrick? Surely it's the bad bullion banks, or perhaps those unwise hedgers over at Ashanti, or the foolish selling of gold by CB's like the BOE that has caused the distress in the gold market? But surely not big, solid, wonderful, pure as the driven snow, Barrick?

Only a somewhat paranoid fellow, moderately inclined toward conspiracy theory (not unlike myself) would even consider such a theory as you proposed. I like it!

Kind Regards.

Goldy Locks Guy

(02/11/2000; 21:09:42 MDT - Msg ID: 25093)

Kaplan

Is the Kaplan here the same one that was quoted in the Rueters story I read, or is it just a coincedence???

Goldilocks guy

Solomon Weaver

(02/11/2000; 21:43:29 MDT - Msg ID: 25094)

Once again, the silver moon is young tonight.

I occasionally make remarks here about silver, because I think that as a near and dear relative to gold, we can understand gold if we think sometimes of silver.

I have also dared to make a little personal prediction. And here it is once again.

THE SILVER MARKET WILL LOCK UP BEFORE GOLD DOES...MEANING SILVER PAPER WILL BURN AND ONLY PHYSICAL WILL SETTLE.

To support my little thought stream here...please consider reading these two URLS:

http://www.gold-eagle.com/gold_digest_98/butler111498.html
http://www.lbma.org.uk/clearing_charts.htm

They are the sources for the numbers I am about to throw out here.

First, no surprise to anyone...silver at about $5 is worth 1/60 of gold at $300. (historic ratio closer to 20-30).

Next, known above ground reserves of gold generally agreed to be in the 120,000 ton range. Known "stocks" of silver according to Butler are in the 15,000 - 30,000 ton range. (Jason Happy, we have gone over this together a while back and I agree if people start to melt down jewelry etc.... Jason gave a value that silver might be much much higher...Butler states that 50 years ago we had about 150-200,000 tons, but that we have chronically underproduced since then.) But, the point I want to make here is that when we talk about the amount of silver or gold that could be considered to enter the market, then there is certainly not more ounces of silver than there are gold, and quite possibly the ounces of silver laying around are much closer to 20% of ounces of gold.

So we have a very unusual situation...silver in the ground much more abundant than gold...silver in stock, much less abundant than gold...but for the sake of argument, let us be generous and call it parity.

Next item. Current outstanding gold short position as calculated by the esteemed Frank Venerosso...on the order of 10,000 tons...maybe more. So let us just say about 10% of the world's above ground gold reserves. Current outstanding silver short position (2 billion oz) according to Butler....on the order of 50,000 - 60,000 tons...so let's just say about 200-300% of the world's above ground silver reserves. (IS THIS STARTING TO FRIGHTEN ANYONE YET?)

OK TAKE A BREAK - GOLD SHORT POSITION IN DOLLARS IS $10 million per ton or about $100 billion plus (sound like too big to fail?) SILVER short position in dollars is about $150,000 per ton or about $7.5 billion (the FED could cover that with one days worth of repos). WHEW, NOW WE ARE BREATHING EASIER...AT LEAST THE PAPER SILVER TIGERS CAN BE BAILED OUT IF NEEDED.

NOW HERE IS THE PART WHERE I WILL BE A LITTLE CONTRAVERSIAL: Although there is always demand, the world does not really need gold...I mean in the sense that they really "use" it...you know for things like photography, electronics and such...be honest folks...most demand for gold is for beauty and wealth...but silver consumption has been growing each year...and in each year the above ground reserve has shrunk by about 6,000 tons....when silver gets real short, there are going to be a lot of industrial users who are going to start buying at any price to keep enough on hand to continue in business. Baxter predicts that even without the massive 2 billion ounce cornice of short silver hanging off the roof of the COMEX, that we would have a serious structural problem in silver in the next couple years.

So, can you all see that the physical gold market is like a big fat new Cadillac (or a Harley if your a biker) and the silver physical market is like a 25 year old VW that delivered mail everyday on salty winter roads???

Now, lets look at those charts that Black Blade showed us today. http://www.lbma.org.uk/clearing_charts.htm

I have pondered and penciled and here is the breakdown. This is for the LBMA only (but COMEX and ASIA are certainly in about the same situation).

These charts are a little deceptive because the dude who made them played around with the scales to make the lines for gold and silver superimpose as best as possible...and the great sin of not letting 0 be the bottom is a problem..but here we go...

On a solid day in early 1998, about 12 times as many tons of silver traded on the LBMA (remember, we are considering that even on a weight to weight basis silver is more rare...it is very rare in central bank vaults and not as rare in exchange vaults...perhaps a misleading situaion to brokers who believe silver more abundant than gold).

But more interesting to us perhaps, is the fact that the dollar value of gold traded is about 5 times silver...now what this really tells us is that based on the number of contract dollars churning every day, silver is not really so puny...sort of like little NASDAQ next to bigger brother DOW.

Now let's go a little further...Number of Transfers...whatever that means...1,500 on a good day for gold and 700 on a good day for silver. I am assuming that these are the numbers of trades between bullion banks, who then go out and transact with the little guy...But what we can distill out of this is that the average dollar size of a gold transfer is about $7-10 million and for silver about $2-3 million.

Now here is the part where I ask hardened gold bugs to pay very close attention: When you are down on the trading floor and watching it all happen, the players are moving "almost" as much silver paper value as gold paper...let us say 30%. When a single counter party cannot settle at the end of the day, the silver pain of $2-3 million is close to the $7 million hit on a gold problem.

Now here is one more factor to consider...whereas central banks may have held silver in reserve in the past, they have long ago sold or leased it all out to BBs and most of that is long gone. Because of this, if silver trading were to explode, Alan Greenspan would not feel like his "reserves" were in trouble...he would just walk over with a checkbook, sit down with the big counterparties, and write out a fat repo check...shorts gone...covered in $$$...."boys, please behave yourselves better the next time around".

Well, actually, by the time the market got that far, it is likely that the number of parties opting for delivery would have decimated the exchange silver reserve and with silver closer to $20 than $5, that check for the repos could start to look pretty fat...

But, the thing to remember, if gold got in the same situation, a whole lot of big CBs and BBs and billionaires would see their interests in trouble, and Greenspan would have a hard time writing out checks for $250-500 billion...

So, it seems that the silver market is not too big to fail...and I am even assuming that the big boys might even let it fail, so that they could scare the living daylights out of everyone in the gold market enough to make negotiations work.

When the dust settles, we can bet that silver will trade between those who really have it, and those who really want it, and the middleman won't have a glamorous job...then the real price of silver can be seen...and as Butler points out, it could be "quite a while" before "supply can catch up with demand".

Oh, and this is not at all taking into consideration that Joe Public might take a stronger interest in owning a silver coin or two in his retirement portfolio. Like I love to say "silver is the poor man's gold".

Jason....that's the online business you want to get into.

There's no silver and gold...all that you can hold is in the moonbeams...(the future themesong for the COMEX).

Good night all, Poor old Solomon

Peter Asher

(02/11/2000; 21:50:33 MDT - Msg ID: 25095)

Stranger

When we get that "One liner" page in the HOF, consider this nominated.

To wit: Give the rest of the world two percent more oil than they want, and you will be on
your knees; give them two percent less, and they will be on theirs.

Solomon Weaver

(02/11/2000; 21:52:28 MDT - Msg ID: 25096)

I like that line a lot too.

I will definately second that one liner nomination...

I can just see the vatican on his knees

Jason Happy

(02/11/2000; 22:11:49 MDT - Msg ID: 25097)

Cavan Man & Elwood; about interest free loans

Re: Cavan Man: "Will you admit that liquidity is required for economic development; that in order to advance the material circumstances of mankind at a needed pace, the monetary system must be flexible?"

No. I don't admit that liquidity is required, nor must a monetary system be flexible. Under strict authoritarian rule, under Hitler, Stalin, the South American Indians (either Aztecs or Mayans, I don't remember which) (and increasingly the U.S.A.) money (gold) is not used as a medium of exchange. Moneyless societies have existed in the past, and have experienced tremendous economic development.

Liquidity, specifically, Money (gold) is needed for freedom. Which also brings about economic development, and at a faster pace. Also, a pure "gold as money" system IS flexible.

Assume I am a fantastic artist who, with $100 in paint, can create a painting worth $1,000,000. Does the Fed need to whip up a batch of paper out of nothing to balance out the value of my painting? Would I sit in front of a blank canvas, and not start my creative work until such excess money is made available? Sillyness! Absurd! Yet, in its bare bones form, this is the argument made to advance the "need" for a flexible money supply!

And I am not against debt. Nor am I against collateralized debt. There are no prohibitions against debt in the Bible. The law is against usury, interest on debt.

Elwood... about "forego present goods in order to gain the same present goods in the future"

If you had a 40 year supply of wheat for one person, created by your own sweat and labor, knowing that you can only store wheat for 20 years, would you give up 20 years supply right now, to receive a 20 year supply 20 years in the future? I'm sure you would. And you would benefit greatly from such an arrangement, as you would not be eating spoiled wheat 21 years down the road. Under this scenerio, you don't need usury to give you "economic incentive" as you put it, to make the loan. There are many other examples I could come up with, use your imagination. But, interest free loans are not the primary means of economic development... WORK, savings and investment are.

Re: "You appear to be arguing that if I, or anyone, has saved a sum of money then I would be willing to lend that sum to another and risk losing it in a business venture without some kind of compensation other than a promise to return my money at some point in the future."

No, I am not saying that loans should be uncollateralized... as you put it... "risk losing it in a business venture without some kind of compensation". Just interest free. Once again, loans are not the best path to economic development; even if they are interest free; savings and investment are the keys.

Gandalf the White

(02/11/2000; 22:15:49 MDT - Msg ID: 25098)

Interesting TA --- The Hobbits are hoping it is correct !

http://www.the-privateer.com/welcome.htmlThe Privateer's analysis of Friday's NY close and the $A Gold Chart as an indicator that a new uptrend is now underway. INTERESTING analysis and also other posts and discussions from the USAGOLD Forum and one SteveH.
<;-)
====
$A Gold $1 x 3 P&F Chart: Close on Feb. 11 was $A 503. This is a VITALLY important level for $A Gold. More on this in the analysis below.
$US Gold $1 x 3 P&F Chart:
Spot future close on Feb. 11 was $US 311.10 - down $5.10. $US Gold has held ALL of its February 4 $US 23.20 rise.
----
The purpose of this page has always been to illustrate the historically proven fact that the price of $A Gold is a good lead indicator for the price of $US Gold. In other words, when the $A Gold price starts to rise (or fall), it gives an advance warning of a similar move in the VITAL $US Gold price.

With that in mind, here are two HUGELY important charts. Please take a good look at both of them:
$A Gold - monthly bar chart - since 1987
$US and $A 5x3 P&F chart - since 1986

Look at the SENIOR (down) trend lines on both these $A charts, the bar and P&F charts. In both instances, the move in $A Gold above the $A 500 level on Feb. 11 HAS PENETRATED THEM! This is of supreme significance, especially on the P&F chart.

$A Gold reached a high of $A 691 in Sept. 1986 and marginally surpassed it at $A 694 in Oct. 1987. These levels are the highest EVER reached by the $A Gold price. They are higher than $A Gold was in January 1980 (when $US Gold reached $US 850) because the $A had fallen massively against the $US Dollar in the meantime.

This trend line on the $A P&F chart is the equivalent of the line connecting the Jan. 1980 high ($850) and the Feb. 1996 high ($414) on the equivalent scale $US P&F chart. On the $US chart, the present level of that line is about $US 375.

Please remember, the $A Gold price of $A 503 set on Feb. 11 does NOT reflect the $5.10 fall to $US 311.10 in $US Gold on Feb. 11. At an exchange rate of $A 1 = $US 0.6315, that gives an $A Gold price on Monday, Feb. 14 of about $A 493. That would not be enough to cause a downturn in the $A 5x3 P&F chart. It would take a close of $A 485 or lower to do that.

If the $A Gold price still acts as a lead indicator for the $US price, and we have seen no evidence that it doesn't, then Gold is at a truly critical juncture. If the senior downtrend line on the $A chart does NOT hold this Gold price move, then we have the definitive "trend reversal signal". The trendline on the $A chart spans 13 years (1986/87 - 2000). The equivalent line on the $US chart spans 20 years (1980 - 2000).
----
<;-)

Jason Happy

(02/11/2000; 22:43:02 MDT - Msg ID: 25099)

Silver

Solomon Weaver; silver to gold ratio, from mining, historically, varies from 6:1 to 10:1 more silver mined than gold. Assume 1/2 of all silver ever mined has been irretrevably consumed by industry in film & photography, circut boards and switches that have ended up in landfills, etc. Still leaves about 4 ounces of silver for every .7 ounce of gold; which are the current estimates of PM's available per person on the planet.

But I agree with your opinion that the silver market will likely go bust (or go to the moon) before gold. There is far more paper silver being traded compared to known silver stocks and mining output. Ted Butler estimates several years worth.

I think the bulk of the "missing silver" is in jewelry and silverware, and it is not likely to come out of these markets at close to today's bullion prices. A typical arty silver bracelet or necklace will sell for $100 and contain about an ounce of silver. This type of item probably will not be sold into the market if silver reaches $50/oz, or even a $100! After all, the jewelry piece will then be worth about $200 or more, if you can even buy such a thing in such a market!

I recently bought a silver ring from an artisan at Fishermans Wharf, San Francisco. No frills, no design, simple band, cost $10. Probably weighs about 1/5 or 1/10th of an ounce.

R Powell

(02/11/2000; 22:43:41 MDT - Msg ID: 25100)

Supply and Demand Mr. Soloman Weaver Msg ID 25086

Good definition, I like it. Many fundamental traders, myself included, try to figure out the total supply picture and compare this to total expected usage and then, for the sake of comparison, figure ending supply (supply-demand) as a percentage of total usage. This percentage figure can be used to compare current prices to past years with similar percentages. Example- total supply-demand leaves a leftover that equals X percent of usage and the last time X percent was leftover the commodity sold for so many $ per bushel, ounce,ton whatever. This gives me some (little but better than no) idea if current prices are likely to rise or fall. Obviously there are many, many more variables and unknowns and unknowables involved which is why I keep my day job. However, back to gold. I think the laws of supply and demand still apply to gold also but have been distorted and intentionally clouded by ill-advised hedging,the gold carry trade,bank manipulation and the perception of gold as a poor "investment". When you wondered why supply/demand laws weren't working I thought again that tampering with the supply/demand equation is like coiling a spring. The gold market has been forced way off center and will(IMHO) swing back violently, perhaps very soon. As for those who sold calls to Barrick, we must remember that there are many people with calls to sell, who probably honestly think they are making a sound investment. This is not to say there is no manipulation but rather that not everyone selling gold or gold calls shares our opinion that gold is grossly underpriced. The buying and selling of options is a zero sum game. For every buyer, a seller and for every winner, a loser. I still have salespeople calling to ask me to open an account with them. I often talk at length to see what they know and what I can learn. They know so pitifully little of our gold market which is why I am here faithfully every day. Gold has been unnaturally driven down but markets can not be manipulated forever but every bearish development shouldn't be seen as conspiracy, much is the honest but uninformed (uneducated)work of market traders.

Elwood

(02/11/2000; 23:44:35 MDT - Msg ID: 25101)

To Jason Happy:

Jason Happy in (02/11/00; 22:11:49MDT - Msg ID:25097) wrote:
Cavan Man & Elwood; about interest free loans

Elwood... about "forego present goods in order to gain the same present goods in the future"

If you had a 40 year supply of wheat for one person, created by your own sweat and labor, knowing that you can only store wheat for 20 years, would you give up 20 years supply right now, to receive a 20 year supply 20 years in the future? I'm sure you would. And you would benefit greatly from such an arrangement, as you would not be eating spoiled wheat 21 years down the road. Under this scenerio, you don't need usury to give you "economic incentive" as you put it, to make the loan. There are many other examples I could come up with, use your imagination. But, interest free loans are not the primary means of economic development... WORK, savings and investment are.

Re: "You appear to be arguing that if I, or anyone, has saved a sum of money then I would be willing to lend that sum to another and risk losing it in a business venture without some kind of compensation other than a promise to return my money at some point in the future."

No, I am not saying that loans should be uncollateralized... as you put it... "risk losing it in a business venture without some kind of compensation". Just interest free. Once again, loans are not the best path to economic development; even if they are interest free; savings and investment are the keys.

Elwood replies:
Sir, you are forgetting that it takes more than just sweat and labor to amass 40 years worth of wheat. It also takes land, capital and TIME, none of which fall in abundance from the sky. If I am to amass my 40 years worth of wheat I must work at an occupation long enough to acquire the goods to trade for the needed capital and land or I can borrow it from someone who has acquired the means through saving over time. Only then can I apply my sweat, labor and still more time toward the effort which may, in fact, fail due to my incompetence in farming or inclimate weather or a myriad of other reasons.

If I choose to borrow the money in order to economize my time, I must compete with others who wish to engage in equally socially acceptable occupations who also require capital and land for their efforts. Assuming that this competition takes place in a free market then there will be a free market interest rate as compensation to those who forego present goods in order to purchase more future goods. The question of security of the principle amount through collateralization is a separate issue entirely from the forbearance of consumption now in return for more later.

If you propose that there be a law passed to render illegal this free market interest rate then I will be unable to legally economize my time and "society" will be worse off because the wheat will be had later rather than sooner while the loan proceeds sit, unused, under a mattress somewhere. Such a law would fly in the face of the concept of a free market economy as I understand it.

Elwood

elevator guy

(02/12/2000; 01:49:18 MDT - Msg ID: 25102)

@Farfel

Farfel, you pompous ass. Wasnt it you who several months ago, before the big October breakout, made a point about how come he was no longer supporting GATA? I dont have time to research it, so I'll just ask you. Maybe someone else has recollection of that post. If it wasnt about support, it was about their leadership skills, or something. I just remember the tone and the posters name. "Farfel" If I am wrong, it still doesn't change my feelings about you.

You storm in spewing bile, with Kitco-like crudeness, like you are singlehandedly bringing about the revival in gold. I dont hang around Kitco for this very reason. Yet you copy posts from Kaplan, and make us read them. Give it a rest, man! If you dont like what is posted at Kitco, dont read it. And dont go re-posting it in here. This is suppossed to be a place where we can get away from that crap.

Quit mentioning me with Nepti. I dont know who he is, but I dont care. And I hate Barrick with a vengence, so shut up about how I'm on their side or something. What distorted logic you use. Its not logic at all, just an attempt to distort the emphasis about my post away from how to be a good soldier for gold. Just because I didn't say anything about Barrick doesn't mean the points you made were lost on me. You've got to be real paranoid to think that way.

I called you on the carpet for disparaging GATA. I think you are jealous of them or something, because you like to show how much a fighter you are for gold, and you probably think you deserve to be in charge of GATA. Why do you throw darts at them? What have they done to you? If you think you have more venom, and can do a better job, then do it. Quit tossing little teaser darts their way. Who the hell do you think you are? God's gift to the gold bugs?

You may be on the side of gold, but you have not a golden heart. How can you attack me as a Barrick fan? Have you not read anything I've posted these last seven months? Can you find anything in them that is the slightest way supports Barrick? What the hell are you talking about?

You are a frustrated person. Maybe you lost so much in the last four years, you are bitter, and eager to try to put down anyone who dares reprimand you. Well go ahead and try. I know who I am. I've been a supporter of GATA and Bill Murphy, if only in prayer and posts, right from the start of my gold education. When ever I hear anyone say anything unfair about Bill, I will speak up, even against an "educated" snot like you.

Even though I tried to appease your obviously insecure ego, with words of praise for what you have done for gold, you still took offense at my reprimand to you for speaking negatively about GATA. God, you're such an ass. And now you try to lump me in with the shorts! Does anyone believe this?
The reason you attack me is clear. You couldnt stand to have me say anything to you.

You think you are so smart cause you know the difference between stagflation and inflation. So what? You dont know how to behave yourself as a good brother in gold. You enjoy tossing darts at your brothers backside. You think we are in here to be attacked, and maligned by you. You are worse than a scoundrel, if you attack those on the same team.

You enjoy wounding others in the back, with "friendly fire" Its Farfel against anyone who dares to reprimand him. Farfel is invincable. Farfel can hit his brother elevator guy, because he is Farfel. Farfel just knows who is on Barricks side, because he has great powers of prophecy. Farfel can spot the truth a mile away. Farfel is just one step below God, but not for long. No one dares to say anything against the great Farfel!

And Farfel gets a cheap thrill by arguing with others on line. What a life! What enjoyment there is to be gained by belittling others, and inflicting pain!

It wasn't you who tipped me off to the tremendous risk/reward ratio in gold back in August. I dont really know who you are. Maybe you do some good for gold. But thats all aside from the point I was making. I was trying to show you how a good gold soldier does not toss darts at those on his side. What has that got to do with Barrick? Nothing, except they are listening. Dont say anything the least bit negative about those fighting with you for gold. The enemy is listening, and you give away the stregnth of our position. Many wars are won psychologically, before a shot is ever fired. You are not acting in the best interest of gold, when you say mean or negative things about GATA. You act like a selfish little jerk, casting aspersions at your own team.

It was not I who sowed disention amongst gold bugs, it was YOU. You who throws darts at the backs of his brothers.
You are an internet coward, who is very brave with his words as long as he is tippy tapping on his keyboard, behind the safety of his monitor.

Come to Irvine California, and I will take our little debate off line, and show you how this gold bug likes to be equated with Barrick. If you've got the guts.

You can ask Michael for my e-mail address, and we can set up a time and place. I'm not afraid of you, you pompous ass.

elevator guy

(02/12/2000; 01:55:39 MDT - Msg ID: 25103)

@ MK

I'm sorry Michael, for speaking so rudely here in the Forum. I'll understand if you take away my posting priveledge, but please know that I just have to stand up for myself.

Black Blade

(02/12/2000; 02:45:46 MDT - Msg ID: 25104)

Voyager RE: Msg. 25046

Voyager:

Personally I don't think that the Russians can deliver PGM's. They are the world's major producer of palladium (while S. Africa is the world's major producer of platinum). This is the reason palladium prices are out-pacing platinum. Much of the PGM supply in Russia was built-up during the Soviet era as by-product of nickel from the Norilsk nickel mines. With the downfall of Soviet-style communism and the rise of the even more corrupt anarchy that resulted in the former Soviet republics, the PGM supplies that were stock-piled were quickly stolen and sold off by Russian organized crime, government officials, and anyone else who had access. The miners in Russia and the other republics work in inefficient mines and production facilities. They are rarely paid on time if at all. They continue to work as if they were still under the communist system where they were paid whether or not they produced. I worked on a project for a company that had become interested in a working (I use the term loosely) gold mine in Khazakstan. The corruption is so pervasive from the top on down, that the company pulled out of the project. They never got back their bond, lost all the equipment (computers and even the lighting fixtures) from the offices. I was a disaster. Most every foreign company has such disaster stories from that part of the world. In short�I don't think that the Russians have significant amounts of PGM's left to deliver. I think that the supply of PGM's are likely to remain tight for some time to come. I had bought Stillwater Mining (SWC) shares partly because of this reasoning, as I think it's a "no-brainer". There are some projects in the works around the world, but they will require a lot of time (3 to 5 years) to come on line. Even SWC has tripled reserves with the addition of their East Boulder project, but that will not be in production until later this year at the earliest. I see PGM'� as a decent investment for the foreseeable future.

Black Blade

(02/12/2000; 03:39:39 MDT - Msg ID: 25105)

Goldfan Re: Msg.25002-3, Skip Re: Msg 25020

Goldfan:

I'm no expert on options or futures. I do know that some positions are so structured that it works against the company as a hedged position (as per Cambior, Ashanti, and Emperor). These exotic hedges didn't protect these companies when the POG rose higher. I think that the directors of these companies simply did not understand the structure of these hedges. I think that R. Powell pretty well described these instruments. It depends on how they are structured. I think that an example of a good hedge is what Stillwater Mining has. They have a floor price built in so that their customers will be guaranteed delivery, yet they are open to rising prices and still benefit. Unfortunately the gold companies don't seem to get these same benefits. As far as how Barrick can closeout their position with paper is beyond me. I understand from friends at Barrick that they are exposed with a rising gold price on contracts from about $340 to $360 per ounce. The $385 per ounce figure comes from the perceived income from treasuries and other investments over the time periods of these contracts. I would think that Barrick is scared stiff at the prospect of a POG greater than $340 per ounce, and will do whatever they can to beat it down. I suppose that it is possible that they were able to get some investment house to take on the risk, but then the same question arises: who is that stupid? There also have been reports in the past that they are able to roll forward these contracts for 15 years. But I am not aware of how this is done. Maybe ORO, Farfel or Stranger can cover this to some degree. Good luck.

Skip:

You asked about risks of holding stock in "street name". This sounds like a question for Stranger. I believe that securities are insured through the Securities Investor Protection Corporation (SIPC) and there are regulations that designed to protect the shareholders from mismanagement or insolvency of the custodian bank or investment house. However, I what I have done, and continue to do is purchases some shares through DRIPs and DSPs over time for some stocks where they are held in my name by the transfer agent. For other shares I use an on-line discount broker. Sometimes, I take possession of certificates in lots (100 or 1000). You can do the same with brokerage accounts, but brokers hate it since it reduces their book and takes some power out of their hands (i.e. They get to vote on proxies, etc.) and they tend to charge high fees. I can sell the shares immediately through a broker or just place them into a brokerage account. You might be able to find out more about this from the Securities Exchange Commission (SEC). Anyway that is my take on it. Good luck!

Goldsun

(02/12/2000; 04:19:52 MDT - Msg ID: 25106)

The Art of the Con

THX-1138
Caution!
Bad Vibes!
This thing has con written all over it.
1 Asking for a cashier's check. If this is legit they'll take a personal check.
2 Short deadline. Keeps you from thinking calmly and investigating.
3 The story. Every con is built on a story. This one isn't even very good, as I'm sure you'll realize. See #2.
Goldsun

lamprey_65

(02/12/2000; 04:26:33 MDT - Msg ID: 25107)

Barrick's Calls

http://www.barrick.com/main.cfmBarrick has the "the right, but not the obligation" to purchase gold when the calls go into the money as of March 1, 2000. I cannot find a mention of cash settlement in the press releases. According to Ted Butler (as posted on Kitco), he heard Barrick state the cash settlement line after being asked a question about the calls during the analyst call...so, we have no independent confirmation at this time (I do believe Ted, however). So, if the cash settlement statement was accurate, it appears to me that Barrick put out a press release outlining the letter of the contract, but a "gentlemen's agreement" was made where it would be cash settlement.

Now, cash settlement strongly leads me to believe that both Barrick and the bullion bank which sold them the calls fully expect gold to rise to AT LEAST $319 as of March 1, 2000.

Also, notice how the second release leads one to believe through example that $400 gold is now beneficial to the company.

Notice also in the first release how the strike price changes after 2000.

February 7th release:

"The purchased call options, an important new dimension, cover 100% of production from March 1, 2000 through 2001. They give Barrick the right, but not the obligation, to purchase gold at US$319 in 2000 and US$335 in 2001. The calls allow Barrick to realize its floor price of US$360 plus any value over the call strike prices of US$319 in 2000 and US$335 in 2001."

February 8th release:

"As soon as the gold price reaches US$319 in 2000, every dollar above that level will now be added to Barrick's floor price of US$360 per ounce of production. For example, at US$400 spot gold, Barrick would realize US$441 on its gold production (i.e. US$360 plus US$81 - the difference between US$400 spot and Barrick's call price of US$319.)"

Lamprey

Zenidea

(02/12/2000; 04:51:48 MDT - Msg ID: 25108)

Jason H and Solomon W re: AG

Hi !. Keep posting re silver! enjoying the topic. My gold detecting forays to the beaches in asia yeild a ratio average of about 14 Ag rings to every Au/PT ring. and actually this small fry just popped down the mint and grabbed a 250 oz last week. In the Chinese back street markets one often comes across Amerian silver dollars for sale and after abit of haggling one can pick them up for about Aussie $2.00 each :). I dont know what % silver they are , but for pennies , its just tooooo easy :).
I venture to suggest to add if we hear that the Chinese Government had made ownership of any of the metals illegal or limited or legal even, it's alot of hoo haaa. My experience is that the laws (whats said) and the reality of life there (what's done) are two entirely different matters. I often wonder what would happen to the world price of Gold and Silver should this economy boom as they love it with passion enough to confidently say that
any spare yuens would be heading in AG's and AU's direction .

Hipplebeck

(02/12/2000; 04:59:23 MDT - Msg ID: 25109)

Barricks and probably some others

I think they and the banks are trying to unwind the derivitive deals as fast as they can without trying to slaughter each other

Black Blade

(02/12/2000; 05:23:50 MDT - Msg ID: 25110)

Out with the old, in with the new!

Ghanaian government lashes out at Ashanti Goldfields management

Accra, Ghana--Feb 11--The Ghanaian government Friday described the current value of Ashanti Goldfields Company (AGC) shares as "totally unacceptable" and threw its weight behind minority shareholders who this week won a court ruling for an emergency general meeting in hopes of throwing out the board. (Story.14069)

The minority shareholders want to replace the board, unwind hedges, seek out small miners for take over, etc., etc. All of which could save Ashanti. We shall see!

Black Blade

(02/12/2000; 05:33:29 MDT - Msg ID: 25111)

Zedidea

I believe that old US silver dollars have 0.714 oz silver. At one time it was illegal for mainland Chinese citizens to possess US currency and coin (punishable by death). This was in the late 1940's. Certainly I don't think that the penalty is that severe now (and probably legal).

BTW, where are you located? I rarely get to Auckland and even more rarely to Sydney. Generally I get to Thailand, Hong Kong, Singapore, Indonesia, or Myanmar. If the gold business improves, then I might even get there more often.

nickel62

(02/12/2000; 05:52:07 MDT - Msg ID: 25112)

Stocks jeopardy in case of a general crash.

To my knowledge there is a risk that if the brokerage firm goes under then the customers securities can be seized by the creditors. The SIPIC insurance fund is only for an Half million dollars per customer if I remember correctly and more importantly is not funded sufficiently to handle any general market failure. In fact I would doubt that SIPIC has sufficient assets to handle evern one large brokerage failure. this problem arose in the 1970-71 bear market when several brokerage firms went under. And is the reason for the last twenty nine years I have always kept certificates in my own safe deposit box. I recently changed to having them held by Fidelity brokerage because of the savings on commission availabel to internet trading. But the real reason was that until the question came up here I had forgotten the risk. Banks provide custody service and these accounts which hold pension assets,trusts and many wealthy family accounts are segregated from the banks assets by law I believe and would provide safety in the case of a meltdown even if the bank was to fail.this might have changed recently as well with the changes in banking laws but I tend to doubt it. The last time this was a major issue was in 1989-90 when the banking industry was on the verge of failure and you had to worry about systemic risk to the system. Obviously too big to fail works in your favor here. But I think the facts are that you are clearly at risk in any brokerage or non-segregated custody account where the parent company could be brought to the brink in a wide spread market crash. And not in danger in an unquestionably stable brokerage account or in a bank custody account. This is a very specific legal issue which is worth watching because obviously the senario we are discussing would involve widespread banking and brokerage problems.Or faithful leaders are pretty much taking their eyes off the ball and going along with the "new era" BS so new dangers will take us all by surprise ,unfortunately should a crash occur. As far as new entrants in the brokerage business without a major parent I would consider the risks quite substantial.Even with a major parent I would be very cautious. I hasten to add that the world has change since 1970 or even 1989 and the laws could be different. It would be helpful for more knowledgable lawyers or bank custodians with experience in this area to add to the discussion.

Clearly a situation where an ounce of prevention is worth many pounds of cure.

ORO

(02/12/2000; 05:54:36 MDT - Msg ID: 25113)

Aristotle and Trail Guide - more comments

Trail Guide and Aristotle
The comments below - particularly those to Aristotle, are somewhat harsh. I hope this is taken in the spirit of friendly criticism. I have done the same kind of analysis of these concepts as I do to my own. I show myself less mercy than I have shown your work.

I do very much appreciate it and have learned much from reading it.

The main point of divergence is that I peg the problem of monetary stability squarely in the hole shaped like a government.

Both Aristotle and Trail Guide associate the problem with borrowing as such.

My view on debt:
Borrowing is a powerful necessity. It does not cause problems of prolonged instability on its own. Even fractional reserve banking, when done in the open, is not destabilizing when coupled with free trading precious metal. It is the government's attempts to leash the power of gold and the trade of debt to its own uses that corrupts the system and puts gold down for prolonged (but temporary) periods.
======================
To put some perspective:

The reality:

1. Economic laws.
Particular actions result in particular consequences. In many instances they are well known.
Keynesians, monetarists, marxists and the quantitative theorists were not ever thought to be students of economics for the purpose of discovery of economic laws nor for the design of better legal infrastructures that allow economies to function more productively. These economic schools, as were many others, are engineers and salesmen working to justify the intended actions and define for their masters in government and finance what the likely benefits to them would be. Their focus is distinctly reserved for giving honest advice to their employers and providing propaganda aimed at the intended victims. These are the inhabitants of macroeconomic text books.

Actual interest in discovery of economic laws and better systems is reserved for the Austrian school. Though some monetarist calculations are useful, the theories were never intended to be discoveries, nor to describe the economy. Though much can be learned from their methods and some from their theory, it is pretty much a waste of time.

There are consequences to the existence of a fiat currency and for the use of debt money for trade settlement.
FIAT HAS NEVER BEEN THE CHOICE OF THE PEOPLE ACTING IN COMMERCE OF THEIR OWN ACCORD.
Even when wildly popular, fiat money has not had a single instance when it had not been established by force - by laws imposing its use.

Fiat money without parity loses value within 5 years unless combined with debt and/or a hidden parity. Debt money has life spans of 2 to 15 years, more often it is 10 years. Gold standard (or open standard) cash and debt money is stable indefinitely in an environment of free gold banking - it does not fail of its own. It takes a government's collusion with bankers to make for a disaster out of the gold standard by the forcing of all banks to act in unison when regulated through charters. When legally forced collusion occurs it is the cause of banks over-expanding credit - and then meeting the inevitable disaster of its deflation and the subsequent depression.

2. Power Politics.
The reality is that a government is the organization controlling the overwhelming power of violence in a geographic area. That is all it is.Anything else one may ascribe to government is not essential to its function or purpose. These are clear: (1) self preservation, (2) expansion of powers at home and abroad, (3) control of more resources for distribution among its members.
Be it Rome of Ceasar, Kohl's Germany, or Stalinist Soviet Russia, the role and function of government is the same, as are its methods.

So long as governments can take for themselves a large portion of individual's output they will do so unless restrained by their populations - citizens who do one of two things: (1) avoid the government's grasping fingers, (2) act politically to restrict its actions.

Their success in either action will result in determining the level of economic development and the level of welfare within the nation.

Success in avoidance of government's thievery takes three routes: (1) moving one's person, wealth and income away from territories where government is particularly grasping and powerful to where it is not. (2) joining with government in alliances to further assist the government in its efforts in return for a share in the spoils. Or just plain bribery of the officials to change their allegiance from government to you. (3) acting within "black markets" where taxation is avoided and assets are hidden from confiscation.

Success in politics depends on the degree of freedom within the state and the intellectual powers of the citizenry, as well as their ideological predispositions. The one thing missing in the arsenal of the propagandist for economic freedom is the promise of government largess and the ability to promise pieces of someone else's pie.

Finally, it is the physical realities of the government's ability to exact tribute - in one way or another - that determines the success of the three strategies. The easier it is for government to seize and control property, the more it can exact.
The world has changed considerably since the heyday of the industrialization periods. Collonies became very expensive to control directly because the cost of firearms had dropped and fell within the reach of the many. The benefits of warfare were lost when the running of industry became less an issue of warm bodies at the plant, now creativity and speed of response make more of a difference in productivity. The advantage of communications that was the privelege of government and the wealthy has made a mockery of secrecy once it became widely available. The ability to control financial flows disipated in the late 60s - where there were capital controls there was no capital. The ability to control banking has disappeared.
Information control has been lost. Those who wish to find out about something can look it up on the net. Those who desire privacy can escape wire taps and even the NSA's automated snooping on the net.

Finally - there is the question of what kind of system is being referred to.
1. One that accomodates the thieves-because-they-can in the capitals of nations?
2. One that accomodates the thieves-if-they-had-a-chance bankers?
3. One that allows markets to function without distortion so that people can freely contract among themselves in trade?

If your monetary system has such a thing as a bank regulatory body, or a central bank, or a national currency, it is not aimed at #3
++++++++++++++++++++

Now for specific comments:

Trail Guide (02/11/00; 17:21:28MDT - Msg ID:25055)
A different view?
ORO (02/11/00; 13:59:00MDT - Msg ID:25019)
Aristotle and Trail Guide
------
What is to stop the gold markets to regroup and form a new gold banking system?
------
Q: Please define "gold markets" in the context you use? We need to know exactly what this market is before one can "bank on it"!
===============
Any holder of non-fractional gold can and will use it through open exchange systems that have now grown for eveything from screws to talcum powder. The surviving gold bankers who had much of their business in fully allocated custodial accounts - not fiduciary accounts will be able to entice the holders to trade and lend it. The LBMA and the other paper gold exchanges will reform the day after their explosion to trade physical gold. The old backroom banking world will be superceded by the automated exchanges that can be established in no time anywhere and at multiple locations to have gold move among those who wish to trade it.

The physicality of location is a dead element. It is unimportant.All one needs is protocol, and these protocols have been well established. The only reason they have not been used so far is because of the existence of a current market that does the job well and cheaply.
++++++++++++++++++++++++++++++

I would think that - if there is gold there is also someoned to lend it and someone to borrow it.
---------
Q: Why use gold to create a lending contract? Would society use gold as a "lend able" account unit if it freezes any further function of their money asset? To date, the history of the past gold systems points that such a function creates gridlock in the banking system. Doesn't this contradict the first purpose of gold: to act as a pay as we go medium, under no contract risk?
=============================
Gold has many purposes. As a money it is used as wealth money and as exchange money. Any and all forms of wealth are contracted at some rate. If I wanted to be owed anything, I would like to be owed gold. When currencies become unstable, few want to be owed a currency AT ANY RATE OF RETURN. The bonfire of the currencies in Asia and the other NICs and LDCs taught well the lesson that even a 60% interest rate is not attractive when a currency is in the throes of crisis. Therefore, gold clause contracts will reappear as they had in the 70s. The lender and lessors will demand payment in the stable currency. If the dollar becomes sufficiently unstable, the smaller currencies will suffer too. The Euro may survive if its gold backing is recognized by the markets and if the Euro debt system can be maintained while the US dollar implodes and the established gold markets implode.

Credit risk is less of a problem than one might imagine. It is far easier to understand, quantify and allow for than currency risk during periods of instability.

Incorrect:
" To date, the history of the past gold systems points that such a function creates gridlock in the banking system." The latter statement is true under only one set of circumstances:
That is only true of government chartered banks that are granted the privelege of enless credit expansion by freedom from competition. It is particularly true while the banks act as one by the coordination of a central bank. When this occurs, leverage in banking rises from its natural levels of 40-60% reserves to under the 3% point.
A double of fiduciary money ocurring in a free banking system is a slow and gradual process. The banks then truly lend mostly client money. To do otherwise brings rapid bankruptcy and no chance of salvation.

Again, you are sticking the gold standard with the history of debt money in a bank system controlled by a cartel enjoying government sponsorship. The limitless expansion of credit to the point of deflationary gridlock is the result of arbitrary settings of reserve ratios by regulation. Three types of regulation cause this (1) central banking - causes this immediately, (2) selective charter - closes the door to new competition and makes effective collusion among the chartered banks possible, (3) regulation of reserve ratios - the regulatory body eventually succumbs to bank pressures to lower reserve raios. The conservative policy of the regulators rarely survives the first year of regulation.

See http://www.mises.org/humanaction/chap17sec12.asp for an explanation. A detailed accounting is given at the end of this post. Suffice it to say - at this point - that it is government intervention that causes banks to issue excess credit. Without government to enforce coordination, the bank that expands most goes bankrupt. After the first goes belly up, the rest of them become more careful.
+++++++++++++++++++++++

If there is new gold mined, it will be contracted for future delivery.
----------
Q: Again, Why must gold be used? And why the illusion of future delivery in contract form? If society places a high enough value (currency price) on it, a" no collateral financing" would easily create a pay as you go operation, NO?
============================
The contract is as good as the people signing it. Illusions of delivery will quickly bring the buyer to disillusion and the seller into disrepute. Creditworthiness is a determinable parameter for individual corporations/banks. The creditworthiness of a system with central bank guarantees, expressed or implied, is only determinate if information is available. The bullion bankers of today see no reason to reveal their secrets. The CB guarantees allow them to hide the secrets because once the CB is involved the depositor's doubt is quenched. The source of the credit risk is the liberal use of CB guarantees.

The concept of a "high enough value" is part of the thinking that the absolute quantity of money matters. It does not.
Only the change in quantity matters. The changes in quantity are dictated by economic needs and legal privelege or restrictions. In the "cash gold only" approach you and Aristotle say will come, there is implied a legal restriction that has never been enforceable in any market. People have an overwhelming need to continuously adjust the balance of wealth and income. This necessitates both equity contracts and debt contracts. It is the balance between debt assets, equity assets and cash that are important for the markets. No amount of money - no particular quantity of cash - is enough to replace the need for this switch among contractual forms and title forms of wealth (all wealth is title or contract wealth). Therefore, forcing "pay as you go" on the markets reduces their efficiency and is an arbitrary rule lacking in economic justification.

Gold must be used because in the currency turmoil we predict, gold is one item we can be assured that people would want to be paid in. Therefore, there will be demand for gold denominated contracts by the lenders.

Hey, gold is no more a holy relic than it is a barbarous relic.
++++++++++++++++++++++++++++++++++

If there is gold of many players in a number of vaults, the gold will stay in the vaults and the title to the gold will trade electronically.
-----------------------------------
Q: Tell me, do we pay for our gasoline with "stock certificates" of IBM? Or any other ware - housed asset. Would not real estate titles also trade electronically? In this period of high speed trade, digits of anything could do the trick, no?
-----------------
The holders of gold can, do now, and will in future increase their use of electronic depositories such as E-gold to place some of their gold. Putting bank's more established custodial gold depositories in more liquid form is not a problem either. Holders of gold can use the credit and debit card systems to do all their purchases and trading just as an American does in Europe with his credit/debit card. Trading gold in the form of checking accounts, bank depositary receipts etc. has never been a problem. As many examples show, receipt money will trade at a premium to physical money except in time of war, when physical possession takes priority.

Gold is a money. Unlike houses, one ounce is identical to all others. Unlike stocks, all gold has the same properties that made it a financial asset in the first place. It is not a house. It can be digitized just as well is it was used for Five Centuries in the form of receipt money and fully allocated checking accounts.

Digits of anything can do the trick. However, digits of gold do the trick better. Wouldn't you like to keep your cash balance in the best cash? If there were a convenient gold debit card, would you not use it? Keep 0 dollar cash balance in your accounts - using only gold cash balances till the very instant of transaction? The technology to do this has been around just as long as credit cards have. The debit cards and "cash value" smart cards are perfect technologies for this.

As you can see, fiat currencies are easilly replaceable. Very easilly. That is because they are inherently inferior for any purpose outside of the government's and banker's interest in fleecing the public without their knowledge.
++++++++++++++++++++++++++++++++++

I still say that there is no economic reason, no justification for central banks at all. There is no economically useful purpose for national currencies.
-------------------
Observation: Years of history and the nature of modern society say you are wrong, no? Our use of digital currencies for trade always flows like a river that's strong and wide,,,,, and it always flows to it's end in the sea. The water takes it into the air and rains it again upon the headwaters for another trip,,,,,a new currency starts again. All the while gold is held from it's value as officials grapple with it's position on the currency river,,,,,,,,,, stopping it's use as a wealth asset held by all.
=======================
The nature of modern society says I am right. Don't you see how much legislation, regulation, obfuscation, lies and propaganda are necessary to keep central banks and national currencies afloat? Are not debt traps and fraudulent lending practices to beleaguered young countries the necessary precondition for our system and the coming Euro system? Is that not evidence enough that modern society abhors fiat currencies in their digital guise just as much as it did before when they were paper?

The years of history show the need for hard money, competitive banking (i.e. no central bank, no regulation, no currency), definite and quick accounting and trade settlement through digitized systems today and through the convenience of paper receipts (honest ones) and checking in the past.

"All the while gold is held from it's value as officials grapple with it's position on the currency river,,,,, stopping it's use as a wealth asset held by all."
Obviously one needs to remove the officials and the currency. They are both completely useless for the markets. You see, the officials need currency in order to have their powerful jobs, the currency needs the officials to make it acceptable - moreover, it is necessary for the officials to command secret service agents to force the currency on the population.

Imagine a world where the international trade and the internal trade of countries is all done in physical metal and paper + electronic gold certificates. No bid/ask on each currency conversion, no need to hedge currencies and borrow them from their creators, no opportunity for governments to manipulate exchange rates to force their citizens choices as to where and from whom to buy, or where to invest. The current payment excised by both banks and governments for dealing in currency exchange amounts to nearly 13% of global cross border trade. This cost could disappear completely and lower the real costs of goods. I will shed not a tear for the bank's loss of business and would gladly take a former currency trader to tend my garden.
++++++++++++++++++++++++++++++++++

I will go further and state that the purpose of central banks holding gold is so their people remain beholden to the state and the bank cartels it has chartered. The best thing for the CBs and treasuries to do is to unload their gold and cease participation in the financial markets. Individuals
and private organizations should hold their gold and trade its receipts, to lend and to borrow it.
-----------------
Observation: Again, society has proven that any and all currencies and moneys that are lent and borrowed,,,,,'soon become corrupted. Even gold itself,,,,,many times! Let gold become an asset of real wealth,,,,,and it will shine as the best background money this modern world has ever seen,,NO?
======================

No!
History has shown that government debt and debt sponsored by government IS the corruption. In all times when governments played only the role of peacekeeper and mediator only, gold, silver, salt, cows and gems served well for both cash and the denomination of debt. Corruption of money is done by government for government with or without a banker's participation. The source of corruption is the quiet acceptance by people of the government's unchecked power when it grabs the authority to denominate and regulate money and credit.

Forever, bankers will solicit or intimidate government to allow them form a cartel that excludes competition and changes the rules in their favor. Forever will government solicit bankers to lend it infinite amounts of real money.

Disallow the government from regulating banks and from issuing currency or minting coin, and you have forever solved the problem of opportunity beckoning the banker to solicit privelege.
++++++++++++++++++++++++++++++++++

The amount of gold and other PMs can not be insufficient in quantity for the basis for the volume of trade settlement. It is precisely the point that the quantity of gold matters not. What matters is that it grows with the economy that trades it as money.
----------------
Q: What will you do today that is different from yesterday? Can we pass laws that remove human nature?
==========================

The thing I would do is so:
Transition:
1. Set a clear date of completion
2. Announce and execute a program to monetize the current debt into cash dollars and that the terms of contract will be changed to floating market rates at a certain date. Past this date, the Federal Reserve would no longer lend, issue credit, add or drain liquidity in the markets, nor to any bank or to government.Past this date banks are free to set their reserves at any value, individually. At this date, the FDIC, guarantees for mortgages pension funds, for foreign government debt and for any other purpose would be null and void.
3. Set the dollar to be convertible into a particular quantity of gold that is now held in the treasury and is expected to come in through the payments of the debts.
4. Allow settlement of dollar debt and taxes in any of a variety of settlement media - gold, silver, platinum, palladium, rhodium, 4-5 sizes of white grade diamonds, 3 grades of gasoline in storage tanks, and whatever else may be appropriate in the form of electronic titles. The rate of exchange between them will be the going market rate.
5. Set a clear final date and redeem each dollar for gold or the other equivalents up to that time.
6. Close the Federal Reserve bank forever.
7. Set up a custodial account for the government to receive the payments on the monetized debt. Better yet, set it up as the sole assets of the social security fund, split it into 5 or more parts and float it into the private markets.
8. Leave a tiny staff at the office of the comptroller of the currency to make market measurements of the use of commodity money in the markets to maintain a

ORO

(02/12/2000; 05:56:14 MDT - Msg ID: 25114)

Continued

8. Leave a tiny staff at the office of the comptroller of the currency to make market measurements of the use of commodity money in the markets to maintain a list of legal tender commodities acceptable for payment of taxes.

At this point government would be excluded from regulation of banking aside from setting clear rules of disclosure. After an economic education campaign to teach the workings of this mechanism, the government should no longer have the options of regulating bank reserve ratios, capital sufficiency, lending to banks, or otherwise interfering in the financial world.
+++++++++++++++++++++++++++++++++

The myth of a living and breathing fiat system. Many have proposed that there is some need in trade and business for the flexible money that fiat allows. I contend that there is no such flexible money, as its cost in trade and to business far outweighs the benefits of flexion.
------------------------------
Observation: We want and use this "flexion" today. Is not the only thing missing,,,,,,,,,,a way to shield our wealth from the effects of this "flexion"'s inflation ,,,,
===============================

As I have indicated before, the flexion does not exist. It is an illusion. The only possible course of a stable pure debt money system is inflationary. There is no flexibility in that. As a result, there is a constant tendency for interest rates to over-compensate for foreseable drops in purchasing power. This alone is sufficient to eliminate any possible stabilizing effect that this flexion allows. Furthermore, the moral hazard issue comes into play as each bailout encourages banks to lend with further recklessness. The risks mount till the inevitable cycle of alternating price inflation and widespread bankruptcy spins out of control. You have pointed to this yourself, at least implicitly.

You, FOA and ANOTHER have indicated that the market trades real goods and services and real wealth through the monetary system. Clearly there is no benefit to be found in issuing more currency of no more product is produced. Credit expansion does not solve problems for the economy as a whole. It only solves temporarily the liquidity problems of particular weak hands. Perhaps the recently bankrupted Builder's Square, Venture stores, Hill's department stores and Sun TV should have benefited for a while, but they had not. For the economy as a whole, there is a cost greater than the sum benefits to the particular individuals, corporations and banks that were saved from the consequences of their own actions, because of the inflation premium in the interest rates.
++++++++++++++++++++++

Fiat currencies do not expand and contract as the markets need. Their mere existence forbids healthy interaction in the markets. The seekers of the conversion of income into wealth and those who must convert wealth into income are forbidden from setting the rates of conversion by the
existence of fiat currencies. The necessary precondition of a fiat currency is the existence of a monetary authority that controls the quantity and the rate of conversion - the interest rate - at which both monetary and "real" wealth
coverts into income.
------------------------------
Perhaps: But no one ever said that wealth was digits? no? A Western view of a world that's always going mad?
-----------------
It is very clear that fiat system was never intended to raise the efficiency of trade and commerce, it was simply intended to erect toll gates along the financial roads with a banker at each gate and a government to collect the proceeds into its pocket.

This is a view of the mad Western world.
(smile)
thanks Trail Guide

Thanks again.
I have enjoyed this tremendously.

Aristotle (02/11/00; 17:46:56MDT - Msg ID:25059)
I may have criticized harshly, however, I do very much appreciate your posts. I did find them very informative and thoughtful. Much of your thinking sets the problems well and in a thought provoking manner. Your presentation lacks nothing.

------------------------------------------------------
With that said, where can I get admission to the world you are living in? It is surely a more perfect version of the one I have found myself in all these years.
==========================

As indicated at the opening of this message, the reality of life is clear enough to me. I am indicating that the imperfections you accomodate are exacerbated by your attempts to remedy the inevitable consequences of these imperfections.
+++++++++++++++++++++

Remember, my goal was to lay out the "perfect" system for an IMPERFECT (real) world. I took on the project with no preconceived notions one way or another. Going in, I was a charter member of the Goldhearts club, and I emerged even more excited about the prospects of Gold than before. The future for Gold is bright, and it is rapidly approaching in the manner I laid out, if I'm reading the signs correctly.

I working on this project, I was personally shocked when I discovered that we absolutely NEEDED paper currency in order to set Gold free. In the perfect world you lapse into in your comments, everything you say is well and good. We don't live in that world, however. My biggest challenge in piecing together my proffered solution was to accept what this real world had to offer and avoid foisting my own preferences onto the world like a square peg in a round hole.
-----------------------------------

Stout goldheart that you are, understand this criticism from one who accepts that actions have consequences that are often foreseable. By addressing the wrong problem we inevitably arrive at the wrong solution. I intended to explain that we do not, never have, never will need the paper currency in order to have a gold money. Instead, I will, at least for the current post, show where your problem is.

Gold can only be set free to be real property under your program. It can't serve its purpose as full money because it would not denominate debt and would not be used in exchange. Trading in the background it does not display its full value. The supply demand balance keeps it at only one tenth of its potential.

**Gold is the only real money there is--fiat currency is not money--so only Gold should be used as currency.
Wrong. Gold is A real money, not the only one. Modern fiat currency is a money in part.

**Fractional reserve lending destroys a currency's value in trade, and therefore must not be allowed.
Wrong. Fractional reserve lending can be limited by the natural operation of the markets in a free banking world. Since the supply demand balance is not altered by the slow expansion of fractional/fiduciary money when banks are allowed to compete on the basis of solvency. The debt money portion of the gold accounts is fully balanced by future commitments of the borrowers to obtain the gold. Competition among banks prevents excessive credit expansion as explained in the section at the end of this post and the URL above.

[time for concessions to the real world]

**People will always want to borrow for the things they want to have beyond their current financial means.
True!
No problem. They should. They need to.

**Spending Gold into the marketplace, whether by the owner or by a borrower, would tend to result in prices for goods that weigh more--costs more Gold.
Wrong. Government sponsored bank cartels - which is the situation I assume you are referring to - close down the natural mechanism for control of the rate of expansion of fractional reserve banking. The result is that the system does its damage in a cyclical manner. It starts by inflating the apparent gold supply, then it deflates steeply as the contracted parity between the inflated supply of banknotes and the gold is broken. Gold will then far overshoot its natural value as the banknotes are ground into dust. Over time, the cycles cross the true value mark repeatedly. Just that the cycles are long in time (50-60 years in two sets of two10-15 year cycles of inflation and deflation) and cause great damage as wasteful boom turns to bust.

As I have said repeatedly, given enough rope, all bankers will hang themselves.

Under a free banking system, the same fluctuation occurs, however, the amplitude is limited by the size of the reckless bank that hung itself. The time for the cycle is about 4-7 years up 1-2 years down, and gold purchasing power remains much more stable as prices tend to remain constant because the rate of fractional money expansion actually stabilizes the system a little.

**As ever more Gold is borrowed out of other people's savings to be spent into the economy, the Gold's purchasing power is lessened from what it otherwise would be...hurting those who have elected to hold their Gold instead of risking it by lending it out as a source of income.
Wrong. Non fractional lending does not increase the money supply because the great variety of non-bank notes are not bearer bonds, and not redeemable upon demand. They don't function fully as money substitutes - $1 of bank debt = $2 of money supply, $1 of bonds = $1 to $1.2 in money supply, and up to $1.5 for the most liquid bonds. (I am assuming that the situation is the one you refer to in the brackets). This bond type lending only increases the velocity of circulation and has little effect on gold's purchasing power.

[notice in the above that we have all the bad devaluation effects without a single bank entering the equation!]
Wrong. The situations you describe can only occur if there is a bank involved.

**For Gold to find its truest value, all savers must retain their Gold for their own use. Its properly retained value will more than make up for the foregone interest income. Gold must not be lent!
Wrong. In order for gold to retain its true value, it must be used for exchange or to back exchange media and to denominate debt. The cause of the inflation is not borrowing or lending in themselves, it is the monopoly that government gave the bank cartel which made fiduciary restraint a losing proposition.

----------------------------------------------
**With Gold as the only money, people will not be able to get loans. [In the real world, this is hard to imagine!] As an alternative, they will work up complicated contracts for the item they desire (new home or car?) in which they promise to deliver a certain level of their future productivity against a pledge of real wealth collateral.

**These contracts for the delivery of future man-hours would eventually be organized into their own market, and quantified into standardized units (called something like "manos") functioning as a currency. Everyone would know what the price for a loaf of bread would be in "manos," and they would all revel at the high price of Gold as quoted in "manos".

**As more future productivity is brought forward into today's market, we would see this "manos" currency-supply inflate, and each pledge of future manhours would be seen as less and less valuable when compared to real goods.

**Someone holding Gold in savings who needed to get some work done or to buy goods could purchase it directly with Gold. They could also sell a quantity of their Gold on the free market to buy the Man-hours they needed to get the job done. There will always be people with an excess of "manos" that will want to move them into this supreme monetary asset--Gold.

**Such a system is not prone to shocks (bank runs and currency crises, etc. are like earthquakes where pressure builds and then is suddenly released) because at all points the assets may freely come into balance against each other in the free markets of the world.
----------------------------------------
This system assumes that any legal limitation you intend to put on gold lending would work.
It can't. It will be borrowed, it will be lent.

The "manos" system above is remarkably simillar to the dollar system, just way more complex because of the individuation of the units, which would all trade at different values depending on the different values of each person's hours.. The only way this would work is if all the "manos" are aggregated into a single pool. Since the pooling makes the "manos" non-particular and non-individual, they are nobody's obligation. Therefore, the structure that would be necessary would be an obligation to repay "manos" created at the time of contract (and used by the contractee to purchase "stuff") at a particular rate - an interest rate. This would be a pure debt system without stabilizers and trading in parallel to gold. .

Since one can not force a person to perform the work promised, but only to sue them for restitution up to the value of their current asstets, the system would lose value as it goes along with people constantly dropping out of the system and breaking their bonds. If you do not do so, but make the bonds stick, you have recreated bondage and then slavery.

This system would very definitely exhibit the same problems that the dollar - and any other debt currency has. Indeed, any system placing a current value on the performance of individuals in the future is subject to boom and bust. This contains the same boom and bust generating mechanism. It is bound to suffer perpetual instability.

As to the thought that the "manos" would trade at par upon their issue - forget it. They will have to bear an interest, otherwise they will never be created. There is a distinct time value of current labor and products whereby the value of a future unit of labor or product would trade at a discount to a current one. The rate of discount is called an interest rate.

Quite frankly, the interest bearing "manos" system could only develop/evolve out of the gold banking system, because the "manos" would not have an initial value at all unless it were initially pegged to a current item. Since the structure of the trade of future labor for current money units is called debt, it would suffer the same fate as a pure fiduciary money must. It will boom, and then crash - unlike gold or a pegged currency, the bottom is 0 purchasing power.
-----------------------------

There is little difference between a [currency] in Bangladesh and a [currency] in Canada where one [currency] is taken at a moment in time as the work equivalent to a healthy man shovelling sand with a spoon into a soda bottle. Who cares if one [currency] is actually called one, ten, or 27.34 rupees in one dialect while in another language it is called one, two, or 6.45 dollars? Its really just a mathematical exercise. Whose to stop the real world from pursuing such a system? Its basically what we have now, except the evolution took another route!

The key is that Gold must be assisted in towards its own final and perfect destiny through the straightforward mandate (whether social, governmental or religious) that Gold shall not be lent as it has been, or otherwise attached to various financial derivatives. You can work for it, mine it, buy it, and sell it. You can't borrow it. Monetary perfection for an imperfect planet.
=============================
Aristotle, by this system you would create a lesser purchasing power for gold, and would prevent it from taking its place in the sun as money. While the current system deprives gold of its value temporarilly (since the gold price repression is unstable), yours would prevent it forever, while making millions into fellons.

Furthermore, you will prevent people from doing their natural trading process in which the goods lent denominate the goods received in future payment of the debt. You will have just poked another stick in the spokes of commerce and reinvented the gold police.

----> We are moving in this direction faster than you imagine.

Yet there is no reason for this to happen but for a short while. The system you see is no better than the one we have now, it is a great deal worse. It preserves all that is wrong with the current system and piles up another set of un-natural rules.

+++++++++++++++++++++++++++

From your Part I
*** Fixed gold convertibility of the currency on account looms large as a threat to the banking system.
((Keep in mind that it is through natural human activity that banking evolves into an important system for much of society, built by a population that has come to depend heavily upon it. Therefore, a stage will always arrive in which the fixed Gold convertibility of the circulating currency will be purposefully abandoned. It is done to preserve "lifestyle as we know it" in the eyes of those people living at such a stage in a currency time line.))
---------------------------
This is not the case.
"lifestyle as we know it" does not depend on whether fractional reserve is or is not applied. Given the kind of symmetry markets allow in money, lifestyle - which I take to mean true economic considerations of the exchange of real goods and services - would come through the market's monetary system as long as it is allowed to treat all money according to its interests. The point is that the purpose of money is to allow the exchanges that market participants desire in the most efficient way.
Where the government issues a currency at all, it will tend to use this power to further its own wants and find friends among bankers who would kill honest money within a NY second the moment it is made possible. What is important is that governments do not have currencies at all. Furthermore, that they define the unit of account for themselves alone.
The debt system is necessary and useful. National currencies are not necessary and not useful for the economy. If you are referring to gold banknote convertibility, the banknote of the fractional reserve system's members are never overstreched as a whole. They can only become overstreched if there is a single bank system, one which acts as an equalizer among all banks and has a monopoly on the issuance of banknotes.
The stage of breaking the fixed convertibility comes only if an effective monopoly bank has been created and has done its damage. Had such a bank not been imposed by government (in its pursuit of powers that can be used to sell favors to bankers), the break of the common fractional banknote's convertibility would never happen.
You are making the error of ascribing to a free market "currency" - fractional bank accounts - the same properties as a monopoly currency.
Note on the simple math of competing banks vs. single banks. Under conditions of competing banks without a common reserve organization (a monopoly bank):
Two or more banks A, B, C .... having an average reserve ratio Ravg, and individual reserve ratios RA, RB...and having a reserve base M, equal to the sum of each bank's reserves: MA, MB.... and the overall sum of fractional money is F = sum (FA, FB, FC...) of each bank's liabilities. RA = MA / FA etc... Ravg = M / F
In trade within each bank's clientele, the loans issued to one client become the balances of another. Upon settlement the bank needs not transfer funds to anyone but its clients. The client's preferences for cash rather than account money are those that dictate R for the particular bank.
In trade among the clients of the different banks, the new loans issued to clients of bank A in excess of loans by other banks, LA, are spent on the purchase of goods and services from the clients of banks B, C...in a sum equal to the loans. By issuing loans to clients, the bank has changed its reserve ratio by increasing FA without increasing MA, so when we denote the initial condition as subscript 1, the condition after the loan as subscript 2, and the condition after settlement with subscript 3, then:
FA2 > FA1, MA2 = MA1, and RA2 = MA2 / FA2 = MA1 / FA2 < RA1 (because the new denominator, FA2 is greater than FA1)
Since the overall reserve base has not changed, i.e. M = constant, then the other banks will receive deposits of the sum of the loans of bank A, LA, and will deliver the demand for settlement by Bank A.
After bank A settles, it will have transferred a quantity LA to the other banks, M - MA = MB2 +MC2... = LA + MB1 + MC1 +...., who will now have increased their liabilities in proportion to the deposits: F3 = F1 + LA
FA3 = FA2 = FA1 + LA
MA3 = MA1 - LA
RA3 = MA3 / FA3 = (MA1 - LA) / (FA1 + LA)
The numerator is smaller than before and the Denominator larger. Each excess loan lowers the reserve ratio twice. Thus the excess loans make the reserves of the aggressive lender, bank A, shrink. After numerous aggressive loans it arrives at the point of MA3 < 0, whereupon it must sell assets in order to settle its accounts. Thus, the reserve ratio of each bank will tend to be close to the average reserve ratio, R. Those banks that lower reserve ratios by excessive lending will eventually become insolvent. Thus, the process of growing the fractional money supply is naturally limited by the simple fact of there being more than one bank.
Most often, a great many banks exist in a free market. Few large banks are only possible when they are provided with an overwhelming advantage. The only overwhelming advantage short of a near perfect prophet of the markets, is government subsidy through charters and monopolies. Otherwise, the above holds.

nickel62

(02/12/2000; 06:17:45 MDT - Msg ID: 25115)

ORO (02/11/00; 03:31:47MDT - Msg ID:24978)Loved your post as usual.

If I understand your analysis the rate of inflation ex the government hype is approaching 6.3% for the last two quarters and productivity has been flat for most of the last four years except for the government numbers misreporting of computer industry productivity into the entire series as a much higher number than it actually is.

nickel62

(02/12/2000; 06:26:10 MDT - Msg ID: 25116)

Oro sorry I am back on your piece of Friday afternoon.

"The 2% per year are the result of the Chen/Woods distortion of the economy through import's
bogus contributions to GDP."
Could you explain the Chen/Woods distortion I do not know what it is. Thanks!

Your analysis is very helpful in trying to understand what is actually going on with the economy over the last ten years. Your GDP numbers take out the distortion that the computer misrepresentation puts in I take it and then tries to put back a more realistic amount of the actual impact that computer, telcoms etc. had on the numbers? Is that correct?

Clint H

(02/12/2000; 06:28:59 MDT - Msg ID: 25117)

Farfel

Farfel, please do not respond Msg ID:25102. You have become a great asset to this forum and each of your writings can stand alone. All your points have been well made.
Let MK handle it.

nickel62

(02/12/2000; 06:35:54 MDT - Msg ID: 25118)

ORO

Another stock market issue is the odd correspondence of the advance decline line to the broad fall off in real economic growth in the non-tech non-import-distribution
economy since Q2 1997, and that it has turned to the worse. Soon the numbers of clients of tech companies who will reduce expenditures will grow to the point of lower end
users and clients in the SOHO sector not being able to pick up the slack.
What does SOHO stand for? I believe what you are saying here is that the fall off in the advance decline line of the stock market overlays with the decline in profitability of the non-tech non-import distribution companies in the economy. Ie if you aren't part of the technology industry or benefiting from repackaging or distributing cheap goods from overseas you have been hurt by Rubin/Clinton's strong dollar weak gold import your way to low inflation monetary poicy. And that soon the weakness of these real companies who have been cut out of the deal will swamp the strength of the "SOHO" ??? companies who have been growing rapidly because the enviroment favored them. Is this correct?

Hipplebeck

(02/12/2000; 06:40:40 MDT - Msg ID: 25119)

a question

Does anyone know more about a news story yesterday that said Saudi Arabia is cutting oil exports to the US by 25%?

nickel62

(02/12/2000; 06:41:27 MDT - Msg ID: 25120)

Elevator guy and Farfel

I have benefited from both of your comments as I am sure many others have as well.I happen to be working my way forward from the origional posts that started your spat and read tham plus the stuff here and sincerely hope that the escalation in your arguemnt can stop. What started as a mere jab at each other has escalated into nuclear war. A real waste of the talents of both of you. Having gotten caught in such understandings many times myself I think the best thing for both of you to do is just drop it. Both sides have voiced their opinion and really nothing positive will come from any more heat. Both of you are valuable and nothing is gained by the others from your fighting.

ORO

(02/12/2000; 07:14:19 MDT - Msg ID: 25121)

Nickel62 - Chen/Woods

You understand it perfectly.

Now the Chen/Woods thing

GDP = Final Sales + Exports - Imports

That is the definition for calculation - it is supposed to give a picture of local production.

The point that Chen and Woods made was that the local nominal value added to an imported product surpasses its cost as an import.

Say a comb from China costs 10 cents there, arrives at 14 cents including transportation and insurance, then moves through wholesale trade to a store where it sells for 1.99.

So:
Final sales = 1.99
Export=0
Import = 0.10 or 0.14 (depending on whether it was a US shipper and insurer or not.

GDP = 1.99 + 0 - 0.14 = 1.85

The main point is this: when the imports are marked up in the US by more than 50%, the GDP actually grows with imports rather than declines with them.
This odd situation is justified by many econo-pologists as a result of the great creativity and productivity of the US worker in creating more value by handling the comb than was created by its manufacturer. This continues with the apparent rise in productivity associated with imports. The retail workers always have the highest sales per employee because they do not make the stuff and handle most items in bulk. Rarely are sales per employee higher in a manufacturing operation than they are in retailing. The result in imports is an apparent increase in productivity.

Another implication and the likely cause of the distortions comes from dollar overvaluation. Because of this, a dollar purchases more abroad than it does at home. The end result is that the comb from China is repriced to show the overvaluation of the dollar in terms of how much more it can purchase in China than it can at home. The Chinese Yuan is severely undervalued trading at less than 1/3 of its purchasing power at home. Thus, an adjustment from $0.14 brings the value to 52 cents and puts the GDP in a more precise light as reflecting the value of local production. When taken this way, GDP has grown miserably as foreign made items stock our shelves and bring down local production.
The dollar mispricing is possible only because of debt traps that have obligated China's competitors in Korea, Malaysia and Indoneseia to dump their productes in order to obtain the dollars they need to repay international debts.

So when you go into a store, you buy Chinese and other goods at firesale prices. This allows you to spend the savings - these 42 cents on a new and bigger home. That is how the distortion works through the economy.

ORO

(02/12/2000; 07:18:34 MDT - Msg ID: 25122)

Nickel 62 - SOHO

small office home office - which are benefiting from the trend to outsource and work from home. This was the fastest growing group in the PC/peripherals world.

nickel62

(02/12/2000; 07:41:01 MDT - Msg ID: 25123)

ORO thanks! I tend to visit this forum only every other day or so and

seldom have sufficient time to read everything, so pardon me if I am rehashing already learned stuff.
But it seems as if you have hit on the basis for this entire economic enviroment for the last ten years. Obviously this probably isn't news to you but I have been trying to put the pieces togetherfor a long time.
The effect you are describing is that the more you import the higher reported GDP will be, but the poorer the industries and their workers that have to compete with imported products in the US will do. Thus the industries that benefit from imports will prosper and the domestic manufacturers and the workers who work for them will be disadvantaged.

Furthermore the debt traps that are created force whole countries to export their brains out to try and pay off their US dollar denominated debts. The high dollar policy that Rubin/Clinton implemented not only allows the purchasing of more and more imports at a discount but also makes the ability of foreigners to pay off their US debt harder and harder.Thus they sell more and more and colectively compete each others value added out.

So the gold manipulation is not an anomalous sideshow (that half of us thought was too unlikely to be real only ten months ago) but is actually one of the cornerstones of the US strategy to reap the full benefit from the US reserve currency status.
Eureaka! The pieces are beginning to fit together.

nickel62

(02/12/2000; 07:49:02 MDT - Msg ID: 25124)

ORO The dollar mispricing seems to be the key!

"The dollar mispricing is possible only because of debt traps that have obligated China's competitors in Korea, Malaysia and Indoneseia to dump their productes in order to
obtain the dollars they need to repay international debts.

So when you go into a store, you buy Chinese and other goods at firesale prices. This allows you to spend the savings - these 42 cents on a new and bigger home. That is
how the distortion works through the economy. "

The 42 cents above that allows us to buy new and bigger homes is the effect of the reserve currency status of the US dollar and the ability of the US to hold this value up higher than it would otherwise be. What did we do to hold this up before the debt traps in Korea, Indonesia , Thailand etc. where created. And how does this work in relation to Japan and China that don't have the debt trap problem in US dollar terms.

Zenidea

(02/12/2000; 07:52:25 MDT - Msg ID: 25125)

Black Blade :)

Gee thanks for the % on the ag US dollar:). Out with the calculator :). Yes indeed, I wouldnt be in the least bit surprised re: your statement regarding the illegality of owning US coinage in China or the consequences thereof.
I am situate in Perth Western Australia Black Blade. Gold Country :). If one wants to prospect it here the tip is just ask the bush Aboriginals. I am as keen as anyone for the price of gold to rise, to me it means jobs and thus clothes, shelter and food on the tables of many families here.
Anyway I note you have been to Hong Kong , I was there in March, fossicking on a beach on one of the many islands just off Hong Kong Island itself, and a group of toothless old locals came up and told me a story that perhaps you may have heard of and asked me for help to find X tonnes of gold that the Japanese had left behind in a rush, in a cave of many caves that they were alledegedly forced to build for defence. Anyway the story goes that the Americans moved in and bombed the living daylights out of the steep hills that the Japanese were fortressing in and consequently the Japanese had to leave in a hurry,leaving some 25 Tonnes behind. Sounds far fetched dosnt it !!.
Anyway they pointed to the area and as was explained to me through a young man doing the interpreting , they had set off searching for it but without much luck. My wife is holidaying in Peking at the moment and maybe I will meet up with her in Hong Kong the end of march 2000. So if I dissapear Black Blade hehehe, thats were I will be , on some island looking for a needle in a haystack :). BTW and where are you from ?. Nice to meet you :).

Leigh

(02/12/2000; 08:06:36 MDT - Msg ID: 25126)

Zenidea

Dear Zenidea: 25 Tonnes?? Just give Goldman Sachs the address of that beach, and they'll be out there en masse next week. Also, the public will be told that there is such a surplus of gold in the world that people are abandoning it on beaches and forgetting about it!

nickel62

(02/12/2000; 08:09:26 MDT - Msg ID: 25127)

ORO I am going to roughly sketch my understanding of the last thirty five years of monetary policy

admitadly as a complete amateur but in order to understand the time perspective of your comments.
In the mid to late sixties the excessive spending on VietNam war and The War on Poverty excetera caused the US to break with the convertability of the dollar for foreign settlement in 1970 and this led to ten years of a rapidly falling dollar and rising inflation in the US (which is saying the same thing twice) and with Volkers tightening in 1979-1984 we returned some credibility to the US dollar and drew investment back into our currency through massive deficit spending and a giant tax cut creating a very strong dollar peaking in the Plaza Accords of 1985 where the tide turned and the dollar began to decline against major currencies until about 1992(?). Since 1989 the US had been in a banking crisis that caused monetary policy to reduce interest rates to 3% on the short end and try and resusitate the moribund banks. Thses low rates eventually did their job and the economy in 1993-1995 recovered and the rates were allowed to return to a more normal 5-6% at the short end.

Does this cartoon characterization of the last forty years allow you to easily put the policy you describe into terms that I can easily grasp? Thanks in advance.

Black Blade

(02/12/2000; 08:16:21 MDT - Msg ID: 25128)

Zenidea

I am currently in N. Nevada, USA (gold country) working on another gold project. I am originally from the US, but tend to travel a bit. I was most recently in Myanmar and Thailand on another project. Yes, I have heard similar stories about Japanese hiding gold in underground caverns. One I heard was about a similar situation in the Phillipines. The story there is that some unfortunate individual found the gold, and was murdered by Marcos and his subordinates, and the gold was stolen. Another version talks of a golden Buddha statue. If you ever get to Yangon, Myanmar, be sure to check out the Shwe Dagon Pagoda. It is capped with 2.5 metric tonnes of gold and studded with precious gems. Hope that the mining business picks up for you all. I had friends at Mt. Todd and Kiddston mines. BTW, when I was in Hong Kong, I stayed at the airport (the old airport) Hilton. I went across the bridge with some colleagues where we met some Aussies at a 1960's style music bar, don't remember the name, lucky to remember much from that night, but we sure had a good time.

nickel62

(02/12/2000; 08:30:38 MDT - Msg ID: 25129)

Henri Welcome! I was attracted by your post of yesterday on gold and oil being

subject to the same manipulation and maybe the same manipulators. ORO a few posts back pointed out that the chinese manufactured comb is undervalued in US dollar terms and is bought by the importer for 10 cents and including transportation and insurance etc. is brought into the US at 14 cents and then sold for $1.99 at Walmart. Isn' this the same thing as your line "I didn't care because I was paying less at the pump. And I guess I too am thankful to GS for allowing me to scoop up
the gold they left by the side of the road cheaply." The market forces that the US have been able to create have depressed all commodities including oil and allowed the value added to be transferred back into the US economy in the same way that the comb analogy worked. I.E. the cheap oil inflated the US GDP and improved domestic productivity. That leads to the questions 1) How were they able to distort the workings of the supply and demand of the marketplace for a commodity as large and important as oil? and 2)If they were able to do this what led to the tripling in oil over the last year?

Here lies the challenge for all of us to figure out the next step before anyone else sees it so for once the gold bugs are ahead of the manipulators and we profit instead of simply survive.

USAGOLD

(02/12/2000; 08:31:02 MDT - Msg ID: 25130)

A Caution to Farfel and Elevator Man...

Each has had his say. Let's leave it at that.

nickel62

(02/12/2000; 08:40:06 MDT - Msg ID: 25131)

In regard to question 1 in my last post I think Henri has already answer it.

The paper dirivative market has I guess allowed the creation of so much virtual supply of oil, gold, silver etc(?)that it swamps the demand whenever the manipulators want and allows the price to be put whereever they want it.No wonder Greenspan and Rubin/Summers don't want any one regulating the dirivative market. It is the main control room of the entire process and would wake up the exploited by showing them their chains. But if this is true what happened a year ago to let the oil price off the floor?

Was it the collapse of Russia that then needed the oil revenues to resusitate their economy?
Was the US policy of flooding Russia with foriegn handouts designed to keep them quiesent,and the manipulators became scared after the Russian debt collapse that their paper games might not work against a nuclear challenge to their debt trap building program?

Zenidea

(02/12/2000; 09:16:40 MDT - Msg ID: 25132)

Hi Leigh . Black Blade

It sounds like you have an interesting job Black Blade. Actually in a documentary I heard that Marcos had hidden his stolen booty inside a wall of his home for awhile and thats were he got the clout to finance himself to political power. Another documentary I saw was re young children
panning for gold by using mercury in the Mekong river in Laos and from what I saw unless the pans were salted for the benifit of the camera that river is loaded with Gold. Is it ?. Just curious if you were working on one of the tributories in Thailand running into Laos?. Black Blade you make me laugh , I can imagine you and a bunch of Aussies in HK drinking in such a bar, Ive known a few hard nights in the British only as it were hotels myself , neverthless, by hook or by crook , tooth and nail, I will be back looking for that Gold ... dare I say on Lamma. Leigh, yeah after I have given up hope, I think Goldman Sach may have a long wait :).

Journeyman

(02/12/2000; 09:20:24 MDT - Msg ID: 25133)

"Interest" vs. "return on investment" @Jason Happy, Elwood,

Sir Happy, I believe your position is that "interest" on a
loan is not OK. I also understand you to say that "return on
investment" IS OK.

Question: Do I understand your position correctly?

Regards,
Journeyman

nickel62

(02/12/2000; 09:46:27 MDT - Msg ID: 25134)

Poor Old Soloman Great post on the silver market

thanks for the education and keep it coming.

USAGOLD

(02/12/2000; 09:46:55 MDT - Msg ID: 25135)

Nickel 62....

When Alan Greenspan made his now famous statement about "central banks stand ready to lease gold in increasing quantities....etc.", it was during his testimony on why derivatives should not regulated. He wasn't so much making a conspiratorial statement on the nature of the gold market as we was saying that international organizations public or private that fall outside the purview of U.S. law can still have an effect on markets despite domestic regulatory stricture. I tried to make that point at the time Greenspan made the statement. As it is, I won't begrudge Mr. Greenspan his "free-market" approach to derivatives, if he will remain consistent in the application of these principles. In other words, when any number of banks or hedge funds get in trouble over derivative losses (perhaps resulting from the lack of regulation) then they should be allowed to fail. There should be no bailouts (a form of regulation). No transference of the loss from the private to the public sector (another form of regulation) either directly or in a hop- scotch, stretch-it-out, pass-it-to-the-next-guy, hope-nothing-happens-down-the-road mentality. If one is going to take a free market approach, let it proceed to its logical conclusion rather than have the Fed jumping in with its bottomless checkbook whenever one of its favored institutions gets pushed to the ropes. That way the market disciplines itself. If we do not allow the free market to function with respect to derivatives, (and as long as you have the Fed stepping in to save the LTCM's of the world), then regulation is going to be needed.

It's either one or the other. Not even Alan Greenspan can have it both ways, and those that say that the Fed fears derivative regulation for what it might do to the markets have a legitimate gripe. Here we have the Chairman of the Fed making a free market argument for an leveraged instrument that is used widely to disguise and alter the true direction of markets. So far, the Fed and federal government have displayed no stomach for stepping into the fray despite the repeated abuses for which corporate managers find a fall guy, wash their hands of it, then pass on the loss to the taxpayer if they can get away with it.

If we do not have a free market comeuppance, the burden of losses in this derivative game when they come (and they will come) will be put upon the taxpayer through direct levies, just as the burden of interest on the national debt is placed on us without permission now, or through the hidden from of taxation commonly referred to as inflation. Alan Greenspan will go to Congress and say this must be done or the entire economy goes down the drain and the Congress will give the government to tax out of our assets to support the financial institution losses.

So it goes...

Over the past week or so, we have heard a flood of rumors of major institutions in trouble due to the bond market meltdown as well as gold's rise. I'm sure this is derivative related, and we may get a test of this issue, if the Republicrats don't sweep it under the carpet.

This is a good time for the discussion you raise, Nickel 62.

nickel62

(02/12/2000; 09:51:26 MDT - Msg ID: 25136)

How many posters would have seen this headline and not been surprised?

Dow Is Off to Its Worst Start Since 1920 as Investors Focus
on Technology
By Philip Boroff

Dow Gets Off to Worst Start in 8 Decades: U.S. Stocks Outlook

New York, Feb. 11 (Bloomberg) -- The Dow Jones Industrial
Average is off to its worst start in eight decades.

The Dow has tumbled 9.3 percent this year, its biggest
decline in a comparable period since 1920, as investors eschew
many of the industrial companies in the average in favor of faster-
growing computer and telecommunications shares.

Rising interest rates and the prospect that the economy could
slow after a record expansion have helped pull down 25 out of the
30 members in the Dow so far this year, investors said.
``People have just walked away from many of these
companies,'' said Robert Begun, a money manager at Orbitex
Management in New York, which oversees $600 million.

Not since 1920's 15.5 percent decline through Feb. 11 has the
Dow had such a dismal first six weeks. And this year the Dow's
rout leaves it trailing the Standard & Poor's 500 5.6 percent
decline. The Nasdaq Composite Index, more than four fifths of
which are computer and technology companies, has risen 8 percent
in 2000.

Honeywell International Inc., which reported lower-than-
expected sales in the fourth quarter, is the worst performing
member of the Dow average, down 27 percent. International Paper
Co. and United Technology Corp., Caterpillar Inc. and Du Pont Co.
are down more than 20 percent.

Three of the five Dow stocks that have gained this year are
computer-related. Intel Corp. is the best performer, up 29
percent, while Hewlett-Packard Corp. is up 6.5 percent and
International Business Machines Corp., 6.9 percent.
``Short-term, the Dow has a headwind against it,'' said
Charles Carlson, manager of the $120 million Strong Dow 30 Value
Fund, a mutual fund that invests exclusively in Dow stocks.
``Investors still want all things technology.''

Nasdaq Gains This Week

The Nasdaq Composite rose 3.6 percent this week, its
fourteenth gain in 16 weeks.

The Nasdaq 100, which tracks 100 of the largest companies in
the composite, Vitesse Semiconductor Corp., up 47 percent, was the
biggest gainer. Last month the largest manufacturer of non-silicon
telecommunications chips reported a 62 percent quarterly profit
rise.

The Standard & Poor's 500 Index lost 2.6 percent for the
week, with all 11 industry groups declining. Health care stocks
fell the most, down 7 percent, and utilities the least, off 0.3
percent.

The companies that were among the biggest decliners included
Nike Inc., dragged down 28 percent because of the threat that the
closure of sporting-goods stores would sap sales. Two insurers:
UnumProvident Corp. and Aetna Inc. fell 44.8 percent and 28
percent, respectively, as the companies reported disappointing
fourth-quarter earnings.

Spurred by hopes for fast growing earnings among technology
companies, WebMethods Inc. shares surged six-fold to 212 5/8 after
the Internet software maker's $143 million initial public
offering. That was the third largest gain for a U.S. company on
its first day of trading.

Shares of security software makers rose after computer
hackers disabled Web sites at Yahoo! Inc., E*Trade Group Inc. and
others, raising concerns other sites were vulnerable. Check Point
Software Technologies Ltd. rose as much as 29 percent for the
week, before closing the week up 23 percent.

Economic Data

Next week investors will focus on government economic reports
including housing starts on Wednesday, wholesale prices on
Thursday and consumer prices on Friday for signs of fast growth
that could nudge interest rates higher.

Federal Reserve Bank of New York President William McDonough
is scheduled to speak Wednesday at a symposium sponsored by the
Bond Market Association at the New York Fed.

The Fed funds futures contracts indicate that investors
expect a quarter-point increase when the central bank's policy's
setting committee meets next March 21.

While most companies have reported quarterly results,
Columbia/Healthcare Corp., the largest hospital operator, is
slated to announce earnings Monday. Wal-Mart Stores Inc. and
Applied Materials Inc., the largest world's largest retailer and
semiconductor equipment maker, respectively, are scheduled to
report on Tuesday.

The most closely watched IPO will be Chordiant Software,
which sells products that lets companies offer personalized
marketing, sales and customer support by computer.

Trail Guide

(02/12/2000; 09:52:36 MDT - Msg ID: 25137)

Reality

Hello ORO,
Well, I knew that if I only asked, we would all receive! Boy did you deliver in ORO (Msg ID:25113).
Good stuff for everyone to read, my friend. You mentioned; """ The comments below - particularly those to Aristotle, are somewhat harsh. I hope this is taken in the spirit of friendly criticism."""

Sir, you can serve me (and probably everyone here) your "harsh" anytime. Waiter ,,,,,,,, I'll have a double order of that please! (smile)

OK, brace yourself ORO ,,,,,, a big plate of my "Trail" harsh coming up!

=============================

You write:
-------There are consequences to the existence of a fiat currency and for the use of debt money for trade settlement. FIAT HAS NEVER BEEN THE CHOICE OF THE PEOPLE ACTING IN
COMMERCE OF THEIR OWN ACCORD. Even when wildly popular, fiat money has not had a single instance when it had not been established by force - by laws imposing its use.-----------

ORO,

On a larger scale there was always more to it than this. Human society has from the very beginnings formed tribes and picked sides against each other. When we are not battling nation against nation, we jockey for position within our own groups. Right down to "me and my neighbour against the three houses down the street. As a tribe ,,, as a nation ,,,,,, as a group ,,,,,, our war is really a human problem with each other and always has been. In better context; the problems are in the way we use our laws and governments to gain advantage over the next in line.

Whether through force (war) or democratic means, we subject ourselves to the order of governments. We rightly perceive that,,,,,, the order gained from this action ,,,,,,, the security of a group, overcomes the rights and property lost on a individual level that living in a tribe requires. It's been this way through the ages. It's a political process that has always had it's in house battles ,,,,, namely portions of society try to circumvent their percentage of lost rights and property by maneuvering the rules (laws) in their favor. Yes,,,,,if I can gain the advantages of tribe life and still keep my "portions lost",,,,,I'm gaining wealth to the disadvantage of the group. Truly, the most obvious action of not paying your taxes,,,,,and that's only a small item when viewing the world battle as a whole.

So, how does this apply to money?

When you and others say """ FIAT HAS NEVER BEEN THE CHOICE OF THE PEOPLE ACTING IN COMMERCE OF THEIR OWN ACCORD """ ,,,,,this is true.

This is true, but this was never the thrust of the argument. The use of money in any context, fiat, gold or seashells, has always entailed the use of borrowing and lending... And as long as economies function at a profit, debts are made and paid back without argument. However, when the eventual downturn arrives, some portions (perhaps a large portion) of the owed wealth (debt) cannot be
returned.

It's here,,,,at this point in tribal life,,,,,,,that all of the context from above comes into play. The "reality" of life on this earth is this: ,,,,,,Some portion of society will use their influence or control of the leaders to make their debts easier to pay. In fact,,,,,it's times 2 for that number of government influencers ,,,, because even the ones that have debt owed to them will try to alleviate an impossible pay back situation the ones that owe them face.

You see,,,,,tribal life and the human nature that comes with it,,,,,,,,will not allow any money system to "completely" destroy the wealth of a good portion of society. Even if everyone is plainly shown that they are going to lose something ,,,,,,they would still option for the good of the overall tribe. This is why we return,,,,time and again to fiat monetary systems. In the few examples where a gold system brings the harsh reality of loses to bear on a nation,,,,,,usually war is the result. Not a
good outcome.

Yes, we can break gold into many small parts,,,,,'stamp it into coins and circulate gold certificates as money. We can borrow it, lend it and also circulate gold bonds as the economy grows. It is the perfect "weights and measures" monetary system. Exactly representing our productive efforts in every faucet of human endeavour. But, when the loses mount, our tribal human tendencies will not allow us to support a government or banking system that forces these real loses on only a portion of the group. Never has,,,,and never will! Without this escape valve, we go to war ,,,,,, internaly or on a world scale,,, so we all can share the loss,,,one way or another. As a human society of thousands of years,,,outside of war,,,,,we have learned to inflate our loses upon everyone as a whole,,,,,for the good of the keeping the whole from each others throats. Even to the
point of a total loss of the current system,,,,,and all the destruction that entail's for everyone.

Yes, indeed,,,,,,,we will transition to the next fiat system from the dollar, when the time comes. Believe it!

Further:

For myself and other observers ,,,,, we know about "peace on earth" and live our life in this context but,,,,as a member of the world tribe,,,,,,and following our best interest,,,,,, one must still arrange his affairs to shield their family from the "I'm going to get yours" times we live in. Should we get our leaders to help us? Well, the leaders of this world can only be but a reflection of us as a
whole. Yes, many things are not right, but they can only strive to do what can be done, not what must be done.

Consider the dilemma:
If a small portion of society telegraphs thoughts that "if we cannot have our oil we will go to war",,,,,,,,how would you force them to not elect officials that ease their pain in a gold money system? What's right and what's wrong is not the issue,,,,,,it's what this present generation will live with that rules. If they will break the gold yoke, no matter,,,,then why place gold on them? Is it not better to at least free the "knight" (gold) for the good of those that would stand with him?

During the period we are now entering,,,,,we can see all the ugly aspects of a fiat system that is failing it's tribe. Look far and wide and witness the various groups ,,,, all jockeying for position as they use whatever influence they have to lessen their own private loses. If this had been a gold system, the outcome would be the same,,,,,as players force their leaders to lessen the gold debts that could not be paid. They would raise the price of gold and inflate their way out of it,,,,,,for better or worse ,,,, come hell or high water.

So, my friend (smile),,,,,,,as you can see,,,,,I completely agree with all of your post. Only, my trail is hiked with a different mind. "Another" mind set, if you will. We use the life experiences of man to dictate the best path to follow. As such,,,,,,Gold must not be part of any money system,,,,,,it must reside as a freely traded asset without debt or paper to resemble it. In this position ,,,,, it's value can fully represent the ebb and flow of the affairs of man. And in doing so retain the wealth of man
as a holding of things. Truly, the "Wealth of Nations" in the peoples hands. We move forward by starting at the beginning of time.

We'll talk much about this and all the affairs of the world,,,including gold,,,, on the gold trail.

"We walk this new gold trail together, yes?" I hope to see everyone there when I return.

Trail Guide

nickel62

(02/12/2000; 10:03:30 MDT - Msg ID: 25138)

usa gold Are not the dirivatives ability to distort the markets a key to under

cutting the very nature of the private capitalist system? After all if the markets can consistantly be rigged to provide whatever price the manipulators want there is not a free market and once the other players relaize this they will stop participating. It isn't a free market system at all but a form of organized theft. You make your investment but I through my market power to determine the outcome of the market forces of supply and demand confiscate your investment every time. That is not capitalism in any stretch of the term. And it will quickly lead to the withdrawal of all investment capital as its nature is more fully revealed. Your additional comments would be appreciated.

USAGOLD

(02/12/2000; 10:29:38 MDT - Msg ID: 25139)

Nickel...

Privatizing profits and socializing losses in my view is a form of corporate socialism that removes the disciplines of a truly free market. Bad habits and practices are rewarded instead of punished leading to ever higher bailouts. The natural conclusion to such a string of events would be a meltdown of the entire economic system instead of the failure of just the offending parties -- the innocent are punished along with the guilty (socialism's final solution). I very much disagree with the way LTCM was handled from a moral point of view. It gave notice to all the derivative players that if you are big enough you need not worry. You will get bailed out. They followed through by expanding their hedge books to extraordinary proportions. Off the top of my head, I can't give you the size of the derivative exposure at the top ten U.S. financial institutions, but it is far in excess of capital -- in the multi trillions -- and it grows by the day without stricture by either the free market or government regulation.

Perhaps one of our fellow Table members can provide the stats. I know they are overwhelming. In fact at one point I considered having a Contest to name a Sixth Horseman -- and the winner would have made the case for derivatives exposure by the world's top financial institutions.

Jason Happy

(02/12/2000; 10:44:46 MDT - Msg ID: 25140)

No usury

Elwood,

I am enjoying our topic of discussion!

Your suggestion that you would be unable to legally economize your time unless usury (lending with a rate of interest) is legal is an interesting notion. I can also imagine a man argue that the human race would be wiped out unless he were legally able to buy a woman to have as a wife. Have you ever heard the phrase, "there is more than one way to skin a cat?"

I have found that one way to economize one's time is to hire someone to help you out. Time is a strange thing, somewhat like money. You can sell your time for money, or you can spend your money for another's time, which, if you do it right, can free up some of your own time again.

Your suggestion that an interest rate is the natural result of marketplace freedom is another very common idea. I would suggest that freedom is the natural result of a people willingly following God's laws. If a people reject these laws, then their freedom is naturally curtailed more and more, until you get a dictatorship or totalitarian society, which is the direction the U.S. is headed today. Some say we are already there, given that the average serf in feudal times paid a smaller portion of his labor to his overlord than we pay in taxes today.

I would also suggest that borrowing at a rate of interest is somewhat akin to voluntary slavery, except that the terms and length of this slavery may be unknown, even perhaps forever, (due to unforseen circumstances if you cannot repay an interest bearing loan promptly), unless there is a rememdy such as bankruptcy.

Also, there is more than one way to accumulate capital. Have you ever heard of an "inheritance"? Perhaps if you don't take out a 30 year loan to buy a house, you would have three houses by the time you paid for one, and then, you would have something to leave for your children?

Finally, you concluded by saying that unless interest bearing loans are allowed, then the only possible other outcome for capital is that the "loan proceeds sit, unused, under a mattress somewhere". Did you miss the main point of my last post? This unusable money as you see it always has another option to it. It could be invested directly by the person who owns the money.

Suppose a very wealthy man has as much money (gold) as the total monetary wealth of a small town. Because you abhor this man keeping his money to himself, unused in his mattress (due to your greed and envy), he graciously decides to lend it ALL out, (collateralized, of course) at 10% annual interest to the people of the small town, keeping all of his original money lent out for a duration of 10 years by making new loans as needed. Unless this small town increases it's productivity to amazing levels creating the export of real goods and begins importing massive ammounts of money, in less than ten short years, the wealthy man will own ALL of the money in the town, or it's near equivalent in collateralized property. If it were up to me, I'd rather the wealthy man keep his money in his mattress, and let the townspeople keep their money and freedom. The other option, if usury is unlawful... this wealthy man could "spend" his money by building a factory in town, being the owner therof, and increase the town's productivity much more efficiently than would personal loans.

Note: there is no "fractional reserve lending" in this example. The evil is usury; interest payments.

As Oro so clearly pointed out, in a similar manner, wealthy nations, through interest bearing loans, have enslaved the third world nations, owning everything they can produce, and more. Third world debt forgiveness is a hot topic these days. Unfortunately, they typically talk about forgiving about 1-2% of the interest payments, still demanding 98% of the interest. Really, they should forgive all of the interest, AND all of the principle, which was funny-money non asset dollars to begin with.

Somebody else posted yesterday a question on this same topic such as, "if two people engage in a private transaction where one borrows 1 oz. of gold and repays the debt with 1.1 oz at a later date, what crime is broken, who is hurt?" The same logic is used to justify prostitution, or drugs, or abortion. The crime is called usury and it is defined by the same moral source that says murder and prostitution are wrong.

Oro, you hit upon the idea that "mano" debt, if lawfully enforced, would be like slavery. Isn't this part of the reason why the proverbs state, "The borrower is servant to the lender." ?

Yes, Elwood, borrowing (voluntary slavery) is one way to provide work for yourself. There are other ways to provide work for yourself that are more profitable.

-------------------
goldfan, you recently posted, last week or so, something to the effect that you came to the conclusion that loaning money at interest was wrong. Why and how did you ultimately come to this idea?

-------------------
Journeyman, yes, you have stated my position well. Interest not ok, return on investment is ok. That's how I understand the Bible's position as it presents these issues. I hope you are not going to take this in the direction I fear. Are you going to ask me how these two are different? Oh boy!

-------------------
Leigh, I just about died laughing at your commentary; Goldman Sachs going after forgotten gold left on a beach!

-------------------
Zenidea, about silver.
U.S. coins dated 1964 and before are 90% silver; a silver dollar is not a full ounce as Black Blade said. In 1965, half dollars were minted that were 40% silver. That is amazing you can buy silver dollars for $2.00 Aussie. These things sell for $8 minimum in the worst condition, up to $20 in good condition, and even more if they are in excellent shape. Buy all you see at that price!

------------------
Black Blade, I'm in Tahoe, Homewood right now, where we just got about 5-6 inches of new snow last night!

Thought for the day:
Real Money is never created or destroyed. It just changes hands.

koan

(02/12/2000; 10:48:23 MDT - Msg ID: 25141)

A silver perspective

Silver, gold and the PGM's are all more or less marching to a different drum. The PGM's are leading the way on simple supply worries i.e. Russian supply, and great demand from auto industry. Gold seems to be following, but also seems to be reacting to two primary variables 1) inflation and 2) where does money go? Stock mkt is over valued, bond mkt is unpredictable and dollar is overvalued, so people at last seem to be insuring themselves with the metals. I have recently increased my hedging to 20% of my portfolio.

So what about silver? Silver is stuck in an interesting wedge. It can't go up or down from where it presently is without direction from gold. The technical damage on either side of this price is substantial. If gold retreats as Kaplan suggests then silver should fall back down. If gold breaks through $340 then silver should break $6.00 and the impenetrable ceiling will have been pierced and silver should scream ($6.00 that's the level we need to have broken). The interplay between the PGMs and gold will be almost as interesting as the demand / supply PGM drama now unfolding.

As far as I can see we are in no mans land, for all of the metals and they could go up or down, but my bias is up. and I still predict $10 silver before $500 gold. Cheers.

nickel62

(02/12/2000; 10:51:43 MDT - Msg ID: 25142)

Thank you USAGOLD now we need the future Adam Smiths in the crowd to shed some light

on the effects derivatives play on the economic structure of capitalism before the melt down of the existing structure makes the results too obvious. Obviously gold at least physical gold and real assets would fare well in any collapse of the paper market place. What would most likely be the interim steps that forum members might be able to profit from. Heavy leverage used in the right way could be very profitalbe (if not extremely risky as well)when used to purchase appreciating assets and denominated at fixed rates to be repaid over time with less and less valuable green pieces of paper. this is the lesson we all learned as young men when we bought a house with ten percent down in the early seventies for thirty thousand dollars paid the mortgage which was always fixed at the time in constantly deflating dollars and then sold the house in the early eighties for three to four times what we paid. Paid off the 26,000 30 year mortgage which still had twenty years left to go, and pocketed a profit of sevety thousand on our three thousand dollar investment. Where forum members do those opportunities exist today? They are out there and our conterparts the manipulators found theirs ten years ago when they figured out what potential impact he introduction of derivatives would had and lined up their personal investments to benefit them and their families as the forces of the market place polayed out.

TheStranger

(02/12/2000; 11:09:54 MDT - Msg ID: 25143)

Make Mine Grape Nuts Flakes

ORO - I got sidelined this morning on my way to breakfast when I checked in here and started reading. Your posts of the last two days are nothing short of extraordinary. As I write this, it is 11 o'clock, and I am just now able to go and get some cereal. Wow! Thanks for every word of it.

Jason Happy

(02/12/2000; 11:12:04 MDT - Msg ID: 25144)

no interest loans

Thanks nickel62, for the reminder:

Here's another way to make out like a bandit by offering zero interest loans: Loan out money as long as it is collateralized by an "appreciating asset" like a house. Start with a million dollars, make loans on houses, see the value of the houses rise by 20% per year for five years, and all of a sudden, the value of the collateral is two million on your one million loan. Even if everyone defaulted and paid nothing and you had to forclose on everyone, you'd make 100%, by offering zero interest loans! Amazing!

USAGOLD

(02/12/2000; 11:14:35 MDT - Msg ID: 25145)

Nickel...

The thing we must all keep in mind is that the free market is not a creation of some economist way back when. It has always been the medium in which human beings operate simply because it is an extension of our own basic instincts for survival. Profit is not some textbook result of the economic process; it is the result of our desire to survive. Socialism is an attempt to harness the free market politically (legally) and redirect it in a way that benefits certain groups. It takes the collective power of the society and re-directs it wherever those who control the government want it directed. This, of course, was Ayn Rand's great complaint about socialism -- it robbed the producer of the fruits of his or her labor.

When you own gold, essentially you are saying that you recognize the poltical (and tenuous) nature of the current march toward the socialist utopia (also referred to as the New Paradigm). You are saying that the free market will eventually have its way and in the process destroy those who tamper with it. All the socialists have accomplished is to extend the timelines through endless round the clock management of the economy (in a larger sense) and their own trading books (in a microcosm). They have not abrogated the free market, nor can they.

If you want to know why momentum and momentum alone has become the cause celebre in American markets today, it is because market management, not free choice, is the strongest force governing this economy, but this is not a permanent state of affairs. When the momentun turns in the other direction, those not fast enough will be crushed in the stampede. Where we stand right now on the timeline, the market managers (to use a kinder, gentler word) have effectively beaten back the free market, but ultimately the free market will have its way.

Up until the advent of the derivative and its widespread use, we thought of markets from a Newtonian perspective -- what goes up must go down; for every action there is an equal and opposite reaction, etc. Now, with the derivative, we must think in terms of Einstein's physics with respect to markets -- wherein a nuclei is bombarded with particles until it reaches critical mass and all is scattered in a single, destructive event. So we wait and watch. Gold owners will be glad to have hard metal nearby when natural law and economic law combine to restore equilibrium. The current political reality (as manifested in today's markets) will be the most obvious and public victim.

nickel62

(02/12/2000; 11:15:43 MDT - Msg ID: 25146)

For you Warren Buffet fans the results of the house purchase

in the prior post would give you an annual return in dollars for the ten year period of 37%. A number even Warren Buffet would be proud of. In fact if you look very closely at great investment records you will often find that the returns are the result of a very early very correct understanding of the very factors we are talking about. John Templeton was one of the first investors to correctly understand that the US dollar would be undermined continualy from the middle sixties onward. Without taking anything away from this wonderful man and investor a large portion of his outstanding longterm record is the result of his holding investments outside the US dollar in foriegn companies (denominated in Yen and deutschmarks)that stayed at least still in value while the dollar steadly declined for fifteen years in a row.Now in fairness to Sir John he also saw the dynamics of an early investment in Japan and many other things but the basic mover of returns was the non-dollar denominated foreign investments in the investment arena of the US. In simpler terms like my house analogy he understood the flows and took advantage of them. Mr T. Rowe Price the man not the investment company that bears his name invented the term growth stock in 1937 because he began to realize that US companies could grow their earnings by reinvesting their profits in growing parts of their businesses and thereby have more profits. Thus he separated out those companies that had significant growth possibilities and recommended them to his clients. Who subsequently became mega rich over the next thirty five years as the growth opportunities were accelerated first by the US supplying the combatants in World War II and then by our own build up in the War years and then after the war as the amount of volume of goods passing over the same invested capital plant doubled and tripled to both meet the additional unplanned for (when the origional capital investment was made in the pre war period)demand from having all their competitors plants destroyed and also the need to rebuild the destruction of Europe and Japan. Believe it or not growth prior to this was not a concept particularlily associated with common stocks. Now were are the opportunities?

Jade

(02/12/2000; 11:18:43 MDT - Msg ID: 25147)

Barrick Calls...or is this the big "Bail-out".

After reading the brilliant posts here regarding Barrick over the last couple of weeks, it sure looks like the Calls that were put on by Barrick were an engineered "bailout" by the Bullion Banks on behalf of Barrick. My question to the forum. What price would gold have to rise to wipe out the short position Barrick holds and equate to a zero sum using the Calls to offset [grab the cash and pay]? This is no doubt where the price of Gold will rise to in the near future. This would make Barrick whole again and appears to be the "reward" to Barrick for being one of the major vehicle's in the war to keep the price of Gold in check over the last few years. Incredible and absolutely disgusting.

nickel62

(02/12/2000; 11:27:19 MDT - Msg ID: 25148)

USA GOLD I thank you for your Newtonian versus Einstienian

analogy it brings the concept home and my physist oriented son might finally understan a little more of what I am grappling for. If you have the ability this post of yours should be added to the archives.

Jason Happy

(02/12/2000; 11:32:58 MDT - Msg ID: 25149)

enforcing "no usury" laws

Yesterday, someone said that enforcing any sort of "no usury" laws would be impossible. After all, how could the government stick it's nose into all transactions between private individuals who consented to a usurious loan agreement?

Actually, the government need not seek out and prosecute people who engage in such conduct. All it need do is refuse to enforce contracts containing a usurious interest rate!

You need not enforce "no usury".
You refuse to enforce "usury"...

MidEastGold

(02/12/2000; 11:41:24 MDT - Msg ID: 25150)

Australian 2000 is a Dragon!!!

Tell me that this isn't preparing for BIG gold sales in China for the YEAR of THE DRAGON!!!!

Jason Happy

(02/12/2000; 11:51:08 MDT - Msg ID: 25151)

not enforcing "usury"

Wow, I just realized what an astute revelation that was.
Under total "freedom", the natural result will be no interest rate? Why? Those who demand repayment of more than the principle loan ammount will have no legal rememdy!
Who was it that said?...

"The government that governs least, governs best."

Tomcat

(02/12/2000; 11:55:27 MDT - Msg ID: 25152)

Nickle 62:

We haven't met (I am an old poster from yesteryear), so to speak, but I have read and benefited from some of your recent posts.

In the 70's I profited from inflation. I played the game and won. How do I feel about it. Ashamed. That's how.

The problem was that I profited from an immoral rip-off of the general public. Indirectly, I joined the banksters, and won at the expense of future generations. In effect, I stole money from my own children.

Do I want to profit from the current bankster sickness? Not on your life. God, if there is anything I learned from my days in the 70's it is that there is no honor in joining the banksters.

Currently a Ponzi scheme is being played on the dot com field. Sure, I could rationalize a way to make buck there also. But in the end, it will be the last greedy suckers holding on to their stocks as the market crashes that will be the finaly losers. I don't want Ponzi money. When I was a kid, on the streets, I stole and cheated with more honor than what I see on the dot com field.

I follow in the footsteps of Aristotle and others who live by the integrity of holding physical. Aristotle is not only concerned with owning physical. He wants the world to benefit from the personal integrity that grows when a golden monetary system exists. It not only would keep us honest. It would also bring out the inherent honesty that resides in most men. That's a far cry from the current fiat system that brings out our potential for dishonesty.

That is why I own gold. I choose to make money by earning it. I convert my earnings and profits to the only honest money I know of: gold.

That is why the integrity of this forum stands out amongst the others. That is why we are the beneficiaries of the wisdom like ORO's recent post where he pointed out that there is no rational reason for the central banking system to even exist; where SteveH brings out the truth associated with protecting gold; where Trail Guide keeps us on the right path.

This forum helped me regain my own sense of integrity. Long live honored group.

USAGOLD

(02/12/2000; 12:26:07 MDT - Msg ID: 25153)

Tomcat...

I was going to wrap-up my last group of posts with a thought along similar lines and I was having trouble getting it into a few paragraphs. You hit on the positive in all this. They say that living well is the "final" revenge. I would say living well and knowing you have not betrayed your own belief system in doing so is the "ultimate" revenge. Thanks for saying what I was hoping to say so well and thanks for showing up here every once in awhile to offer your well-considered words.

All: I don't know if you've noticed but we are going to another level here with ever more and higher quality participation. Sir Peter of Asher alluded to something along these lines yesterday. My thanks to all the originals (who have stayed and keep coming back), the current group of extraordinary people who post here, and the newbies who keep things lively with their new ideas, thoughts and discussion.

I agree with The Stranger...We have created a wonderful place for ourselves here.

As FOA would say..Gone for awhile. Thanks for discussing.

TheStranger

(02/12/2000; 12:29:19 MDT - Msg ID: 25154)

Peter, Solomon, Gandalf

Thanks to Peter and Solomon for kind remarks.

Gandalf - I tried in vain to find those two charts in particular you recommended last night. Can you help?

mike55

(02/12/2000; 12:36:51 MDT - Msg ID: 25155)

MK - Greenspan and Derivatives

I only caught the last few seconds of an announcement at the end of a financial report the other day, but it seems I heard the Alan Greenspan will be giving testimony on derivatives later this month. Is this correct? Can anyone else confirm?

Rod

(02/12/2000; 12:37:32 MDT - Msg ID: 25156)

Re: Platinum & PGM's

Platinum is rising in price because of the demand caused by PEM(proton exchange membrane)fuel cell production.
We all need to look around to see the huge demand for fuel cells that use Platinum as the catalyst. Ballard Power systems (BLDP) is the maker of the fuel cell engine that powers the new Ford car. Ballard is building a 100,000 sq. ft. plant to increase production. They have lots more things going on with other fuel cells. Plug Power (PLUG) is making a home power unit that looks about the size of a heat pump and they are partially owned by General Electric and Southern California Gas. I, like a dummy, knew about the fuel cells last summer and didn't act. I really don't think the Russian stopage of Platinum exports is the cause of the PGM run up.
P.S. I'm a first time poster and have lurked for over two years. This forum is great, no kook heads and silliness like some others.
Thanks for listening, Rod

sourdough

(02/12/2000; 12:48:10 MDT - Msg ID: 25157)

Query on Islamic extremism and state-sponsored terrorism

I am in the process of reading a book titled "Bin Laden, the man who declared war on America", by yosef bodansky.
Reading it caused me to wonder: If a great abrupt increase in the price of gold could cause such disruption to America, that it is speculated that the U.S. GOVERNMENT might actually interfere in the free-trading price of gold,
WHY HASN`T THE PRICE OF GOLD BEEN A POLICY OF TERRORIST EXTREMISM?
It would seem quite possible to launch terrorist attacks on a major gold producer disrupting production enough to cause an immediate increase in gold price.
A company such as Barrick, which has links to former politicians and which their hedging policy has received much of the blame for continued depressed gold prices could be singled out as an American 'lackey" and subjected to production site bombings. Would anyone care to comment on what would happen to the gold price if some of Barrick`s production was subjected to events like this? Would an increase in the price of gold and disruption of major production be viewed as beneficial to the Islamic extremism cause? just wondering?

Phos

(02/12/2000; 12:54:07 MDT - Msg ID: 25158)

mike55 (2/12/2000; 12:36:51MDT - Msg ID:25155)

Alan Greenspan has already testified on derivatives last week. He was recommending greater freedoms in the U.S. to prevent the players from moving off-shore where they would be totally beyond control or regulation.

Chris Powell

(02/12/2000; 13:01:48 MDT - Msg ID: 25159)

FT's Riley says gold manipulation probable

http://www.egroups.com/group/gata/376.html?Financial Times writes at length
about GATA and gold price manipulation.

mike55

(02/12/2000; 13:04:15 MDT - Msg ID: 25160)

Phos

Thanks for the note on Greenspan's testimony. I've been so wracked by this wicked flu for the last couple of weeks that lucidity is just now beginning to return. I look forward to further discussion on the quagmire of the derivatives game.

Jon

(02/12/2000; 13:45:42 MDT - Msg ID: 25161)

Financial Times' article on probable gold manipulation

I suggest that all of us call Drudge's attention to this article. If we can get him interested it could result in Congress looking into this matter.

Cavan Man

(02/12/2000; 13:47:30 MDT - Msg ID: 25162)

Jason

Jason,

How do you define "usury". "Usury" is not simply, the charging of interest.

Webster's New World: the act of practice of lending money at a rate of interest that is excessive or unlawfully high.

If a market does not function as a mechanism to set rates then we must rely on someone's definition of what is "excessive". That is not freedom.

Jason Happy

(02/12/2000; 14:03:54 MDT - Msg ID: 25163)

Usury definition

[Lev 25:36] Take thou no usury of him, or increase: but fear thy God; that thy brother may live with thee.

[Lev 25:37] Thou shalt not give him thy money upon usury, nor lend him thy victuals for increase.

[Deut 23:19] Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury:

[Neh 5:11] Restore, I pray you, to them, even this day, their lands, their vineyards, their oliveyards, and their houses, also the hundredth part of the money, and of the corn, the wine, and the oil, that ye exact of them.

To me, these scriptures indicate that usury is charging any increase upon a loan of anything that can be loaned. According to Neh 5:11, a quote in a story about the evils of usury, even a 1% interest charge is usury.

If you loan me 10 silver spoons, and I repay you 11, that's usury.

Cavan Man, you suggest that interest rates are either set by free market forces or by government decree. I agree. But let's not let not government enforce any interest rate contract, and I suspect that interest rates would drop to zero, if there were no enforcement of any kind...

If two people decide to break the law together, and lend and borrow at interest, there's no reasonable way to stop it. But don't let the lender cry for government help of the borrower doesn't pay the final 100th part of the money, otherwise, government is setting the interest rate, by enforcing an unjust and unlawful contract!!!

nickel62

(02/12/2000; 14:09:45 MDT - Msg ID: 25164)

Sourdough

The odd thing about the gold market is that there is about fifty times as much gold in the world at any point in time as there is gold produced in a year.About 130,000 tonnes versus annual production of 2550 tonnes . Since gold is not used up like other commodities but is recycled because of its value the market can always see some portion of the past production (the 130,000 tonnes that exist)pass into the spot market and be used for fabrication etc..So unlike all other types of commodities the price is not overly affected by procduction in any given year. The proportion produced is just too small. Now add to that the fact that the worlds largest mines would only produce 1,000,000 ounces or about 31 metric tonnes per year even if you could put them out for a full year (unlikely, these guys are earthmovers after all )you wouldn't even start to dent the spot market.

Gandalf the White

(02/12/2000; 14:13:57 MDT - Msg ID: 25165)

Howdy there Stranger !!

http://www.the-privateer.com/chart/twogold.htmlPlease follow the yellow brick road !
(Directional signage furnished by the Trail Guide.)
<;-)

oldgold

(02/12/2000; 14:17:07 MDT - Msg ID: 25166)

(No Subject)

Mainstream Investment Advisor Sy Harding now bullish on gold and gold shares:

STREET SMART REPORT ONLINE
Sy Harding www.StreetSmartReport.com

From: Asset Management Research Corp.
Our 13th year of providing research to serious investors!

Column for Sunday editions, February 13, 2000.

BEING STREET SMART

by Sy Harding

GOLD CONTINUES TO LOOK BRIGHTER.

Remember those gold chains and bracelets that used to be so expensive and popular? They may soon make a come-back as a
symbol of prosperity.

At the height of its popularity in 1981, gold reached a high of $840 an ounce. Its long decline began shortly thereafter, and by last
August gold had lost 70% of its value, hitting a twenty-year low of $253 an ounce.

The long decline in gold's value was easy enough to understand. Gold rises as a safe haven when rising inflation erodes the value of
paper money, and it falls when inflation subsides and paper assets (including stocks) are healthy.

Inflation has certainly been in decline since the early 1980s, allowing paper assets to flourish, and sending the price of gold in the
opposite direction.

But declining inflation wasn't the only thing depressing gold prices. As its price moved lower over the years, central banks around
the world, which had always maintained large gold reserves in support of their currencies, decided that was no longer necessary
(after all it's a new era). So they began to sell heavily from those reserves, hammering gold prices even lower.

Gold had an even more surprising enemy - its own producers. As gold prices fell, gold-mining companies began forward-selling
their production to lock in current prices. The way that worked, they would borrow gold from the central banks, at interest, and sell
that gold into the market. Then they'd replace the borrowed gold with the following year's production. That action, repeated year
after year, put still further downward pressure on gold.

But central banks and gold producers finally went to school on what the oil-producing countries have managed with the price of oil.

OPEC countries came to realize that by flooding the world with more oil than it could use, they were driving its price ever lower. (It
was close to dropping below $10 a barrel just over a year ago). By cutting back their production, the oil surplus dried up and they
soon had crude oil rising toward its current $30 a barrel, almost triple what they were getting for it before.

The situation with gold wasn't quite the same. Production of new gold has not even been keeping up with demand for a couple of
years now. But the selling into the market of gold reserves by central banks, and of borrowed gold by the producers, did flood the
market and have supply significantly exceeding demand. As we all know, when supply exceeds demand, prices fall.

Central banks were the first to come to their senses. Last September, fifteen major European banks announced they would restrict
their gold sales for the next five years. The result was magical. Within days gold spiked up a huge $72 an ounce to $325.

But still the gold producers, apparently with their heads down in their mines and not aware of what was going on up in the real
world, continued to borrow and sell gold to lock in current prices.

So gold gave back about half its rally of last fall, as gold traders figured the producers must still be expecting lower prices in the
future.

But, this week, gold producers finally took their heads out of the sand. The first was large Canadian miner Placer Dome. They
announced they will trim their gold hedging position by 2 million ounces, and suggested that, since it now looks like higher gold
prices ahead, other producers should follow suit, which several have already done.

And gold has been rallying strongly since.

At the same time, inflation, the long-term depressant for gold prices, seems to have also decided to become friendly toward gold
again.

While Wall Street continues to claim inflation is nowhere in sight, the CRB Index of Commodity Inflation has spurted up 13%
since mid-1999. The National Purchasing Manager's Prices Paid Index jumped in January to its highest level in five years. Average
annual wages rose a stronger than expected 0.4% in January, an annualized inflation rate of almost 5%. The Economic Research
Institute reported its Future Inflation Index rose again in January, and said, "Underlying inflationary pressures rose sharply in the
closing months of last year and continued to rise in January. There is no end in sight for the current inflation cycle upturn."

Put it all together, along with rising concerns about the safety of paper assets again, and a strong argument can be made for a buying
opportunity in gold. At least you might want to dig those old gold chains out of the dresser drawer and polish them up again. They
could see their value come back.

Sy Harding is president of Asset Management Research Corp., publisher of The Street Smart Report Online at
WWW.StreetSmartReport.com, and author of Riding the Bear - How to Prosper in the Coming Bear Market.

Back to the Top Home

Copyright � Asset Management Research Corp. -- ALL RIGHTS RESERVED.

Hipplebeck

(02/12/2000; 14:19:16 MDT - Msg ID: 25167)

to Jason Happy

If I may,

<<Bible's position as it presents these issues. I hope you are not going to take this in the direction I fear. Are you going to ask me
how these two are different? Oh boy!>>>

The difference is that you take the risk with the other party. If things don't go so good you both lose, not just the one who took out the loan.

Elwood

(02/12/2000; 15:16:39 MDT - Msg ID: 25168)

To Jason Happy:

Jason Happy in post (2/12/2000;10:44:46MDT-Msg ID:25140) wrote:

Elwood's comments are preceded by a *.

I am enjoying our topic of discussion!

*As I am. (smile)*

Your suggestion that you would be unable to legally economize your time unless usury (lending with a rate of interest) is legal is an interesting notion. I can also imagine a man argue that the human race would be wiped out unless he were legally able to buy a woman to have as a wife. Have you ever heard the phrase, "there is more than one way to skin a cat?"

*Yes, there is more than one way, but to limit the range of choices is no different than imposing the slavery itself. Sorry, but I don't see the connection between a voluntary contract between myself and a lender of money and engaging in the outright sale of other human beings.*

I have found that one way to economize one's time is to hire someone to help you out. Time is a strange thing, somewhat like money. You can sell your time for money, or you can spend your money for another's time, which, if you do it right, can free up some of your own time again.

*There's the rub. A poor farmer am I with nothing to offer another man until my crop comes in, that is, if I'm allowed to borrow the sum necessary to acquire the land and sufficient capital to plant it. Would you allow my hired hand to work on credit?*

Your suggestion that an interest rate is the natural result of marketplace freedom is another very common idea. I would suggest that freedom is the natural result of a people willingly following God's laws. If a people reject these laws, then their freedom is naturally curtailed more and more, until you get a dictatorship or totalitarian society, which is the direction the U.S. is headed today. Some say we are already there, given that the average serf in feudal times paid a smaller portion of his labor to his overlord than we pay in taxes today.

*A wise person once told me that when reason meets faith neither will prevail, and the result is usually violence or war. As a fellow Christian I'm willing to try anyway. (smile) I agree with you above, but would also say that God gave man a free will, the intelligence to contract for future delivery and payment, and the capacity to value things differently. Again, I state that man, because his time on this earth is limited, values present goods differently than those same goods delivered in the future. This difference is what is known as interest.*

I would also suggest that borrowing at a rate of interest is somewhat akin to voluntary slavery, except that the terms and length of this slavery may be unknown, even perhaps forever, (due to unforseen circumstances if you cannot repay an interest bearing loan promptly), unless there is a rememdy such as bankruptcy.

*I suppose that's one way of looking at it, in the same way that one man employing another is voluntary slavery.*

Also, there is more than one way to accumulate capital. Have you ever heard of an "inheritance"? Perhaps if you don't take out a 30 year loan to buy a house, you would have three houses by the time you paid for one, and then, you would have something to leave for your children?

*Inheritance is not capital accumulation. Inheritance is the transfer of previously accumulated wealth or capital from one to another upon the death of the one.*

Finally, you concluded by saying that unless interest bearing loans are allowed, then the only possible other outcome for capital is that the "loan proceeds sit, unused, under a mattress somewhere". Did you miss the main point of my last post? This unusable money as you see it always has another option to it. It could be invested directly by the person who owns the money.

*Yes, it could be. In your economy that would be the only choice available to the owner of the capital. If, however, the owner did not have the inclination, entrepreneurial expertise or time to "invest" it in such a manner it will sit under his mattress. You give the owner only two choices: investing it in an enterprise which he must run or lending it at zero interest. Such a solution is a prescription for the destruction of the division of labor within our economic system. The risking of one's capital in any endeavor is an economic service that requires and deserves compensation over and above the collateralized return of the capital itself.*

Suppose a very wealthy man has as much money (gold) as the total monetary wealth of a small town. Because you abhor this man keeping his money to himself, unused in his mattress (due to your greed and envy), he graciously decides to lend it ALL out, (collateralized, of course) at 10% annual interest to the people of the small town, keeping all of his original money lent out for a duration of 10 years by making new loans as needed. Unless this small town increases it's productivity to amazing levels creating the export of real goods and begins importing massive ammounts of money, in less than ten short years, the wealthy man will own ALL of the money in the town, or it's near equivalent in collateralized property. If it were up to me, I'd rather the wealthy man keep his money in his mattress, and let the townspeople keep their money and freedom. The other option, if usury is unlawful... this wealthy man could "spend" his money by building a factory in town, being the owner therof, and increase the town's productivity much more efficiently than would personal loans.

Note: there is no "fractional reserve lending" in this example. The evil is usury; interest payments.

*You're thinking in terms of a static economy with no growth. In reality, technology progresses such that man IS able to produce more with the same or fewer inputs. Thus, everyone is better off. There is no such thing in the real world as a free-market zero-sum economy. Your stated rate of 10% would only apply within an economy that is able to sustain such a rate through the increasing productivity. Note that in a lending transaction there are two parties either of which may walk away if the value to be given up is greater than the value to be received. *

As Oro so clearly pointed out, in a similar manner, wealthy nations, through interest bearing loans, have enslaved the third world nations, owning everything they can produce, and more. Third world debt forgiveness is a hot topic these days. Unfortunately, they typically talk about forgiving about 1-2% of the interest payments, still demanding 98% of the interest. Really, they should forgive all of the interest, AND all of the principle, which was funny-money non asset dollars to begin with.

*I agree the world is in a mess caused by our fiat dollar system and the corruption it breeds, however, enforcing zero-interest lending is not the answer. The answer lies in a free market money which, history has shown, would result in a system in which a commodity such as gold would be the money.*

Somebody else posted yesterday a question on this same topic such as, "if two people engage in a private transaction where one borrows 1 oz. of gold and repays the debt with 1.1 oz at a later date, what crime is broken, who is hurt?" The same logic is used to justify prostitution, or drugs, or abortion. The crime is called usury and it is defined by the same moral source that says murder and prostitution are wrong.

Oro, you hit upon the idea that "mano" debt, if lawfully enforced, would be like slavery. Isn't this part of the reason why the proverbs state, "The borrower is servant to the lender." ?

Yes, Elwood, borrowing (voluntary slavery) is one way to provide work for yourself. There are other ways to provide work for yourself that are more profitable.

*Again, I have no answer to faith-based arguments. If you insist on presenting such arguments I will withdraw and give you the final word so that we may end our debate as friends.*

Regards,

Elwood

Farfel

(02/12/2000; 15:43:30 MDT - Msg ID: 25169)

My FINAL Rejoinder to Elevator Guy

You wrote:

Have you not
read anything I've posted these last seven months?

My Answer: Absolutely NOTHING. I've skipped by all your posts. Please do not take offense but there are only a handful of posters I read on this forum or KITCO and I skip past all others. No doubt I would have loved to read your many past posts but I suffer time-bankruptcy in this fast-paced world of ours so I only read my favorites.

The only time I ever read you on this forum was in a post you directed my way implying I am anti-GATA. Then I was compelled to re-read it when Bill Murphy sent me a copy as it certainly upset him.

Well, here's the final picture or clarification for your benefit:

I do NOT support aspects of GATA methodology and have gone on the public record and sent mail to Bill Murphy in that regard.

However, nevertheless, I have helped GATA via countless "intellectual donations" during its initial gestation period PLUS my ongoing attempts to facilitate Federal political contacts for them. Both entail time, personal connections, etc., and they do have value.

In the final analysis, I will repeat that I think GATA has done a great job and I may have underestimated their ability to "shake the world." BUT the evolution taking place in the gold market is not solely the results of the "Bill and Chris" show. It is also the thousands of essays and letters aimed at politicians and media, pouring in from all over the world from thousands of goldbugs. GATA is the only real lobbyist organization that goldbugs have today ( I happily exclude the World Gold Council since it seems primarily concerned in pleasing gold producers, NOT gold investors or shareholders). So, to reiterate, it demands our respect no matter what qualms we have about aspects of its strategy.

As for the torrent of ad hominem abuse you direct at me and KITCO, I do not really know who you are (nor do I care).

When you state that I am bitter, well, you are absolutely correct. I am bitter but it is certainly a case of "the pot calling the kettle black," as your torrent of venom aimed my way is a good indicator of your own current sour disposition in life.

All goldbugs I know are bitter as hell today and if they are not, then they have no pulse or they are resigned to the notion that the status quo is undefeatable and will reign forever.

Suffering several years of Clinton Government manipulation in the financial markets and being on the wrong end of the stick lends one to bitterness. When you fervently believe that an apple is an apple while the world tells you it is really an orange, well, that is a frustrating, embittering experience. Losing a good deal of one's net worth also does that to you and so, thank God, there are other virtues and angels in life besides money such that one can laugh and smile now through all the pain.

I am talking about true goldbugs, NOT the fellows at Kitco who pick up a couple of gold coins (like SPOCK) and imagine themselves to be invested in gold. Nor am I talking about the many investors who place a mere five to ten per cent of their wealth in gold as a "hedge" whilst they place the rest of their monies in Cisco, Intel, Amazon, and the rest. Nor am I talking about the traders who play a long gold position for a few days, then switch short, or when they get truly bored with gold, move over to pork bellies. I am talking about ideological goldbugs, which is what I am now, even though I did not start out as one many years ago.

So re-read your post addressed to me, my friend, and if you do not see a very bitter hostile man, then go get your eyes checked.

But that's OK, I forgive you, because whether you wish to acknowledge it or not, you are MORE like me than you will ever realize.

Ah, the frustrating life of a goldbug.

Don't worry, Elevator Guy, we shall overcome...together.

Thanks

F*

Quicksilver

(02/12/2000; 16:03:54 MDT - Msg ID: 25170)

The Oil Card

http://www.iqc.com So OPEC fall apart the first time after members got greedy and began overproducing, thus selling out the group as a whole. Vying against each other as the children of Esau are so well known to do with "each man's hand against his brother". They eventually realized that they never had it so good as back in the days of OPEC. But, without any way to unify dissident producers, little hope for a re-formation was in sight.
Then a conflict starts. A wild brother to the north decides to attack little Kuwait with all the war toys we sold him to get his oil money so he could pick on Iran. Saudi princes said "You can blow up his toys and save our brothers in Kuwait but don't kill him because he's family". So we were invited to the Desert Storm conflict. So we go over there and blow up nearly every bridge and building that stands, with or without civilians present. Prisoners? They took in so many prisoners that some officers said "Enough, no more prisoners, if they come in with their hands up just shoot them all"."Yes, sir'sir!"
I personally worked with a marine on a construction site who told me this and after much consternation and disgust, I just came to realize that it isn't just factory workers that can screw up once in awhile. Same thing happens in every war. Germans didn't want to surrender to Russians in WWII. They wanted to surrender to us because we offered them a meal instead of a bullet.
So Ted Turner's CNN "View's Machine" found out we don't live in a perfect world. Maybe if we all stop using politically incorrect words that all problems will go away. So there are women in black wailing through the streets of Bagdad because of the first storm in the desert. A victory similiar to Mussolini's victory over the Ethiopian's where "Their spears were no match for our tanks". So we rolled over Sadam like a monster truck weekend. Little uproar in the Moslem community but we were invited and all members antied up and paid us well for it. Flushed out some Kuwati gold to depress prices, the Mr. Bill show.
Then there is talk of a common currency for Europe the EURO. Here we go again, they're trying to be like us. Can't have that. Russians seem to be getting close to getting a warm water port. Can't have that. Who is Milosovich? Blue eyed Aryan picking on Albanians. Hey this could be good press! Sort of even looks like Archie Bunker, he must be a bigot. But will the European's ante up? Call em and find out. UK says if you blow up a lot of infrastructure and they get some good reconstruction contracts that it's a go.
Down in the poles but not out yet, a major diversion is about to take place. OK executive order only with no Congressional approval, fire foton torpedoes! Eye eye captian Kirk. Hello Euro destabilisation, goodbye European goodwill. "See europeans you don't have fireworks like these fireworks, and you still need NATO to protect yourselves from each other." War drags on, peace easily attainable. No not so fast drag it on a little more and let us work a little unbelief on this common union thing.
Now you see 20 times the "women in mourning" wailing through the streets from Bagdad to Bangladesh. Every OPEC brother gets a jab in the ribs from his wife (plural) every time he looks out the palace window at the demonstrations. Days, weeks, months go by. Same jab in the ribs. Common enemy unifies old enemies. Pilot and Herod and friends now with a nation to scourge. OPEC II in overtime.
But one problem, oil isn't just in Arabia anymore. So they visit Mexico and Venezuala and treat them with fine respect. With mistresses or harems, these birds all sit on the same wire. And a puritanical "OPEC crashing" State Dept. isn't really invited.
Yes, Amigo,we give you more production, lower prices, but our debts? and the workers? So unfortunate this strike at this time, maybe come back next month. Buenos Dias.
State Dept. running close to E and it's a long way to get to Bret Sea crude. The Brits are good people let's see if they can pump out a few more barrels for the land of the SUV.

"Oil barrels are the best, serve them to your favorite guests"
"Put parity prices to the test, watch out for the hornets nest."

So what would you do if you were a British Oil Baron and some Yankee Doodle leglislater calls up begging for cheaper oil? You'd promise him the sky on a sunny day. Then, a month later you'd have a minor oil spill to rile up the Green Party, or you'd get your workers to strike too, or you could dial the OPEC hotline and ask them what to do.
What goes around comes around, as we surrender our greenbacks we're getting shot at the pump. (please don't hold me to any sense of fairness to that comparison, I'm just sharing what I see).
Maybe we'd better hedge high pump prices. Go long gold stocks but first add on the snorkle extension for the underwater stuff and "hold means hold" not sell. Then buy more after the dead cat bounce. In the eye of the hurricane. The more they get shorted the higher they spike up. Positive bias. Positive bias. Positive bias. We're in that quiet intermission when people go for buttered popcorn and count their change. And I am leary of "predictions" where the one own makes them hasn't the decency to even attempt to say why............Kaplan!!!!!!!!Space on a website is so important, no time to type a paragraph.
Inflation numbers could easily move fund managers to go back and get 15% invested in precious metals like they know they are supposed to be. And all the day players burned with margarine calls who "just had to sell their gold stocks" instead of explian to their wife (singular) why they need this check, they're missing the bread if they don't get back to butter. Watchout for Monday's reprieve rally of the DOW if optimists begin to feel lucky. Then SHORT,SHORT don't cover and SHORT some more. Gold could go sideways and eventually bounce along under this $320 resistance level till Barrick disappoints us again. Never fear, the Aussies are here, buying, buying, buying. Chinese can legally bury gold in little clay jars. Every glittering ounce that hits the dock of Shanghi isn't coming out of China. In India paper currency is contemptable (they disdain it) again gold and silver in little jars.
The oil card is this, Saudi's are saying "You want an oil embargo around Iraq? We'll give you one. Lift the embargo and you'll get another member in OPEC."
Key factor I want to know is this: Are Saudis buying war toys from Europeans? How much? If yes, then we can't negotiate by withholding spare parts. A card possibly needed to play in the future.
I'm underwater a little and I'm not selling because this spike up will probably hit in the PM on another exchange. Look at the last spike. If you want 40% on your money in a day and 15% the next, you've got to stop chickening out and returning your stock to the shorters who laugh at you when you sell it low. What is the 2yr low of your underwater gold stock? So you can't take that much risk? One serious article in Barrons and the horses are off. Little profit potential after the first big spike,I'm going to sell the morning of the second day, same as before,(shoulda woulda coulda) same pattern as before, then rebuy after Gold-in Socks tries to slam it back down. That is the only way we can ever get more shares is to mark your points and don't get too greedy.
Really appreciate all the numbers guys into calculations very interesting to me. I am disappointed at the investment community's attitude toward gold, so I take well to what the unhedged producers are doing. No need to get depressed by dwelling on the negative. Only one dysfunctional gold exchange out there, "get a rope". Good Day Mate!

Tomcat

(02/12/2000; 16:52:49 MDT - Msg ID: 25171)

USAGOLD

Michael, thanks for the acknowledgement and kind words. I have been going through a major family transformation and it has been consuming both in time and energy. It is just about over I hope to be back to the forum soon. I also will be in Denver soon and hopefully we can have lunch.

Your recent point about the gold producers shifting into a hedge or no-hedge camp is very fundamental. This is what is going wake up the investors.

One of the problems we might have as a forum is that it is hard to grasp how slow the investment community works. One of the biggest lies about the market is that it forsees all and has already discounted important factors. I think that many investors and much of the market are truely clueless. The Stranger pleaded his inflation case almost a year ago. The inflation statistics are in front of all but still some indices are high as hell.

The point is that this forum is "spot on" (pun intended) on its assessment of gold/inflation/oil etc. and it purely a matter of sticking to our guns (and gold!) and waiting it out. When you hold physical for the long run time is always on you side. This plan is so simple that it lacks excitement but at least we can rest assured that holding physical is the way to go.

DAYOOPER

(02/12/2000; 16:59:25 MDT - Msg ID: 25172)

Quicksilver

Great post. Enjoyed the reading. I am a lurker and enjoy the witty commentary that takes place at this forum. Way to sharp for me...but I would like to add my 2 cents in the form of a question.

Gold Futures as of 2-11-00
OI Calls Puts
April 300 10,398 5,641
310 12,965 3,275
320 11,246 1,648

Do the big boys controlling the market have control of the call option for these futures contracts? If not, where do YOU think gold will go before the 3-10-00 expiration of these options???? I believe the gold price in the next few weeks lies within this answer.

DAYOOPER

Aristotle

(02/12/2000; 16:59:58 MDT - Msg ID: 25173)

RossL, your question --(Msg ID:25073)

"How do you prevent gold from being lent? What if I, in a private transaction, lend 1 ounce fine gold to my neighbor for improvements to his house. He then pays me back 1.1 ounces fine gold at a later date. This is a voluntary contract to all persons involved. What law have I broken? Where is the victim?"

I had a very nice reply typed up for you, but switching to another application crashed my computer's operating system so I lost the fragile work which had been residing in a notepad window. Dang!

Here's the short and sweet version, because my patience is temporarily in short supply, courtesy of this recently lost effort. I can't emphasize enough that my commentary set out to describe the "perfect" monetary System for an IMPERFECT world. (Please note the use of quote marks and the description of the world in which we live.) I am not about to pinch individual freedoms, so in truth, I would like to say that anything goes, and the "perfection" of the system will have to accomodate a living world. However, with this tiniest adjustment regarding institutional lending, we will arrive at a whole new reality, and new personal perceptions will rule the day. We will finally have a system that is better than any other that has come along--with Gold at the foundation if it comforts you to think of it that way. In that day, everyone will gain a firsthand and intimate appreciation for Gresham's law.

Getting to your question, I would not anticipate any formal restrictions against such personal activity--no different than we have today regarding the lending of $5 from your wallet to a brother or friend, or the lending of your wheelbarrow or car. However, if you put yourself in the context of that future day where institutional lending has been halted such that the Gold market may finally reveal its true value, you would likely say to your friend seeking the loan, "What do you need the loan for? To pay for something? Here, let me lend you the dollars you need instead." That way your Gold stays safe and sound. Do you lend him your car when he wants to chase a hot stock tip? I don't think so! Personal Gold loans won't likely be a big problem, but then again, you be the judge.

Seeing the trouncing that Gold's market value has taken at the hands of lending operations and derivatives, Gold advocates should welcome this termination. Gresham's law assures us that they won't rush to spend their Gold, choosing to save it and spend their dollars instead. To be certain, Gresham's law is not enforceable under penalty of punishment by society. But like the Law of Gravity, it commands a reliable respect and predictability.

ORO--I will get to your comments later.

Gold. Get you some. ---Aristotle

schippi

(02/12/2000; 17:02:06 MDT - Msg ID: 25174)

Four Year Gold Sector Chart

http://www.SelectSectors.com/gldresit.gif This Chart shows where we have been
and where we are going.

DAYOOPER

(02/12/2000; 17:07:58 MDT - Msg ID: 25175)

computer fallout...sorry

OI calls puts
300 10,398 5,641
310 12,965 3,275
320 11,246 1,648

Hopefully the numbers will fall out right this time. These are by no means all the options in April. In fact April has 66,815 Open Interest options out there but this takes up the bulk of them. This will be my last try.

DAYOOPER

USAGOLD

(02/12/2000; 17:19:25 MDT - Msg ID: 25176)

Tomcat...

Please call or e mail when you're coming. Looking forward to it. Lunch is on me. MK

Aristotle

(02/12/2000; 17:23:03 MDT - Msg ID: 25177)

Tomcat, thanks for the recognition in your (Msg ID:25152)--

You said, "I follow in the footsteps of Aristotle and others who live by the integrity of holding physical. Aristotle is not only concerned with owning physical. He wants the world to benefit from the personal integrity that grows when a golden monetary system exists. It not only would keep us honest. It would also bring out the inherent honesty that resides in most men. That's a far cry from the current fiat system that brings out our potential for dishonesty.
That is why I own gold. I choose to make money by earning it. I convert my earnings and profits to the only honest money I know of: gold."

You are right on the mark, my friend! I wonder how many people have formed the erroneous conclusion from my recent series of posts that I am some kind of fiat currency monger. Nothing could be further from the truth. I recognize that paper money is good for whatever its users may find it to be good for. (No rocket science in that analysis!) While my personal philosophy and strategy of wealth management is probably not suitable for most people, let there be no doubt that I "put my money where my mouth is." My life's earnings are completely represented by solid wealth (property) with Gold forming by far the largest and most liquid position--my savings for the ages. This is much more secure than holding the ledger accounts which track the "promises of future man-hours" (dollars). I do sleep well at night knowing that I am living a decent life in the here and now, with honest prospects for a decent future when I must become a net Gold spender rather than saver during my eventual feable and nonproductive years.

Gold. Our key for living a good life. Have YOU started yet? ---Aristotle

Jason Happy

(02/12/2000; 17:41:43 MDT - Msg ID: 25178)

no usury, post number 5

Jason: I will attempt to avoid faith based arguments, and stick to reason. However, I still think it is reasonable to say that God is a higher authority than Webster's dictionary. And this has less to do with faith, than with the reasonable conclusions I've made from studying the creation/evolution issue, the Bible/Reliable issue, and others. If you can edit down my quotes, or not quote them at all, when you write your next response, I think for the sake of keeping it as short as possible, it would be best for the forum. Elwood's comments where responded to still have the "*'s"

*...to limit the range of choices is no different than imposing the slavery itself. Sorry, but I don't see the connection between a voluntary contract between myself and a lender of money and engaging in the outright sale of other human beings.*

Jason: The connection is that both slavery and usury are wrong. It is difficult to see the evil of usury without extra thought and study, and when it first hit me about a year or two ago, it was like a ton of bricks fell on me as the roof of the cave fell in and the sky opened up. The reason for the "man-wife-as-slave-only"analogy was to show that your argument, "I can't benefit unless wrong X is legal" is a bad argument. I was hoping you would see the man's poor argument in the analogy, and see that your logic was based on the same type of bad reasoning. I wasn't clear enough, obviously, so you missed my point.

If I am correct, this is your argument:

"I need a loan to benefit. The only way I can get a loan is if interest is charged to me. Thus, interest needs to be legal for me to benefit."

There are many ways I can show this to be a faulty conclusion, since both of your beginning assumptions are false. IE, loans do not always benefit, and interest is not always charged. In fact, there are powerful secret societies today wherein they force you to swear an oath or pledge where you will not ever go into any debt whatsoever... And, I do not believe that this great nation was built upon the foundation of being able to borrow our way to wealth. No, we flourished because the people who settled this part of the world swore off debt.

Most importantly, getting back to your assertion, if there are other ways to benefit without usury, then your argument falls flat. And this is the point I will try to stick to. The point about skinning a cat was to show that there are more options available under a theoretical "no usury" economic system than you seem to know about. Besides, a limit of options is NOT akin to slavery. Obeying the law, just laws (which limit options), opens up more options. Are you a slave because you obey stop signs or red lights? Hardly. The traffic laws, "ooh, restricting the range of choices" gives you more freedom, that of safe travel. Similarly, living in a "no usury" society, which simply refuses to enforce usury contracts, opens up options.
----------------
*There's the rub. A poor farmer am I with nothing to offer another man until my crop comes in, that is, if I'm allowed to borrow the sum necessary to acquire the land and sufficient capital to plant it. Would you allow my hired hand to work on credit?*

Jason: You are not a farmer if you have neither land, nor seed, nor equipment. Sorry. A poor philosopher, maybe, but a poor farmer, no.
----------------
*...I state that man, because his time on this earth is limited, values present goods differently than those same goods delivered in the future. This difference is what is known as interest.*

Jason: Please expand on why you believe future goods must be "more" than present goods and not just equal for a beneficial transaction to take place. Further, prove more transactions will take place if one person receives more, and another less by engaging in such a transaction. In fact, wouldn't more transactions take place if both parties are allowed to benefit as they see fit, as long as neither party is forced into such a transaction? Aren't people today forced into accepting interest bearing loans because there is no alternative? Isn't your inability to conceive of interest free loans a direct result of current law which enforces interest bearing loans, which eliminates interest free loans from the marketplace, which is a severe restriction of your options and economic freedom? Wouldn't you rather have an interest free loan than an interest bearing one?
----------------
*I suppose that's one way of looking at it, in the same way that one man employing another is voluntary slavery.*

Jason: Except that usury is forbidden, while it is allowed to voluntary enslave one's self, or hire one's self out for wages if one chooses.
----------------
*Yes, it could be. In your economy that would be the only choice available to the owner of the capital. If, however, the owner did not have the inclination, entrepreneurial expertise or time to "invest" it in such a manner it will sit under his mattress. You give the owner only two choices: investing it in an enterprise which he must run or lending it at zero interest. *

Jason: First you say I offer one choice. Then you say I offer two. No, there are three, and you mention all of them: 1. Sit on money, saving it. 2. Invest it. 3. Loan it at zero interest. All three options provide substantial benefits, without interest, with varying levels of attention to detail. Unless, you live in a system where money is loaned at interest. Why? Savings does not work. Why not? When interest is charged, the process of paying back the interest reduces the pool of money available, causing the dreaded deflation. This is what the indebted farmers complained about in the U.S. in the late 1800's.

You say my faulty thinking is that I'm viewing the economy as a zero sum game. Well, the facts show that the amount of gold available per person throughout history has remained strikingly constant, at about 7/10ths of an ounce per person. Today, the rate of growth of gold and the population is remarkably similar at about 2.5 % per year. An erroneous thought would be that a man needs to earn 2.5% a year on his gold to stay even. No, a man needs to keep the same amount of gold per year to stay even.

Getting back to the problems of the late 1800's deflation... Thus, the remedy is inflation, which destroys option number one. "saving money and paying little attention"... So, instead, with interest charges being allowed, and inflation occurring in response to the deflation, options are reduced, as poor savers are reduced to buying bonds, the value of which may rapidly rise and fall according to market pressures. In fact, since the hapless induhvidual is not a bank, he does not even have the option that replaces number 3, loaning money out at interest. And since inflation reigns, the option of lending at zero interest is destroyed as well. Usury reduces the options available... which is why the system that enforces it, is always so keen to let us know about the multitude of investment options available... they even call these ugly derrivatives, "options."!!! No need to get creative!
----------------
*Such a solution is a prescription for the destruction of the division of labor within our economic system. The risking of one's capital in any endeavor is an economic service that requires and deserves compensation over and above the collateralized return of the capital itself.*

Jason: Why is there risk if there is collateral? Doesn't collateral eliminate risk? How would "no usury" destroy the division of labor? That's a LARGE leap to make, and you need to support this argument. Also, why do you assume that an interest payment is required for investment? Wouldn't a wealthy man without food in a starving location be willing to invest in farming or trade, if it meant that he, himself, would be able to eat? Also, we both admit that as a society progresses, more goods are produced more cheaply. Thus, if a wealthy man decides to loan out money (interest free) doesn't he receive an extra benefit when society uses the loan proceeds to advance society, since he will be living in a more advanced society?
----------------
*I agree the world is in a mess caused by our fiat dollar system and the corruption it breeds, however, enforcing zero-interest lending is not the answer. *

I agree. I said as much earlier. No need to enforce zero- interest lending. Simply stop enforcing "at interest" lending, and let the free market decide for itself... which, should gravitate towards zero.
----------------
*The answer lies in a free market money which, history has shown, would result in a system in which a
commodity such as gold would be the money.*

Jason: It is amazing that two Christians, who both long for a gold is money standard, (both you and me) can disagree so much on a topic such as lending at interest.

Getting back to the options that would be available under Biblical rule. You may have missed my post about scriptural references regarding a perfect monetary system... see

Jason Happy (01/18/00; 21:34:52MDT - Msg ID:23165) ideas
Jason Happy (01/19/2000; 14:20:01MDT - Msg ID:23214) scriptures

in the forum archives. In addition to no usury, there would also be: free land; debt forgiveness & no accumulation of societal debt; daily wages; tax free inheritance; and no taxes.

Surely these options outweigh the benefits of being able to receive an interest charge on a loan?

All in all, I am relatively dissatisfied with this post, only because I know I could do better. My apologies for being long winded, repetitive, argumentative, variously off topic, and for not presenting the evils of usury more clearly. I was hoping that my previous comment about interest bearing loans to third world nations trapping them into bondage would do the trick, and maybe you are mulling that one over still, as that brick bounces on your head... 8-)

RossL

(02/12/2000; 17:50:21 MDT - Msg ID: 25179)

Aristotle

Thank you for the gracious reply. However, I still see an economic function for lending gold in a "perfect" monetary system. ORO touched on it this morning.

In my little scenario about lending gold to my neighbor, I believe the transaction to be perfectly legitimate... unless I was to take my neighbor's IOU and use it as money. That would open Pandora's box ! Paper gold !

USAGOLD

(02/12/2000; 17:56:22 MDT - Msg ID: 25180)

Aristotle...

Paper money in and of itself is not an evil. As you have tried to point out repeatedly in post after post over the past year or so, it is its misuses that must be brought to account. At the same time, handing over a piece paper (perhaps representing gold) can facilitate day to day transactions without the imposition of moving this heavy metal around (a state of affairs those who own it fully understand.) The problem comes when we trust a government in the management of this asset as part of the national treasury. We have repeatedly run into problems in this regard during the 20th century and that is why so many mistrust any paper representation of gold let alone fiat paper -- not realizing that the two circulated successfully side by side for decades both here and abroad.

On a related issue, there was a well known goldmeister economist years ago (I wish I could recall his name) who made a surprising comment during hearings on a whether or not we should return to a gold standard. His attitude was who cares if the money is backed by gold as long as we can own yellow metal as free citizens. As long as we can do that, we can put ourselves on the gold standard when we feel it necessary and renounce government paper at will-- another point you have made repeatedly. At the time, I was surprised at this economists' maverick viewpoint for a gold advocate , but nevertheless could see the wisdom of it. The real crux of the matter is ownership. As the old saying goes "He who owns the gold makes the rules" -- an admonition that I would suggest be hung in big, bold letters on bullion bank trading room walls all over the world. (They tend to forget as we have seen in recent weeks.) If enough people at any given time convert to gold (and perhaps that is the motivation behind all the machinations against gold we have witnessed just in my lifeteime, let alone the rest of the 20th century), there can be no doubt the message trying to find its way to Washington and Wall Street.

Don't worry, my friend. No one here questions where your heart is. The gold standard is an extraordinarily complex issue, especially for we Americans who are so far immersed in the paper money game that its difficult to see a way out (though I think it can be done.)

Aristotle

(02/12/2000; 18:02:54 MDT - Msg ID: 25181)

Question for RossL--

YOU: "In my little scenario about lending gold to my neighbor, I believe the transaction to be perfectly legitimate..."

ME: Sure it's legitimate. I don't question that at all. But I DO question whether you would in fact willingly choose to part with your Gold on such a day if dollars could also satisfy your neighbor's need. Would you? I certainly wouldn't.

Gold. Save you some. ---Aristotle

RossL

(02/12/2000; 18:13:01 MDT - Msg ID: 25182)

Jason - Usury

Apparently we are going to disagree on usury, since I don't see a big moral difference between interest and investment.

If I was to loan a gold miner some gold that he needed to buy tools, and he agreed to pay me 1.1X gold in return after his mine was running, is that investment or usury?

The 3rd world debt trap, however, is a crime of racketeering. In the gold loan scenario above, the borrower has the perfect capability to repay the loan. As ORO has explained in the past, 3rd world debts must be repaid with dollars that they cannot manufacture. They must manufacture goods and trade them for dollars. If the exchange rate is manipulated by racketeers, then the loans can be forced into default.

Aristotle - hey... it's a hypothetical situation, OK? I have never loaned gold to anybody!

Tomcat

(02/12/2000; 18:32:35 MDT - Msg ID: 25183)

USAGOLD

Michael, thanks, when I get a date I will give you a call.

Chris Powell

(02/12/2000; 18:41:50 MDT - Msg ID: 25184)

Freedom to own gold requires a free market in gold

Let me emphasize a comment posted here tonight by MK. It
reflects GATA's attitude. We add only the provision that, in
addition to the freedom to own gold, free citizens are assured of a free market in gold. For the freedom to own gold is nothing without a free market that fairly values gold and makes it convertible into other currencies and forms of exchange.

Here's what MK wrote:

"There was a well-known goldmeister economist years ago
(I wish I could recall his name) who made a surprising comment during hearings on whether we should return to a gold standard. His attitude was: Who cares if the money is backed by gold as long as we can own yellow metal as free citizens? As long as we can do that, we can put ourselves on the gold standard when we feel it necessary, and renounce government paper at will."

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

Harley Davidson

(02/12/2000; 18:52:06 MDT - Msg ID: 25185)

@Jason, RossL and Aristotle

I've been following your discussion and have found it very interesting so I thought I would offer up this piece for your consideration.

I lived in Lancaster, Pennsylvania for a while where there is a sub-culture of Amish folk. They make their living primarily through farming while some have branched out into house construction and other trades. Their farms have been "in the family" since they settled here from Germany looking for religious freedom, etc. While I'm not an expert on their culture, I do know that because of their religious beliefs, they don't utilize modern conveniences. They drive around in horse drawn buggies (a sight all tourists hope to see in the summer time) and plow their fields with plows drawn by teams of mules.

To the point - when they build a house, usually somewhere on the family farm land, it is not wired for electricity or telephone, has no running water, or conventional heating or plumbing. They have wells for water and use fuel lamps for lighting, and wood/coal stoves for heating. As a result, the banks will not give them a mortgage as their houses don't meet the building codes to qualify. Even if they did, I don't believe the Amish would do business with them for such a purpose. So, it appears, they seem to do fine in there simple lives, paying cash as they go. Also, a large part of the cost of there houses and barns is contributed by the rest of their community in the form of volunteer labor. That's the way it was always done and that's the way many of them will continue to do it.

Hope this provides some food for thought.

Leigh

(02/12/2000; 19:03:41 MDT - Msg ID: 25186)

Jason

Dear Jason: What about Jesus's parable about the servants and the talents? Matthew 25:26-27 says, "His lord answered and said unto him, Thou wicked and slothful servant, thou knewest that I reap where I sowed not, and gather where I have not strawed; Thou oughtest therefore to have put my money to the exchangers, and then at my coming I should have received mine own with usury." Isn't usury being condoned in this story? I'm not arguing with you; I'm just asking.

Jason Happy

(02/12/2000; 19:07:33 MDT - Msg ID: 25187)

Usury issues for RossL

RossL,

Is the main moral determination to make really the issue of "the ability to repay"?

Do you mean to say that a gold loan to a gold miner is moral because ALL gold mining operations in the entire history of mankind have always been economically profitable, with no failures anywhere?

Ross, loans are not immoral. And nobody is powerful enough to prophesy whether or not someone has the ability to repay, because "time and unforseen circumstancees happens to every man". It is the charging of interest that is wrong, even at a 1/10 of one percent interest, no matter how long the time frame.

It is also immoral to loan at zero interest if there is no 7 year and 50 year escape clause. If I spend a loan foolishly, should my children or my grandkids be forced to pay back my debt? This is what happens even in a short span of 50 years. Without an escape clause, a single debt can trap an entire nation into indentured servitude, feudal bondage, forced slavery, as we are in the process of witnessing in the good ol' USA today. Why should I pay 50% of all my future income in taxes just because my great grandparents founded a bank to take out a loan to win World War I back in 1913? Why should my grandchildren be forced to pay an 80% tax rate to pay back the debt of WWII? It's still on the books and growing...!

According to your "ability to repay" theory, such loans and conditions are morally justifed as long as the government is strong enough to strong-arm my children into accepting an 80% tax rate!!!

Or, do you mean "willingness to repay" without being forced by the state? If so, then we are on the same page. Nobody should have the government force them to pay back a loan older than the "Biblical statute of limitations" which is 7 to 50 years, and nobody should be under the thumb of government force to pay back a loan at interest.

I think Hipplebeck clarified the difference between loaning at interest and investment much better than I could put it.

"The difference is that (with investment) you take the risk with the other party. If things don't go so good you both lose, not just the one who took out the loan."

Jason Happy

(02/12/2000; 19:17:18 MDT - Msg ID: 25188)

no usury, continued...

Leigh,

I read once that this story condons usury if you assume that the master who reaps where he did not sow, and gathers where he did not straw, represents Jesus Christ. The moral of the story is that we should put our talents to productive use, not that we should reap where we do not sow, and gather where we do not straw. If we want to do the latter, then, yes, by all means, we should engage in usury. And so, I think the story condems usury quite well.

Harley Davidson,

Thanks for the observations... without usury, the Amish are not homeless. There are other ways to exist in life other than by taking out an usurious loan. I have read similar things, in that the early pioneers did the same thing, all in a small community would pitch in to help build the houses of their neighbors.

Jason Happy

(02/12/2000; 19:21:47 MDT - Msg ID: 25189)

my spelling is poor

Of course, that's "condonEs usury", and "condemNs usury"... sorry about that.

Tomcat

(02/12/2000; 19:26:58 MDT - Msg ID: 25190)

Aristotle

You know, I was also wondering what people would get from those posts. Early on, I was fortunate to read your posts on how you integrated gold into you view of life. I don't remember the details but I realized that you were speaking of a philosophy of life; a philosophy that included: honest work for honest pay and a sense of honor and personal integrity.

Ari, those posts were the one's that really influenced me. In my personal notes, I referred to your view as the Aristotle Standard. For me the Aristotle Standard wasn't an economic system but a higher standard I could follow for myself. It represented going the extra mile and giving my clients more than they expected. It included more charity. It included more honesty with myself and others.

And I was paid in gold! That gold that represented real value for what I was giving in life. I went the extra mile and was rewarded with a pay in gold. For me it was a personal gold standard. I felt better about myself, slept better and I was freed from the bondage of trying to get wealthy from money I did not earn. It was not an accident that my investments became more sound and I even earned more than earlier.

I also felt that the mutual respect demonstrated by Knights of the Round-Table was also a part of the Aristotal Standard. And when we communicated with Old English mannerisms and invited someone to sit down and share an ale we were, in effect, acknowledging a common, undefined but understood, quest for the honor and self respect that came from a Knight's actions which were based on honesty and fair play.

I would like to believe that this standard also influenced many of the distinguished posters we have here to share their views and to honor us with their presence.

I also want to acknowledge Michael for his genius-like role in all this. To me it is amazing what he has created and how subtle but powerful his influence has been. If someone ever asks me how much money Michael makes I will say "I don't know, but he sure has made a difference".

Thanks again, my friend.

elevator guy

(02/12/2000; 19:33:11 MDT - Msg ID: 25191)

Farfel 25169

Acknowledged. More later. Have to go.

Solomon Weaver

(02/12/2000; 19:34:08 MDT - Msg ID: 25192)

great Tomcat

Tomcat

This was a very beautiful and honest expression of a feeling that has also grown in me.

For the fact that you can so clearly recognize the "real gold standard" that is a way of life that comes from our hearts.

I can think of no better praise for such goldhearts on this forum than what you have just given us.

May the Providence of the Universe continue to enrich your life.

Poor old Solomon

Harley Davidson

(02/12/2000; 19:35:52 MDT - Msg ID: 25193)

@Leigh, Jason - MsgID:25186

Interesting question! (and an equally interesting answer Jason) I'd like to suggest another view. If you look at Deuteronomy 23 v19 it states "Though shalt not lend upon usury to thy brother; ... " and then in verse 20 "Unto a stranger thou mayest lend upon usury; but unto thy brother though shalt not lend upon usury: that the Lord they God might bless thee in all that thy settest thy hand to..." Apparently, the bankers weren't considered his brother.

On the surface, it does seem that this provides an argument for usury in some circumstances but I suspect, if one were to look deeper, they would find it has something to do with the Hebrews having license to exploit the non Hebrews as they settled into the land of Canaan after the exodus from Egypt.

RossL

(02/12/2000; 19:53:31 MDT - Msg ID: 25194)

Jason - Usury

You asked:
"Is the main moral determination to make really the issue of "the ability to repay"? "

No, that is not the point I was trying to make. My moral determination is made on the intent, or lack thereof, to commit fraud in the transaction.

You still have not convinced me that charging or paying interest is immoral or unethical!!!

Henri

(02/12/2000; 20:06:06 MDT - Msg ID: 25195)

Harley D Msg 25185

I currently live on the western fringe of Chester County, PA where the Amish thrive. They enjoy sweet simplicity of life with very little debt if any. They pay cash in transactions or just barter. They are not by any stretch "poor" either in spirit or assets. Because they pay cash immediately they enjoy a 50% discount at the local hospital for any services rendered. They do not believe in insurance and since the hospital does not have to file any paperwork to the HMO's etc, their overhead and time they have to wait for payment is reduced to where it normally should be. These savings are passed on directly to the consumer. What a concept pay as you go! Use savings for unexpected expenses like Hospital bills. Rumor is that even non-Amish can get this same discount if they pay cash within 10 days for services rendered. I guess it wouldn't serve to discriminate. As for usury, I cannot speak to it on their behalf. next time I engage some in conversation I might broach the subject, but I get the distinct impression it is a strictly private matter. I would venture to guess there is no actual interest/usury, but there probably is a beholdin'...that is if ever I can return the favor brother you have but to ask. Simple, no? or is it yes?

There was once a definition of usury on the books of the Uniform Commercial Code of any rate of interest in excess of 10% per annum. Don't ask me to quote chapter and verse because I have only heard this anecdotally. The law had to be changed before the Federal Reserve and other banks could raise interest rates above this level. Has anyone else heard of this before?

Henri

(02/12/2000; 20:18:35 MDT - Msg ID: 25196)

Tomcat Msg 25190

Notwithstanding the wisdom of Ecclesiastes, it has been said that all paths lead nowhere. It is not the arriving or the departure that matters, nor even which path is taken. What matters is who you meet along your journey and how you allow your spirit/experience to grow from the meeting. This enrichment can be taken into the next world...our gold cannot.

Harley Davidson

(02/12/2000; 20:19:10 MDT - Msg ID: 25197)

Henri - Msg ID:25195)

Thanks for the response. I had an Amish contractor build my house in Lancaster about 12 years ago. They also built some houses in Chester County, for the well to do, that were just incredible.

I found it curious that while they held to their beliefs of simplicity with vigor, they wouldn't hesitate to ask for a ride (in a car) if they needed to get somewhere and would offer a couple dozen farm-fresh eggs or gallons of milk (cow or goat) for the favor.

Leigh

(02/12/2000; 20:26:55 MDT - Msg ID: 25198)

Home Shopping Network

Hey, everyone! The HSN is selling 1999 1/10 Gold Eagles for only $69.00! Silver Eagles are $17.95! Get them quick before they sell out!

Aristotle

(02/12/2000; 20:29:45 MDT - Msg ID: 25199)

Sir Tomcat! I love you, brother!

There must be something about February and sharing one's thoughts about integrity and striving for higher plateaus of the quintessential human experience. Perhaps it's the several months of winter that make us introspective? It was in February of 1999 that I made my first appearance at this noble Round Table, and as you have correctly recalled, the topic of those earliest posts were more philosophical in nature than economic. I do still cling to those thoughts, and, like you, my life has been richer and more productive for it.

When you get right down to brass tacks, the details of settling your personal household budget is immaterial. What puts us both on a Gold Standard is that we exchange the remaining currency for the safety and comfort of that special yellow precious heavy metal. Over the course of the past year, I have endeavored to lay out in the clearest of terms how this program of Gold accumulation actually has a sound, economic merit to it that goes beyond the emotional and psychological benefits. (Although as I have discovered through actual practice--and you now confirm that you have too--these latter, non-economic benefits alone are enough to justify our course of action to save our excess productivity with Gold.)

I am saddened that so many people fail to discover Gold in the course of their lives, and am doubly saddened to see misery run so deep among those gathered at a forum such as this where the natural assumption is that they have in fact discovered Gold. Are they all doing something wrong--buying paper forms of Gold on leverage and whatnot?? To be so close, and yet so far...Sheeeeesh!

I do have another important theme, but I don't dare share it at this time for fear of excommunication from the forum. As with all of my other posts, including this latest series, it is a very pro-Gold message and very pro-life. But, as a wise friend of mine once cautioned me, "there is a proper time for all things...try and deliver heaven on Earth before the world is ready, they'll crucify." I'm just a child in this planetary garden hurtling though space, but I strive to be a quick study. As such, I'm quickly beginning to appreciate the difficulties of world leaders as they try to ensure that we all continue to play nicely with each other. I have discovered that as you move from the philosphical ideal into the real world--trying to find a way to make the latter resemble the former--the people will have none of it. They twist your words so as to sooner justify your hanging.

Here's a final thought for you Tomcat, if your busy schedule allows you some personal time. Read a classic book by George Eliot called 'Silas Marner.' It's about another kind-hearted soul who first found comfort in Gold during his emotionally trying times before discovering his unique way to share what he had to offer to his small portion of the world.

Gold. It's so much more than money. ---Aristotle

Quicksilver

(02/12/2000; 20:41:00 MDT - Msg ID: 25200)

The Sacagewa Incident

http://www.radiowallstreet.comCorrection, when I said short'short and short some more I was refering to overvalued equities and NOT goldstocks. For the simple reason that if a crash does occur and you can't log on,if you are short the market, then you can go out to dinner that evening and stay up all night worrying if your brokerage has a dime. But if you're long and you can't log on you won't feel like going to dinner and the brokerage will take you to the cleaners.
That link above has an analyst Bob Brogan who is a sharp index guy, an ace on techinical and fundamental analysis. If we can understand where the money is flowing, then we may be able to better position ourselves when this feeding frenzy starts for gold. I think some of you guys are too hung up on Barrick. They are just another cog in the wheel. Are other exchanges net buyers of physical or sellers? I'm only interested in what happens to the physical because as I see it all this paper is like dross that will come to the surface and be scraped off as being too risky because of the failures of derivative players. Barrick is big but the disappearance of physical from the markets when these Sacagewa coins come out is going to dwarf our imagination of what gold shortage is. Yes, I'm saying that when you put a golden colored coin in an American's hands he is going to look at it and say "Man you know I ought to own some real gold". GOLD HAS LITTLE POPULARITY now and that is our investment quality problem. Sacagewa can change all that. Yes, and popularity is pokemon. What has the pokemon stock done? I mean for kids? pun intended. Sacagewa is our first gold (colored) coin since 1933 for general circulation. Woopie do. Yeah, laugh at me, it's our only shot. Gold is a metal of emotion my friend not an investment of logic. You may be logical but I don't think the public is at all. Passion numbs the senses. People in line 25yrds long outside coin shops waiting to buy gold at $850 back in those insane days. No logic only fear and passion. I hope no one whould get stuck with gold at 850 but I'm just saying how people are. What emotions do you feel when you first look at one of these gold colored dollar coins? I'm talking about the subliminal psychological effect if every man, woman, and child picking up a gold coin with an indian on the front (very American) and asking the one next to them "Is it real gold ?"......................................! Oh yeah we're down 5 runs in the bottom of the ninth. Look who is up to bat, an indian girl with a baby on her back. What can she do. Not much if all you can do is complain about the negative. When it ziggs I'm selling and when it zaggs I'm buying.

Jason Happy

(02/12/2000; 20:57:15 MDT - Msg ID: 25201)

usury; to charge or not to charge

Well RossL, as Harley Davidson pointed out, the moral determination to make is that it depends on who you want to take advantage of, when it comes to deciding who to charge interest. So, yes, I'm backing down a bit, Biblically, charging interest is ok, as long as it's not charged to a brother, or countryman. And, if you are an aethiest, I guess you can charge interest to anyone all you want.

My point is that the government should not be in the business of enforcing unlawful contracts, and I maintain that usurious contracts are unlawful. (Unlawful meaning UnBiblical; since our common law's original and ultimate source was the Holy Bible.)

In ages past, I've heard that Jews wouldn't loan to Jews, neither would Christians to Christians, nor Muslems to Muslems. So the Jew would loan to the Christain, the Christian to the Muslem, and the Muslem to the Jew, or any variation thereof.

But, in one Christian sense, you might say that everyone on the planet is a brother, (and thus, deserving of an interest free loan) yet in another Christian sense, you could say that righteousness should not be yolked with unrighteousness... tricky thing this religion sometimes.

One of the lawyers that I worked with in the past, when beginning to write up a business contract, started off the conversation with, "Ok, so now tell me, 'Who are we tryin' to screw?"

Also, since someone else brought this other topic, I have read that in England at one time, perhaps in the 1700's or 1800's, interest beyond 8% was deemed usurious, or illegal.

Henri

(02/12/2000; 20:59:55 MDT - Msg ID: 25202)

Aristotle...To be so close, and yet so far...Sheeeeesh! Msg 25199

Just finished up reading (Thoughts!) from Another...remember I am still new here. I now believe I know where you are coming from on the issue of paper gold,hence your comment (subject above)...but maybe not. I am about to delve into your HOF series. Have enjoyed your recent posts. I just wanted to say that I too sleep much easier knowing I have taken delivery of my e-metal and yes have even noticed the blossoming of charitable thoughts. Now if I could only break this fixation with gold shares and convert to physical...

Henri

(02/12/2000; 21:14:49 MDT - Msg ID: 25203)

Alternative Money for a not so perfect world

http://www.zolatimes.com/writers/grabbe.htmlI noticed there was some discussion of this subject although I haven't yet had time to read these posts. I was just wondering if you folks here had seen this "DMT" denominated in "Rand"? Interesting, but I can't tell if there is actual gold/fiat currencies backing it 100% or if it is banked.

Harley Davidson

(02/12/2000; 21:37:45 MDT - Msg ID: 25204)

Henri - Msg ID:25203)

It looks it would take quite a while to absorb all that information and I'm not qualified to assess the pros and cons of such a concept but while browsing through, I saw the following which I believe is based on gold at $290:

1 rand = .20 US dollar + .20 euro + 20 Japanese yen + .124 British pound + .0007 oz. gold.

Seems to me, that one "rand" is worth about $.20 (the gold content). Hard to believe someone with Grabbe's credentials would come up with something like this but I'd be interested to hear what others more qualified than myself would have to say.

Elwood

(02/12/2000; 22:02:13 MDT - Msg ID: 25205)

Reply to Jason Happy:

Jason Happy (2/12/2000; 17:41:43MDT - Msg ID:25178) wrote:
- - - - - - - - - - - - - - - - - - -
*Such a solution is a prescription for the destruction of the division of labor within our economic system. The risking of one's capital in any endeavor is an economic service that requires and deserves compensation over and above the collateralized return of the capital itself.*

Jason: Why is there risk if there is collateral? Doesn't collateral eliminate risk? How would "no usury" destroy the division of labor? That's a LARGE leap to make, and you need to support this argument. Also, why do you assume that an interest payment is required for investment? Wouldn't a wealthy man without food in a starving location be willing to invest in farming or trade, if it meant that he, himself, would be able to eat? Also, we both admit that as a society progresses, more goods are produced more cheaply. Thus, if a wealthy man decides to loan out money (interest free) doesn't he receive an extra benefit when society uses the loan proceeds to advance society, since he will be living in a more advanced society?
- - - - - - - - - - - - - - - -

From "Man, Economy and State" by Murray Rothbard, 1993 ed, pg 321-323
All emphasis is in the original as italics, not caps.

Although the loan market is a very conspicuous type of time transaction, it is by no means the only or even the dominant one. There is a much more subtle, but more important, type of transaction which permeates the entire production system, but which is not often recognized as a time transaction. This is the purchase of producers' goods and services, which are transformed over a period of time, finally to emerge as consumers' goods. When capitalists purchase the services of factors of production (or purchases the factors themselves), they are purchasing a certain amount and value of net produce, discounted to the PRESENT value of that produce. For the land, labor, and capital services purchased are FUTURE GOODS, to be transformed into FINAL FORM AS PRESENT GOODS.

Suppose, for example, that a capitalist-entrepreneur hires labor services, and suppose that it can be determined that this amount of labor service will result in a net revenue of 20 gold ounces to the product-owner. The service will tend to be paid the net value of its product; but it will earn its product DISCOUNTED by the time interval until sale. For if the labor service will reap 20 ounces five years from now, it is obvious that the owner of the labor cannot expect to receive from the capitalist the full 20 ounces NOW, in advance. He will receive his net earnings discounted by the going agio, the rate of interest. And the interest income will be earned by the capitalist who has assumed the task of advancing present money. The capitalist then waits for five years until the product matures before recouping his money.

The pure capitalist, therefore, in performing a capital-advancing function in the productive system, plays a sort of intermediary role. He sells money(a present good) to factor-owners in exchange for the services of their factors (prospective future goods). He holds these goods and continues to hire work on them until they have been transformed into consumers' goods (present goods), which are then sold to the public for money (a present good). The premium that he earns from the sale of present goods, compared to what he paid for future goods, is the RATE OF INTEREST earned on the exchange.

THE TIME MARKET IS THEREFORE NOT RESTRICTED TO THE LOAN MARKET. IT PERMEATES THE ENTIRE PRODUCTION STRUCTURE OF THE COMPLEX ECONOMY. All productive factors are future goods: they provide for their owner the expectation of being advanced toward the final goal of consumption, a goal which provides the raison d'etre for the whole productive enterprise. It is a time market where the future goods sold do not constitute a credit transaction, as in the case of the loan market. The transaction is complete in itself and needs no further payment by either party. In this case, the buyer of the future goods - the capitalist - earns his income through transforming these goods into present goods, rather than through the presentation of an IOU claim on the original seller of a future good.

The time market, the market where present goods exchange for future goods, is, then, an aggregate with several component parts. In one part of the market, capitalists exchange their money savings (present goods) for the services of numerous factors (future goods). This is one part, and the most important part, of the time market. Another is the consumers' loan market, where savers lend their money in a credit transaction, in exchange for an IOU of future money. The savers are the suppliers of present money, the borrowers the suppliers of future money, in the form of IOUs. Here we are dealing only with those who borrow to spend on consumption goods, and NOT with producers who borrow savings in order to invest in production. For the borrowers of savings for production loans are not independent forces on the time market,but are rather completely dependent on the interest agio between present and future goods as determined in the production system, equaling the ratio between the prices of consumers' and producers' goods, and between the various stages of producers' goods.

End of quote from Rothbard.

Sir, if you understand the above, it should be obvious to you that what you propose (enforcement of zero-interest time contracts) will destroy the division of labor within our economic system.

Elwood

Tomcat

(02/12/2000; 22:05:55 MDT - Msg ID: 25206)

Henri

Henri, you said

"It is not the arriving or the departure that matters, nor even which path is taken. What matters is who you meet along your journey and how you allow your spirit/experience to grow from the meeting."

I don't quite understand why but that really hit home. This forum and who I have met here and the growth experienced is for me a great example of this principle. Thanks.

Tomcat

(02/12/2000; 22:09:54 MDT - Msg ID: 25207)

Solomon Weaver

Thank you Solomon. I wish I could put in words my appreciation for you kind words. Strange how close we can get as a group without meeting in person.

Solomon Weaver

(02/12/2000; 22:23:24 MDT - Msg ID: 25208)

IN DAYS OF YORE and silver bars galore

TOMCAT - I DEDICATE THIS LITTLE STORY TO YOU...PERHAPS YOU TOO ARE A SILVER BUG.

In very old times, a market was a place where you took something you had produced to meet those who were interested in buying it. Coin was a convenient way to store and transport the value of something you had sold until you used that value to buy something.

Although there were certainly contracts made even back then, where for example a large householder with many servants, who did not want to plant potatoes that year, might pay for seed potatoes, give them to a farmer with the agreement that the farmer would return double the amount of potatoes at harvest time. Is this not unlike a futures contract?

Now, when I think of a modern gold mining company (or a corn farmer) who is making most of their money from a single product, taking that product down to the market to "sell" it (so that bills can be paid, new investments made, and profits taken home), I understand that he will be paid a price which is determined by the market. That market, in classical jargon, sets the price based on the relationship between supply and demand. For example, I am one of those poor unfortunate householders who have had to experience the dramatic reduction in "supply" of heating oil and diesel up here in the Northeast this winter, and the very rapid price rise that this caused. Fortunately, I got a brand new woodstove at half price a while back because with many Americans feeling like cutting and hauling wood, and cleaning ash to be a "barbaric relic" of the past, the vendor had literally no demand for it.

Now here is something interesting: When I decided last year to buy one of those 1000oz units of junk silver, I had to send in a "certified" bank check before the goods could be shipped. Now that I have them, if I want to sell them back, I have to send the silver back and cannot "sell" it until it is safely at the BB. So, this is living proof that there is a "market" out there that considers the transfer of the physical asset to be a fundamental element of the sale. Now, even more interesting: I could have used my line of credit to allow the same broker who sold me a junk unit to "purchase" two units (using margin) so that my net gain could be doubled. I could have (hopefully) "sold" these two units at a profit to someone else�all the while never ever having to have carried that 60lb box into or out of my home. So, this is living proof that there is a "market" out there that considers ONLY THE POTENTIAL transfer of physical assets ON DEMAND to be a fundamental element of the sale.

In the first case, the verification of my ownership is a heavy box. In the second case, it is a file in a computer saying which side of the deal I was on. In the first case, I have SILVER. In the second case I have a SILVER DERIVATIVE (in the sense that the value of the paper printout "derives itself" from the value of a given amount of silver). Folks�sorry to use Silver instead of gold�but like POOR old Solomon says�silver is the poor man's gold. Those of you who are less poor enough to have a box of gold can certainly substitute gold anywhere you read silver.

So we have TWO different markets. We have the SILVER MARKET, and we have the SILVER PAPER market. There are two things which tie the two together. The first is that the "prices" in each are the "same". The second is that the paper has the right to DEMAND DELIVERY, which means the paper is really a PROXY of the real market. This implies (in a truthful market) that the SUPPLY OF SILVER PAPER which is offered for sale, is exactly corresponding to a physical storage of REAL SILVER which has been set aside by the owner and cannot be offered for sale twice. If this rule is followed, then THE SUPPLY AVAILABLE to both SILVER AND SILVER PAPER markets is in fact identical, and price based on demand should be the same in either market.

NOW, let us say, that an entity who owns a large fraction of the SILVER in our market decides to issue TWO PAPER CERTIFICATES for each unit of silver (and claims that he can go outside of our market to buy more SILVER if needed with the extra money he just got by selling a second supply). Let us say that this fact was known by all players in the market�and we all understood that it "might" not really be possible for us all to "demand" at once. Now, in a real market, a "buyer" of SILVER would now have to ask himself, "if I pay for the SILVER today, but accept PAPER SILVER for it now, what are the chances that I will not be able to CONVERT IT ON DEMAND to SILVER?" If the answer is that there is a given risk, then the VALUE of the SILVER PAPER is actually marginally lower than the value of the SILVER. As our large friend creates larger numbers of SILVER PAPER he continues to reduce the value of the SILVER PAPER vs SILVER.

Now let us move a little farther forward in time. Let us say that certain other entities in our market were jealous of the great profits which our large friend could make by issuing PAPER SILVER and selling it at the price of SILVER. So, after a certain revolt and negotiation, rules were made which allowed a certain large cartel to issue SILVER PAPER under certain guidelines of liquidity and collateral. As the supply of SILVER PAPER continued to multiply, it eventually reached the point where several multiples of SILVER PAPER existed for each SILVER. As new players entered the market with the purpose of SPECULATING, the cartel would take their money, and issue them their SILVER PAPER. If they were clever speculators they could wind up with more SILVER PAPER than they started with. If not, well we all understand that gamblers can loose. As more and more "gamblers" enter the market, who have no real interest in ever DEMANDING DELIVERY of SILVER, it becomes easier and easier for the cartel to pay out the money profits to those who want to "exit the market with their winnings".

Over time, the market swells to include both a large PAPER SILVER float and with brisk PAPER SILVER trading, a very high transaction velocity. The "primary" activity of the market becomes the frantic betting and handwaving, and end of day settlements. The SILVER sits quietly hidden in the basement, a ceremonial relic of the market. On any given day, a few sellers to the market are actually silver mining companies who have come to sell their SILVER. The bouncer greets them at the door and sends them in to the bartender who checks the invoice on their shipment, and issues them SILVER PAPER, which they carry over to the cashier and exchange for money. It is very obvious to the miners that the SILVER and the SILVER PAPER have the same value. At about an equal frequency, there appears at the door an executive from Kodak, or a jeweler who needs to buy some SILVER. They give the cashier some money, who issues them SILVER PAPER, which they take over to the bartender who fills out a sale invoice and sends them down to the basement with the bouncer to pick up their SILVER. It is also very obvious to them, that the SILVER and the SILVER PAPER have the same value.

The fact that for every unit of SILVER actually coming into or leaving the market on a given day is only about one percent of the amount of SILVER PAPER that trades does not seem to bother the party. They are much to absorbed in their games. The fact that in a bad week, the price of SILVER PAPER may fall so much that the "net loss" that week to owners of PAPER SILVER is more than the entire cash value of a years worth of NEWLY MINED SILVER does not bother them because in a good week the "net gain" might far exceed that. In time, based on the swollen number of NEW SILVER PAPER created the market can even come to be a more important value creation engine than the mining industry which provides the product.

But there is a great problem here. Contrary to what everyone believes, as soon as one of the big cartel players is not able to DELIVER ON DEMAND, the value equality between SILVER and SILVER PAPER is questioned. The market players know that they have seen Kodak executives coming by to pay cash and pick up SILVER so they know that since they are witnessing a potential default on SILVER PAPER they immediately DEMAND PAYMENT IN SILVER in the hopes that on their way out the door they could find a Kodak buyer.

Suddenly, there are two very different markets. SILVER PAPER holders who have little chance of getting delivery, and SILVER owners who can deliver immediately. Is there any surprise that the price of SILVER will be much higher than the price of SILVER PAPER? Is there any surprise if the bar actually closes down and the miners and Kodak buyers decide to start meeting somewhere else?

Poor old Solomon

Tomcat

(02/12/2000; 22:27:40 MDT - Msg ID: 25209)

Aristotle

I am honored by your response. There is so much to say but something else is on my mind so please bear with me. I feel that as tougher times come to the fore there will be a much wider audience for what you have to say.

I urge you to continue with your writing. The is no way to measure the effect of someone like yourself when combined with the power of the internet. Truth penetrates the heart and soul and its effect on men's actions can be very lasting. It is no accident that the corruption of the shorters is becoming more exposed every day. Perhaps we will live to see the power of our own pens!

Love ya too, brother.

Tomcat

(02/12/2000; 22:31:22 MDT - Msg ID: 25210)

Solomon Weaver

Dear Solomon. Such a dedication is more than someone could hope for. And to think that I am an old silver bug as well! Thank you my friend.

Quicksilver

(02/12/2000; 22:39:36 MDT - Msg ID: 25211)

Give Gold a chance.

http://www.windsorpublishing.comI had some questions in my mind over want many have said so I had to go to the source and here is is.

Lev. 25:9-10 You shall then sound a ram's horn abroad on the tenth day of the seventh month; on the day of atonement you shall sound a horn all through your land. You shall thus consecrate the 50th year and proclaim a release through the land to all its inhabitants. It shall be a jubilee for you, and each of you shall return to his own property, and each of you shall return to his family.

interesting this next one

Lev. 25:20-21 But if you say,"What are we going to eat on the seventh year if we do not sow or gather in our crops?" then I will so order My blessing for you in the sixth year that it will bring forth the crop for three years.

Usery
Lev. 25:35-43 Now in case a countryman of yours becomes poor and his means with regard to you falter, then you are to sustain him, like a stranger or a sojourner, that he may live with you. Do not take usurious interest from him, but revere your God, that your countryman may live with you. You shall not give him your silver at interest, nor your food for gain. I am the LORD your God, who brought you out of the land of Egypt to give you the land of Canaan and to be your God. And if a countryman of yours becomes so poor with regard to you that he sells himself to you, you shall not subject him to a slave's service. He shall be with you as a hired man, as if he were a sojourner with you, until the year of jubilee. He shall then go out from you, he and his sons with him, and shall go back to his family, that he may return to the property of his forefathers. For they are My servants whom I brought out from the land of Egypt; they are not to be sold in a slave sale. You shall not rule over him with severity, but are to revere your God.

This is why the Jews pressed Jesus for an answer to the question,"Who then is my neighbor?" There were more serious responsibilities that were to be shown to a countryman. No usery allowed. The Jews were allowed to loan out their money to pagans for usery but if it was overly oppressive (over 1% per month
) then it was considered sin and their soul was cut off from Israel by God. It doesn't say 12% but that it could not be excessive. 1% per month was the threshold of oppression according to Smith's Bible Dictionary which isn't much to compare from but it's the historical limit of what was allowed to be charged without condemnation of the community. See Ezekiel Chapter 18 if you think sin is casual like a smooth lying preacher who teaches for money may lead you to believe. I am no fan of organized religion myself. Follow the Spirit of Truth who can lead you into all truth. It is actually impossible for a soul to keep the Law perfectly without surrendering to this Spirit of Truth for that is the Law of the I AM to live in truth, and to speak the truth in love without fear of mortal man. This takes bravery that I have failed to hold dear and have suffered many a heart ache having compromised the truth in times past to gain an unrighteous friendship for the love of money or pursuit of lust. I can say that only by speaking the truth even in this forum has it helped me to be more real and when I see men striving for truth it delights my soul. You may call me a hypocrite for wanting to trade stocks but I really don't want to be a bricklayer though I have advanced skills. Wasted years not a few. I'm tired and I want to be free. May we know the kindness of attaining to philanthropy and to gain the faith of Peter who said "Silver and gold have I none but in the name of Jesus of Nazareth rise up and walk". I love gold because it's pure and it reminds me of God's glory. But I read how it all ends and the only way I can take it with me is to get into truth like a knight climbs into armor and no CIA,FBI,KGB,Jesuit,or Illuminati thug can take even an ounce of the purest gold away from me because I've got it all hidden in some wood on a hill. I know the truth and that you will not find His Voice spoken through hired preachers who actually murdered God, organized religion is corrupt to the core and if you love the praise of men you are under a cloud and kept from the dawn of His day. If you go speaking too much truth in a church you are probably going to be asked to leave. Is anyone asking you to leave this forum because you wrote the truth? Happy campers I think with or without physical.

(02/13/2000; 01:28:40 MDT - Msg ID: 25212)

quicksilver

just been to church, I don't need any more sermons today

nickel62

(02/13/2000; 05:47:53 MDT - Msg ID: 25213)

Hey Farfel flad to see you and elevator guy have buried the hatchet.

I read your last post and noticed the following lines.

All goldbugs I know are bitter as hell today and if they are not, then they have no pulse or they are resigned to the notion that the status quo is undefeatable and will reign
forever.

Suffering several years of Clinton Government manipulation in the financial markets and being on the wrong end of the stick lends one to bitterness. When you fervently
believe that an apple is an apple while the world tells you it is really an orange, well, that is a frustrating, embittering experience. Losing a good deal of one's net worth also
does that to you and so, thank God, there are other virtues and angels in life besides money such that one can laugh and smile now through all the pain.

I am talking about true goldbugs, NOT the fellows at Kitco who pick up a couple of gold coins (like SPOCK) and imagine themselves to be invested in gold. Nor am I talking
about the many investors who place a mere five to ten per cent of their wealth in gold as a "hedge" whilst they place the rest of their monies in Cisco, Intel, Amazon, and the
rest. Nor am I talking about the traders who play a long gold position for a few days, then switch short, or when they get truly bored with gold, move over to pork bellies. I
am talking about ideological goldbugs, which is what I am now, even though I did not start out as one many years ago.

Well I don't know about anyone else but that pretty well describes my situation exactly. Maybe that shouldn't surprise me since we are after all both poeters on this forum but I was surprised anyway. I wonder how many others are in a similar situation? Best wishes to you and your family. And may our day be unfolding.

Journeyman

(02/13/2000; 06:23:30 MDT - Msg ID: 25214)

Absolutely Brilliant (hope I'm first to nominate this for

I Journeyman do hereby Solomonly nominate the following post
to the USAGOLD Hall of Fame:

Solomon Weaver (2/12/2000; 22:23:24MDT - Msg ID:25208)
IN DAYS OF YORE and silver bars galore
TOMCAT - I DEDICATE THIS LITTLE STORY TO YOU...PERHAPS YOU
TOO ARE A SILVER BUG.

Sorry to repeat myself, but this piece of knowledge is
simply brilliant. You can extend Solomon's "story" to the
entire "financial" (gambling) economy, I think.

The analogy enables a user of this knowledge to think about
derivatives of all sorts in a coherent and accurate way.

It correctly labels the "gamblers," if not their (original
at least) value to the "real" economy (the silver miners,
Kodak, etc.) Inherent in the story are the dangers of the
game, the suckers, and how the game has the potential to
suck the "real economy" dry as more and more people begin to
believe they can make more in the derivatives game than in
the real economy.

Just one question though Solomon:

What were you considering when you wrote, "In time, based on
the swollen number of NEW SILVER PAPER created the market
can even come to be a more important value creation engine
than the mining industry which provides the product."

Not quibbling, just curious.

High Regards,
Journeyman

Journeyman

(02/13/2000; 06:46:58 MDT - Msg ID: 25215)

UCC, usury & Federal Reserve @Henri & Harley

"There was once a definition of usury on the books of the Uniform Commercial Code of any rate of
interest in excess of 10% per annum. Don't ask me to quote chapter and verse because I have only
heard this anecdotally. The law had to be changed before the Federal Reserve and other banks could
raise interest rates above this level. Has anyone else heard of this before?"
Henri (2/12/2000; 20:06:06MDT - Msg ID:25195)

Yes! Absolutely for sure. but I can't quote chapter and verse either.

Regards, J.

Henri

(02/13/2000; 06:51:24 MDT - Msg ID: 25216)

Tomcat Msg 25206

For me, it is more than a principle. It is the key to happiness on this earth. The fellowship of others brings more joy than a whole pile of gold. On this plane of existence...earthbound as we are...gold is the Honest man's means of obtaining sustenance so that he can continue on his journey and enrich himself with the interactions with others of like mind and especially those whose perceptions of the journey differ from our own. In each case we may learn something new.

I sense in this forum even as a new sojourner here, that there is a great trove of comradery and enjoyment of each others company. In a way, this medium of exchange is like a dream in that you meet all sorts of personalities and yet cannot touch or feel them in a physical sense. Yet it is better than a dream because the feelings communicated through the written word are every bit as real as those spoken in person...with the added advantage that you don't easily forget the encounter as in a dream. It is this essence which is carried forward not in the sense of time but forward in the enhancement of the relationships.

It does not suprise me in the least to find that those attuned to honest money are also civil and honest in dealing with their brethren be it the written word or actions. Perhaps this is the only element missing in this medium...that action cannot be observed directly but come only in the form of give & take of ideas. For this reason, I still consider traditional friendships superior; however that is not to say we could not all meet one day (at a Round Table) and share our perceptions til dawn.

But I digress, the reason these words strike a chord for me is that here (fellowship) is the true treasure...it is not the gold, although that too has a beauty of its own...it is the discovery that there are others on the same path of our journey. To stop here and take the time to meet and interact with them is not only and act of incredible kindness but a time well spent from what can be learned.

What joy hath a person that has gold but suffers of loneliness.

Hipplebeck

(02/13/2000; 07:16:15 MDT - Msg ID: 25217)

on usury

http://www.murabitun.org/The Arab societies are trying to work out this problem, since their beliefs on usury are the from the same sources as the Jewish

Tomcat

(02/13/2000; 07:58:11 MDT - Msg ID: 25218)

Henri

"It is the key to happiness on this earth. The fellowship of others brings more joy than a whole pile of gold."

You know, when I used the word principle I felt its inappropriateness but could think of no other. It is rare to find someone like yourself that lives this "key" rather than giving it lip-service.

"I sense in this forum even as a new sojourner here, that there is a great trove of comradery and enjoyment of each
others company."

Yes, it is true. If you get a chance to read the archives you will find and continual theme of respect and friendship. By the way, you ability to communicate via the written word is a treasure of its own. Hope we hear more from you.

Bonedaddy

(02/13/2000; 08:02:21 MDT - Msg ID: 25219)

Usury vs. Interest (All)

I've been loosly following the discussions regarding usury. As humans, when we feel deeply, we tend to interpret narrowly. Is it possible for usuary to be wrong and interest to be right? There appears to be ample scripture quoted here to back up either position. May I offer the following as a possible explaination? Usuary could be interpreted as the charging of "unfairly high" interest. What it is that constitutes "unfair" can then become the topic of another marvelous discussion.
Here is one to ponder. I like to keep my gold outside the bank. I do this for several reasons, which many here probably share. One of these reasons is that my bank won't pay me interest on gold deposited there. Fine. No interest, no deposit. Now, let's say for the purpose of the illustration, that some of the banks outstanding loans go bad, as they did during the S&L crisis of the '80s. Federal regulators show of to audit the bank and if necessary, close it down. Would the bank, at that time, be willing to pay me interest in return for a deposit of my gold to augment their balance sheet? Probably. Could that interest rate be determined from prevailing rate on other isntruments? Possibly. Under such a scenario, the line between usurous and market rate interest might blur, depending on the need. One final point to ponder: Would I be willing to put my gold on deposit at a bank, any bank, during a time of financial upheaval like the S&L crisis? I think NOT!

USAGOLD

(02/13/2000; 08:49:03 MDT - Msg ID: 25220)

Canamami...

http://www.telegraph.co.uk/et?ac=000401090230472&rtmo=gljYwwZu&atmo=99999999&pg=/et/00/2/13/cnash13.html Seems our Castroite friend is making his play. We warned of Ashanti's naionalization. Here it comes. They do not have many alternatives as suggested on these pages in the past. I would rate nationalization a 75% probability now -- up from 50% a couple weeks ago (the last time we broached this subject) when some in the gold industry laughed off the suggestion.

What some in the industry failed to put in the equation is that we are talking about Ghana's primary asset here. They are not going to let it be cannibalized property by property to satisfy the bullion banks who's advise in this regard has been questioned, if not a target of outight criticism. If Ghana nationalizes, the bullion banks by inference will have already taken a hike. Ghana will force them into the market for a substantial amount of physical metal.

Especially telling is the pressure being put on Ashanti by the rising gold price. This dovetails into yesterday's discussion on derivatives. Where does this put the bullion banks involved in the Ashanti meltdown with respect to their own trading books? (And, as an aside, where would this put Ashanti in terms of developmental money and a market for their gold?) It might be instructive to owners of Barrick that the Ashanti shares which moves opposite the gold price (much like Barrick does) are down 78% from the 1999 high. $100,000 invested at the top would now yield $22,000 -- and in a rising gold market (of all things!).

The London Telegraph story above is instructive and could set the tone for the upcoming week.

Jason Happy

(02/13/2000; 10:05:51 MDT - Msg ID: 25221)

Usury; power of interest; world ownership & control

To RossL, Bonedaddy, Hipplebeck, Elwood, Aristotle, Harley Davidson, Leigh, Journeyman, quicksilver, and all who have thoughtfully followed the usury debate:

For RossL,

Why should Usury be illegal? Why is it immoral and unethical?

Compound interest is very powerful, and if legally guaranteed by the government, then it will naturally lead to world dictatorship, as someone will eventually claim to own all the money, and will have legal title to it all. How so? Simple math: If you start with a million dollars worth of gold, how long do you need, and what is the rate of interest you need, before all the world's gold belongs to you? Or, conversely, when did they need to start to succed by 1930?

Helpful Hints:

Total world gold: about 100,000 tons.
Total world gold valuation at today's price, $1 Trillion.
Total world gold valuation at 1920's price, $20/oz., $64 Billion

21 doublings will take 1 to a million, or a million to a trillion

1 1
2 2
3 4
4 8
5 16
6 32
7 64
8 128
9 256
10 512
11 1024
12 2048
13 4096
14 8192
15 16384
16 32768
17 65536
18 131072
19 262144
20 524288
21 1048576

If you double your money every 7 years, as the financial press tells us we should, then in 147 years, 21 doublings, a million dollars would turn into a million million or Trillion. (Investment gurus will usually show that in 9 doublings, you can turn $2000 into a million, or with 7 doublings, $10,000 will turn into a million.)

At 20%, money doubles sooner than every 4 years

10 x 120%
12
14.4
17.28
20.7

At 10%, doubles sooner than every 8 years:
10
11
12.1
13.31
14.641
16.1051
17.71
19.48
21.44

At 5%, doubles sooner than every 15 years.
10
10.5
11.025
11.57
12.15
12.76
13.40
14.07
14.77
15.51
16.28
17.10
17.95
18.85
19.79
20.78

So, then, starting with a million in gold, at

5%, your family dynasty needs 21 x 15, or 315 years to own all the world's gold.
10%, your family dynasty needs 21 x 8, or 168 years to own all the world's gold.
20%, your family dynasty needs 21 x 4, or 84 years to own all the world's gold.

But, really, they only needed 16 doublings to win the game by 1929, when world's gold valuation was $64 billion, (rather than a trillion) and if they started with more than a million in gold, they would, obviously, have needed even less time.

5%, your family dynasty needs 16 x 15, or 240 years to own all the world's gold.
10%, your family dynasty needs 16 x 8, or 128 years to own all the world's gold.
20%, your family dynasty needs 16 x 4, or 64 years to own all the world's gold.

Now for the proof that this was achieved by the 1930's. And that forced globalization was attempted by the forclosure that occured in the U.S. with the great depression, and culminated with WWII. Want proof? Also proof of fraud?

The United States borrowed 250 Billion to win WWII. Gold was $35/oz. from 1933 to 1971.
Here are the government historical figures for the national debt. See for yourself
http://www.ustreas.gov/opc/opc0019.html

Thus, the 250 Billion x 1 oz/35 = 7,142 million ounces of gold. x 1 ton/32150oz. = 222,146 tons,
which is two times as much gold as there exists in the world today.

Since WWII, the U.S. dollar has been the primary instrument to legally trap the rest of the world into the same debt trap that got us back in 1930.

Now that they've won the game, isn't it interesting that you can't loan gold at greater than about 1% per year? That if you try to participate in the interest increase game, you must use dollars, which can be devalued as fast as they desire? And that if you convert your dollars to gold, your increases, if any, become lower than the rate at which gold is being added to world supply each year? And that, instead, a typical gold investor is CHARGED a 1% per year storage fee? How long before any new gold family dynasties reach the top? Never! What a rigged game!

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

Dear Sir Elwood, I fully understand everything Rothbard said. Thank you for presenting the source of thoughts you are thinking. Did he successfully confuse you? To me, it is obvious that he is trying to equate direct investment with loaning money at interest. And by comparing the two, he forgets that one carries risk and the other, if supported by collateral and government enforcement, does not carry risk. The other benefit of trying to confuse the two, the natural conclusion is reached that one should receive the same "interest income" whether one engages in risk and work, or whether one makes a guaranteed loan keeping the hands clean and dry. Thus, if work and investment produce rates of return of 20% a year, this is justification for making loans at 20% per year...

Now, just because I propose lenders receive zero interest income, does not mean that investors cannot run profitable businesses. The two are not the same, despite Rothbard's linquistic attempt to say so. Please try again to explain why no usury lending will destroy the division of labor. To do so, you must also answer the following challenges, which remain unanswered:

The first question; "How is there significant risk in a loan if there is collateral, and government enforcement of lending contracts? Don't these things eliminate risk?"

The second challenge; namely, prove that a man will not invest if there is no usurious "percent increase" incentive. This would be the same as proving that no trade will occur if two equal things are exchanged!!! You cannot do it! Pure logic dictates that if a trade will occur when equal value items are exchanged, then an "investment" will naturally occur even if there is "zero interest increase"!

----------------
Hipplebeck, thanks for the link http://www.murabitun.org/ about Arab societies & usury... It will make interesting reading today.

----------------
Bonedaddy, I don't think you can say interest and usury are different. If so, you would need scriptural support. The verse I quoted earlier, requoted by quicksilver says that they are one and the same; and there are far more verses than these that make the solid case that interest and usury are identical. The argument thay they are different is without support, but needed to justify the practice.
KJV:
[Lev 25:36] Take thou no usury of him, or increase: but fear thy God; that thy brother may live with thee.
[Lev 25:37] Thou shalt not give him thy money upon usury, nor lend him thy victuals for increase.

Quicksilver's Bible: "Do not take usurious interest from him, but revere your God, that your countryman may live with you. You shall not give him your silver at interest, nor your food for gain"

My definition of "unfairly high interest rates" could therefore be a charge of .000000001% increase every 100,000 years. In fact, a zero rate of interest is unfair at times! How so? "Time and unforseen circumstances happen to everyman." and there needs to be a possible escape from unlucky chance misfortunes, (mandatory debt forgiveness every 7 & 50 years) IE, loans must carry risk, because the world is not perfect.

It is the people who insist on being able to make a risk free investment who are the idealists living in a fantasy world, not me! 8-)

--------------
To all: Unlike one of my posts yesterday, I rather like this post I've worked on this morning!

Chris Powell

(02/13/2000; 10:19:20 MDT - Msg ID: 25222)

Sunday mail examines crisis at Ashanti Goldfields

http://www.egroups.com/group/gata/377.html?Sunday Mail in Britain examines crisis at
Ashanti Goldfields. GATA thinks the Ashanti
situation is bullish for gold and the
publicity about it even more so.

http://www.egroups.com/group/gata/377.html?

Chris Powell

(02/13/2000; 10:20:18 MDT - Msg ID: 25223)

Man armed with cream pie was NOT Bill Murphy

http://www.egroups.com/group/gata/378.html?Of course it may have been some other
GATA supporter.

Jason Happy

(02/13/2000; 10:39:02 MDT - Msg ID: 25224)

usury

http://www.murabitun.org/documents/trading/usury.htmlExcellent link.

Elwood, your argument that investment is the same thing as an usurious loan, or as the above link puts it, "trade is the same as usury" is old, and has been destroyed long ago...

Jason Happy

(02/13/2000; 11:06:57 MDT - Msg ID: 25225)

trade or usury? Right on topic...

From the latest GATA quote of the Article which reads:

Human-rights groups and left-wing activists have been
protesting on the fringes of the summit against what
they see as the evils of free trade and its impact on
poorer developing countries.

Should read:

Human-rights groups and left-wing activists have been
protesting on the fringes of the summit against what
they see as the evils of USURY and its impact on
poorer developing countries.

But, since they say these are the same thing... and confuse one with the other, they say "free trade" where people are really protesting against the evils that result from USURY.

oldgold

(02/13/2000; 11:37:15 MDT - Msg ID: 25226)

Ashanti Article

Must admit I was incensed (but not surprised) that the article devoted so much space to quotes from notorious gold bear and bullion bank propogandist Andy Smith. Sounds like his clients are still short big time as he never ceases trying to talk gold down.

SteveH

(02/13/2000; 12:03:17 MDT - Msg ID: 25227)

Interesting

www.kitco.comrepost:

Date: Sun Feb 13 2000 13:53
Goldfish (@goldbrick) ID#390280:
Copyright � 1999 Goldfish/Kitco Inc. All rights reserved
The deflated price of oil ( low like gold, and all commodities ) has eaten slowly into the existing infrastructure over the last 2 to 3 years.
There can be a price that is too low and is as as much a misallocation of capital as inflation.
Due to the deflated price - exploration has almost stopped and existing capital investment has been prematurely shut down. = more deflation

Ultimately you get shortages . . . which lead to increasing prices . . . .which leads the Fed to 'think' that there is inflation - when there is deflation . . . . and so the Fed raises rates . . . . which only makes capital more expensive . . . . which makes it even harder to afford to keep the oil infrastructure up and operating . . .much less expanding . . . until some event - and all h*ll breaks loose.
Check out the info I posted Sat at 1500 if you really want to understand.

Peter Asher

(02/13/2000; 12:04:47 MDT - Msg ID: 25228)

Henri, Journeyman

Henri (2/12/2000; 20:06:06MDT - Msg ID:25195)
>>>There was once a definition of usury on the books of the Uniform Commercial Code of any rate
of interest in excess of 10% per annum. Don't ask me to quote chapter and verse because I have
only heard this anecdotally. The law had to be changed before the Federal Reserve and other
banks could raise interest rates above this level. Has anyone else heard of this before? <<<

As well as I can remember, the usury laws existed till the demand for LEGAL loans pushed the interest rate ceiling held in place by them. At that point, the only way to free up sufficient capital was to abandon the law. (That was the justification) What is significant is that the law was thrown out, not altered upward.

It was considered that the usury laws were there to prevent loan sharking. When "ordinary" business transactions caused "ordinary" interest rates to reach the legal limit, then "loan sharking" was more or less defined as "100% a month or we'll break your legs."

18KARAT

(02/13/2000; 12:06:34 MDT - Msg ID: 25229)

ORO

Oro, your twin posts 25113/25114 are easily the best posts I have ever read on this forum.
You make a devastating case for the elimination of CB's.
Have you ever considered writing a book on the subject and getting it published for a wider audience?
It is a case that needs to be put to the wider community.
18K

goldfan

(02/13/2000; 12:13:47 MDT - Msg ID: 25230)

Ghana Governemntr and Ashanti takeover

This is just my personal kneejerk reaction today. But I think that governments have a role, armies have a role and individuals with or without weapons have a role, when thieves use illegal methods to set up situations where they can appeal to the law, to take over a country's or a person's assets. Hence, I believe the Ghanian government is totaly justifed in taking the assets of Ashanti out of the hands of the thieves like Lonmin and Goldman Sachs.

I don't for a minute believe that "no one will invest in black Africa again" if they do. In fact, I bet there are plenty of honest gold mining companies (if dumb) who would be happy to run the Ashanti mines, profitably and fairly, for the Gahanian government if they were asked and could get a reasonable deal.

I hope the Ghana government takes Ashanti over. This should start a major and incredibly overdue review of the policies of all gold miners, and gold mining investors everywhere. Those who rely on the bullion banks, or any banks, for any part of their business, will be put on notice, that if they don't run their affairs to provide a reasonable benefit to the people in whose countries they operate, will be put out of business.

FWIW
Goldfan

Peter Asher

(02/13/2000; 12:29:40 MDT - Msg ID: 25231)

USAGOLD (2/12/2000; 11:14:35MDT - Msg ID:25145)

MK's theory of economic relativity!Second to nickel62's nomination

TheStranger

(02/13/2000; 12:31:03 MDT - Msg ID: 25232)

Productivity: How Much of it is Real?

Yesterday, Tomcat made a point about how slowly important shifts in the economy seem to gain currency on Wall Street. He cited recent reinflation as one frustrating example. Day after day we are told, simply, there is no inflation. In fact, the oft-repeated mantra is found as recently as in the Ashanti article from this morning's Daily Mail.

But my advice to all is this: Don't listen to what Wall Street has to say on this subject. Rather, watch what they do. Let the bond bear market and the commodity bull market be your guide, not the verbal protestations of those who fail to see reality. Liken their hollow arguments, if you will, to the words of Richard Pryor when he said, "who are you going to believe, me or your own lying eyes?"

Yesterday, ORO treated us to another flurry of his brilliance that should not be missed. It took some time for me to wade through his remarks and distinguish them from some of the thoughts he was debating. But the effort was well-rewarded. I do not wish to demean his work or reduce it in any way by singling out and paraphrasing one passage, but it contains a point which bears repeating here.

Disinflationists base their faith upon computerization as the source of America's accelerating productivity numbers. Yet, it is implicit in ORO's words that recently high productivity reports may be more coincident to acceleration in the trade deficit than they are to computerization. After all, computerization has been going on for a very long time while the recent parallel surges in productivity and the trade deficit appear to have their roots in the period associated with the Asian collapse of 1997-98.

Here is my attempt to paraphrase ORO's explanation of how this works:

China produces a plastic comb for ten cents. It is then shipped to the
United States for, say, 4 cents. Then the comb is sold here for 75 cents.
75 minus 10 minus 4 equals 61. So, the more labor-intensive process of
making the comb yields 10 cents in China, and the less labor-intensive
process of selling it yields 61 cents in the U.S.

As America's imports continue to grow faster than our exports, this math continues to yield phantom productivity improvements. This is so, not because we are becoming so much more efficient but because our excessive spending habits are forcing a growing proportion of the more labor-intensive production we need to come from overseas.

Does this form of "productivity" growth result in lower prices. Yes. Temporarily. But eventually it must result in a lower dollar and higher prices.

(Forgive me, ORO, for trying to abridge your work. I thought this particular point worth repeating in a more condensed format so that it not be missed by anyone.)

The implied loss to U.S. manufacturing in all of this may even help explain the concurrent trend towards lower corporate after-tax profitability. Many tech companies make little or no money, and many non-tech
companies are sqeezed by cheaper imports. Perhaps, as non-tech companies
contribute relatively less to the economy, and as relatively more of what we
buy is imported, we are simply skewing the productivity numbers in a way
that has nothing to do with greater efficiency and everything to do with
loss of competitiveness. High U.S. employment rates, therefore, can be seen more as a
product of rapid money creation than competitive achievement.

Even now, such well-known architects of American productivity as IBM,
Dell, Intel, Compaq, etc. are experiencing a slowing in their rates of
growth while, nationwide, productivity continues to accelerate. No wonder
the NYSE advance/decline line has been falling for two years. No wonder gold has rewakened from its slumber.

Journeyman

(02/13/2000; 13:14:28 MDT - Msg ID: 25233)

Shocked and appalled @ALL

Quite frankly, I'm in awe of the extreme effectiveness the
incredibly weak anti-gold propaganda from the establishment
has apparently had over the years. For example, the recent
announcement from GATA of the Financial Times article
suggesting gold has been manipulated carrys the disclaimer -
- -

"GATA, whose officers consider themselves patriotic
Americans and WHO ARE CERTAINLY NOT ADVOCATES OF RETURNING
TO A GOLD STANDARD, maintains that their government's
economy should not be based on dishonesty, secrecy, and
private advantage." [CAPS emphasis added -j.]
http://www.egroups.com/group/gata/376.html?

- - - as if you had to be slightly crazy to advocate such a
thing. FOA echoed this same refrain. I guess this proves
that even embarassingly defective propaganda, when combined
with ignore-ance in government schools is good enough. I
guess the big lie works as long as no one stands up and
states loudly and with authority, "BALONEY!" eh Stranger?

In fact, even here at USAGOLD, in the very heart of "gold
country" there are only a handful of stout hearted
individuals with the intestinal fortitude to unabashedly
suggest the obvious truth about the gold standard and who
also posess the knowledge to stand up and defend it. No
wonder we have been losing!

Who here will join ORO and declare for the gold standard?

Journeyman

Journeyman

(02/13/2000; 13:15:57 MDT - Msg ID: 25234)

Defending Gold Ch. 3: The Gold Standard Failed and Was Unpopular

@Aristotle, Trail Guide, ORO, Mr. Gresham, Peter Asher,
Elwood, ALL

It's funny how the human mind works. OK. I can't speak for
your mind. . . . . Ah, it's funny how _my_ mind works.
Though I agree with the majority of what you say, Aristotle,
and really admire your approach, honesty, and yes, even
bravery in presenting your well done five part series, I
find my mind dwelling on the particular aspects where we may
disagree. Perverse little devil, my mind.

In support of ORO's fine work on the whole issue, there are
several things that I believe it would still be useful to
address. This post presents two of them. I will attempt to
address some of the others later if time permits. A bit of
historical perspective will serve to place previous points
in context, especially some of those presented in the "Crime
of 1873" link provided awhile back by Cavan Man:

http://www.micheloud.com/FXM/MH/Crime/carricat.htm

First, though, are we arguing that the gold standard was or
would be perfect?

"The gold standard is certainly not a perfect or ideal
standard. There is no such thing as perfection in human
things. But nobody is in a position to tell us how
something more satisfactory could be put in place of
the gold standard." -Ludwig von Mises, Human Action A
Treatise on Economics, Third Revised Edition (Chicago,
Illinois: Contemporary Books, Inc. 1966), pg. 473

Thus we need not argue that the gold standard is perfect,
only that it's better, and that's an easy argument to win.

Onward. There seems to be a pair of common underlying
assumptions upon which many gold standard detractors as well
as both Aristotle and Trail Guide seem to build a large part
of their thinking. The first assumption seems to be that
the old gold standard in some way failed; the second
assumption, that as a result of this failure, the gold
standard was rejected by a sort of majority vote.

To paraphrase this position: "Since we used to have a gold
standard, but now have a paper/megabyte financial system,
there must have been something wrong with the gold standard
and people just didn't like it anymore so they got rid of
it."

Nothing could be further from the truth.

Gold DIDN'T lose the election:

First, let's look at the "gold lost the majority vote"
notion a bit. Actually history shows that "the people" had
no say what-so-ever in the move from the gold standard to
the paper "standard," and a sense of history and common
sense says if they had, they would have overwhelmingly voted
_for_ the gold standard.
Neither the people nor even their erstwhile representatives
in Congress voted their country off the gold standard.
Ultimately the conversion was ordered, appropriately if
ironically, by presidential fiat, by infamous Executive
Order 6102 signed by that traitor to his country and its
constitution, Franklin Delano Roosevelt. The move from gold
to paper had nothing to do with democracy or popularity;
horrendous as it seems, it was purely an elitist banking-
political power play.

In the late 1800s and early 1900s, as Murray Rothbard
pointed out that amongst "the people," no one in their right
mind was against the gold standard. Not liberals, not
conservatives, certainly not farmers, and not even William
Jennings Bryan. That was because everyone knew the bank
runs, so-called "panics," were caused by issuance of paper
bank notes that, while claiming they were redeemable in
gold, lacked sufficient gold to redeem them. That is, while
everyone knew there were some problems with hard money,
everyone knew there were far _more_ problems with paper
money.

When William Jennings Bryan campaigned against being
"crucified on a cross of gold," he didn't have a cross of
paper in mind as the substitute. He just wanted to include
another class of _hard money,_ silver, in the official
monetary constellation to offset a perceived "deflation."
It's easy to see from this how his perceptions led him to
support the Federal Reserve. All the banksters had to do
was convince him they would keep the money supply stable and
so no one would have to worry about a golden crucifiction
anymore. It's unlikely Bryan knew the Federal Reserve would
eliminate _both_ gold _and_ silver from the money supply
twenty years later.

To repeat: The move from gold to paper was a horrendous
elitist power-play, in no way democratic. Had "the people"
of the time been given the choice, it's a safe bet that had
they been forced to think about it by participating in a
vote, they would have overwhelmingly voted for the then
taken-for-granted gold standard. Far from being done
democratically, the move off the gold standard was presented
to the American people as a sudden unexpected gut-wrenching
fait accompli, accompanied by a full range of gestapo-like
tactics.

The gold standard DIDN'T fail:

Predictably an unprecedented expansion of the money supply
by excess issuance of "Redeemable In Gold" Federal Reserve
Notes without enough gold reserves to redeem them began in
1913 shortly after passage of the Federal Reserve Act. The
_consequences_, however, didn't become apparent until it
blew-up 20 years later in 1933 with half of US banks
unsound, that is, without enough gold to make good on all
those "Redeemable In Gold" Federal Reserve derivative IOUs.
Sound familiar?

How do you defend yourself when you can't make good on your
IOUs? The best defense is a good offense so - - - That's
when the banksters, in cahoots with the US Government,
officially _stole_ the gold -- AND MADE GOLD OWNERSHIP BY
AMERICANS ILLEGAL TO BOOT!! That theft is the main reason I
have chosen to call them "banksters."

[It looks to me as if the gold hiest was probably planned in
conjunction with the passage of the Federal Reserve Act,
though I have only logic with no direct evidence to support
that contention. Anybody out there able to shed any light,
pro or con, on this contention? MK? ORO? Aristotle?
ANYONE?]

A small off-topic comment: Most of the people running the
banking systems of the world today are completely ignorant
of the origin of the institutions they inherited, and as the
population at large, unaware of our probable destination.
They don't think of themselves as the beneficiaries of
stolen goods and special political favors anymore than U.s.
land holders feel they are the beneficiaries of land stolen
from the native inhabitants by their ancestors. I'll try to
keep that in mind, thanks to one of Aristotle's posts from
several weeks ago. That doesn't change the vector of the
situation, however.

Finally, if the gold standard was fatally flawed, how do you
explain that the U.s. prospered on hard money for more than
a century with only one major hiatus during the American
Civil War? If the gold standard strangled business
expansion, how do you explain that growth in the later part
of the 19th century was regularly in the 6% to 7% range?
How do you explain that the U.s. prospered through the
largest economic expansion in history, the "industrial
revolution," on the gold standard? In fact, it prospered
right up thru 1912, at which point, with the chartering of
the Federal Reserve System, the money supply was, in
reality, no longer tied to gold.

As we here at USAGOLD know, once the Federal Reserve went
into operation, the percentage of gold reserves per issued
"dollar" paper note began dropping continuously (because of
inflation of the money supply by the FED), leading in short
order to the "Roaring 20s." If you'd been an Austrian
economist at the time and heard the term "Roaring 20s," you
would have thought, "Ah oh! They've been manufacturing
vapor-paper with inadaquate gold backing! Malinvestment!
There's going to be hell to pay." And, as we all know,
there was - - - beginning in 1929.

For all intents and purposes, the gold standard ended in
1913. Thus anything "bad," economically speaking, that
happened after that date _can not_ with a straight face be
blamed on the gold standard. In fact, anything economically
bad that happened after 1912 can be laid solidly at the
altar of fiat paper money. True, in _form_ FRNs between
1912 and 1933 were still backed by gold, just as today in
_form_ the gold contracts traded on COMEX are backed by
gold. However, in both cases the reality reveals the form
as the travesty it was and is. If, as FOA suggested, the
paper gold markets burn, is it the fault of the gold? Or is
it the fault of the paper and the institutions?

I know what you're thinking. When the politicians like Bill
Clinton (with bankers like Alan Greenspan in the background)
claim they have our best interests at heart, you want to
believe them. When they say, "We know how to manage a
currency," you'd like to believe it's with the common man in
mind. I'd like to believe it too, but recent history
especially (the Brady bonds, the Mexican crisis, the Asian
crisis, the Russian crisis, Ecuador's money melt down, etc.)
and the US bubble won't let me.

OK, OK, --- let's give them the benefit of the doubt. They
DO have our best interests at heart. They really DO want to
manage the currency for the benefit of "the people." It's
just that the last 90 years of history, and particularly the
last five, proves, even here in the United states, they're
simply not up to the job.

Finally - - - -

If you wish to argue that fiat currencies will inevitably be
instituted {evolve }because the political and banking
cliques will conspire, will lie, cheat, steal, distort
history, do whatever is necessary to institute them in order
to gain advantages at everyone else's expense, well, history
bears you out. However, if you wish to argue that "the
people" preferred a "paper standard" to the gold standard,
history proves you're dead wrong.

If you wish to argue that the benefits of fiat monetary
tokens far outweigh the advantages of hard money - - - - to
the political and banking cliques - - - - history bears you
out. If you wish to argue that those benefits accru to the
rest of us as well, history proves you're dead wrong.

TANSTAAFL (There Ain't No Such Thing As A Free Lunch)

Regards,
Journeyman

elevator guy

(02/13/2000; 13:24:35 MDT - Msg ID: 25235)

@Farfel, my brother in gold.

I'm sorry I jumped on you for saying something about GATA.

And after that, I defended myself for being equated with ABX supporters. It is not like me to lose my temper, and when I do, it makes me feel ashamed to see what ugliness lies within me. I hope this post will serve as an apology to you, and all who had the misfortune to read my nasty response.

You mentioned that I seem bitter, probably due to my lot in life, Well, I would rather not bring up more of my self into this place, but lest you think I am a "Walter Mitty" who lives a "virtual" life of success, I will take this moment to let you know that my lot is not grievous. Not that anyones really cares, of course.

I used to be a tradesman, an elevator constructor/troubleshooter/adjustor/repairman/service man, who through his weekly paycheck made enough to buy a 2600 sq ft house in So. Cal., pool/spa, two new Caddys, 1 new Vette, amongst a host of other vehicles and material possesions. I have a lovely wife and two children who are my reason for living. 3 1/2 years ago, we started our own business, my wife and I. First year was very hard, made 85K gross, 2nd year, 195K, 3rd year, 1.5M, and right now we have 2.8M worth of work on the books, that we will complete in 2000. The year is still young, so that could easily double. What signifigance is all this? None, really, because "A man's life consisteth not in the abundance of things he posseses"

It is the love of family, the peace of mind, and the joy of knowing your Creator that makes life worthwhile. And "Godliness with contentment is great gain". Not that I measure up to this ideal. I am still striving for the next possesion that will satisfy my quest, even all the while knowing the futility. So I am internally conflicted.

But I feel successful, in that every fiber of my being is put to the test, to learn new things, to meet the challenges put before me with a heart of faith, and staying the course, to overcome, and to win. This is not neccessarliy expressed in monetary rewards, but challenges and the rewards are not mutually exclusive, either.

What good is it to boast? It only makes those who have more sneer at you, for you have not attained their grandiose level of accomplishment. And those who have less only see you as shallow and proud, that one could be so easily distracted and puffed up in ones own eyes, by the temporal things of life.

I'm sure there are those in this forum who are so far above the mundane chores of existence, that they have never known how to dig a ditch with a shovel. But my hands are still dirty, and I have no distaste for manual labor. Its just that my time is more valuble now, if I devote it to growing the business. But I am rambling now.

I came here last year seeking information, because I thought gold might react to Y2K fear. After I came in, I started to learn things about gold that I never knew. It is a window, and when you look through it, you can see through fiat currency, like an x-ray, and then you realize that fiat currency only has value, because we say it does. At first, it seems like a crime, and one wants to return to the gold standard. And then you learn about the need for a convenient easily dividable exchange medium. Right now, I'm at the juncture where it seems best if gold remains free and separate from fiat currency, but is traded openly and honestly.

I never knew any of this stuff before. Its all new to me. I'm a wrench slinger at heart, who has begun a metamorphasis, largely through the information diseminated through this forum.

People like you, Farfel, seem to have "grown up" in these matters, because of your background or education. This is your chosen field of study. So I guess if anyone could be critical, it would be those who live closest. I'm just a lurker, an outsider, a student.

I have no grudges against you now. Please be assured that I am no supporter of Barrick, not in any way. To me, they represent a type of monopoly that is unholy, and abusive of its shareholders, and detrimental to the gold workers of the world. If the current politically correct paradigm of popular thought were to examine the activities of those shorts, it would have to conclude that Barrick is harming the economy of the darling of democracies like South Africa. Now that the "evil, nasty apartheid regime" has given way to a government of the people, sensitive voters at home are appeased, and there is the illusion of goodness and niceness, (oh, joy) and the incumbent president will get re-elected.

This is a sham, designed to soothe the wrath of those Americans who have a social conscience, and remove a straw man, so no objections can be raised at home. Keeping the pc crowd quiet.

But behind the scenes, the world is largely un-changed. Barrick still makes profits off a declining POG, the workers of the world still make the wealth with the efforts of their hands, and the sweat of their brow, the international bankers still play with the American currency through the actions of the Fed, and life continues as a pyramid of power, as it has from almost day one.

I dont worry. I work hard, and pray. My lot in life is good, because I have learned the truth of gold.

Elwood

(02/13/2000; 13:35:00 MDT - Msg ID: 25236)

New York Mercantile Exchange Announces New Bullion Product for COMEX Delivery

This just in:

New York Mercantile Exchange Announces New Bullion Product for COMEX Delivery

New York (BULLion Sellers, Holders & International Traders network) - Traders in the metals pits were all excited today on the announcement by the Commodities Exchange (COMEX) of the New York Mercantile Exchange (NYMerc) that a new product would be available for trading and delivery against the huge number of outstanding Gold short contracts. The reason for the introduction of the new product, exchange officials said, was the increasing amount of outstanding delivery notices for gold bullion relative to the stocks available in the COMEX warehouse. Reaction on the exchange floor was overwhelmingly positive.

One trader was overheard saying, "It was just a matter of time anyway. I mean, it's not like anyone could ever mistake bullion for money." Another stated, "It's about time we got something to fix this. I'm getting sick and tired of these miners getting overly jittery when faced with a little adversity."

This reporter has learned that the idea for the new products came directly from the Secretary of the Treasury, Larry Summers, while being served appetizers during an emergency meeting on Friday, February 4 at a posh local hotel. The meeting had been called due to the technical insolvency of an unidentified New York-based Bullion Bank. After desparately attempting to find out exactly which bank it was that was in such trouble this news agency gave up after an insider was quoted as saying, "What does it matter? They're all teetering on the edge."

Exchange officials said it would take no more than a few days to get sufficient quantities of the new product and then to shape it into the same form as the previous gold bars which were normally delivered against the COMEX contracts.

When asked if implementing the new products would present any undue hardships for brokers, one broker stated, "Not at all. When they place their order, we'll just ask them: Chicken or Beef?"

Developing�.

elevator guy

(02/13/2000; 13:41:28 MDT - Msg ID: 25237)

@Elwood

HA-HA! Thats funny! You really had me going!

Elwood

(02/13/2000; 13:45:14 MDT - Msg ID: 25238)

To Journeyman:

Count me in with ORO. I don't think his position is to push a Gold Standard. I may be wrong, but I think he's more of the thinking that we should get the government out of our money and let free markets decide. I, too, believe that if that's done, gold or some other commodity wealth item will be the basis that individuals choose for a medium of exchange.

Elwood

elevator guy

(02/13/2000; 13:52:33 MDT - Msg ID: 25239)

In my last novel about myself,

I didn't mean to imply that I thought returning to the gold standard meant carrying around gold bullion in ones pocket. As I read my post over again, it occured to me that I had put the words together in such a way as to leave this possibility of interpretation open.

That is all. Returning to cave now.

Quicksilver

(02/13/2000; 13:53:24 MDT - Msg ID: 25240)

Daytrooper

http://www.usagold.comDo the big boys control those call options?

How's it going? They normally don't write options at strike prices that they think will go into the money before expiration but this is a different situation because collusions may be involved. Barrick may be owed some favors for helping the shorters. The redemption of the calls, when they go in the money it may be "understood" already that they be redeamed in cash . Only thin markets can be manipulated easily. Speculators will be fully tuned in to the next Bank of England auction and we could see a bidding war develop if interest is shown early on. Have you ever seen two farmers bid an old shovel up to $12 when you can buy one at Lowes for $8? Even if there is little interest, longs get a little excited before these auctions. Where is the price going to go? I can only look at the probabilities, Barrick's calls give us some resistance at 320 so expect some bounce down off of that just like any stock trying to break through a resistance line.(sorry to use the S word). If the price goes to 325 or so and stays there a day or two then you know they are loosing grip and every speculator knows it. We should look at who is going to be selling physical to determine how much the manipulators can scrape together to dump on the market. How do we know the calls aren't naked and Barrick won't redeam for physical? Interesting scenario. I'm going to get trounced for saying that by people who really know. Anyway, Anglo and Goldfields already may have covered enough that if a bidding war starts (which is what a rally is) they might step back and say not today not at this price. But my guess is that they will try to start a bidding war and once they get the panic going they'll sell into it at the top, because they can. Why would you brag about how much you have covered if you still are desperate to cover? Some of the Aussies and other American and Canadian smaller corporations are too in debt not to cover. Do you think they can get favors like ABX. Don't quote me on any of this please. As the price goes up these understandings of "walk don't run to cover" are probably going to break down like OPEC broke down when demand increased. What if the speculators want gold for the Year of the Dragon play in China? What's China going to do with paper gold? Fried Wontons. But to talkabout the worst case scenario, if gold goes back down to the 280-290 level and doesn't bounce off it but stays down and everybody covers cheap, then we have a slow climb out everything else being the same. But what's going to stay the same? To me the key is whether these call options get redeamed for physical or not. The put/call ratio is interesting. Maybe a real options trader can comment.
The only physical gold I'd consider owning are semi-rare coins that are artwork I think. Senators and Congressman are probably not going to pass laws to confiscate collector gold that they themselves own. Collector gold exclusion clause prior to 1971. Watch the US Mint gold coin program, they would probably stop that before passing anti-gold ownership legislation. If they can't keep it down one way they would be the ones to try another. If you plan to buy any rare American gold you should read a few books on counterfeits. Many honest coin dealers can barely tell. But they are easy to spot if you know what to look for.

goldfan

(02/13/2000; 13:58:21 MDT - Msg ID: 25241)

Jason Happy (2/12/2000; 10:44:46MDT - Msg ID:25140)

Sir Jason, lot of posts to catch up on, saw your note to me....you said,
>>>>goldfan, you recently posted, last week or so, something to the effect that you came to the conclusion that loaning
money at interest was wrong. Why and how did you ultimately come to this idea?<<<<

Like many at this forum , I have in my 65 years of life come to understand that the money men have defrauded people. I believe the fraud becomes possible in the notions that money has a time value and a risk of loss, and so we ought to be compensated for both when we lend the surplus of our labour to someone.

I have traveled a lot among tribal people, and I have experienced how "gifting" can transform one's relationships. I place the highest reward I can have in life, on the quality of my relationships with others , my friends and family. So the notion of gifting as the glue that binds us in community is a very large one for me.

If my friend needs what I have, and I can afford it somehow, I give it to him. (Even if he doesn't need it, just to see him happy) Maybe he treats it as a loan. That is his way. But for me, it is a gift freely given, and not missed if he doesn't repay.

The notion of lending, and compensation for risk and reward for lending, divides people from the only sure basis of a society, a society of friends, who deal with each other out of love,and no other motive. As I see it, this is the whole of Christ's teaching, all the rest, is an unnecessary and interfering addition by those who gain power by pretending to own the truth.

This what I said in my post msg. goldfan (02/04/00; 19:12:18MDT - Msg ID:24368)

>>>>Loans are a necessary evil. Necessary to facilitate commerce and productive work. Evil because in the hands of "money-men" they contain the seeds of savings-destroying inflation, and deflation. These are the men who, when we protest that our currency is constantly dropping in value, say "give it to us, we'll keep it safe for you and even cause it to grow...." (the African bushmen say "the whiteman has a magic hole into which he puts money and there it grows.")<<<<

and I guess there are parts of it I would revise a little. I think we may need the "necessary evil" of loans until we learn how they distort our ability to love. Until we start to value love above all our other possibilities in life....

I think we should not be able to expect "safe" savings, any more than we can expect safe weather, or no hurricanes or tidal waves, or no epidemics of disease. If we did not expect our savings to be safe AND if we were not tied to consumption as our religion, then we would be able to get the juice out of life. We would know that this moment is all we truly have, and we would savour it. And we would not easily hand our moments over to despots, no matter how honeyed their promises, or belligerent their threats.

thanks for stimulating these thoughts

Goldfan

Peter Asher

(02/13/2000; 14:29:45 MDT - Msg ID: 25242)

Cyanide mining

http://www.foxnews.com/world/021200/yugoslavia.smlA global outcry and banning of cyanide leach mining, could dramatically alter the supply-demand equation/perception.

jaydeevee

(02/13/2000; 15:05:37 MDT - Msg ID: 25243)

Farfel, I also totally endorse your remarks. . .

http://www.usagold.comFarfel, Nickel 62 endorses your post,
and so do I ! ! !

You posted, "All goldbugs I know are bitter as hell today and if they are not, then they have no pulse or they are resigned to the notion that the status quo is undefeatable and will reign forever.

Suffering several years of Clinton Government manipulation in the financial markets and being on the wrong end of the stick lends one to bitterness. When you fervently believe that an apple is an apple while the world tells you it is really an orange, well, that is a frustrating, embittering experience. Losing a good deal of one's net worth also
does that to you . . ."

As I'v said before about USAGOLD FORUM, that notwithstanding years of university education in economics and many years of business life, reading this is the greatest education I'v ever had or ever hope to have!

To those that are new here at USAGOLD FORUM, what can I say other than to welcome you to the real world - the REAL world of politics, economics and social issues where the tracking of GOLD becomes your vehicle to discovering your TRUTH as you would see it!

Through GOLD you will learn how to filter out the lies, the propoganda, the disinformation! You will develop confidence in assessing how trustworthy political leaders worlswide are, learn about greed and manipulation, discover the hidden agendas and much, much more!

You will develop opinions! Your opinions! You will learn about yourself!
You might become very BOLD through GOLD! It's all up to you!

Once again, welcome, welcome, welcome to the REAL university! The university of life as-it-really-is on this planet where wondrous GOLD reflects the point of evolution that we've reached as a species in year 2000!

Farfel

(02/13/2000; 15:57:17 MDT - Msg ID: 25244)

@ELEVATOR GUY

You said:

I used to be a tradesman, an elevator
constructor/troubleshooter/adjustor/repairman/service man.

I say:

If the "labor of the Earth" inspires a person to write as well as your
post 25235, then I will begin digging ditches tomorrow.

It is poignant, eloquent, and no doubt a glimpse into your real heart.
I am much impressed by your humility and perspectives on life.

Now I will make a point of reading ALL your future posts, they will
certainly be worth the effort.

Please accept my own apologies for my loss of temper. Just blame it on
Barrick.

Thanks

F*

Journeyman

(02/13/2000; 15:58:36 MDT - Msg ID: 25245)

A golden clarification @ Elwood & ALL

In defending the "gold standard," I'm really comming from
the Austrian viewpoint of competing currencies. In this
pursuit, I believe it is necessary to debunk anti-gold-
standard thinking, which was used to temporarily unseat gold
as the competing currency which had evolved to be the
preferred medium of exchange. Despite what you may think, I
have no _personal_ bias against other currencies -- I've
used many of them. My bias is against the market lacking a
free range of choices primarily because of disinformation
and outright manipulation. I have no disagreement with ORO
on any of his points, as you may have guessed. "Peripheral
Banks" and no government involvement sounds good to me!

To sum-up my position, including all those previously
unstated assumptions: I favor a free-market in currencies,
including any IOUs anyone wants to try to sell or trade,
including Uncle Billy's scribble on the back of that
envelope, and even "yen," "dollars," or "euros." I suspect
that under such competition among trade token alternatives,
gold will prove to have an "unfair" advantage in that it's
still the "esperanto" or "electricity" of trade.

Keeping in mind goldfan's classic observation - - -

"In trading systems, barter is the only reality. All
the rest is an illusion put in place to "manage" the
system for stability until the exchange is "settled" by
completing the barter." -goldfan (1/30/2000; 9:30:04MDT
- Msg ID:23863), Chaos Dynamics and the World Economy

I suspect gold will have the advantage of being perceived as
"settling" the underlying barter on the spot as opposed to
carrying a future obligation around and hopeing it will be
settled later -- or hopeing that you can off-load it before
someone discovers it's bad debt.

Disregard these notions as to gold's likely predominance as
speculations if you wish, competing currencies is the goal.

Regards,
Journeyman

Peter Asher

(02/13/2000; 16:44:22 MDT - Msg ID: 25246)

Journeyman (2/13/2000; 13:15:57MDT - Msg ID:25234)

Read and under contemplation. I am 3+weeks behind the curve on post responses, still in rough draft on 1877 silver standard deflation, but not forgotten. So much good stuff lately that I have succumbed to the sin of skipping posts, to be read later. (Hopefully a better resolution than those at New Year's) What I need is one of those MacArthur Foundation grants, so as to set aside a year of nothing but Forum time.

Harley Davidson

(02/13/2000; 17:51:56 MDT - Msg ID: 25247)

@TQ In your Msg ID:25243 you said...

"Suffering several years of Clinton Government manipulation in the financial markets and being on the wrong end of the stick lends one to bitterness. When you fervently believe that an apple is an apple while the world tells you it is really an orange, well, that is a frustrating, embittering experience. Losing a good deal of one's net worth also does that to you . . ."

I know that many gold bugs share what you feel as I've seen it before here and on other forums. My intention is NOT to disagree with you and those whose post you responded to. Rather, I would only add that the frustration and bitterness you speak of are the result of factors beyond our control that are preventing the price of gold from being what we think it should be.

There are a lot of injustices taking place today and I would ask, if one weren't playing the gold market, would they care as much about the reasons for why gold is priced where it is? I don't have a solution to defeating the powers at work, as it relates to gold, and in the world in general. But I do see major benefits to be had by separating all of that from the issue of gold, and how I can benefit from it and have peace of mind at the same time.

I would posit that those people that invest in gold over the long term via dollar cost averaging are probably less provoked about the injustices above as compared to those who attempt to time the market and, as a result, have hopes and expectations that are vulnerable to powers they can't control. That sounds like a recipe for frustration, bitterness and anger to me!

As for myself, I can't handle the heartburn associated with trying to predict the short-term behavior of the markets simply because I can't read the minds of those who have the ability to impact it significantly. I buy gold for the long term on a regular basis. If the price has gone down when I'm ready to buy, I buy and consider it a bargain. If the price has gone up, I buy then too and what's so bad about that? My only concern here is that it reach a cost I perceive to be too expensive. And even that is not such a bad problem if I have been systematically acquiring the metal up until that point in time. This is the only way I know of to level an otherwise un-level playing field.

Take another look at the postings of Aristotle and what his view of gold is about. While I don't dare to speak for him, I don't get the impression from what he has to say that he is frustrated or bitter in his experience with gold.

Just a suggestion and MHO. My intension is not to be critical.

Harley Davidson

(02/13/2000; 17:59:08 MDT - Msg ID: 25248)

Sorry, my message Msg ID:25247 was to jaydeevee - Msg ID:25243

Correction, an error between the keyboard and the chair on the "Post new message Page"

DAYOOPER

(02/13/2000; 18:58:22 MDT - Msg ID: 25249)

QUICKSILVER

Thanks for your response...I think. It's DAYOOPER but daytrooper is close. Midwest significance in the USA.

Has anyone considered the apathy and negative attitude towards gold in the USA and the tie that was made to tax protesters such as Gordon Kalh (sp)? The powers at the time played it up in the media during the 80's to indicate that if you owned gold you must be trying to hide your assets from the Government. This may or may not have had an affect but it all plays a part. The news today said that platinun is now the metal of choice. This was on Fox and they had a very prominent New York wholesaler on the show that made this comment. Gold is down $1.70...darn Aussies.

DAYOOPER

Chris Powell

(02/13/2000; 19:08:05 MDT - Msg ID: 25250)

Ashanti's troubles shouldn't hurt Golden Star

http://www.egroups.com/group/gata/381.html?Comments by GATA's Bill Murphy.

RossL

(02/13/2000; 19:22:55 MDT - Msg ID: 25251)

Jason _ Usury

In Message #25221 you describe a scenario where someone could own all the gold in the world through compound interest. Since compound interest has been with us for centuries, shouldn't there be many people who have accumulated all the wealth in the world by now? Someone should have accumulated every atom of gold in the universe by now. But none of that has happened. There must be a flaw in this compound interest theory somewhere.

Hackers?

I tried to read USAGOLD a few times in the last hour or two and all I could get was "connection reset by peer"... must be the hackers at it again!! Those ba$+@rd$ !!

Quicksilver

(02/13/2000; 19:42:57 MDT - Msg ID: 25252)

for Stranger

http://www.usagold.comThankyou for correcting me about the productivity and the false "deflation due to computerization" theory I was stuck on. Sounds to me if I understand this right that we are stuck with having to inflate to make up the difference of what the combs cost(trade deficit). So if they stop printing unsound paper, the trade deficit will run the country dry (dollars leaving) causing a credit implosion. If they keep printing unsound paper as they have then commodity prices rise but the game drags on. So inflation is the air keeping up the balloons (false productivity numbers, lofty real estate valuations, stocks ). Are we addicted to inflation because we used to sell bonds instead of run the presses? If no one comes to the bond auctions I think "we don't pass go we don't collect the two hundred" we need to keep the balloons filled. Things can be hidden for awhile though, I'm wondering how much more debt can we float overseas without a debt holder wanting something real for the paper. Because when one dumps the dollar the rest may want to do the same. Only thing that keeps them from that I feel is that they have no alternate strong currency to hold for reserve. But really they could go to the yen or the euro with some different risks. You don't have to reply. I'm just rambling. Thanks.

Jason Happy

(02/13/2000; 19:47:51 MDT - Msg ID: 25253)

All the gold in all the world...

RossL,

Did you gloss over my assertion that this is what happened in the 1930's with the foreclosure across the the U.S. and OF the U.S. when it made gold ownership of its citizens illegal? Explain the size of the loans for WWII? How could they loan over 200,000 tons, more gold in all the world, unless they actually owned more gold than exists? Did you follow the link, showing the size of the U.S. Debt?

RossL

(02/13/2000; 20:02:54 MDT - Msg ID: 25254)

Jason

I honestly don't see the connection. There is a long history of 'grabit' printing up more paper than they have gold to back it up. What does that have to with the argument on usury? Seemingly, every fraud and racket in the history of man is because of usury?

I'm losing interest in this argument because it is driven by faith, and we are not going to convince each other.

Jason Happy

(02/13/2000; 20:52:16 MDT - Msg ID: 25255)

RossL's questions the connection between usury and world power...

RossL,

When I was about 5, I put a quarter in a wishing well, and my parents told me that if I made a wish, it would come true. So, I thought, great! "I wish for all the money in the entire world would be mine." Of course, there is a problem with this wish... Which was pointed out to me by my older brother. If I was the only one with money, then other people wouldn't, COULDN'T, be using what I had for money, they would use something else, and my money would, by defintion, be worthless. Of course, this was back when I thought "paper" was money.

Obviously, when you are getting close to owning all the gold in all the world, owning every last scrap of it is less important than the power that naturally follows from holding such a position. And, if you squeeze too hard, you can lose the power. Thus, there is no need to own every last tiny atom of gold in the earth, you just need to own the governments.

Who was it that said something like, "I care not who makes the laws in a country. Let me control the money, and I'll control everything..." or something like that.

What I'm saying is that one of the ways they came to power, in addition to the fraud of fractional reserve banking, was through usury. And anyone who defends usury doesn't see the big picture.

Didn't you tell me that a interest bearing loan of gold to a gold mining company was not wrong? The failure of Ashanti and Cambior and the indignation of just about all gold bugs say it IS wrong.

Tell me straight, do you think it's morally right that there should be a way to earn money with no risk and no effort, just because you are wealthy? This is the very definition of usury, when it is backed up by collateral and government enforcement of usurious contracts.

RossL

(02/13/2000; 21:22:25 MDT - Msg ID: 25256)

Jason

You Asked:
"Tell me straight, do you think it's morally right that there should be a way to earn money with no risk and no effort, just because you are wealthy? This is the very definition of usury, when it is backed up by collateral and government enforcement of usurious contracts."

Loaning somebody money is a risk. Collateral can be based on inflated values like the Japanese real estate in 1989. There is no way to earn money with no risk and no effort.

Using government to force the time value of money to zero will cause malinvestment and a reduction of the maximum possible efficiency of the economy.

That's all I have to say on the matter. You still haven't convinced me!

SteveH

(02/13/2000; 21:37:16 MDT - Msg ID: 25257)

gold being knocked down, now down

$3.8 in overnight trading in April futures. At $309.80.

SteveH

(02/13/2000; 21:40:32 MDT - Msg ID: 25258)

Protecting gold

The following link is the best document that explains the individual rights nature of the Second Amendment. Of particular note is the paragraphs posted below the link as to the historic intent of the amendment. In short, Madison was a Federalist who drafted the Bill of Rights. He sent it to the Legislature and it all were virtually accepted as they were written. All of Madison's Bill of Rights were individual rights. He took reference of the rights from the English Bill of Rights, from an Englishman named Blackstone, and from the Pennsylvania Bill of Rights which preceded the US Bill of Rights. Oddly, the many state constitution Bill of Rights closely resembled the PA Bills and clearly show the individual right nature of these state constitutions.

http://www.saf.org/Young.html

"...On June 18, 1789, Tench Coxe's REMARKS on the first part of the AMENDMENTS to the FEDERAL CONSTITUTION appeared in a Philadelphia newspaper and was reprinted elsewhere, including New York, shortly thereafter. This two part production described and explained each of Madison's proposed amendments to the Constitution. Coxe's description of the Second Amendment related proposition was:"

"'As civil rulers, not having their duty to the people, duly before them, may attempt to tyrannize, and as the military forces which shall be occasionally raised to defend our country, might pervert their power to the injury of their fellow-citizens, the people are confirmed by the next article in their right to keep and bear their private arms.' [OSA 671]"

"Coxe sent a copy of the newspaper containing this article to James Madison and indicated that he was the author, [OSA 672] Madison replied to Coxe indicating that Madison's amendments project "is therefore already indebted to the co-operation of your pen."[OSA 674] There is NOT A WORD to Coxe that he had completely misinterpreted the Second Amendment related proposition, which would have been the case if the exclusively collective right interpretation has any validity whatever."

"Would Madison have stood by and allowed a political supporter to publish a completely erroneous interpretation of this proposal which was being propagated across the nation newspaper to newspaper? Not very likely. Are Coxe's comments on Madison' other proposals completely incorrect, or are they not, if fact, accurate interpretations? They are accurate. Are we to assume that Coxe simply got this one, relating to the Second Amendment, all wrong, when he was perfectly able to read and understand all of Madison's other proposals? Coxe's article indicates the intent of the Second Amendment was to protect individual rights only. All other period evidence also indicates the individual intent of the Second Amendment as stated by Coxe was correct. The question to be asked is why should anyone today ignore such clear period evidence as the above and accept contrary modern viewpoints which are supported by NO period evidence whatsoever?"

Jason Happy

(02/13/2000; 21:47:29 MDT - Msg ID: 25259)

no risk usury?

I'm glad you came up with the inflated real estate in Japan as collateral argument as the exception, in an attempt to disprove my assertion.

I like the way you think. Finding the exceptions to the assertion disproves the assertion! Very logical, exactly how you need to think in Geometry class.

However, there are flaws with this exception.

First, these were not gold loans, but fiat loans.
Second, why were the collateral values "inflated" in the first place? Because of fractional reserve banking, excessive lending, and fiat money.

A more accurate analogy was the excessive lending of the late 1920's, which were also made in fiat money, but called in with real gold when the U.S. made gold ownership illegal.
How else can you fleece gold from the people?

A better "exception" to my assertion might be today's gold loans made to mining companies and hedge funds at 1% interest rates. These loans, which all are in severe risk of default, are the ultimate way to disprove my assertion that usurious loans carry no risk when backed by collateral and government force.

In fact, these loans are the least usurious, and the highest risk of all!

However, these loans, which we are all following very closely these days, for clues as to when the big "blow up" in the POG will occur, are not really "losses" for the big powers that be. I see them more as an excuse to usher in the new rules that will likely be imposed upon the world in the wake of the next great depression.

Of course, the banksters could just be stupid, too. Somehow, I don't think so.

Jason Happy

(02/13/2000; 21:58:42 MDT - Msg ID: 25260)

SteveH's call to arms...

SteveH, the slippery slope of your argument is that if these rights are dependant upon Madison's (a man's) intent when he wrote them, then are not our rights today dependant upon a man's (the president's or the Supreme Court's) interpretation or decision today?

After all, most people would probably erroneously accept that the rulers of today surely hold more power than the rulers of the past.

The only sure way to successfully stand on the right to bear arms is to declare that this is a God given right. For there is no power in the universe higher than God. In the book of Esther, you will find God's remedy of "let every man take up arms to defend himself". Also in the story of how all of Isreal was to conquor the land of Cannan/Isreal.

More Bible quotes on the topic can be found at
http://www.jasonhommel.com/sword.htm

Journeyman

(02/13/2000; 22:13:17 MDT - Msg ID: 25261)

Some curve balls on usury @Jason Happy, Hipplebeck, RossL, Harley, almost ALL

Sir Happy,

Continuing the following:

<<Interest not ok, return on investment is ok. That's how I
understand the
Bible's position as it presents these issues. I hope you are
not going to take this in the direction I fear. Are you
going to ask me how these two are different? Oh boy!>>>

Yes, I was going to ask that! -j.

"The difference is that you take the risk with the other
party. If things don't go so good you both lose, not just
the one who took out the loan." -Hipplebeck (2/12/2000;
14:19:16MDT - Msg ID:25167)

Exactly! -J.

Three curve balls:

There's an information/cost built into both alternatives.
All you need to know to make a loan at interest, at least
these days, is someone's credit rating, which is easily and
cheaply available, both in terms of time and money. An
investment on the other hand, since you are risking on only
one aspect of a person's enterprises, requires much more
research and specific, information unique to the enterprise,
which, not being either as easily (and thus cheaply)
available, or easily verified, costs you more time and money
to evaluate. Thus it's more expensive and theoretically
more risky as well to make an investment than a loan.

It will cost the entrepreneur a larger chunk of his profits
if you invest rather than making him a loan.

Consider. I had a deal with a business acquaintence of mine
in Poland just before the Berlin Wall came down. It was a
unique situation for which he couldn't get conventional
financing. The situation looked so good, I _wanted_ an
investment share rather than just interest. He promised me
15% interest instead of giving me an investment share
because by his calculations that would cost him less - - - -
and he didn't want me looking over his shoulder. He
insisted on "usury" rather than investment, over my own
preference.

Also, it's assumed that poor men are the ones borrowing and
making interest payments. That's not necessarily the case:

A poor man never gets to be a big debtor. Only a rich
man, or a man with a reputation of being rich, can get
into that situation. . . . . it is more than doubtful
that the "creditors" would prove on the average to be
richer than the "debtors"; it is much more probable
that the relationship would prove to be the other way
around. " -Henry Hazlitt's March 1959 introduction to
Andrew Dickson White, _Fiat Money Inflation In France_,
(IRVINGTON-ON-HUDSON, NY: THE FOUNDATION FOR ECONOMIC
EDUCATION, INC. 1959) pg. 13 & 14

Sometimes things aren't as simple as they seem!

Regards,
Journeyman

Jason Happy

(02/13/2000; 22:35:35 MDT - Msg ID: 25262)

Three curve balls...

Journeyman, that's going to take some real thought there... I might need more than a day or so to even be able to comment!

Donald Trump comes to mind as the wealthy debtor... as is the U.S. government... and all who are "too big to fail"...

Farfel

(02/13/2000; 22:53:28 MDT - Msg ID: 25263)

CYANIDE, European Central Banks, and Gold Manipulation...

The current ecological disaster in Europe where large quantities of cyanide are alleged to have spilled into several rivers as a result of an alleged accident at a Romanian gold mine is a particularly compelling issue. Compelling, not so much in the sense of its awful environmental impact but more in terms of its economic/financial/psychological impact in the gold market.

Although I am very much opposed to the usage of cyanide by gold producers in extracting the metal...and I think heap leaching is something that should only be performed in remote desert areas away from large populations... nevertheless the timing of the cyanide disaster in Europe is notably suspicious.

With gold set to break critical price targets of 320 and 330 at any moment, it is an understatement to say that there is tremendous anxiety amongst certain bullion banks and OVER-hedged producers that chose last year and this year to write loads of soon-to-expire gold calls at those particular price levels. Most recently, a major entity(ies) wrote a tens of millions of dollars of gold calls with a 320 strike price on behalf of Barrick.

Some of the worst offenders appear to be the Australian gold producers who are said, in many cases, to hold hedged positions averaging EIGHTY PERCENT of current production, via direct forward sales and derivatives purchases. No doubt when these various producers and bullion banks were writing gold calls last year, most probably never imagined gold would go a penny higher than 300 an ounce in the year 2000.

I do not know much about Esmeralda Gold, the Australian gold producer said to be the primary offender in the Romanian cyanide spill. But if it is like most Australian golds, then it is over-hedged probably to a dangerous degree.

Is it possible that Esmeralda itself PURPOSELY created the cyanide disaster in order to drive down the price of gold and "save its butt" in terms of its gold call exposure? After all, desperate companies/people often take desperate measures. Under such logic, the company might think it has a better chance surviving long term environmental litigation versus coming up immediately with the huge amount of gold/cash necessary to cover a margin call.

Or is it a case of some extremely powerful bullion bank(s) with huge uncoverable gold short positions aiming to create maximum anti-gold sentiment in Europe at a time when the Washington Agreement has capped European gold sales and gold leases? Under this hypothesis, the bullion banks would payoff agents/friends to create this ecological problem, then blast the news all across Europe utilizing its favorite "captive" media contacts, certain that the resultant fury would turn the European population against gold. The net result: a dropping price of gold, with a sufficient drop to save the gold shorting bullion banks.

The strategy may be working as, last I looked, gold was down over 3.00 in Australia.

Although these conspiracy hypotheses might strike some as unusually cynical or paranoid or fantastical, they are simply the result of watching the chronic frauds perpetrated in this most manipulated gold market over the past few years.

I only hope that a true thorough investigation is conducted into the European cyanide spill. I suggest that the investigators focus on Esmeralda's current gold hedge position PLUS its links and ties to major gold short bullion banks and heavy hedged gold producers. It might also be worth looking into the Romanian governments ties to certain gold short bullion banks.

Thanks

F*

elevator guy

(02/13/2000; 22:53:33 MDT - Msg ID: 25264)

@Farfel

May you never lose your "cut-through-the-fluff" no-nonsense style. You are an asset to the gold community, and a formidable opponent.

Your posts get to the point, and tell it like it is.

Go get 'em, man!

Black Blade

(02/13/2000; 23:03:00 MDT - Msg ID: 25265)

SteveH, Jason Happy, etc.

The problem with interpretation of the constitution or the bill of rights lies in the school of thought regarding that interpretation. There are essentially three schools of thought in regards to the US constitution and how it should be applied.

1) The Living Constitution: This is the favorite among liberals. The thought is that the constitution must be changed to reflect the times that we live in. The theory is that the forefathers could not have foreseen the complexities of the future world. Certain rights would have to denied for the good of the many, etc. or curtailed for the common good
2) Original Intent Theory: This is the favorite among conservatives. This supposes that the constitution should be interpreted based on the intent of the dead forefathers. Unfortunately, they're dead. We have the writings of a few such as the Federalist Papers, but there are no clear cut answers as to original intent.
3) The Logical Approach (also known as the Common Sense Approach): This is the favorite of libertarians and is quite simple. The Constitution means what it says. Nothing more, nothing less. This approach would suppose that the Supreme Court could interpret the constitution through logic and reasoning.

This of course is the problem. Supreme Court justices are appointed by the administration and admitted by congress. These people know who their masters are. They will rule accordingly as per one of the schools of thought listed above (most likely the first two). If it is likely to be unpopular (such as an income tax or personal freedom question for example), the court will simple refuse to hear the case and let the lower court ruling stand.

Black Blade

(02/13/2000; 23:09:01 MDT - Msg ID: 25266)

Farfel and cyanide

I would think that if anythin, this would be a positive for the POG. It would seem that Esmeralda would be shut down, and pressure put on other producers that use cyanide extraction to do the same. Of course, the other extraction methods are more costly and if more miners are shut down, then the supply becomes more contricted. This would put the screws to the BB's as Au would not come their way so easily.

Black Blade

(02/13/2000; 23:16:58 MDT - Msg ID: 25267)

Farfel it could be criminal.....

You might be right about it being intentional. The amount of cyanide used in heap leaching is not dangerous given the dilution of the solution involved and the small preg solution ponds even at the largest mining operations. In order to cause that much damage to a large lake and river system would require a concerted criminal effort or extreme mismanagement along with the worst mine planning ever concieved at the very least.

SHIFTY

(02/13/2000; 23:25:10 MDT - Msg ID: 25268)

kitco gold chart ! !

gold just shot up $5.00 I hope its not BS

SHIFTY

(02/13/2000; 23:26:41 MDT - Msg ID: 25269)

kitco gold chart ! !

WOW !

Elwood

(02/13/2000; 23:41:04 MDT - Msg ID: 25270)

Request for Comments on OPEC Oil Cutbacks

http://www.canoe.ca/MoneyOil/mw_oilnews2.html
This would be an odd thing to do if the Arabs have thrown in their lot with the Euro crowd. Question to Trail Guide, USAGOLD and ALL: Would this be a smart move to make if the Saudis and others have become fed up with the footdragging of the Europeans to get their public physical gold exchange up and running?

I remember reading in one of FOA's earlier posts sometime last year about plans for such a public physical market for gold in the Middle East. Could this be a move in that direction? I'm thinking that a more likely location for this market would be in Johannesburg or Zurich with a subsidiary exchange in, perhaps, Hong Kong or Sidney.

- - - - - - - - - - - - - - -
From:
http://www.canoe.ca/MoneyOil/mw_oilnews2.html

Saudi tightens rein on oil supplies to west

By KERM YERMAN

Oil power Saudi Arabia has kept the pressure on its customers in the West by tightening supplies for March, oil traders said on Friday.

Already gasping for supply, European crude customers were hit by news that they will receive between 35 and 40 percent less than standard contract volumes in March, compared with cuts of between 30 and 35 percent in recent months, traders said.

U.S. lifters will get around 25 percent less crude than standard contract volumes next month against cuts of around 21-23 percent in recent months, the traders added.

The surprise move sent world benchmark Brent hurtling above $28 a barrel for the first time in nine years as tough producer supply limits drain consuming countries' stocks of spare oil to record lows.

Saudi Arabia's tough new stance comes in the last month formally affected by a year-long producer deal pledging to cut over five million barrels per day (bpd) of supply to revive ailing prices.

Customers were taken aback by the deeper March cuts. "We had no inkling that this was coming and can't for the moment see what the explanation is," said one. Some speculated that it might reflect higher heavy crude runs at some Saudi refineries.

Oil traders were scrutinising the move for clues on whether the OPEC cartel will relax its supply curbs when the restraint deal formally expires at the end of March.

Saudi Arabia, the world's biggest producer and key OPEC policymaker, is supposed to cut 1.31 million bpd, 15 percent of its output as part of the pact.

Producers have not yet decided whether to leave restraints in place after March or increase supply.

March Saudi exports to Asia could not immediately be confirmed but traders said reductions seem to have been held steady at between 12 and 17 percent below contract volumes.

Deepest cuts were on heavy grades, with more lenience on the lighter crudes. Lifters that requested more heavy grades had been cut by up to 40 percent overall in Europe, traders said.

The International Energy Agency had already sharpened supply worries on Friday by saying that industry stocks across the industrialised world were drawn sharply at the end of last year and are being sucked down even faster now.

Petroleum inventories held in the Organisation for Economic Cooperation and Development (OECD) countries were reduced by 2.7 million barrels a day in December, the largest draw since February 1994, the IEA said in its monthly Oil Market Report.

Farfel

(02/13/2000; 23:48:16 MDT - Msg ID: 25271)

Leading the GOLD Price Down aka Shaping Goldbug Perceptions

I am one of the first to admit I have a paranoid streak. It is probably a combination of excessive leafy indulgences during my teen years PLUS the several years I have been able to study the gold market's multitudinous manipulations on a daily basis.

Now the latest source of my paranoia comes from Canada:

Speaking with a investment banker friend in Canada, he informs me that, contrary to popular goldbug belief, almost every bullion bank holds significant gold share positions, directly or indirectly, in every major gold mining company on the XAU. Moreover, the same bullion banks, although holding enormous gold short positions on their books, also always hold notable long positions, on a physical and paper basis.

In his mind, the reasons are obvious: the gold market is something that can never be allowed to operate in a free, independent manner. It must always be controlled or shaped by the Establishment Powers such that the proper response always (or in most cases) results. It is a form of Pavlovian conditioning designed to a science by Wall Street's finest spin control artists.

According to the Canadian broker, every news item about gold can be seen as either half full or half empty. When it is seen in the former light, the gold price should rise; seen in the latter light, it should fall.

For example, the gold spill problem in Europe can be seen from two diametrically opposed perspectives:

1) Half-Full -- it is great for the gold price since resultant shutdowns of the Romanian facility will reduce the amount of gold available to the market. Less gold in the market = Higher gold price.

2) Half-Empty -- it is bad for the gold price because all the resultant negative publicity will alienate current gold investors/holders and encourage them to sell existing gold assets. MORE gold sales = Lower gold price.

So the question is: which perception wins in the gold marketplace, the glass half-empty or the glass half-full?

According to Mr. Canada, the bullion banks will always lead and shape the negative, half-empty gold perception in the marketplace by immediately SELLING their long gold positions when the market first opens.

Thus, when gold investors awake to see a huge selling wave occurring from the first bell, they are conditioned to assume that most gold investors are jumping ship in terms of physical metal and gold shares, ergo they must jump ship too. Selling begats more selling which begats more selling until you have a virtual sell panic.

In reality, according to Mr. Canada, it is not the average gold investor selling at the first bell, but instead it is almost always "a cartel of like-minded bullion banks" who are determined to shape the reaction of any gold news development in what they deem to be its proper negative spin.

Unfortunately, most gold investors, being conditioned by this process over a period of two decades, tend to react just as rats conditioned to push certain levers at the provocation of a specific stimulus. Of course, the fear reaction is the prevailing reaction for most goldbugs so when they see those first waves of selling, they immediately follow suit.

According to Mr. Canada, a bull market in gold will only arrive once gold investors become aware of these egregious manipulations in the gold market and provide the antithetical reaction to what is normally expected.

Finally, he sees this "conspiracy of perception molding" as not simply a bullion bank conspiracy but also one involving a number of associated technical chartists who have direct ties to the bullion banks. By virtue of their close ties, these technical "experts" are passed MOSTLY negative inside info about future bullion bank strategies in the gold market designed primarily to drop the gold price, and with such inside info, they are in a better position to forecast gold price movements to a tee vs. the uncorrupted gold technicians who genuinely practise the "art of the chart."

Of course, when the corrupted gold technicians' forecasts come true, then their neverending ability to be "correct" only enhances their influence over goldbugs. They are raised to the level of guru status and, in a kind of vicious circle, they continue to forecast a mostly diminishing gold price and when the gold price drops via bullion bank manipulations as per their predictions then those accurate predictions only enhance their guru status, thus enabling them to continue to attract even more gold investor followers so that they can continue to "talk down" the gold price.

Again, according to Mr. Canada, that is why the gold price falls, with occasional rises to suggest a free market.

In his mind, there are only two ways in which the gold market will escape its current "negative psychological slavery:"

1) MORE major left field events (like Europe's Washington Agreement) that are so unmitigatedly positive for the gold price that no amount of "leading the gold price" by the bullion banks will prove effective.

2) Goldbug psychological liberation, such that goldbugs become oblivious to the orchestrated negativity against gold perpetrated by the cartel of bullion banks, their technical chartist minions, and assisted by their major media spin controllers.

Very interesting conversation.

Thanks

F*

CoinGuy

(02/14/2000; 00:00:51 MDT - Msg ID: 25272)

Oil, Gold, and Joe Kernan

It's great to be on the forum again, I've been traveling, and basically having a good time. I have to admit, I've had a chance to look in a couple of times, but never had time to sit down and write out a few thoughts. I've missed everybody, and would like to throw out a hearty "HELLO" around the table.

I hope I'm not the only person who watched "Weekend Squak Box" Joe's comments were hair raising. He said he's actually woke up with cold sweats the past few days, over which way the markets were headed. Quote, "with the price of oil going up, and gold on the rise" Unquote, a rather interesting quote I might add. He did sound a little shaky, I've never seen this type of demeanor from the Kahuna, and I 've been watching since it's inception.
After reading the OPEC article, the DOW in correction phase and the articles on Ashanti, this will be one interesting week.

Gold...Got it, and getting more,

Coinguy

CoinGuy

(02/14/2000; 00:02:44 MDT - Msg ID: 25273)

Squakbox

The show is replaying right now, and just started. A must see.

Coinguy

Black Blade

(02/14/2000; 00:49:45 MDT - Msg ID: 25274)

Au is getting HAMMERED tonight! London next?

Au down -$5.20 at $305.00 in Hong Kong! and still dropping.

Strad Master

(02/14/2000; 01:00:41 MDT - Msg ID: 25275)

Martin Armstrong???

Does anyone know what's up with Martin Armstrong? Last I heard he was being led off to jail with a lot of sensitive information rattling around in his head. Then he just dropped off the radar screen. Did the Feds do him in with a sudden, unexpected heart attack? (Am I paranoid, or what??)

SHIFTY

(02/14/2000; 01:03:43 MDT - Msg ID: 25276)

BLACK BLADE

Where do you watch the pog?

Farfel

(02/14/2000; 01:37:04 MDT - Msg ID: 25277)

Leading the GOLD Price Down aka Shaping Goldbug Perceptions

I am one of the first to admit I have a paranoid streak. It is probably a combination of excessive leafy indulgences
during my teen years PLUS the several years I have been able to study the gold market's multitudinous manipulations
on a daily basis.

Now the latest source of my paranoia comes from Canada:

Speaking with a investment banker friend in Canada, he informs me that, contrary to popular goldbug belief, almost
every bullion bank holds significant gold share positions, directly or indirectly, in every major gold mining company
on the XAU. Moreover, the same bullion banks, although holding enormous gold short positions on their books, also
always hold notable long positions, on a physical and paper basis.

In his mind, the reasons are obvious: the gold market is something that can never be allowed to operate in a free,
independent manner. It must always be controlled or shaped by the Establishment Powers such that the proper
response always (or in most cases) results. It is a form of Pavlovian conditioning designed to a science by Wall Street's
finest spin control artists.

According to the Canadian broker, every news item about gold can be seen as either half full or half empty. When it is
seen in the former light, the gold price should rise; seen in the latter light, it should fall.

For example, the gold spill problem in Europe can be seen from two diametrically opposed perspectives:

1) Half-Full -- it is great for the gold price since resultant shutdowns of the Romanian facility will reduce the amount of
gold available to the market. Less gold in the market = Higher gold price.

2) Half-Empty -- it is bad for the gold price because all the resultant negative publicity will alienate current gold
investors/holders and encourage them to sell existing gold assets. MORE gold sales = Lower gold price.

So the question is: which perception wins in the gold marketplace, the glass half-empty or the glass half-full?

According to Mr. Canada, the bullion banks will always lead and shape the negative, half-empty gold perception in the
marketplace by immediately SELLING their long gold positions when the market first opens.

Thus, when gold investors awake to see a huge selling wave occurring from the first bell, they are conditioned to
assume that most gold investors are jumping ship in terms of physical metal and gold shares, ergo they must jump ship
too. Selling begats more selling which begats more selling until you have a virtual sell panic.

In reality, according to Mr. Canada, it is not the average gold investor selling at the first bell, but instead it is almost
always "a cartel of like-minded bullion banks" who are determined to shape the reaction of any gold news development
in what they deem to be its proper negative spin.

Unfortunately, most gold investors, being conditioned by this process over a period of two decades, tend to react just
as rats conditioned to push certain levers at the provocation of a specific stimulus. Of course, the fear reaction is the
prevailing reaction for most goldbugs so when they see those first waves of selling, they immediately follow suit.

According to Mr. Canada, a bull market in gold will only arrive once gold investors become aware of these egregious
manipulations in the gold market and provide the antithetical reaction to what is normally expected.

Finally, he sees this "conspiracy of perception molding" as not simply a bullion bank conspiracy but also one involving
a number of associated technical chartists who have direct ties to the bullion banks. By virtue of their close ties, these
technical "experts" are passed MOSTLY negative inside info about future bullion bank strategies in the gold market
designed primarily to drop the gold price, and with such inside info, they are in a better position to forecast gold price
movements to a tee vs. the uncorrupted gold technicians who genuinely practise the "art of the chart."

Of course, when the corrupted gold technicians' forecasts come true, then their neverending ability to be "correct" only
enhances their influence over goldbugs. They are raised to the level of guru status and, in a kind of vicious circle, they
continue to forecast a mostly diminishing gold price and when the gold price drops via bullion bank manipulations as
per their predictions then those accurate predictions only enhance their guru status, thus enabling them to continue to
attract even more gold investor followers so that they can continue to "talk down" the gold price.

Again, according to Mr. Canada, that is why the gold price falls, with occasional rises to suggest a free market.

In his mind, there are only two ways in which the gold market will escape its current "negative psychological slavery:"

1) MORE major left field events (like Europe's Washington Agreement) that are so unmitigatedly positive for the gold
price that no amount of "leading the gold price" by the bullion banks will prove effective.

2) Goldbug psychological liberation, such that goldbugs become oblivious to the orchestrated negativity against gold
perpetrated by the cartel of bullion banks, their technical chartist minions, and assisted by their major media spin
controllers.

Very interesting conversation.

Thanks

F*

Zenidea

(02/14/2000; 01:56:20 MDT - Msg ID: 25278)

Talking our of my league here .

Re: Consciousness?. If I had a glass of water literally in a vacuum in space and moved it from A to B does the water move ? . Well the ans is obviously yes !:). but if I had a glass filled with space in space and moved it from A to B does the space move ?. Well the ans is obviously , no . The space is already there like our consciousness. As the Ancient Creek Aristotle said, (bluntly) We dont have to go anywhere to find ourselves. I am no math wizz but I have a vauge understanding of things known as infinite regresses.
Aham-Kara !!!. Knowledge of the understanding between the I and the object. :). Immm I have talked myself speechless, and no wonder why !. I had a poor day at work , a blistering 50-60 celcious brain shrunken noisy heat next to the Cracker knee deep in Platinum Catalyst. and I would have sold the lot for half a drop full of water :).

Zenidea

(02/14/2000; 02:11:23 MDT - Msg ID: 25279)

oops

Not creek ,... Greek. Like seeing the world as a fussy place inside the Atom 99.999 % empty space. but that small
...%. Oh sorry Socrate's re big and small , didnt know you were listening in :) Like Aristotle says . Au. get yea some :)!!.

Black Blade

(02/14/2000; 02:25:58 MDT - Msg ID: 25280)

SHIFTY and POG sites

http://www.quoteline.com/irtmecoe.aspThe link above is good. Also Kitco, and

http://www.mrci.com/qpnight.htm

http://www.crbindex.com/curquote/crbquote.mhtml

There are others, but these are probably best

Black Blade

(02/14/2000; 03:10:43 MDT - Msg ID: 25281)

Au is recovering in London.

Down -$2.40 at $307.80, Pd is up +$8.00 bouncing around $600.00. (Russians obviously can't deliver!), while Pt is down -$7.00 at $538.00, and Ag down a couple of pennys.

Black Blade

(02/14/2000; 04:26:53 MDT - Msg ID: 25282)

http://www.mrci.com/qpnight.htm

Crude up 0.26 to $29.70, maybe over $30 today?

nickel62

(02/14/2000; 04:28:03 MDT - Msg ID: 25283)

Farfel enjoyed your recent piece

From my twenty years of experience in the securities business I can confirm that you and your Canadian friend are not paranoid. That is exactly how the business works but I would hasten to add that it is not only gold stocks that are controlled in this manner. That is why they call the main decision makers position traders they are taking positions and using their substantial resources,media contacts ,analysts,"research"'salesman,market strategist etc. to take the risk out of their positions. Good time to point that out I am afraid too many people think there is more of a free market determining price than they should. the "free market" in many stocks,bonds,and commodities is only the exception nowadays I am afraid. A very scary reality because it means many of our perceptions are as flawed as the publics acceptance of government data. When the profitablity of traditional banking disappeared sifteen years ago they all developed large proprietary trading desks just like the investment banks and used their resources(same as above plus more)to swing any market they could. Today that is almost all of their earnings n many years. That is probably why the FED and the regulators look the other way.

nickel62

(02/14/2000; 04:41:58 MDT - Msg ID: 25284)

Farfel The cyanide desolves quickly in contact with sunlight and therefore when

entering a river is not only massively dilluted quickly but begins to break down rapidly. The dangers of this type of spill is often overstated by the media for obvious reasons. the Golden Star and Cambior mine in Guyana had a similar spill in 1995 and the press went to town althought the damage was actually very minimal. Now granted the Omai mine was two hundred miles from any major population center and I assume the Romanian one was in an Urban area, but it is important to watch out for sensational reporting in this area. Heap leaching is a closed system where the cyanide is captured on rubber mats and returned to the process in a continual cycle and is quite safe enviromentally. It is the holding ponds that contain the dangerous cyanide solutions and since cyanide is a major cost item as much of it is recycled as possible. Generally the danger comes from an inproperly constructed dam breaking and releasing the effluent into the water system. Normaly associated with the holding ponds of carbon in leach solution processing. Miners on the forum please help with any technical mistakes I have made. You have more experience with these matters than I do. Thanks

Black Blade

(02/14/2000; 04:43:47 MDT - Msg ID: 25285)

Can't deliver what you ain't got!

FOCUS-Palladium at all-time high of $600, supply tight

LONDON, Feb 14 (Reuters) - Palladium was fixed a record $600.00 an ounce on Monday, its highest ever price and more than $150 up from the start of the year. Dealers said ongoing concern over deliveries of metal from Russia, which accounts for over 70 percent of the world's palladium supply, and record industrial demand were behind the sharp price increase. Palladium has risen from around $120.00 an ounce early in 1997 after successive supply hold-ups from Russia. ``One can only describe the platinum metals market (palladium and platinum) as out of the control,'' Dresdner Kleinwort Benson said in a report.

Since the beginning of the year demand for palladium has soared, mostly from car companies needing the metal to make autocatalysts to clean dirty exhaust gases. Sister metal platinum, also used to fabricate autocatalysts, initially followed palladium higher but has run into profit-taking at higher levels which has seen the price drop to current levels around $538.00. Car makers said although current prices were hurting, no viable substitutes for platinum and palladium are expected to emerge soon. Dealers said they expected palladium and platinum to remain at present levels. ``We expect liquidity to remain very tight and the lack of supply will likely result in higher platinum-group-metals prices later during the week,'' one Swiss trader said.

Platinum was last quoted at $538.00/$548.00 from the New York close at $547.40/$557.40 and palladium at $595.00/$605.00 from $595.85/$605.85.

nickel62

(02/14/2000; 04:47:59 MDT - Msg ID: 25286)

Esmerelda Gold

Is more than likely an under-capitalized gold producer that has had difficulty raising money as you can understand and consequently cut some corners on the construction of their coffer dama and the price is now being paid . Someone like that is unlikely to be a significant hedger because they most likely aren't financially stable enough to be a conterparty for anyone and the results you see are more than likely due to normal business screw ups than any ulterior motives. These operations often raise money and sometimes don't have the operational skills one would expect from a true professional mining operation.

Black Blade

(02/14/2000; 04:55:43 MDT - Msg ID: 25287)

Nicke62

You essentially got it right. The cyanide generally breaks down to nitrogen and ammonia, and a few trace mineral salts. The reason that the damage appears to be so pronounced in this case suggests that there is much more to the story. I'm sure that there will be a bit of sensationalism with the media. I don't know the details of this event (accident?), however, there was a spill of cyanide in one of the former Soviet republics last year (overturned truck). There was a lot of sensationalism in the media with reports of massive deaths, etc. The damage was overstated, no deaths or severe environmental damage, however, a lot of attempts at extortion to get cash from the foreigners. Of course the media wasn't interested in reporting bland news like that. We shall have to see what occurred in Romania as more info is released.

Black Blade

(02/14/2000; 05:05:01 MDT - Msg ID: 25288)

Now for something a little different - White gold, not Platinum.

White gold making a comeback
Source: The New Straits Times

NOT so long ago, "white gold" was considered a taboo gift among the Chinese because the term (pai jin in Mandarin) also connotes funeral expenses. However, times have changed. The commodity is gaining popularity among the modern generation who are less superstitious. Young couples are turning to white gold as one of the gifts they shower on their partner on Valentine's Day. A & R Gold Mart's retail and promotions manager, Tan Chiap Pang, said sales of white gold have been encouraging lately.

The company hopes to capture about 30 per cent of the white gold market in Johor. "Many people think white gold is platinum, but it isn't," Tan said. White gold is made by mixing 75 per cent gold with a mixture of nickel, silver and palladium. The current rate for palladium is US$600 (RM2,280) per ounce compared to US$310 (gold) and US$550 (platinum), according to the world market.

"We introduced our white gold range six months ago, and two weeks before Valentine's Day, we sourced an additional 1,500 pieces from Japan and Italy," Tan said. However, he declined to reveal the current sales figure for white gold. One of Johor Baru's biggest outlets for gold jewellery, A & R Gold Mart is also planning to introduce "Rose Wood" to consumers here. Rose Wood is the latest trend in Hong Kong. It is made up of the same metals as white gold, added with copper. Tan also said gold prices went up 10 per cent during the Chinese New Year.

Black Blade

(02/14/2000; 05:20:40 MDT - Msg ID: 25289)

Aussie producers are the weak hands in overnight Au trades!

Gold Falls as Australian Miners Sell to Hedge Decline

By Rajat Bhattacharya

Gold Falls as Australian Miners Sell to Hedge Decline. Sydney, Feb. 14 (Bloomberg) -- Gold fell as much as 1.7 percent in Asia trading as some Australian mining companies sold to hedge against a possible decline after gold rose to a four-month high last week, traders said. Australian mining companies likely sold 1.5 million ounces of gold for present and future deliveries last week and may have sold as much as 250,000 ounces of gold so far today, said Paul Lee, a director in commodities trading at Dresdner Kleinwort Benson in Sydney. ``Although gold producers may expect prices to keep rising, they don't put all eggs in once basket,'' said Lee. ``If they're mining gold at $200 an ounce and if the price is now $310, then they would want to be sure that they are making at least $100,'' even if they miss the opportunity of making more profits if gold prices rise further.

Australian gold mining companies such as Newcrest Mining Ltd., Normandy Mining Ltd. and Delta Gold Ltd. mine a total 300 tons, or about 10 million ounces, of gold a year. Gold for immediate delivery fell as much as $5.2 per ounce, or 1.7 percent, to $305.75 in Asian trading, after declining 1.3 percent on Friday. It recently traded $1.9, or 0.6 percent, lower at $309.00 per ounce. It rose to $315 an ounce on Feb. 10, its highest since Oct. 15. Gold for April delivery fell as much as 1.6 percent to $308.70 per ounce in electronic trading on the Comex division of the New York Mercantile Exchange. It was recently trading $2.6, or 0.8 percent, lower at $311.00

Zenidea

(02/14/2000; 06:21:08 MDT - Msg ID: 25290)

(No Subject)

Clay and Plastic :)

Zenidea

(02/14/2000; 06:22:33 MDT - Msg ID: 25291)

(No Subject)

Clay and Plastic :)25284. PD ? After Russia's tiff ! <.

Black Blade

(02/14/2000; 06:28:04 MDT - Msg ID: 25292)

News about cyanide release(?)

http://CNN.com/2000/WORLD/europe/02/14/yugo.cyanide.01/index.htmlNews on Romania, Hungary, and Serbia cyanide flush!

The Invisible Hand

(02/14/2000; 06:31:19 MDT - Msg ID: 25293)

aka - semantic question

What does "aka" mean/stand for?
Sorry for my ignorance.

Black Blade

(02/14/2000; 06:39:01 MDT - Msg ID: 25294)

Invisible Hand

aka - "also known as"

Black Blade

(02/14/2000; 06:41:28 MDT - Msg ID: 25295)

Au rebounding

Au now down only $0.90. Recovering nicely!

Trail Guide

(02/14/2000; 06:45:20 MDT - Msg ID: 25296)

OIL

http://biz.yahoo.com/rf/000214/b6.htmlElwood (2/13/2000; 23:41:04MDT - Msg ID:25270)
Request for Comments on OPEC Oil Cutbacks

Hello Elwood,
We are seeing the media blow everything out of proportion these days. The oil cut-backs were in no way what was reported! It was more of an adjustment. see the above article (there is a follow up also). Actually, oil management is working very well now.
Today, with oil more likely rising into the $45 range, we are getting a small view of where gold, in oil dollars should be. The mechanics (gears) of all of this are turning now. Prior to this we had the political software installed that literally placed gold "on the road" to much higher prices. The US / IMF have been managing this turn-a-round,,, trying to keep it from exploding too quickly (they did
a good job too!).
I'll be talking much more (and very clearly) about this later "on the trail".

thanks

----------------------------
Saudi denies reports of March oil export cuts

DUBAI, Feb 14 (Reuters) - Saudi Arabia, the world's largest oil producer and exporter, on Monday denied reports that it had cut its March crude exports to the West by 25 to 35 percent.

``The Saudi Arabian Oil Company (Saudi Aramco) has refuted recent news reports that it has cut its March deliveries of crude oil between 25-35 percent to some regions of the world as 'misleading and incorrect','' the state oil giant said in a statement faxed to Reuters.

Black Blade

(02/14/2000; 06:53:32 MDT - Msg ID: 25297)

PGM's expected to go higher this week!

http://biz.yahoo.com/rf/000214/j4.htmlNews on PGM's, Ashanti, and Specs going net long!

Henri

(02/14/2000; 07:14:33 MDT - Msg ID: 25298)

Farfel Msg 25277

Hmmm....That would explain the failure of FN to recover on the recent run-up in POG. On one hand, I think "dang those BB's", But then, in such a "small cap" market, I think a disjoint in share prices and POG would quickly have wide eyed stock investors eventually depleting the supply of the BB's shares. They cannot sell shares they do not have...or can they. I guess they could go naked short...just like they do with gold.

Boy wouldn't that be interesting if everyone buying gold shares did so in an IRA. IRA held shares cannot be manipulated by brokers like those found in their clients margin accounts. They must be held on a cash basis and not sold and rebought by the house. BTW if you have a margin account, on any given day it is my understanding that any shares you own can be lent to another for short sales or even borrowed by the broker directly to be sold short. I do not like this type of meddling in my account so I have insisted on keeping my holdings on a cash basis...not margin account. It is a simple process but keeps you from taking option and stock positions "on margin". You can still buy options and sell covered calls. You just can't sell naked calls or puts. It does not affect your ability to buy or sell the issues in your account it is just a red "hands off" flag to your broker. All you do is send a simple note to your broker that says, I want to convert my margin acct to a cash account.

They will try like hell to talk you out of it as it curtails their "house" reserves for daytrading.

nickel62

(02/14/2000; 07:51:45 MDT - Msg ID: 25299)

Here is a new element of our strategy OUR OWN SPIN ON THE GOLD NEWS!

hollins (Another way to state the Bloomberg story!) ID#21936:
Copyright � 1999 hollins/Kitco Inc. All rights reserved
Mon, 14 Feb 2000, 11:36pm EST
Gold Falls gives back a little ground after its historic rise over the last two weeks. Australian Miners were said to be taking a breather from the paniced hedge covering to try and give the market a chance to settle down.
By Rajat Hollins
Gold retraced some of its historic advance of last week as Australian Miners pondered their heavily hedged postions.
Major attention was focused on the Asian news that China's central bank said it raised gold price today. Many Austrailian mining companies have been terrified that China would use its hundred of Billions of United States dollar assets to purchase a substantial gold position to protect themselves from the danger of a US stock market collapse destroying the dollars inflated value. Talk in the trading community had rumoured amounts as high as 2000 tonnes. That the Chinesse have targeted as their initial purchase objectivel. This sent chills through the heavey speculative shorts in Austrailia, London and New York who have been left heavily out of the money on gold's spectacular rise from $253 /ounce last august to $308 today. rumours have it that many Wall Street stalwarts are heavily over-exposed to the short side and will likely be unable to meet their other financial market obligations. Goldman Sach denied these rumours and said that as long as robert Rubin is Treasury secretary they are confident that gold will remain a sterile asset.
Sydney, Feb. 14-- Gold fell as much as 1.7 percent in Asia trading as some Australian mining companies were said to be trying to counter earlier news that several new asian central banks would be taking advantage of the less than 2% decline to resume their mamouth purchases. Panis cleared the bullion trading desks as the likely ultimate objective of the Chinese to raise their total gold bullion holdings to exceed both the European Central Bank's 12,400 tonnes and the rumoured existance of as much as 8,000 tonnes still hidden in the Fort Knox repostitory of the US Treasury. If these market fears are true it is surely sufficient buying power to attrach the recently disenchanted day traders of the world who having watched the momenteum drain from the internet bubble on Wall Street are primed to now benefit on the long side from an explosion in the long depressed gold market. Sources say that the recent market manipulations have problably reduced gold by at lest a third and more importantly inprudent actions by major market participants have left the physical gold market with a 10,000 tonnes short position which must be covered by bullion banks and heavily hedged mining companies such as the majority of Austrailians mentioned earlier in this article.
Australian mining companies likely sold an additional 1.5 million ounces of gold for present and future deliveries last week in a desperate attempt to continue the impression that gold is still in a bear market. In addition the traders have said that miners may have sold as much as 250,000 ounces of gold so far today as they become more and more desperate to protect their exploding hedge books. said Paul Hollins, a director in Kitco Gold Forum.``Although gold producers may expect prices to keep rising, they wouldn't want to continue to put all their eggs in once basket,'' said Lee. ``If they're mining gold at $200 an ounce cash cost and an additional $100 of capital and exploration overhead and if the price is now $310, then
they would want to be sure that they are making at least $10,'' even if they miss the opportunity of making more profits if gold prices rise further. Because if they are unsuccessfull in convincing the average investors to stay off the long side in gold they know that they will join Ashanti and Cambior sooner rather than later. Awareness of that grim reality has galvinized market makers,miners and bullion dealers to continue to escalate the spin campaign that has become so much apart of their everyday activities.
Australian gold mining companies such as Newcrest Mining
Ltd., Normandy Mining Ltd. and Delta Gold Ltd. mine a total 300 tons, or about 10 million ounces, of gold a year while granted that pales in the face of the 2550 tonnes of gold mined last year world wide it is a big number and should impress those day traders that really don't know much anyways. In fact if you compare that to the 10,000 tonne short position than you can see their problem. Gold for immediate delivery retraced only1.7 percent, to $305.75 in Asian trading, after declining 1.3 percent on Friday. These price corrections were probably to be expected after its largest one day move ever two weeks ago when the growing panic among gold shorts caused gold spot to explode from$283 /ounce to $318 / ounce in only two days. The tremendous volatility sent a strong message to any recalcitrant shorts who doubted the poswer of the current bull market in gold that has exploded 22% since first lifting off last august. On an annualized basis even after the recent correction gold is on target to provide a schorking 43% annualized return over this twelve month period starting at the market bottom last summer. Major long term players say this is only the beginning and referring back to the exploaive lift off in the same month august ,1982 of the recently ending stock market rally think that this move in gold could make that bull market pale in comparison. Gold recently traded $1.9, or 0.6 percent, lower at $309.00 per ounce. It rose to $315 an ounce on Feb. 10, its highest since Oct. 15. Many view the recent corecction as a great opprtunity to increase their leverage to a long rise in the gold price.Gold for April delivery fell as much as 1.6 percent to $308.70 per ounce in electronic trading on the Comex division of the New York Mercantile Exchange. It was recently trading $2.6, or 0.8 percent, lower at $311.00.

nickel62

(02/14/2000; 07:58:30 MDT - Msg ID: 25300)

Black blade no offense but I prefer Mr. Hollins version of the same story much better.

Check with Bloomberg and see if they can pick him up as a stringer will you.

Chrusos

(02/14/2000; 08:05:05 MDT - Msg ID: 25301)

Trail Guide

Great news about the new page. Your trail food is nourishing as ever. I have new boots and new wind - ready for the promised blistering pace you, and events, are promising.

Trail Guide

(02/14/2000; 08:08:19 MDT - Msg ID: 25302)

Gold

http://www.fame.org/HTM/Mundell%20and%20Parks.htmNOTE: These are (see the bottom) segments of questions and answers copied from this interview. I PLACE THEM OUT OF CONTEXT TO UNDERSCORE THE THOUGHT! Please see the link above for the full discussion. It's very good and so is Mr. Park's and his site.

ALSO: The point I was trying to make in #25137 (and the question I was asking) was this;
A full gold money system works during level and rising economic dynamics. It also works "VERY" well during a downturn. In fact it works "Perfectly" all the time! It's the lending of money that creates debt, be it gold debt or fiat debt ,,,, and the failure of that debt during a downturn is what causes the pain.

I ,,,,, we as gold bugs ,,,,,, most financial thinkers ,,,,, do not debate this point. The argument is that:
If the pain dynamic (loses) of a financial downturn is not "Somewhat" shared by society as a whole ,,,,, the economic dislocation always intensifies until we go to conflict. (see my earlier post)

It's during the downturns that society in general will not tolerate a full gold system because it concentrates the loses upon their rightful owners. As such "these same" are usually "wiped completely out" and their fallout effects on the social and economic structure can be widespread and very destructive to tribal life.
Again, history has proven, time and time again that humans will not allow the full (natural) effects of gold money ,,,,, if it threatens to create factions. They accept gold during long periods until conflict (internally political or externally war) forces a break in the gold bond.
We as nations will break the "gold bond" by calling for the shared pain of inflation. Whether we (as countrymen) understand the reasoning behind it or not; currency inflation (not price inflation) in the modern world is carried out until it's debt destroys the current system ,,, there by, sharing all the pain of the loses before it. We then move into the next fiat system.

The question:

Is it not better for all ,,,, if we remove gold from the official currency structure by forcing derivitives failure and creating a free physical only marketplace,,,,, so as to keep "US" ,,,,,, ourselves ,,,,,, from controlling it through our politicians?
Through "legal tender laws" currently in place ,,, let's force us (ourselves) to continue to create debts only in paper.
As such, "they" ,, "we" can manipulate the fiat as needed for society.
Does this not place gold in it's rightful position of being a "real currency asset" as it was chosen to be used from the beginning of time?
A private money for trade and savings that's outside the "contract / debt' system. Your thoughts?

Trail Guide

Robert Mundell:
--------I think that legal tender is a very old institution. It certainly goes back thousands of years and legal tender is an institution, whether we like it or not is going to stay. ----------

Robert Mundell :
------There's no institutional mechanism by which we could ever duplicate the kind of financial system we have under a system that relied almost entirely upon gold. Of course you could always have a system that used a lot of paper that was in some sense convertible into gold. You could always find a price of gold that you could convert that paper theoretically into gold. But I don't think anyone has thought in terms of the enormous price of gold that would be required in order to achieve that.-----------

Larry Parks:
---------George Soros says in his book Soros on Soros that the gold standard had to be given up because it did not make possible a lender of last resort. And says Soros, because financial markets are in his words "inherently unstable" you have to have a lender of last resort.-------

Solomon Weaver

(02/14/2000; 08:16:59 MDT - Msg ID: 25303)

FARFEL - I doubt cyanide spill was planned

Farfel (2/13/2000; 22:53:28MDT - Msg ID:25263)
CYANIDE, European Central Banks, and Gold Manipulation...

_____

Farfel

I would offer a rather contrary viewpoint. This is a catastrophe which will put this company under severe threat of litigation...consider that DowCorning is only now settling after many years.

I believe that environmentalists might become "anti gold mining"...meaning that they call for much more severe environmental regulation. This has the prospects of creating additional costs and time hurdles, particularly for young Jr. mining companies...

The net effect could be a "reduction" in the amount of physical gold produced.

-----

Just a note from a biologist who knows...there are actually an extensive number of microorganisms which are able to degrade cyanide (when it is in dilute quanitity)...so fortunately, this is not a long lasting problem for the river.

Poor old Solomon

Henri

(02/14/2000; 08:31:41 MDT - Msg ID: 25304)

New Paradigm for Tech investors...High Tech Gold Play

http://www.emrmicrowave.com/press/Aug17-99.htmlAnyone who peruses the home website willrecognize some astounding developments. Besides increased extraction efficiency (Still must use cyanide...I'm afraid) The EMR gold process replaces the ore heater with microwave heating that for some ores binds sulfur preventing release into the atmosphere. Acid rain precursors are thereby effectively removed. Its a "green" process. They have also just released a process for Copper that could be HUGE if they can sell it to the likes of Phelps. Interesting piece there on Oil processing as well.

nickel62

(02/14/2000; 10:27:35 MDT - Msg ID: 25305)

It is about time that the lie of claiming that hedging above your cash cost

provides a "profit". I am far from an expert in gold mine accounting but this little ruse has gone a long way toward justifying the absurd behavior of these hedged miners. If I am not mistaken the capital costs plus the finding and acquiring costs have to be added back on to the cash cost per ounce to get a realistic "cost" for their peoduct. Theese Austrailian miners that are claiming they are making money by hedging above their cash cost are full of it and each of us should email the next brain dead reporter that quotes one of them and point this out. first could one of the miners in the forum give a more exact definition of full all in cost so that we all can understand what BS these article contain.

TownCrier

(02/14/2000; 10:31:14 MDT - Msg ID: 25306)

Today's Market Report (Hurrah...the web-server is back up!)

Market Report (2/14/00): Gold started the new week lower in thin overseas markets with Australian producers cited as engaging in substantial selling of the yellow metal for immediate and future delivery to capitalize on gold's strong gains since February 4th. After slumping to $305, gold recovered nicely throughout much of the London session on what was described by one Bridge News source as "strong demand lurking at the lows, particularly under $300." Steady trade was said to accompany gold's rise back toward the $310 level near Friday's New York close where profit taking emerged, "making that level a pretty important hurdle over the coming days," according to one dealer in London. Bridge News reports that dealers are split in their opinions over expectations for gold's short-term prospects, with one camp calling for $300-310, while others anticipate $305-315 to define the trading range. Overall, market sentiment was said to be positive on the back of recent announcements by major producers scaling back their hedge positions. Reuters notes that some dealers expect volitility to be the name of the game ahead of Ashanti's latest margin call deadline, currently at February 17th. Pending the continuation of "business as usual," Ashanti will likely receive its fourth extension from the counterparties of its failed hedging strategy. Since the October surge in gold prices, Ashanti has been saddled with an adverse position of $570 million in the wrong direction on its hedge books...certainly providing cautionary inspiration to other hedgers and mining investors to take a look at their own companies' hedge programs and future strategies. Hard lessons have a remarkable way of becoming effective teachers. And as we prepare to fetch this report over to the server, we see that New York traders have successfully brought gold back down from near $310 at the open to retest the overnight lows, bouncing off $305 to a spot price of $306.50 per ounce.

That will do it for today, fellow goldmeisters. We'll see you here tomorrow.

Luv_G7

(02/14/2000; 10:44:15 MDT - Msg ID: 25307)

Goldman in trouble?

http://biz.yahoo.com/rf/000214/qf.htmlGoldman Sachs has filed a shelf registration for $7 billion in notes. They must see a need for capital, perhaps loses in their gold short positions are hurting them. If my guess is true, this is bullish for gold. GS will be less likely to play down the gold market if they're losing their butt.

Farfel

(02/14/2000; 10:45:12 MDT - Msg ID: 25308)

Yes, Goldbugs, THEY are Manipulating You (Repost)

I am one of the first to admit I have a paranoid streak. It is probably a combination of excessive leafy indulgences
during my teen years PLUS the several years I have been able to study the gold market's multitudinous manipulations
on a daily basis.

Now the latest source of my paranoia comes from Canada:

Speaking with a investment banker friend in Canada, he informs me that, contrary to popular goldbug belief, almost
every bullion bank holds significant gold share positions, directly or indirectly, in every major gold mining company
on the XAU. Moreover, the same bullion banks, although holding enormous gold short positions on their books, also
always hold notable long positions, on a physical and paper basis.

In his mind, the reasons are obvious: the gold market is something that can never be allowed to operate in a free,
independent manner. It must always be controlled or shaped by the Establishment Powers such that the proper
response always (or in most cases) results. It is a form of Pavlovian conditioning designed to a science by Wall Street's
finest spin control artists.

According to the Canadian broker, every news item about gold can be seen as either half full or half empty. When it is
seen in the former light, the gold price should rise; seen in the latter light, it should fall.

For example, the gold spill problem in Europe can be seen from two diametrically opposed perspectives:

1) Half-Full -- it is great for the gold price since resultant shutdowns of the Romanian facility will reduce the amount of
gold available to the market. Less gold in the market = Higher gold price.

2) Half-Empty -- it is bad for the gold price because all the resultant negative publicity will alienate current gold
investors/holders and encourage them to sell existing gold assets. MORE gold sales = Lower gold price.

So the question is: which perception wins in the gold marketplace, the glass half-empty or the glass half-full?

According to Mr. Canada, the bullion banks will always lead and shape the negative, half-empty gold perception in the
marketplace by immediately SELLING their long gold positions when the market first opens.

Thus, when gold investors awake to see a huge selling wave occurring from the first bell, they are conditioned to
assume that most gold investors are jumping ship in terms of physical metal and gold shares, ergo they must jump ship
too. Selling begats more selling which begats more selling until you have a virtual sell panic.

In reality, according to Mr. Canada, it is not the average gold investor selling at the first bell, but instead it is almost
always "a cartel of like-minded bullion banks" who are determined to shape the reaction of any gold news development
in what they deem to be its proper negative spin.

Unfortunately, most gold investors, being conditioned by this process over a period of two decades, tend to react just
as rats conditioned to push certain levers at the provocation of a specific stimulus. Of course, the fear reaction is the
prevailing reaction for most goldbugs so when they see those first waves of selling, they immediately follow suit.

According to Mr. Canada, a bull market in gold will only arrive once gold investors become aware of these egregious
manipulations in the gold market and provide the antithetical reaction to what is normally expected.

Finally, he sees this "conspiracy of perception molding" as not simply a bullion bank conspiracy but also one involving
a number of associated technical chartists who have direct ties to the bullion banks. By virtue of their close ties, these
technical "experts" are passed MOSTLY negative inside info about future bullion bank strategies in the gold market
designed primarily to drop the gold price, and with such inside info, they are in a better position to forecast gold price
movements to a tee vs. the uncorrupted gold technicians who genuinely practise the "art of the chart."

Of course, when the corrupted gold technicians' forecasts come true, then their neverending ability to be "correct" only
enhances their influence over goldbugs. They are raised to the level of guru status and, in a kind of vicious circle, they
continue to forecast a mostly diminishing gold price and when the gold price drops via bullion bank manipulations as
per their predictions then those accurate predictions only enhance their guru status, thus enabling them to continue to
attract even more gold investor followers so that they can continue to "talk down" the gold price.

Again, according to Mr. Canada, that is why the gold price falls, with occasional rises to suggest a free market.

In his mind, there are only two ways in which the gold market will escape its current "negative psychological slavery:"

1) MORE major left field events (like Europe's Washington Agreement) that are so unmitigatedly positive for the gold
price that no amount of "leading the gold price" by the bullion banks will prove effective.

2) Goldbug psychological liberation, such that goldbugs become oblivious to the orchestrated negativity against gold
perpetrated by the cartel of bullion banks, their technical chartist minions, and assisted by their major media spin
controllers.

Very interesting conversation.

Thanks

F*

(02/14/2000; 10:54:23 MDT - Msg ID: 25309)

ASHANTI CFO OUT

The Ashanti Gold Chief Financial Officer Mark Keatley will no longer be with the company it was announced today, Monday Feb 14, 2000 in Accra.

ORO

(02/14/2000; 11:49:40 MDT - Msg ID: 25310)

Trail Guide - Gold system

I am working on a detailed reply, however, I wanted to put up a short version sunce you are online at the moment.

In your latest post, as in the earlier one in which you replied to my previous comments, you talk of pain and losses under the gold standard in the bust that follows th economic boom. After a period of growth a pile of debt had formed and that this debt collapses the system.

I pointed out that it is the existence of a "lender of last resort" that causes the debt boom. It is obvious then, that had there not been a lender of last resort there would not have been a substantial credit crunch, because the lenders would not have taken the same risks they allowed themselves once a promise of bailout was given, and thus would have avoided the credit boom.

The argument is false in that it is circular. The lender of last resort was there in the first place, the inevitable credit boom followed, the credit crunch followed - just as inevitable - and a further lender of last resort was needed.
History shows that the credit policies of the BOE led to its bankruptcy before WWI and before the Fed was created. This was among the reasons for the argument for the Fed being pressed. All the previous lenders of last resort were tapped out and a new one was necessary. In 1929-1930 the Fed was tapped out and the gold standard obligation was abolished shortly after.

The incredible incompetence of the large banks makes the lender of last resort necessary. That incompetence was bred into the banking system by previous lenders of last resort. Bankers are like a herd of cattle, they follow the leading bank bull and end up running in his Sh%$. All feeders on leverage know this as "the trend is your friend".

The pain and losses are those of the bankers and the outdated and mismanaged corporations they control, as well as the wildly unprofitable new technology corporations they build. Society as a whole suffers mildly, but wide range suffering occurrs only if there is a lender of last resort. The lender of last resort functions to destroy the business and purchasing power of those who acted responsibly and saved cash. The purpose of the lender of last resort was to save the fat man's bacon by raiding everyone else's larder so that he would not go hungry.

The recourse to war results from the spreading of misery by the lender of last resort. The war serves to divert people's attention and to reflate the system by creating enormous new debts that would later be paid by the citizens as a whole.

A far more efficient way to take care of the credit crunch is to allow the markets their fine function in limiting it in the first place. The second most efficient way is to have the markets do their job in punishing the bankrupt and their incompetent lenders.

The key issue of the lender of last resort is that it is the mechanism for the transfer of losses from the incompetent bankers (and their defunct clients) to the public at large.

Without the lender of last resort, the bankers would have their empires taken apart and disbursed to their creditors, and the corporations they controlled through debt would be reorganized through bankruptcy.

The real assets would change hands, but would still be there. The assets that produced losses would sell at a discount - perhaps at a low enough price so that they could be run profitably without the burden of the original debt that formed them (when they financed the capital investment of the businesses).

The key is that the Morgans and Rockefellers hold on to their empires not because they are so successful in their business, but because they have first dibs on the bail-out funds because they control the Federal Reserve. To be sure, the large financial empires were created by consolidation of smaller operations through the use of government enforced banking monopolies that forced the small operators to come to the bankers for finance. These small operators would only be able to overcome their competitors through the subsidized lending available from the bank monopoly members. The post Civil War commercial business of Morgan and the rest of the large banks was to do in the rest of industry what they did in banking. They formed a monopoly on money creation that gave them an edge in consolidating enormous "trusts" who'se purpose was to avoid competition. Part of the methodology was to run the competition out by price competition. The bank backed business had the benefit of endless loss capacity, while the resources of the independent corporation were limited by the markets. Once control was gained, the trust would raise prices to the sky and generate enormous profits. Since the large bankers divided the territory among themselves, there was no competition among them.

The purpose of antitrust regulation was not to break up the trusts, it was to break up NEW corporations that created new markets and threatened the trust's business with obsolesence.

To summarize, (1) lenders of last resort cause moral hazard and uneconomic investment because of the expectation of bailout. (2) The credit boom that ensues during growth periods results in the uneconomic investments failing and with an actual need for bailout. (3) The bail-out by the lender of last result ends up converting the losses of the few into the pain for many.

Again, the problems are not those of the gold standard but of the government enforced bank cartel and its lender of last resort.

Indeed, Soros has it right in that central banks and the gold standard do not mix. However, it is the central bank that needs to be chucked into the waste bin.
----------------------

There is a secondary myth of free gold banking not producing the large amounts of money that are necessary for expansion of the capital base in times of expansion.

Money is the mechanism for trade of goods and services through indirect barter. The amount of money does not change the amount of goods. At most, it changes WHO gets the resources, it can not change the amount of resources significantly. Furthermore, artificial increases in the money supply through uncompetitive banking cartel lending produces less goods and less capital overall. What matters to the cartel members is that they are the "who" that benefit from the new money.

schippi

(02/14/2000; 12:05:33 MDT - Msg ID: 25311)

Hourly Gold Sector Chart

http://www.SelectSectors.com/agpm70.gif So far, a flag formation, which implys a
move to the Upside?

Jon

(02/14/2000; 12:10:58 MDT - Msg ID: 25312)

Farfel's msg#25308 re: Bank manipulation of POG

I would appreciate seeing comments from bankers on this site. Thanks.

nickel62

(02/14/2000; 12:47:51 MDT - Msg ID: 25313)

Hello coin guy welcome back

I missed your input.Glad to have you back.

ORO

(02/14/2000; 12:53:37 MDT - Msg ID: 25314)

A sudden interest in the ceiling

A friend of a friend is a low ranking banker with mathematical proclivities. The man ran a multidimensional regression on the world currencies and the PMs, a method that is still in development as far as theoretical considerations are concerned. But within particular parameters, the method can practically isolate currency crosses through the PMs and reveal hidden relationships of up to any 3 currencies and 1 PM.

After asking some coleagues about it, no one seemed to know that this relationship was there and couldn't make heads or tails of it.

He went to an international banker's convention and had a chance to join some high ranking officials from other banks in conversation. He proceeded to describe the relationship he found between the German Mark (and the Euro afterwards) and the British pound and gold prices in dollars.

The resulting response was complete silence as the group of high ranking members focused on counting the cracks in the ceiling during the explanation, and quickly dispersed without giving a clue as to what they know. During the rest of the convention he felt he was being avoided.

I am trying to get the mutual friend to have the data files and regression results sent to me.

Interesting, is it not?

nickel62

(02/14/2000; 12:53:43 MDT - Msg ID: 25315)

Elwood great article on the Chicago Mercantile Exchange introducing a new

Bullion settlement plan. I got all the way to the end before I got it. Very funny! I wonder did anyone else pick up on this?

Solomon Weaver

(02/14/2000; 12:54:10 MDT - Msg ID: 25316)

(No Subject)

Farfel (2/14/2000; 10:45:12MDT - Msg ID:25308)
Yes, Goldbugs, THEY are Manipulating You (Repost)
-----
FARFEL - THOSE CONCERNS ARE WELL WORTH CONSIDERING. I think the coming months in the gold market are going to be like witnessing one of those epic battles in Greek Mythology between Thor and his thunderbolts (the longs) and Neptune and his gale winds and misty fogs the underwater shorts).

Imagine the uproar, if it were to be discovered that similar major banning shareholders of oil companies had been doing the same...to me, the whole gold financing scandal with leases, forward sales, owners of gold stocks shorting the product, it all has massive CONFLICT OF INTEREST problems...but, what doesn't in today's world.

Perhaps there are some BBs who are able to turn around enough of their positions that they could become BULLS??? Certainly, they of all, know the most how much that could mean, even if it is simply saving them from the jaws of defeat.

We GOLDBUGS have to trust that the real nature of gold will somehow be their demise.

I really appreciate your ability to combine scepticism and conviction. The truth of the way things should be vs. the truth of the way things are is hard for many to understand. You seem like a great practical philosopher in this regard.

Poor old Solomon

SOS

(02/14/2000; 13:08:05 MDT - Msg ID: 25317)

Schippi: Flag formation?; #25311

This formation is more akin to a pennant and as the point of the formation is formed (as it is doing) a breakout to either the up or down side is possible. It is an either or situation.

nickel62

(02/14/2000; 13:16:23 MDT - Msg ID: 25318)

ORO you must remember that having spent some time talking

to high ranking bankers myself it is quite possible that none of them wanted to admit they didn't know that the deutsch mark had been converted to the Euro. All kidding aside I have found senior executives often don't have a clue about many things and hidden patterns would not necessarily mean they knew they existed. Gold Field Mineral Services annual survey always has a long term table with gold prices in twenty different currencies and this has always been interesting reading. The actual depreciation of the various currencies (the mark being one of the lowest rates of longterm depreciation against gold of course)fits almost perfectly with the embedded core interest rates charted in the various fixed income markets over the same corresponding timeframe. If you don't already have these numbers I will try to locate them for you. Off the back of the envelop I have always wondered how the pound got put into the European Currency union at such a high rate(back in the early ninties) and then crashed out of the union in such a spectacular way. If my suspicions are correct I would expect to see an artifically high UK pound and US dollar versus the deutschmark in gold terms. Is this what your friend found?

nickel62

(02/14/2000; 13:28:11 MDT - Msg ID: 25319)

Henri (2/14/2000; 7:14:33MDT - Msg ID:25298)Help me understand what you meant

When you said that would explain the failure of FN Franco Nevada to rebound after the rise in the gold price. I am interested in FN which for the last five years has been over priced and currently is beginning to look intriuging.

Cavan Man

(02/14/2000; 13:46:45 MDT - Msg ID: 25320)

Oil

Bloomberg showing oil over US$30 now at $30.25.

R Powell

(02/14/2000; 14:10:17 MDT - Msg ID: 25321)

Possible default by Ashanti?

MK and all What news of Ashanti? There has been speculation that Ashanti might not be able to replace borrowed gold (owed to the bully banks) after a possible nationalization of the company or that country's equivalent of chapter 11 (bankrupt protection). Might not default of borrowed gold be big enough news so that gold might once again break free from its jailors? Mr. John Hathaway at www. tocqueville. com correctly predicted that "gold producer hedge book buybacks combined with high profile statements that promise to de-emphasize the importance of hedging" would cause a "big upmove" in gold. Does anyone know what he foresees now? What will set gold free again and can it run fast and far enough to avoid capture?

Henri

(02/14/2000; 14:19:48 MDT - Msg ID: 25322)

Nickel 162 Msg 25369

In a way, I can see that if what Another has said comes to pass, and the mining companies have to close their doors because their financial infrastructure collapses...no PM's will be mined and no royalties will be gained. Since the royalties will still be owned by FN, I would think that would be an excellant time to buy it. Because just as mankind will always gamble, he will also mine gold. It will just be a matter of time before the next fiat regime funds the mining. FN should then trade close to the share value of its cash holdings with the royalties discounted. With such a large trove of its own (hopefully in something other than fiat) it may even be able to buy/finance a couple small mines and outgrown Barrick. That is if gold runs to $600-$6000. It wouldn't take a big mine to be self financing from its own operations. On the other hand, if the world does move out of $ into Euro's FN is a good deal at these prices as long as mining continues. I wonder if their royalties are denominated in oz or proceeds from hedged sales.

R Powell

(02/14/2000; 14:26:15 MDT - Msg ID: 25323)

SOS , pennant formation

Your right, it does look like a pennant. Have you ever noticed that by changing the scale on a gragh, the technican can change the shape or picture of the image. Also, if gold trades in a narrow enough range and does reach the point of the pennant, it will then have to either rise or fall or have no price change whatsoever. But I have seen explosive moves from this formation especially if enough technical traders see it coming. It may become a self-fulling prophesy and hopefully to the Upside!

ORO

(02/14/2000; 14:30:46 MDT - Msg ID: 25324)

Farfel - The glass

In the financial markets and gold markets, the glass tells a different story.

In the temple of Mammon stands the Crystal Chalice of Holy Water. Before the temple was built, each person had a little temple of his own where he prayed to Mammon and gave offerings of ambrosia. The priests of Mammon, in a few large temples had come together with a plan to take control of ambrosia and had preached in their temples that all should bring the Ambrosia they grow to the one great temple that they will build, citing the difficulties some temples have in keeping their doors open, and how this threatens everyone's prosperity.

A grand temple was built and a great Crystal Chalice made to hold the golden ambrosia. But the grand priest and his oracles who had received the Ambrosia for the Temple never put it in the chalice, and replaced it from the first day with colored water, drinking the ambrosia reserved for the god.

When Mammon came to his temple, as he does when the sweet ambrosia beckons, he found the Chalice filled with colored water. He shook the ground and the economy collapsed. When pressed the priests of Mammon said that the god must have lost his taste for ambrosia and that hence forward the ambrosia would be replaced with holy water that had been appropriately blessed as the priests claimed Mammon had demanded.

At the same time, the priests erected new temples, well away from the old and hidden from view, where they made their own Crystal Challices and the ambrosia they collected and refined. There they prayed to Mammon and partook in the traditional sharing of ambrosia. The prayers had changed, however. From the blessing of the people, the land and industry, they had transformed it to a plea for their fortunes alone.

A Chalice of cheap glass was made and put in place of the intended Crystal Chalice. The Chalice is displayed prominently, but on a high pedestal that prevents close inspection. The glass can be seen from anywhere in the public room of the Temple.

The observer looking at it can see no water, but word has it that the glass has been completely filled, which is why one can't see the water.

The question of whether the Chalice is full or empty baffles all who ask. But they accept the notion of it being full because the priests say so.

In the course of time, the astute observer notices that the Chalice is never filled by anybody and comes to the conclusion that the water must have evaporated long ago. Upon careful examination and measurement of the index of refraction with his science set's crude tools, this astute observer comes to the conclusion that the Chalice high up on the pedestal is most definitely empty.

However, when talking to people, no one will take the careful arguments and measurements seriously because "everyone knows the glass is full".

Digging in the archives, our observer, very frustrated, notices that the documents imply that the priests who installed the Chalice and were responsible for filling it, drank the water and that the bottom of the Chalice broke just before installation because it was so cheaply made.

Checking the holy gardens where ambrosia was grown through a nick in the wall, our observer saw that ambrosia was grown and refined as before. Where could the ambrosia go?

Our friend then found the story of the new temple and drafts of the text of the new prayers and was appalled.

Speaking to the believers in the temple, he tells them again and again of the story, how the Chalice they see before them is empty and that no one fills it with water, holy or otherwise, and that the Ambrosia is still being made and brought elsewhere. Challanged to prove his point, he tells of the papers in the archives and the measurements of the Chalice and his reasoning. But all repeat to him, but that is absurd, the simplest explanation of the facts before you are that the Priests don't lie like they used to. That the Chalice is full of holy water and all is fine.

The story points out that

1. You don't really know if the glass is full or empty unless you check.
2. It does'nt matter if the glass is empty or full. Because the water that was supposed to be in it is not holy.
3. What is important is not in view.
4. Nobody will believe you.
and
5. There is no Chrystal Chalice and what is there on display could never hold the holy water anyway.

dragonfly

(02/14/2000; 14:47:55 MDT - Msg ID: 25325)

ORO - msg id 25310

That was a very clear post which helps to unravel things.
Thanks, ORO.

I can recommend a book written in 1982 by Kurt Rudolf Mirow and Harry Maurer titled "Webs of Power - International Cartels and the World Economy". The jacket cover blurb is as follows:

The authors demonstrate that markets in crucial industries such as oil, electrical machinery, chemicals, uranium, steel, synthetic fibers, and shipping are now under the control of the cartel giants. They draw disturbing parallels between the current situation and the turbulent thirties, when cartel-led trade wars fed world-wide depression and contributed to the tensions leading to World War II. The danger today, the authors show, is that the cartel conspiracy can force still higher prices on American consumers and threaten world stability by stifling independent growth in developing countries.

dragonfly

nickel62

(02/14/2000; 15:09:35 MDT - Msg ID: 25326)

Henri thanks for your response.

I am intrigued by the recent plunge in the value of FN it is a bunch of smart guys who do have a good portfolio of very fine royalties and a fine new mine in the Ken Snyder mine on the Carlin Trend. All of this of course is not news but the stock was always so overpriced I never cared. At $12.75 US this may not be the case any longer. In a true gold bull like I believe we are entering this is Microsoft. If you are interested let me know and I will tell you what i find from my research. Thanks for your help.

law

(02/14/2000; 16:03:55 MDT - Msg ID: 25327)

nickel62 and Henri

http://www.franco-nevada.comI too have been very interested in this royalty company. This may be the obvious...but there is good information at their website...good researching!

dragonfly

(02/14/2000; 16:07:11 MDT - Msg ID: 25328)

Journeyman - msg id 25234 & 25233

After thinking about your recent posts and the ongoing debate I will gladly declare in favor of the gold standard.

Not that I have any notion of how it could actually come about but simply from a sense that it should.

I look forward to the day when I can trust some entity to hold my gold in exchange for a digital gold account.

But don't you think trust is going to be at a premium in the world at hand, if it continues to exists at all outside of immediate relationships?

Thanks for the keen thoughts, I really like to print out this kind of post for the guys at work to think about.

canamami

(02/14/2000; 16:20:49 MDT - Msg ID: 25329)

Re Ashanti

MK,

Sorry for the delay in replying to your post. It is true Rawlings' regime was Castroite at one point, but he has followed liberal (i.e., free market) economic policies for about a decade now. Given the Ashanti situation and Ghana's circumstances, I suspect a government of almost any ideological stripe would be tempted to nationalize. As it is, right now all that happened was a corporate coup of some sort, orchestrated by some shareholders with the Ghanaian government's aggressive backing (in a Ghanaian court). Ashanti could, however, be the catalyst we are looking for. Rawlings does have a fair bit of support in the country, and could probably pull off a nationalization of some sort, if nationalization would benefit the Ghanaians. This is a fascinating problem, in that Ashanti has shareholders worldwide, assets in more than one country, and I believe pending shareholder lawsuits in either two or three countries. The conflict of laws situation, and the possible political/economic/legal/diplomatic consequences are interesting. Sadly, the Ashanti situation may be deemed to be of such a nature that Ashanti will be bailed out at all costs. If not, this could be the catalyst to break the gold market open, given either the defaults concerning forward contracts, or the buying needed to cover short positions.

R Powell

(02/14/2000; 17:09:52 MDT - Msg ID: 25330)

CoBra(too) where are you?

Mr. CoBra... I want to echo Leigh's sadness when hearing of your leaving us. I'm quessing that you still read here and I'm hoping that you see this message requesting that your absence be a short one!!

Quicksilver

(02/14/2000; 17:34:14 MDT - Msg ID: 25331)

Goldstock Pattern Rank Analysis:The GOOD, The BAD, and The UGLY

http://www.murphymorris.comWhich goldstocks have held their price since the Wed. morning gap up? Considering the square stair-step pattern to be the strongest with the "over the hump elliot-wave dump" to be the pattern of least confidence and those stocks that are hanging in about 50% retracement off the high and near even with the Wed. morning open being somewhere in the middle. It only covers 5 days. I chose this because they all spiked up on euphoric buying but my question is, "Who is holding on to their stock?" and "Stocks held tight are reluctant to crash back down". These retracements could be due to manipulative shorting. But then why aren't some stocks coming back down (yet)?

The Good: GOLD,HGMCY,GSR,HM
The Bad: NEM,AEM,PDG,ECO,BMG,HL,MDG
The Ugly: ABX,AU,KGC,ASA,DROOY(hedged)

bad really means OK but this is a critical analysis and why haven't they acted like the top four

ugly really means hopeless (they've already fell to very near Tues' close, up and over the hump, bring in the strecher get the IV, we have a hedge wound). No not my stock, yes your stock, don't get upset, we all have to test our mask and flippers. But we can't earn a living picking up trash so possibly "wait to switch". Very possibly the "bad" stocks will fall more and become better deals. Even now they all are bargains but my question is which stocks have real holding power and will these stronger pattern stocks triple or quintuple when it really gets going. A second or third doubling would be truely incredible. AU is supposed to be a strong goldstock but it retraced back hard, maybe their vocal anti-hedging campaign is bringing on some enemy shorting. Is AU's pattern different from all the rest?I have no idea why.
If the POG rests above $322 after a spike or after a steady climb, then there may be a general liftoff of everything gold.

Why is hedging dangerous? Ashanti's stock (ASL) did very nicely in the last Oct spike only to fall and loose 2/3rds of its price in one afternoon. Excessive hedging will kill a stock price if gold soars. So don't eat the bait.

What is hedging?

Essentially they can sell all the gold still underground before they mine it. So you think it's a gold mine but actually it has been robbed by BANKSTERS who pre-negotiated the gold price and if gold rises too much the mine can go into bankrupcy.

Sort of like taking your entire college tuition for four years and blowing it on a corvette and a great apartment before you enter your second year because you just know you can make it without an education like Bill Gates.

SOS

(02/14/2000; 17:38:39 MDT - Msg ID: 25332)

R Powell Re. Your ID#25323

I agree with everything you had to say about that pennant formation. It is facinating how fundamental circumstances and events as well as pressure from technical traders so often bring about the explosive moves you mentioned having seen time and time again. Same for me. Now if it can just be turned into a profitable trade. The good thing is that there doesn't appear to be very much down side to the move even if it did break out "South."

flierdude

(02/14/2000; 18:07:49 MDT - Msg ID: 25333)

Oro..Concerning your Message # 25314

I would suggest that you go to Kitco and research SDRer posts in the Search Engine in the top right hand corner. He has addressed this better then anyone I have read on the net.

R Powell

(02/14/2000; 18:08:00 MDT - Msg ID: 25334)

Ashanti still stewing

Found a news article from Canadian Corporate News on Kitco. (www.kitco.com)then live market quotes,then news, then CCN. It says Richard Peprah has resigned as director and Chairman of board but he's still Minister of Finance of the Republic of Ghana. The article then gives, in detail, Ashanti's numerous attempts to deal with its hedge book problem (17 counterparties). It has tried Gov. guarantees, additional funding by merger offers, buyouts, asset sales- all to no avail as I read it although I think they came close with Lonmin. The deal fell apart without Government quarantees. It's dated today and leads me to think that the Ashanti pot is still boiling and in danger of spilling.

Trail Guide

(02/14/2000; 18:20:51 MDT - Msg ID: 25335)

Freegold

Thanks for your reply, ORO.
My comments presume that readers have read our full posts.
Your major point, logic and comments that I got from your post (25310) , followed by my comments:

POINT:
I pointed out that it is the existence of a "lender of last resort" that causes the debt boom

Logic:
It is obvious then, that had there not been a lender of last resort there would not have been a substantial credit crunch, because the lenders would not have taken the same risks they allowed themselves once a promise of bailout was given, and thus would have avoided the credit boom.

Your Comments:
The argument is false in that it is circular. (Trail Guide note: I think he is referring to my logic?) The lender of last resort was there in the first place, the inevitable credit boom followed, the credit crunch followed - just as inevitable - and a further lender of last resort was needed. History shows that the credit policies of the BOE led to its bankruptcy before WWI and before the Fed was created. This was among the reasons for the argument for the Fed being pressed. All the previous lenders of last resort were tapped out and a new one was necessary. In 1929-1930 the Fed was
tapped out and the gold standard obligation was abolished shortly after.

My Comments:
ORO, I cannot accept that a "lender of last resort" causes a debt boom. It presumes that a great portion of lending is done for reckless, uneconomic reasons. Yet, at the end of great expansions many projects that were considered "blue chip" in the beginning still go bad. Sometimes, the most necessary economic activity is curtailed because peoples needs change during the course of life ,,,
not to mention a recession. Thus changing business dynamics.

How many instances can we document where banks lent into real demand ,,,,,,, backed with the very best demographic patterns ,,,,, only to find the loan blow up from changing demand. Oil in the late seventies would be a convenient example for us (smile). People were breaking down the doors
of the old "Texas Commerce Bank" in Houston ,,,,,,, all in an effort to finance hugely profitable petroleum projects. This was no flash in the pan, as the oil industry had a progressive expansion history of 15++ years before this. Truly, a lender of last resort was the very last thing on their minds. Later, even paper based on $10 producing reserves was trashed! Certainly there are many, many other examples,,,,,,,, most are of a more mundane, unglamorous nature, but fine examples.

Further:
Was this really circular thinking on our part? Did the Lender of last resort exist during the 'South Sea Bubble" or the "Tulip mania",,,,,, and did the "Black Plague" of Europe shut down a few sound financial systems then? I think gold was the norm in that period?

ORO, this portion of your thinking needs to include the other side of the lending aspect,,,,,, people want and demand loans for sound, economically justifiable, profitable projects,,,, and they get them on sound lending principles. Still, some 90% of them can become only "at the margin"
when demand changes. And typical of our human society, we all shift at once.

Truly, my friend, bank loans often fail because human events change the course of money dynamics,,,,,, and it does so in a way that is beyond the vision of any lender. Be the lenders you, me or a group of people as a bank, large portions of deals go bad just as much from human affairs
as from "over lending".

After all, the entire economic structure of the world is nothing more than people dynamic ,,,,,,,,, in the long run it's just too risky to bet ones physical gold on (huge smile)!

Yes, our present financial system gives the impression of total insanity,,,, but we are looking at the very "end of the timeline",,,, not how it began. It all starts with the very first loan and progresses until everyone has borrowed "too much", but no one wants the music to stop. Last resort lenders then become the norm because society will lose "across the board" if everything is "marked to the market". It is not a circle (smile) as it starts and ends with the currency system (gold or fiat) everyone demands to borrow into. It all ends in the shared pain of debt collapse as the debt is discounted to zero from price inflation ,,,, even if it's based on gold ,,,,,, gold that cannot be returned. Not much different from our present gold loan structure.
We will move on to the next money system when this one ends.

If it were gold we started with? The banker would lend his gold only to find the same metal returned to his bank as a new deposit. The "society at large" would remove his franchise if he did not re-lend that same gold during "good times", "booming times" no less! Round and round the gold
goes. Reserve lending hits it's limit and society demands the limits be raised again ,,, and again ,,, and again! Lender of last ,,,,,, or not.
In our modern world we must remove gold from the official money system, place it in a free market and people will use it as wealth money, not borrowing money. Then the fiat can come and go as the wind! Yes?
You agree now!
I'm so very glad!

Trail Guide

Elwood

(02/14/2000; 18:52:10 MDT - Msg ID: 25336)

To Trail Guide, Re: Trail Guide (2/14/2000; 18:20:51MDT - Msg ID:25335)

Sir, I could never hope to make a reply as eloquent as ORO has done in his previous responses to you (or in yours to him), but I think Mises could shed some light here.

I offer this:
http://www.mises.org/humanaction/chap20sec8.asp

Table of Contents:
http://www.mises.org/humanaction.asp

Kind regards and my sincere thanks for your participation,

Elwood

gidsek

(02/14/2000; 19:17:50 MDT - Msg ID: 25337)

Franco Nevada

http://finance.yahoo.com/q?s=FN.TO&d=5yThree troubles for the company lately;

1-/ Has a stake in Aber Resources diamond project, recently stalled due to gov/enviro concerns.

2-/ Bought into giant Voiseys' Bay nickel project (INCO)which and is suffering because of a breakdown in negotiation between INCO and the province of Newfoundland.

3-/ Extraordinary high grade Ken Snyder mine in the Carlin Trend of Nevada is performing somewhat below expectations.

These are temporary set backs IMO and the stock appears to be at the bottom of it's channel (link).

A cash-rich non-hedger and a buy at these levels.

gidsek

canamami

(02/14/2000; 19:18:14 MDT - Msg ID: 25338)

Frustrated With the POG

...a looming crisis re Ashanti, Cambior, et al, the Saudi threats of a cutback corroborating the FOA/Another thesis, crude at $30.30, inflation starting to seep out of the stock market.....What else is needed for the POG, and when will we finally see a really strong rally that sticks?

Elwood

(02/14/2000; 19:24:53 MDT - Msg ID: 25339)

Ashanti Solution

No need to nationalize. If the court finds the hedge contracts to be fraudulent then there is no need to enforce the claims of Goldman Sharks and the others. No harm, no foul.

Cavan Man

(02/14/2000; 19:59:08 MDT - Msg ID: 25340)

To Trail Guide

I think I am beginning to understand.

First of all, if the gold price is freed from the $USD, monetary discipline will re-assert itself relative to all fiat currencies.

This one sentence of yours tells me quite a lot; "In our modern world, we must remove gold from the official money system, place it in a free market, and people will use it as wealth money, not borrowing money. Then fiat can come and go as the wind."

Second, fiat currency is for convenience only and is now truly represented in proper context for all the world to see; all of its weaknesses and limitations are manifested in the relationship between a particular genus of fiat and the POG. If it can come and go as the wind then truly, one should hold equity and wealth in gold and not fiat; exposure to the medium should be minimalized as is prudent.

Third and perhaps most importantly, the personal gold standard that Aristotle speaks so eloquently of from time to time still continues to assure an individual's right to and desire for honest money. A personal gold standard in the context you espouse will and should encourage and promote the realization that gold is indeed the money and wealth of the ages. Gresham's law will keep fiat relegated to a small percentage of one's net worth as it is mine now. Perhaps even those who see a Biblical mandate for a gold and/or silver standard will see the reason in your remarks. I believe I do.

Our Creator endowed mankind with freedom of choice. With gold in this context so obviously the choice to make, it could be reasoned that this new paradigm satisfies the Needs first of God and secondly the needs of the modern world in which we live. Could this be so?

In the back of the pack....taking up the rear..."Cookie"

aka: CM

Cavan Man

(02/14/2000; 20:00:09 MDT - Msg ID: 25341)

To Trail Guide

Cavan Man

(02/14/2000; 20:02:02 MDT - Msg ID: 25342)

last post

Sorry for the double header. Experiencing technical difficulties.

Chris Powell

(02/14/2000; 20:32:07 MDT - Msg ID: 25343)

How Barrick's call purchases keep gold capped

http://www.egroups.com/group/gata/383.html?Brilliant commentary by Reginald H. Howe.

Chris Powell

(02/14/2000; 20:33:11 MDT - Msg ID: 25344)

How Barrick's call purchases keep gold capped

http://www.egroups.com/group/gata/382.html?Sorry for the wrong link in the previous post.

Chris Powell

(02/14/2000; 20:34:13 MDT - Msg ID: 25345)

Bill Murphy's "Midas" commentary for 2/14/200

http://www.egroups.com/group/gata/383.html?The word is getting out about gold.

Elwood

(02/14/2000; 20:40:51 MDT - Msg ID: 25346)

Must be a night for apologies

The Mises link I referred to in a previous post was the wrong section. I apologize. Here's the correct link and another that's not so cryptic.

http://www.mises.org/humanaction/chap20sec9.asp

http://www.mises.org/fullarticle.asp?control=309&month=13&title=+Inflation%2C+Deflation%2C+and+the+Future&id=13

Cavan Man

(02/14/2000; 20:52:26 MDT - Msg ID: 25347)

To Trail Guide

RE: Cavan Man 25341Furthermore, when gold is understood in this light, this new paradigm, then, any fiat currency will suffice for transactional purposes; USD, Euro, Yen or even the Cavan geounit. The fiat currency that will maintain the role of first among (un)equals will be that which purchases the largest amount of gold for the least amount of fiat.

Hope to hear back from you when you have the time.

Many thanks TG!

megatron

(02/14/2000; 20:54:01 MDT - Msg ID: 25348)

franconevada

It is strange how heavily over-sold the TSE gold index is, with the POG @ 300+. No one is buying heavily yet, although a couple of junior explorers Madison, and Minera Andes have done very well. Rather than wait for the big one I've started to move into some of these momentum stocks and have done better than anything I touched in the last 18 months.
Lots of upside now, (cross my fingers)

Chris Powell

(02/14/2000; 21:04:32 MDT - Msg ID: 25349)

Ashanti can blow up on shorts, banks at any minute

http://www.egroups.com/group/gata/384.html?Important dispatch from www.TheMiningWeb.com.

Trail Guide

(02/14/2000; 21:11:17 MDT - Msg ID: 25350)

Freegold

Elwood,

I have read much of Mises and even a few others. Actually, I completely agree with them that the Gold money systems of the nineteenth century worked very well. As such we do not fall into any groups that argue against that concept. Our problem is with people (smile).

In a Money and Freedom speech at a Mises meeting Mr. Joseph T. Salerno made this point:
-------Unfortunately, the monetary freedom represented by the gold standard, along with many other freedoms of the classical liberal era, was brought to a calamitous end by World War One.----------

Further, he stated:
------Within weeks of the outbreak of World War One, all belligerent nations departed from the gold standard. Needless to say by the wars end the paper fiat currencies of all these nations were in the throes of inflation of varying degrees of severity, with the German hyperinflation that culminated in 1923 being the worst.---------------

My point (as an extension of earlier posts):
No country, however rich in gold or resources, can continue to fight a war once their money runs out! Consider ,,,,,,, You and your family as a country, a nation ,,,,,, you are under attack and have spent the last of your gold ,,,,,You will print money and continue the effort, no matter the inflationary costs,,,, come what may!

Many nations utterly failed to return to the original gold standard simply because they were mostly tapped out from the war. At the best, the richer, surviving countries would have taken a major economic hit by going back into a full gold system. All the eventual gold deals and non- deals
were little more than a part of the progression of events that lead us here today. All in an effort to keep from fully marking to the market the cost of a shared loss in war, defence and other financial failures.

There is not one person among us that ,,,,,,,,, if their family was completely broken from the war experience ,,,,,,,,,, would have asked for a return to gold. In full a honest context, millions would have starved in the process. The world optioned to share the loss and spread it out as far and as long as possible.

The war experience is but one example of why society has such a hard time with an official gold system during times of stress. Over and over again we have seen where gold is the very best holding and defence against private and public financial loss. Yet, when large scale national loss
threatens society as a whole ,,,,,, it's always the money system that receives the brunt of the demands for change. Society demands that whatever money system is in place at the time of stress, be shifted so as to spread the burden amongst all. Is it right,,,,,, is it just,,,, I do not think so. But it is what we do and have done for a long time!

Today, if gold can be forced out of the official money system, it will be to the benefit of everyone during times of stress in the future. In times of war people spend the legal tender in commerce. Yet they save the food, liquor and necessities. A common currency of the world would be just such a necessity to hold as part of your wealth.

Trail Guide

Cavan Man, see you later or on the trail!

megatron

(02/14/2000; 22:17:42 MDT - Msg ID: 25351)

supernova time

We're burnin' through the silicon now! Ha Ha! It's actually the last element a star eats/converts to energy before iron and we all know what that means. Ka-Blam! How ironic. More gold would be created, from Dell, Intel,etc.

Elwood

(02/14/2000; 22:18:04 MDT - Msg ID: 25352)

Trail Guide (2/14/2000; 21:11:17MDT - Msg ID:25350)

But, sir, isn't it true that war destroys everything it touches? Isn't the fact that our freedom disappears during time of war just one of the many varied reasons to avoid war?

I must admit that I am confused about your position, a state for which I don't hold you responsible, by the way. You state in your post:

"Today, if gold can be forced out of the official money system, it will be to the benefit of everyone during times of stress in the future. In times of war people spend the legal tender in commerce. Yet they save the food, liquor and necessities. A common currency of the world would be just such a necessity to hold as part of your wealth."

Yet, from what I've read of others here, the inherent strength of the Euro/Gold system is 2-fold: 1) that there IS an official place for gold in the system and 2) that it is not burdened with the debt-overhang which plagues the dollar.

I think that history has shown that it is during such times of stress that you describe when issuers of fiat currency pull the rug from under the feet of those who hold the free-market money through confiscation and wealth-taxation. I respectfully submit that a fiat currency cannot, for long, co-exist with a free-market money. The issuers of such fiat currency will not allow it. They will always engage in manipulation or change the rules in favor of such fiat currency in order to drive the free-market money out because the free-market money undermines their ability to smoothly inflate the fiat.

You have pointed this out to us in your posts regarding the paper and physical gold market manipulations.

What guarantees have the Arabs been able to wrest from the issuers of the Euro fiat currency that their free-market money will endure?

Regards,

Elwood

Chrusos

(02/14/2000; 23:09:35 MDT - Msg ID: 25353)

Reagan, Russia and Oil

http://www.dailyreckoning.com From latest Bill Bonner (free) newsletter

Did the Reagan administration engineer the collapse
of oil and other commodity prices? Bill King reports an
intriguing idea: that Reagan officials made a deal with
the Saudis and Japanese -- to flood the world with oil.
The Russian economy is and was heavily dependent on the
sale of natural resources. Unable to add value in their
clumsy, antique industries, the Soviets relied upon the
sale of oil and other raw materials. Reagan saw an
opportunity to destroy the Evil Empire -- by bankrupting
its economy.

Zenidea

(02/15/2000; 02:48:41 MDT - Msg ID: 25354)

Palladium

Check it out !. Palladium 631.00.View Yesterday's Discussion.

Black Blade

(02/15/2000; 02:50:05 MDT - Msg ID: 25355)

PM's down except Pd and Rh, look at em' go!

Palladium up another $26.00 so far tonight, currently at $631.00. Rhodium up another $25.00 earlier today ay $2275.00. Russia can't deliver! can't deliver what go don't have!

Black Blade

(02/15/2000; 02:54:28 MDT - Msg ID: 25356)

Zenidea

Looks like two of us up tonight! Well I'm up tonight, guess it's morning for you. PGM's are definitely lookin' good! Crude should continue to look good too, but not to worry, it isn't inflationary (by government decree - "aka" core rate).

Black Blade

(02/15/2000; 03:02:01 MDT - Msg ID: 25357)

Nickel62 - Nickel and Inco look good!

Nickel62: Looks like the positive news gave us a nice bounce in Inco shares today. Nickel has more than doubled over the last year. They are content to just sit on Voisey Bay and let the Provincial government sweat it. They have other fish to fry as follows:

Inco (N:TSE,ME) is moving ahead with plans for a C $70.4 Million deepening of its Birchtree nickel mine in Manitoba, which it says will help extend the mine's life by at least fifteen years. The deepening was postponed three years ago but was re-evaluated last year after an employee co-design team demonstrated that operating costs could be reduced by more than 25%. The company says the project will increase
production to 3,175 tonnes/day, up from the current 1,635 tonnes/day rate and will develop proven reserves of 13.6 million tonnes grading 1.79%. Work will begin immediately and take about two years to complete. Inco's shares soared $1.65 on Bay Street to close at $30.65/share.

Zenidea

(02/15/2000; 03:06:50 MDT - Msg ID: 25358)

Blake Blade

Hi friend , its 6.00pm in the evening here. I sold the Palladium some time ago , made a reasonable % in a small amount of time , but still it seems like a loss in that
an even greater % could have been had. Perhaps the Russians indeed , dont have much left. I heard some rumour somewhere eons back that there shipments had the old stamp on the bars that seems to indicate that that which they had been selling had come from there stockpiles and not fresh as it were from the mine. It seems like Platinum is starting to get the speed wobbles but!.

Black Blade

(02/15/2000; 03:31:30 MDT - Msg ID: 25359)

Palladium just spiked up again!

http://www.crbindex.com/curquote/crbquote.mhtmlPd up again, suddenly can't access Kitco, but had Pd at $641.00, now looks like $650.00. Don't worry everybody, it's not in the core rate - so no inflation (just like oil, food, etc.)

Zenidea

(02/15/2000; 03:31:41 MDT - Msg ID: 25360)

I dont suppose anyone knows what the breakdown of the alloy Inconel 601 is please. Another question. Ok if some dealer is selling platinum and gold bullion coins of the same weight and one looks at the dimensions and sees that there dimensions are identical. Then why is it, given that we know that the Atomic weight of the aforesaid metals are different, the dimensions are not so?.

Usul

(02/15/2000; 03:49:43 MDT - Msg ID: 25361)

@Zenidea

http://www.matls.com/At above link, type inconel in the Quick Search box.
You get a list of 8 alloys.
Click on Inconel 601 and it lists the composition:

Al 1 - 1.7, C max 0.1, Cr 21 - 25, Cu max 1, Fe 13,
Mn max 1, Ni 58 - 63, S max 0.015, Si max 0.5,

in percent by weight. Plus other data.

Wot, no gold in it?

(There is information on precious metals and their alloys there too)

SteveH

(02/15/2000; 03:57:31 MDT - Msg ID: 25362)

rise continues

Palladium up $44!!!!!

Description Last Change Percent Change
Palladium 650 +44.5 +7.35 %
Silver 530 +3 +0.57 %
Copper 84.25 -0.15 -0.18 %
Gold 310 -1 -0.32 %
Platinum 513 -4.2 -0.81 %

SteveH

(02/15/2000; 03:59:21 MDT - Msg ID: 25363)

Black Blade

Couldn't be anyone using Paladium and other PGM to pressure gold? Now why would anyone want to do that?

Black Blade

(02/15/2000; 04:04:30 MDT - Msg ID: 25364)

SteveH and Zenidea

Pt is now playing tag with Pd, Pt up +$7.00 at $532.00, Au to follow? Who knows, at this rate it would seem to be the most likely scenario. Au down -$1.70. But hell, a feww minutes ago Pt was down -$4.20.

Zenidea

(02/15/2000; 04:14:23 MDT - Msg ID: 25365)

Black blade

where are you watching the metals. Kitco's in accesable still. :)... thanks Usul :)

Zenidea

(02/15/2000; 04:22:11 MDT - Msg ID: 25366)

oops

Kitco's up and running :)

Black Blade

(02/15/2000; 04:24:43 MDT - Msg ID: 25367)

Zenidea, more quote sites, posted yesterday for Shifty

Am able to access Kitco now, Try these and add to bookmark or favorites list for future use:

http://www.quoteline.com/irtmecoe.asp

http://www.crbindex.com/curquote/crbquote.mhtml

http://www.mrci.com/qpnight.htm

SteveH

(02/15/2000; 04:41:59 MDT - Msg ID: 25368)

palladium

Black Blade:

Wow!

Description Last Change Percent Change
Palladium 655 +49.5 +8.18 %
Silver 529.5 +2.5 +0.47 %
Gold 309.9 -1.1 -0.35 %
Copper 83.95 -0.45 -0.53 %
Platinum 514 -3.2 -0.62 %

SteveH

(02/15/2000; 04:42:51 MDT - Msg ID: 25369)

oil

Market Mth Open High Low Last Change Date Time Ask Bid
Crude Oil(NYM)(Access) Mar 30.28 30.39 30.22 30.37 +0.12 2/15/00 3:27 30.39 30.36
Heating Oil(NYM)(Access) Mar 75.80 76.20 75.50 76.00 +0.30 2/15/00 3:15 76.50 75.50
Unleaded Gas(NYM)(Access) Mar 83.40 83.85 83.40 83.70 +0.15 2/15/00 3:14 83.90 83.15
Natural Gas(NYM)(Access) Mar 2.550 2.560 2.525 2.531 -0.010 2/14/00 16:00 2.538 2.530

Zenidea

(02/15/2000; 04:48:40 MDT - Msg ID: 25370)

(No Subject)

Thanks Black Blade they are bookmarked . Hi Steve H .

Henri

(02/15/2000; 04:49:56 MDT - Msg ID: 25371)

Black Blade /Zenidea

Are you guys/gals insomniacs or just in some other part of the world than I (0640 EST). I got in trouble once for walking on some inconel. My feeling at the time was...well if its that important you shouldn't just leave it around where someone can walk on it. They were not amused. I guess its not so much the lack of PM's that makes it useful but the lack of all those other elements specified as "Less than a certain percentage.

ORO

(02/15/2000; 05:14:21 MDT - Msg ID: 25372)

Trail Guide - comments on your latest

Comments to Trail Guide (2/14/2000; 18:20:51MDT - Msg ID:25335) Freegold

Trail Guide:
Thank you for your thoughts. I'll comment on the points you have countered.
POINT:
I pointed out that it is the existence of a "lender of last resort" that causes the debt boom

Logic:
It is obvious then, that had there not been a lender of last resort there would not have been a substantial credit crunch, because the lenders would not have taken the same risks they allowed themselves once a promise of bailout was given, and thus would have avoided the credit boom.
----------------------------------
ORO
Under a gold standard and the debt dollar standard as well, the existence of a lender of last resort in one substantial country will cause all international banks to lower their rates or minimum credit rating to make use of the guarantees of that lender of last resort - If they had not, the banks of the country with a lender of last resort would have forced them out of the markets during the boom. This is as much the case today as it was during the turn of the previous century.

For reference in reading the comments below, this note:
Booms and busts do occur. Debt bubbles occur without government sponsored cartels. What is different is the following:
1. Early failure. The non-central bank gold standard produces a small crash after 4-5 years of overextension. This is long before a gold debt boom made possible by a central bank and government sponsored bank cartel would have fully developed.
2. The scale of debt. The natural dynamics of the free banking business is towards caution. By disabling the market's tempering mechanism (it functions through the specie money supply), the cartel can push debt to 15-20 years. The resulting scale of debt would be some 8 fold larger, because the rollover game made possible by the government cartel and the presence of a lender of last resort.
3. The weeding out of weak business. Weak businesses are weeded out much earlier than under a central bank regime.
4. Who benefits. The key motive of a cartel is the elimination of competition by means other than fair competition on the merits of the corporation. The best cartel to have is that of banking. The bank cartel allows endless losses during the establishment of the cartel, until the competition is destroyed. One familiar example to the goldbugs is Barrick. Their growth through the use of hedging was very rapid, much more so than any other gold company starting out at their size in the mid 80s.
5. Who Pays. The failures of the centrally controlled bank system are swept under the rug and reappear in the form of fresh loans coupled with monetization. In the case of monetization, the "good" securities are purchased by the central bank, adding to the monetary base. The additions to the monetary base are leveraged through the bond markets and the banks into a price rise that swindles the saver of the purchasing power of his funds.
------------------
ORO:
The argument is false in that it is circular. (Trail Guide note: I think he is referring to my logic?) The lender of last resort was there in the first place, the inevitable credit boom followed, the credit crunch followed - just as inevitable - and a further lender of last resort was needed. History shows that the credit policies of the BOE led to its bankruptcy before WWI and before the Fed was created. This was among the reasons for the argument for the Fed being pressed. All the previous lenders of last resort were tapped out and a new one was necessary. In 1929-1930 the Fed was tapped out and the gold standard obligation was abolished shortly after.

Trail Guide:
ORO, I cannot accept that a "lender of last resort" causes a debt boom. It presumes that a great portion of lending is done for reckless, uneconomic reasons. Yet, at the end of great expansions many projects that were considered "blue chip" in the beginning still go bad. Sometimes, the most necessary economic activity is curtailed because peoples needs change during the course of life ,,, not to mention a recession. Thus changing business dynamics.

How many instances can we document where banks lent into real demand ,,,,,,, backed with the very best demographic patterns ,,,,, only to find the loan blow up from changing demand. Oil in the late seventies would be a convenient example for us (smile). People were breaking down the doors of the old "Texas Commerce Bank" in Houston ,,,,,,, all in an effort to finance hugely profitable petroleum projects. This was no flash in the pan, as the oil industry had a progressive expansion history of 15++ years before this. Truly, a lender of last resort was the very last thing on their minds. Later, even paper based on $10 producing reserves was trashed! Certainly there are many, many other examples,,,,,,,, most are of a more mundane, unglamorous nature, but fine examples.

Further:
Was this really circular thinking on our part? Did the Lender of last resort exist during the 'South Sea Bubble" or the "Tulip mania",,,,,, and did the "Black Plague" of Europe shut down a few sound financial systems then? I think gold was the norm in that period?
--------------------------------
ORO - current reply
The South Sea Bubble was a result (in part) of the new Bank of England. Chartered in 1694 with a monopoly on the issuance of gold backed paper money, being official money, the BOE notes were used by other banks as reserves. Within two years it had issued enough notes to have prices to double. At that point, the banknotes were being discounted in the markets versus specie and people came in droves to cash out their gold. The bank was on the verge of collapse. Parliament and the King passed a law eliminating the redeemability of the BOE notes. The notes were to continue in use with selective redemption in specie. The booms and busts that followed paupered many and enriched the bankers immensely.
The South Sea Bubble was just the worst cycle in the investment community. The imaginary business of the company was even less real than that of the internet companies of today. With exciting prospectuses and much promotion, the company was floated in 1711, just before the Spanish Was of Succession was fought. The boom started soon after the end of the war in 1713 and made its great strides in 1720 as stock emissions in secondary offerings were issued in a deal with the BOE, whereby the company was granted trade monopolies by the King and took on the Exchequer's debt in return. The BOE received stock which was sold to the public, often financed by margin loans from the bank itself.

The Tulip Mania was the speculative mania of 1636-1637. Though the Bank of Amsterdam was very conservative and served only as a depository, the Banco Del Giro chartered in Venice was then in the latest stage of its inflation. Much of the speculative mania could be traced to the international loans, some made by this central bank of Venice. The closure of the Banco Del Giro in 1637 is partially attributable to the crash of the Dutch Tulip markets and the incredible debt bubble that grew around the Tulip Mania.
----------------------------------
Trail Guide:
ORO, this portion of your thinking needs to include the other side of the lending aspect,,,,,, people want and demand loans for sound, economically justifiable, profitable projects,,,, and they get them on sound lending principles. Still, some 90% of them can become only "at the margin" when demand changes. And typical of our human society, we all shift at once.

Truly, my friend, bank loans often fail because human events change the course of money dynamics,,,,,, and it does so in a way that is beyond the vision of any lender. Be the lenders you, me or a group of people as a bank, large portions of deals go bad just as much from human affairs as from "over lending".
-------------------
ORO
You are obviously right. However, the hare brained schemes and late stage boom time borrowing - particularly those of monopolies blow up into a balloon that is much larger than possible in free banking and results in stagflationary disaster that would never have occurred in free banking.

The bottom line here is that the new money does not change the available resources, but is does change the allocation of the resources. It takes resources away from the markets as a whole and puts them at the disposal of the banker's failed investments. The lender of last resort reduces the responsibility a bank must exercise, increases the proportion of resources available to the bank and its corporate clientele, and then spreads the pain from the captains of perpetually sinking Titanic Industry to the public at large.

The key "people" dynamic is this - holding depository receipts and fiduciary trust are difficult assignments. Few can withstand the temptation to make use of the client's moneys for ulterior purposes. The institutionalization of fraud is not the solution to it.

The supposed need for flexible money would have showed up in the markets during any of the short periods of history where government and bankers did not help each other to our pocketbooks. It never happened.

This leads to the point of the discussion of what it is that people want. The broad public would be happy to have debts erased overnight, but that would not make anyone's lot any better. Why? Because the income freed from debt service would be going into the purchase of goods - raising the price of everything so that the same amount of consumption would be available. More money does not mean more purchasing power, just more zeroes in your account. This is an ancient observation that was well formalized by David Ricardo and taken into the Austrian School's thinking. People know this. The popular support of currency inflation happens to correspond with the generational shift from maturation to middle age when paying down debt and saving for retirement ends up with the preference for getting rid of debt taking precedence. However, it comes out of the hides of everyone else.
---------------
Trail Guide:
After all, the entire economic structure of the world is nothing more than people dynamic ,,,,,,,,, in the long run it's just too risky to bet ones physical gold on (huge smile)!
ORO:
This is not the case, gold is not holy, it is money. Like the wealth that it represents it has a time value and the risk of gold lending are not different from the risks of lending in other monies (currency). If the risks were so much greater, the interest rates on gold loans would have been higher than those on currency loans. Both nominal and "real" interest rates on loans are much higher on the floating currency debt relative to the rates charged on gold in the pre central bank period of the US and during the gold standard period with the central bank.

Gold is what any lender would prefer to have as the denominator of debt. The borrower would like to owe the sleaziest money - if the interest rates are the same. Well, the interest rates on sleazy money are much higher, and are significantly higher than necessary to compensate for the currency risk.
-----------------
Trail Guide:
Yes, our present financial system gives the impression of total insanity,,,, but we are looking at the very "end of the timeline",,,, not how it began. It all starts with the very first loan and progresses until everyone has borrowed "too much", but no one wants the music to stop. Last resort lenders then become the norm because society will lose "across the board" if everything is "marked to the market". It is not a circle (smile) as it starts and ends with the currency system (gold or fiat) everyone demands to borrow into. It all ends in the shared pain of debt collapse as the debt is discounted to zero from price inflation ,,,, even if it's based on gold ,,,,,, gold that cannot be returned. Not much different from our present gold loan structure.
We will move on to the next money system when this one ends.
--------------
ORO:
"It all starts with the very first loan and progresses until everyone has borrowed "too much"," - This is not the progress pattern of free gold banking. There, the reality of competition causes the over-leveraged borrower and his bank to fail quickly. The cycles are short and the market metes out punishment in proportion to the idiocy of the failed projects. "Too much" borrowing is quickly stopped. And the preference for going into debt is much smaller because of the absence of the benefit of price inflation.

The pattern of free gold banking is different in that the leverage is limited by the market dynamics and it can not blow up in this way. That is the social preference. Bankers and governments lacking for popular support use the central banking structure for the purpose of allocating our resources for themselves.

"Last resort lenders then become the norm because society will lose "across the board" if everything is "marked to the market". "The lender of last resort only serves to make sure the loss is spread "across the board". Markets do differentiate between the good and bad debtors even in the throes of this kind of "mark to market" event where debt implodes and currency printing is initiated with the purpose of stopping the implosion

In the next iteration of the monetary system it would serve well to have the central banks closed and the bank regulatory bodies chopped up and done away with. This is the only way to prevent losses to "society" at every stage of the boom and bust cycle.
---------------------

Trail Guide:
If it were gold we started with? The banker would lend his gold only to find the same metal returned to his bank as a new deposit. The "society at large" would remove his franchise if he did not re-lend that same gold during "good times", "booming times" no less! Round and round the gold
goes. Reserve lending hits it's limit and society demands the limits be raised again ,,, and again ,,, and again! Lender of last ,,,,,, or not.
ORO
Again, it is not society. It is a small group of bankers and a government bureaucracy coming to an agreement to maximize their returns at the expense of everyone else. Society does not condone theft from itself if it understood that theft was happening.
---------------------
Trail Guide
In our modern world we must remove gold from the official money system, place it in a free market and people will use it as wealth money, not borrowing money. Then the fiat can come and go as the wind! Yes?

ORO
I disagree strongly.
1. Without gold (or whatever other money the markets may prefer) as denominator of debt at some point in the system, there would not be any way to prevent constant and severe currency depreciation. A pure debt money is very unstable. The central bank makes it more so.
2. The best result would be to remove the "official" designation from the financial markets. No more government deals with banks to thieve the resources from the public.
3. The use of gold in debt would not disappear even if it were made illegal. There would have to be a tie between gold and the debt money.
4. Surely the Euro structure belies the intention of keeping gold within the "official" financial system.
5. The debt free gold system you imply would be good in the eyes of the biblically minded, but has no basis in economic principles.

Finally, there is this thought that democratic government is somehow different in motivation from its predecessors. The democratic model is just as easy to use in burglarizing the public as any other. The only structure that prevents or delays this is a strong constitutional backbone to the structure of government that eliminates the legal loopholes a government could use to bilk the people.

Usul

(02/15/2000; 05:24:39 MDT - Msg ID: 25373)

@Henri

On the contrary, my friend, it is you that is in some other part of the world than I.

Leigh

(02/15/2000; 05:29:37 MDT - Msg ID: 25374)

Henri

Hi, Henri, I'm usually up by 5:30 EST. Sometimes I'm up earlier, if my toddler wakes up hungry.

Black Blade

(02/15/2000; 05:51:02 MDT - Msg ID: 25375)

PGM's Pd blasts off! Pt sags!

TOCOM Precious Metals Review: Palladium surges; platinum slides Tokyo--Feb 15--Tokyo Commodity Exchange palladium futures contracts continued to surge to another daily maximum price limit-up across-the-board Tuesday in Asia on short-covering, while profit-taking depressed TOCOM platinum following weaker spot platinum prices during TOCOM trading hours, dealers said. Meanwhile, TOCOM gold was supported by the steady US dollar/yen, they said. (Story .2192)

Russian platinum export quotas not signed yet
Moscow--Feb 15--Acting Russian President Vladimir Putin has not yet signed export quotas for platinum and other platinum-group metals (PGMs), the Interfax news agency quoted Valery Rudakov, the head of the State Depository of Precious Metals (Gokhran) as saying Tuesday. Rudakov also said it was still unclear when the quotas could be signed. He did not provide any reasons for the delay. (Story .12915)

Trail Guide

(02/15/2000; 05:57:35 MDT - Msg ID: 25376)

Freegold

Cavan Man (2/14/2000; 20:00:09MDT - Msg ID:25341)
To Trail Guide
I think I am beginning to understand.
First of all, if the gold price is freed from the $USD, monetary discipline will re-assert itself relative to all fiat currencies.

Hello Cavan Man,
You write my words:
-------This one sentence of yours tells me quite a lot; "In our modern world, we must remove gold from the official money system, place it in a free market, and people will use it as wealth money, not borrowing money. Then fiat can come and go as the wind."------

TG:
The above is my point in it's most simple form. I word it this way in an effort to engage ORO in one of the many aspects of our modern gold world.

------------
Second, fiat currency is for convenience only and is now truly represented in proper context for all the world to see; all of its weaknesses and limitations are manifested in the relationship between a particular genus of fiat and the POG. If it can come and go as the wind then truly, one should hold equity and wealth in gold and not fiat; exposure to the medium should be minimalized as is prudent.
------------

TG:
In it's most basic form, the beginning concept of gold money saw it as only one of many wealth items people held on their shelf. We traded anything and everything back then,,,, as all wealth was tradable money. Gold became the dominant circulating wealth money because of it's many unique qualities.

----------
Third and perhaps most importantly, the personal gold standard that Aristotle speaks so eloquently of from time to time still continues to assure an individual's right to and desire for honest money. A personal gold standard in the context you espouse will and should encourage and promote the realization that gold is indeed the money and wealth of the ages. Gresham's law will keep fiat relegated to a small percentage of one's net worth as it is mine now. --------------------------

TG:
Somewhat yes, CM! We can trace gold's first troubles,,,,,, back to when it was made an official currency that one could borrow and lend. This entangled it into the human emotions of fraud and cheating. I don't dispute (and completely encourage) the fact that real gold,,,,,, stamped into coins and circulated as such,,,,,,, is the correct form of world money. The problem comes in that "modern society" (as opposed to perhaps 19th century society) will never let an official money just circulate without manipulating it.

If gold is the only currency in circulation (in paper or coin form) our modern world demands that we borrow and lend it to service human functions. In this realm, we have and do change it's true format as our stress requires. However, if gold can circulate in coin form ,,,,, and traded on a world
physical freemarket,,,,,, without legal tender status,,,,,, it will become a perfect background currency for all mankind. Let the various governments stamp it as they now do in Maple Leafs, K-Rands, Eagles,,,,,, (especially relevant are the old world gold coin long in circulation prior to these modern ones) even call it "non binding Legal Tender" or place a ficticious low LT price on it. But, most importantly destroy the banking aspects of gold and let it all trade for physical settlement only.

In this ages old format, it evolves backwards into a wealth asset that once again projects all the fine qualities of circulating real wealth,,,,, and does so without the entangling alliances of contract legalities inherent in a gold standard. Truly in this old format, Central Banks, governments, citizens will all be able to use gold,,, side by side with fiat currencies. In this position, any official will quickly see how "more gold" held in reserve becomes a defacto backing for national moneys,,,,,, instead of
competing with them. Of course, the relative rarity of gold will force it's currency price sky high. But, in this position, it will quickly become "the dominate currency asset" that values all other circulating fiats. This position negates the desires of society to manipulate it while utilizing it's ages old purpose of holding wealth in a way that transcends time.

We are today, heading towards the trading of freegold,,,,, and the ECB is laying the political software for it. For better or worse we will ride this river of change to the sea.

Also: Elwood, is this more clear? Read it quickly as ORO is putting on his largest boots to grind it down (smile).

Trail Guide

Cavan Man

(02/15/2000; 06:07:10 MDT - Msg ID: 25377)

ORO 25372

"Without gold......as a denominator of debt at some point in the system, there would not be any way to prevent constant and severe currency depreciation."

Regarding the type of monetary system TG proposes, isn't gold a de facto denominator of debt because, for example, the USD, heavily debt encumbered, would be found "weak" relative to POG and the Euro "strong".

Do you see this point in monetary history as an all or nothing; convert to gold standard in this transition or else? Couldn't the adoption of another fiat currency structured as the Euro is be considered a step in the right direction?

I'll stop here because I am not following you so well. Thanks.

Cavan Man

(02/15/2000; 06:15:47 MDT - Msg ID: 25378)

Trail Guide

As the US observes the "political software" you reference, could the US be building yet another (no pun) better mousetrap? I am not referring to the gold colored token that is stamped dollar (smile).

Cavan Man

(02/15/2000; 06:23:49 MDT - Msg ID: 25379)

Sir Trail Guide

Mr. Reg Howe was kind enough to answer a question of mine last night. His email message asserts that only "massive buying" will break the Barrick camp.

In your opinion, what might be the source of "massive buying" and what possible events might trigger it? Or, is the trail more properly defined as circuitous?

canamami voiced some frustration last night regarding POG. All evidence should point to a much higher price at this time but, not.

nickel62

(02/15/2000; 06:56:17 MDT - Msg ID: 25380)

Black Blade

Thanks for the input on Inco. Very helpful.

Trail Guide

(02/15/2000; 07:07:49 MDT - Msg ID: 25381)

Freegold

Good day ORO,
Because your ORO (02/15/00; 05:14:21MDT - Msg ID:25372) is on this page and easily found, I will not completely re post it.

I believe that you have still not challenged the thrust of my argument. That being:
------Today, in our modern society,,,,,, no form of any national currency system will be left unmanaged. Be it a full gold system or a fiat system, society will expand it (inflate the currency through the loan process) or shrink it (deflation through uncontrollable stress default). As soon as the system in place bumps against it's natural or manmade limits, society will option to change those limits. Without
fail.---------

You write:
----------------------------------
ORO
Under a gold standard and the debt dollar standard as well, the existence of a lender of last resort in one substantial country will cause all international banks to lower their rates or minimum credit rating to make use of the guarantees of that lender of last resort - If they had not, the banks of the country with a lender of last resort would have forced them out of the markets during the boom. This is as much the case today as it was during the turn of the previous century.

For reference in reading the comments below, this note:
Booms and busts do occur. Debt bubbles occur without government sponsored cartels. What is different is the following:

1. Early failure. The non-central bank gold standard produces a small crash after 4-5 years of overextension. This is long before a gold debt boom made possible by a central bank and government sponsored bank cartel would have fully developed.
----------------
Trail Guide (TG):
How true! But this does not address the aspects of society control in our modern world. We will not allow any system to contract after a 4-5 year overextention. Any "small crash" today,,,,,, if using a gold standard,,,,,,would be countered with an immediate devaluation of the currency (raise
the nation's, official price of gold) so as to allow the boom to continue. Outside of that remedy ,,, and the loss of currency prestige it would entail,,,,,,, we would just dump the gold system entirely.
Not my idea of sound operation, but it's what society does today.
--------------------

2. The scale of debt. The natural dynamics of the free banking business is towards caution. By disabling the market's tempering mechanism (it functions through the specie money supply), the cartel can push debt to 15-20 years. The resulting scale of debt would be some 8 fold larger, because the rollover game made possible by the government cartel and the presence of a lender of last resort.
--------------
TG:
In a natural dynamic what is the greater fear,,,,,losing your banking capital or losing your banking franchise? There is no method of disabling a markets tempering ambitions. We have not outlawed fear, greed, fraud or war and conflict with each other. Today, if it's official, it's open for negotiations and rule changes.
--------------------

3. The weeding out of weak business. Weak businesses are weeded out much earlier than under a central bank regime.
-----------------------
TG:
As above, society today has a way of tolerating it's weeds and always says "oh, let's help them out for a while ,,, it' only just these few weeds". Soon, the boom is on!
----------------

4. Who benefits. The key motive of a cartel is the elimination of competition by means other than fair competition on the merits of the corporation. The best cartel to have is that of banking. The bank cartel allows endless losses during the establishment of the cartel, until the competition is destroyed. One familiar example to the goldbugs is Barrick. Their growth through the use of
hedging was very rapid, much more so than any other gold company starting out at their size in the mid 80s.
----------------

TG:
I agree! But when you have a nation that loves "Las Vegas" and all that represents,,,,,,, buys dot.com stocks and trades stock options,,,,,,they also enjoy the soap operas of these cartels. Hell, they buy into them, no less! ORO, with this mindset, no nation will tolerate the discipline of having gold as their official money. Yes, it's my loss,, your loss,,,,,,all of our loss!

But,,,there is another way! And it will politically work because it builds on the desires of this mind set, while offering an escape route. You are reading my posts, yes?
-----------

5. Who Pays. The failures of the centrally controlled bank system are swept under the rug and reappear in the form of fresh loans coupled with monetization. In the case of monetization, the "good" securities are purchased by the central bank, adding to the monetary base. The additions to
the monetary base are leveraged through the bond markets and the banks into a price rise that swindles the saver of the purchasing power of his funds.
------------------

TG:
Absolutely! But, remember, this is the same format we have been using for 20 years now. Everyone shares the loss through currency inflation (not price inflation yet) as they try to jockey for position. Yes, in the end (one that is coming soon) the entire system fails and most everyone loses
totally (at least in dollar based assets). But return to gold? No they won't!

However, place gold in a format where everyone can watch it run,,,,,then they will reach for it,,,, outside their fiat world. In doing so an ages old process begins that will clean the dirty currency pipes without making laws to enforce it.

You are the best ORO! We will all hike this gold trail to the sea and see all we can see.

Cavan Man and others, later!

Thanks,,,,, gone now Trail Guide

Henri

(02/15/2000; 08:21:34 MDT - Msg ID: 25382)

Trail Guide PM secured credit lines Now

I am, I admit, a fan of Patrick O'Brian's novels of English naval endeavors at the time of the Napoleonic wars. He has made reference to a custom of credit transfer known as "letters of credit". My perception is that these letters gave creditworthiness to individuals from well known banking institutions of the day. If you had "on deposit" with such an institution a quantity of gold/silver and wished to travel overseas without the risk of carrying such large quantities. Then the bank could issue a letter of credit I think backing the individuals credibility in the world financial markets. If the letter was presented a certain amount of local currency (a credit line so to speak) was given to the traveler which was secured by the letter of credit. If presented with certain signatures of the traveler, the quantity of PM's securing the letter could be transferred to the presenting entity "on deposit" I presume at the same bank. Alternatively, if the traveler engaged in business at the foreign location and returned the local currency and the agreed borrowing fee. Then the letter of credit would be returned unused to the traveler.

I can see where in a free market gold world that this system makes a lot of sense and also depends to a large degree on the faith and trust in the bank issuing the letter. If currencies are marked to free market gold. and gold rises or falls, the credit line can be contracted or expanded accordingly.

Is this system that was used historically, viable in todays govt controlled fiat currency world? Does it indeed go on even now? Since no interborder transfers of govt. issued currency occur, I am thinking no laws would be broken.

USAGOLD

(02/15/2000; 08:51:18 MDT - Msg ID: 25383)

Today's Market Report: Gold Corrects After Last Week's Strong Run-Up

http://www.usagold.com/order_form.html2/15/00 Indications
�Current
�Change
Gold
305.00
-4.00
Silver
5.28
+.02
Gold Lease Rate
0.4300%
-0.1050
Gold Comex Stocks
1,373,484
-6878

Market Report (2/14/00): Gold stumbled in the early going --a
continuation of the correction that started late last week.

For the most part the gold market is awaiting news from Ghana on the
Ashanti situation. High level speculation that the government might
nationalize Ashanti's Ghana properties are balanced by a perception that
the bullion banks are so over-extended that they will be forced to push
the due date on margin calls further as a matter of self-preservation.
As the gold price rises, however, Ashanti and the bullion banks go
deeper into an unacceptable debt/asset ratio which has a tendency to
make bank supervisory committees very nervous. I do believe that no
matter what the short term outcome with respect to Ashanti, the whole
gold carry/forward trade has taken a turn in favor of the bulls.

As it is, London traders are saying that physical demand is improving as
the price drops with $305 seemingly the support figure most are
watching. A break there could lead to a $300 price where we have seen
good short covering in the past. Oil pushed over $30 yesterday which
could intensify the building inflationary trend in the United States.
Palladium was up a cool $49.50 in early trading the result of curtailed
Russian shipments.

It's good to be back in the saddle again writing the morning gold
report. A remodeling project at home, where I write this each morning,
had me on the sidelines for a couple weeks. But now we have the internet
back up and running. I was thinking the other day how fortunate we are
that the same stream of news that used to go exclusively to our daily
newspapers, television and radio stations is now available to all us,
making reports like this one possible. We owe much to the internet, not
the least, this daily report that goes to all the goldmeisters around
the globe every morning. My thanks to Randy Strauss for the outstanding
job he did filling in for me the past three weeks.

If you are looking for a pro-gold view of the various financial markets
as well as a summary of the events affecting the yellow metal, our
monthly newsletter might be of interest. News & Views -- Forecasts,
Commentary & Analysis on the Economy and Precious Metals has
been characterized as witty, urbane, intelligent and down-to-earth. Not
to mention it's Free of Charge If you want to keep up with gold, this
is the way a large segment of the gold owning public does it, and has
done it for over a decade.

Please click on link above.

PLEASE REMEMBER: IT IS YOUR PURCHASE OF GOLD FROM CENTENNIAL
PRECIOUS METALS/USAGOLD THAT NOURISHES THESE PAGES.

Skip

(02/15/2000; 09:04:19 MDT - Msg ID: 25384)

@canamami: Frustrated With the POG

Hi canamami,

Regarding your Msg. 25338, I also am VERY frustrated with the POG...(along with many other goldbugs).

Rhodium is going ballistic. Palladium is almost SIX TIMES MULTIPLIED (600%) of where it was two or three years ago. Platinum has increased by over 50% in a few months...yet gold and silver keep getting squashed back down repeatedly at every rally.

Even without GATA shining some light on the situation, present circumstances would most certainly seem to be very strong circumstancial evidence pointing to manipulation in the POG and POS...and it's about time for gold and silver to catch up to the rallies of the other precious metals.

--Skip

tedw

(02/15/2000; 10:12:14 MDT - Msg ID: 25385)

Silver

http://www.usagold.com
Just my own thoughts which may not mean to much:

All of the precious metals have moved somewhat except silver. I just have an intuition that Silver is going to move sometime soon, most likely as a result of the next gold runup.

Are we seeing a shock wave of inflation that is hitting all the metals as well as oil with silver just higher up on the beach so to speak?

I would be interested in anybodys thoughts on the silver market.

SOS

(02/15/2000; 10:24:46 MDT - Msg ID: 25386)

Reliable Server: HELP!

Would someone be so kind as to direct me to one or more sites where I might "reliably" check the day time USA real time (or as close to it as possible) spot price of Gold and Silver? I would be very thankful.

SOS

(02/15/2000; 10:38:48 MDT - Msg ID: 25387)

tedw: Silver Thoughts

From a fundamental point of view, tedw, silver is positioned to fall back quickly after experiencing a sympathetic run up with gold because I believe there is a fairly large supply of it available here in the USA with pleanty more of it in foreign hands which would be more than willing to sell it to us at higher prices in a heartbeat.
Also, many have overlooked the deteriorating use of silver in photo processing because of the ever increasing inroads into the photography market by digital cameras.
I am not saying silver will not rise as gold does because a rising tide floats all ships. What I am saying is there is a greater supply of silver around and less a desire to hold it than gold presently.

Luv_G7

(02/15/2000; 10:42:56 MDT - Msg ID: 25388)

Alternate site to check POG

http://www.monex.com/prices.htmlWhen kitco.com is down, check the above URL. Note that the time on the web page is PST (3 hours behind NY).

SOS

(02/15/2000; 11:07:49 MDT - Msg ID: 25389)

Luv_G7: Alternate PM site

Very nice, very helpful, very thankful.

Journeyman

(02/15/2000; 11:08:28 MDT - Msg ID: 25390)

What foreigners do with some of their dollars

- Foreign investment in the US stock markets set a record last year of about $125 billion, $20 billion of that just in the last month. The previous record was about $70 billion. Interest in US treasury bonds last year however, was at a 25 year low. -Bob Pisani, CNBC, 00/02/15, 1:02:21 PM

Journeyman

(02/15/2000; 11:10:43 MDT - Msg ID: 25391)

Defending Gold: Chapter 3B, Comments on FREEGOLD @Trail Guide

What's all this fuss about? @Trail Guide, ORO, Elwood, Peter
Asher, Mr. Gresham, dragonfly, ALL

It's finally gotten through to my opinionated mind that
there isn't really that much disagreement between Trail
Guide, Aristotle, and the Austrian faction here. Although,
remember, wars have been fought over _smaller_ disagreements
-- let's be cautious; we're all on the same team afterall
aren't we?

If the people who saddled us with fiat money and central
banks by using the problems caused by the gold standard as
an excuse were lassoed by Wonder Woman's lariat of truth,
they'd tell you, "You've got the sniffles, we'll fix it by
giving you antibiotic-resistent double pneumonia -- but you
won't come down with it for awhile."

To understand why mankind regularly ends up with fiat
currencies despite the consequences, it helps to remember
the context. Since trade first developed, "political
economy" has involved continual agitation by one financier
or another (John Law, etc.) to have paper banking. In the
older days at least, the motivation was mostly for the
segniorage (profit) available from manufacturing unbacked
paper money and loaning it. Unfortunately because of human
nature, the results of unbacked paper (one form of "money
substitutes" in Austrian terminology) is boom-bust cycles of
enhanced amplitude. The busts are characterized by
"deflation," that is, major economic slowdowns accompanied,
previous to about 1970, by a shrinking supply of money and
money substitutes.

It is human nature for the paper bankers and their
government partners to want protection from competition and
from the results of their fiat behaviors. The preferred
form of protection is the monopoly power embodied in central
banks and legal tender laws. It is logical that bankers
should constantly agitate for this protection. It is
against the backdrop of this constant agitation by banking
elites that the gold-fiat dance is performed.

Inherent in this constant agitation is to "spin" all
possible events to favor your desired outcome, which is a
fiat banking cartel working through and with the aid of the
dominant government. Thus any problem which develops is the
fault of the non-fiat system and could be easily corrected
if only we could ditch that barbarous relic, gold. With
this chronic background "spinning" firmly in mind, the rest
makes easy sense.

As Trail Guide points out,

"It's the lending of money that creates debt, be it
gold debt or fiat debt ,,,, and the failure of that
debt during a downturn is what causes the pain." -Trail
Guide (2/14/2000; 8:08:19MDT - Msg ID:25302)

It is indeed creation of excess money substitutes, whether
by lending, printing, or computer that enables development
of excess debt. The only reason one might want to
distinguish between gold debt and fiat debt is that if gold
debt is created through the perniciously dishonest mechanism
of printing up extra "redeemable in gold" type money
substitutes, this creates confusion between the paper gold
and the real physical gold --- and we know the trouble THAT
causes. If I'm not mistaken, Trail Guide, that pernicious
dishonesty and the trouble it causes is the main reason to
set gold permanently free from fiat??

The writing of IOUs, that is, lending, is unavoiadable, and
when done "correctly," is good. (There is "consumer debt,"
which except for rare instances is in the long run
inherently "bad," and "commercial debt" which is good or bad
based, ultimately, on whether or not it increases
productivity.) But how are you going to stop Uncle Joe from
writing an IOU and using his gold soverign as collateral?
Just as unavoidable is that there will be some bad debt, and
from time to time, bank failures and the resultant pain. I
would think we all agree that keeping this to a minimum is
desirable.

The best way to minimize bad debt is through accountability
-- the bank and it's owners suffer when it's officers make a
bad loan. But it's not enough for them to suffer after the
fact --- they must _know_ ahead of time that they will
suffer in order to motivate them to be careful of the loans
they make. If they get too comfortable -- believing they
are too big to fail, or for that matter that the economy
will continue to grow forever (that belief is another of
Greenspan's worries)-- the "moral hazard" that Greenspan and
the central bankers speak of comes into play, and the
bankers, believing they will be bailed out, become more
likely to let their loan judgment lapse. (Banks also may
get stuck with large inventories of money they must loan out
because they must pay interest on it -- a real problem in
Japan right now.) The main source of "moral hazard"
thinking is created by so-called "lenders of last resort,"
who label themselves as such and are perceived as such by
bankers and others as well.

Failures will happen. The problem then is the size of the
pain and the time concentration of it. When banks were
individual enterprises, the pain was much more local,
affecting only the patrons of that one individual bank, and
possibly a few other associated enterprises. But with a
banking cartel, you can spread it around more. You can't
eliminate the pain -- in the long run, all you can do is
postpone it. Maybe you'll be lucky and die of old age before
the pain hits. As Keynes quipped, "In the long run we're
all dead." Perhaps the kids or grand kids will be the ones
to suffer.

If every once in awhile a neighbor's house burns down, the
neighborhood can help out fairly easily; if the whole
neighborhood burns down all at once there are way fewer
resources left to help with. What's more, if enough houses
burn at the same time, the whole infrastructure goes up too
-- the telephone poles, the blacktop street, the trees,
everything sort of like the fire-bombing of Dresden. At any
rate, it's better, if burning is unavoidable, that it
happens in small increments and at separate times - - - like
bank failures did before the Federal Reserve Act.

When you create a banking cartel, only done effectively with
government complicitly, and usually in the form of a
"central bank," you prevent the small fires but when things
finally burn, they all go up at once. This is NOT an
improvement. Better to let the banks fail naturally in
small numbers, at different times and places caused directly
by the decisions made by each bank's officers. But remember
we have that constant background agitation and "spinning,"
clamoring for the central bank!

Of course, here would be the place for someone to argue that
a central bank, a lender of last resort, actually doesn't
just delay pain, but rather prevents it entirely.
Anyone????

"It's during the downturns that society in general will
not tolerate a full gold system because it concentrates
the loses upon their rightful owners. As such "these
same" are usually "wiped completely out" and their
fallout effects on the social and economic structure
can be widespread and very destructive to tribal life."
-Trail Guide (2/14/2000; 8:08:19MDT - Msg ID:25302)

Absolutely!! But what makes it so bad "society in general
will not tolerate" it is the results of the operations of a
"lender of last resort like, for example, the Federal
Reserve. The downturns are factors of 10 times worse when
you have a central bank cartel. For example, in the worst
pre-Federal Reserve panic, the panic of 1873, only 2.8% of
banks failed (and that was due, largely I believe, to the
loss of a huge gold shipment off the East Coast), while
after only 20 years of Federal Reserve operations, about
50%, that is fully HALF, the nations banks were unsound.

Some conceptualized the perceived dangers of Y2K in terms of
hurricanes. If a hurricane strikes your town, that's bad -
- if it strikes the whole country, that's catastrophically
worse. Why would you want to set up a central-bank system
that makes the nation-wide hurricane possible? Remember
that constant background pro-central bank agitation?

As Trail Guide points out, we DO want to help our neighbors
when they're in pain. This is _our_ group, and there's a
lot of biology behind this desire to help. But a bank,
especially a central bank, is part of the extended order,
and as Hayek suggests,

If we were to apply the unmodified, uncurbed, rules of
the micro-cosmos (i.e., of the small band or troop, or
of, say, our families) to the macro-cosmos (our wider
civilization), as our instincts and sentimental
yearnings often make us wish to do, _we would destroy
it_. Yet if we were always to apply the rules of the
extended order [trade with those we don't know face-to-
face -j.] to our more intimate groupings, _we would
crush them_. So we must learn to live in two sorts of
world at once. To apply the name 'society' to both, or
even to either, is hardly of any use, and can be most
misleading (see chapter seven)." -F. A. Hayek, _THE
FATAL CONCEIT The Errors of Socialism_, (Chicago: The
University of Chicago Press 1988), p. 18.

The bank treats us, not as part of their "small band or
troop," but rather as part of their "extended order" (and
rightly so) when times are good ---- we'd better pay up or
there goes the ranch. But when they're in trouble, they
want to be bailed out, treated by us now as if they were
part of our small band or troop, or now that they're really
big and might cause the whole neighborhood to burn, treated
as "too big to fail."

And who are "the rightful owners" of the debt who are "wiped
completely out?" As it turns out, the people hurt most, the
people who's pain the elites want us to share when banks
fail aren't necessarily our poor neighbors, aren't by any
streach members of our small band or troop:

A poor man never gets to be a big debtor. Only a rich
man, or a man with a reputation of being rich, can get
into that situation. . . . . it is more than doubtful
that the "creditors" would prove on the average to be
richer than the "debtors"; it is much more probable
that the relationship would prove to be the other way
around. " -Henry Hazlitt's March 1959 introduction to
Andrew Dickson White, _Fiat Money Inflation In France_,
(IRVINGTON-ON-HUDSON, NY: THE FOUNDATION FOR ECONOMIC
EDUCATION, INC. 1959) pg. 13 & 14

There's nothing wrong with being rich or a big debtor -- but
if you lose big, that's YOUR problem, unless you're part of
my small band or troop and I _voluntarily_ decide to help
you out.

Clearly the answer for everyone is don't allow all that
background agitation to force us to facilitate bigness with
government-central bank monopoly cartels. Thomas Jefferson
understood this, as did Andrew Jackson. Both men put their
presidencies on the line to stop the particular elitist
central bank movement of their historical melieu because
they understood both the agitation for these central banks
and the results should they give in to it. Keep 'em small,
then they'll make better decisions, and if they do burn, it
won't destroy the whole neighborhood.

If we have small local pain, distributed over time instead
of broad local pain all at once, it also won't be so bad
that we have to go to war, etc. to overcome the effects.

As for legal tender and the ultimate price for gold, should
we go back to redeemable gold, well, $30,000 gold is not
unthinkable for those of us here who have followed FOA.
Actually, it seems to me there is only a relatively very
small difference between what Trail Guide sees and what I
see.

Without going into detail here, I believe a natural
evolution from having a parallel market in gold will be full
free gold banking and the appropriate price for gold.
Especially with internet commerce and encryption, there is
no way to prevent this. Legal tender will become irrelevant
and die. Yes, dragonfly, trust IS important, but it'll
happen. A post for another time. When I finally do it,
look for "NEWS FLASH: Journeyman disses Yogi Berra and
Climbs Out On A Very Thin Limb.

Regards,
Journeyman

SOS

(02/15/2000; 11:14:17 MDT - Msg ID: 25392)

Skip: Rhodium Spot Price

Hi Skip,
Is there a site where one can check the spot price of more obscure precious metals like Rhodium? I would like to know where I could follow its progress if possible. Thanks for any input!

TownCrier

(02/15/2000; 11:27:40 MDT - Msg ID: 25393)

Sirs SOS and Luv_G7, and all...

http://www.mrci.com/qpday.htmMichael has gone to some effort to make available a source of quotes that he feels to be among the best on the web. You can at any time access this comprehensive list of market prices from the links at the top of this Fourm page ( DAY QUOTES or NIGHT QUOTES ) ... or you can click the link I've provided above. Naturally, everyone is free to use whichever service they choose, but hopefully you can understand why we might cringe when this very Round Table is used to facilitate steering our valued family of visitors away from us at Centennial Precious Metals to a competitor (MONEX in this case) for any future business they may contemplate. We're simply asking for a little sensitivity and awareness in this regard as is stated in the forum's Guidelines and Phohibitions. Thank you for your understanding and cooperation on this matter. So, now that you know, give the link a click...it's got just about everything.

Galearis

(02/15/2000; 11:38:04 MDT - Msg ID: 25394)

@ tedw and SOS

Sorry to disagree with you both, but the silver supply deficit and short overhang in the white is very much worst than that of gold. That this is obvious should be implied by the obvious manipulation in the POS. Does it seem to you to mirror (the manipulation pattern, that is) that of gold. Yes, indeedy.

There are only 3 to 6 mo above ground supplies of this metal available, and the "CABEL", which is very worried about gold, is vertually terrified by its problems with the white.

Please note, however, that the metal releases via leasing supplies are not curtailed (by CBs) as they are for gold, and there is still supply of the metal coming out of private accounts held in BBs. (These people have very likely lost their bullion if they have allowed it to be leased.) Warren Buffett may even be leasing some, probably is - just for timing, or from the twisting of the limbs.

ALso note that the Silver Institute supply figures for Ag are not accurate. The Silver Users Association is connected with this organization and hence the former should be seen as a source of disinformation at best.

One additional note, however: I believe that the short holders of this metal will allow the supplies to go to a dead market situation. They really have no choice as they can now only roll over their leases with new metal. THEY CAN NOT POSSIBLY COVER. (Yes, that means massive defaults.) I personally do not think a dead market will happen, as silver is beginning to mimic its traditional moves with that of gold. I do not thing we will see silver much below $5.20 ever again (but nothing is guaranteed, yes?), and I further feel that silver will take flight with the next major gold rally. As with gold, the paper markets, LBMA and Comex, will likely fold as they will need to for these pms to mirror the gains seen in most other metals and pms. There will have to be a death of these paper deriviative markets first.

Got silver? Get you some. Physical!

SOS

(02/15/2000; 12:38:10 MDT - Msg ID: 25395)

TownCrier: Re.Msg.ID#25393

Thank you for the instruction. The top of the page day - night quotes hot button will be very helpful. I did over look it.

SOS

(02/15/2000; 12:42:44 MDT - Msg ID: 25396)

Galearis: Msg.ID#25394

Thank you for your comments. Will faithfully continue to watch the relationship silver has to gold in this present day environment and as it compares to gold's performance historically. Always good to have as many additional views as possible.

silent runner

(02/15/2000; 12:51:56 MDT - Msg ID: 25397)

tedw re: silver

.regardless of silvers future in photography, the high tech uses, battery tech for personal computers,and the medicinal properties ensure silvers future as a sound investment. the versatility of silver in my opinion will make it the metal of the millenium.

jaydeevee

(02/15/2000; 13:46:47 MDT - Msg ID: 25398)

It's days like these are are hard to understand . . .

http://www.usagold.comI have POG down $6-80 & XAU Up 2% and trending upwards.

Other than what is obvious, can anyone enlighten about this sort of action ???

TownCrier

(02/15/2000; 13:58:21 MDT - Msg ID: 25399)

More reserves from the Fed

http://biz.yahoo.com/rf/000215/vw.htmlYesterday the Fed added temporary reserves to the banking system through $1.5 billion of two-day fixed system repurchase agreements, and today the Fed tacked on another $6.25 billion using overnight repos.

TownCrier

(02/15/2000; 14:54:16 MDT - Msg ID: 25400)

Read about Sarah Da Vanzo and her heads-up approach to marketing the precious yellow metal...

http://www.btimes.co.za/98/0215/news/news9.htmQuotes from Ms. Da Vanzo from the article:

"I looked at the branding of globally recognised commodities and ingredients such as Intel, Nutrisweet and Colombian Coffee, so I could learn how to apply those lessons to Africa's gold. The focus on selling to Asia is for two reasons: there is a strong gold culture, and Asians are extremely brand-conscious."

"In the East, people don't trust their currency, their legal system, their politicians. But they do trust gold, and they trust manufacturers of big brands. Remember that a significant portion of the world's gold is still going into dowry jewellery. Estimates are that an average Saudi Arabian bride spends $32 000 on wedding jewellery."

As much as the world likes to collect things pokemon cards, state quarters, and beanie babies, can you imagine if they could be turned onto collecting gold bars from the various refineries? A bright era where collecting merges with responsible saving. Keep up the good work, Sarah.

R Powell

(02/15/2000; 15:05:38 MDT - Msg ID: 25401)

Jaydeevee today's decline

I subscribe to many commodity information-type publications. The best of these (IMHO) is Consensus which is a weekly newspaper and provides the best fundamental information and opinions that I've found to date. (The USDA also provides facts,numbers and predictions). However, even all this expensive research doesn't come close to what I've learned here and on other internet sites (this is of course the best). Now when I read my Consensus I find myself thinking "these people don't have half the facts". Bridge news disclosed today that the Dutch Central Bank sold 18 tons of gold during the week ending Feb. 11. We know this is in keeping with the Sept 1999 Washington Agreement but many so called experts and Traders don't and may have seen this as a new sourse of supply or a new beginning to bank selling. This might have caused today's decline or caused enough of a downturn to trip preset sell orders. It may also have been any number of other things. I hope you get many responses as I'm sure many of us are wondering why. Also, markets don't always respond the way conditions indicate they should or harder yet When you think they should. Mr. Murphy from GATA would say that the gold market hasn't behaved in a free market manner for many years but the tighter the cork and the more the bottle gets shaken-- the bigger the explosion!

TownCrier

(02/15/2000; 15:34:52 MDT - Msg ID: 25402)

Sir R Powell...Dutch sale

If my memory and mental arithmetic serve me rightly, the Dutch CB has only 12 tonnes remaining of their pledge to move 100 tonnes prior to September 26 of this year. The world is lapping up this gold with hardly a blink, and as you say, the traders are likely missing the boat badly on this fact. Looks like supplies will get very thin unless the Swiss can come on board and supply their approx 200 tonne contirbution to the Washinton Agreement quota before the year is up.

R Powell

(02/15/2000; 15:35:30 MDT - Msg ID: 25403)

Jaydeevee , Re Dutch Bank sale

An upbeat way to view the 18 ton sale last week by the Dutch Central Bank would be to remember that the Dutch were allocated only 100 or so tons under the Washington Agreement and a rate of 18 ton/week suggests a market desperate for gold. Their share to sell won't last long at that rate. Does anyone know how much they have sold to date? Also how much of the 400 ton yearly allowance per W.A. has entered the market thus far?

R Powell

(02/15/2000; 15:40:25 MDT - Msg ID: 25404)

Sir Town Crier

Thanks! What a place this. My answer gets sent before I can finish typing and hit the post message key!!

Solomon Weaver

(02/15/2000; 15:51:14 MDT - Msg ID: 25405)

(No Subject)

Zenidea (02/15/00; 03:31:41MDT - Msg ID:25360)
?
I dont suppose anyone knows what the breakdown of the alloy Inconel 601 is please. Another question. Ok if some dealer is selling platinum and gold bullion coins of the same weight and one looks at the dimensions and sees that there dimensions are identical. Then why is it, given that we know that the Atomic weight of the aforesaid metals are different, the dimensions are not so?.
--------------
Most of the mass (weight) of all atoms of all elements is located in the nucleus, which takes up an extremely small space of the atom (much less than 1 per million. The nucleus has protons (positive charge), the number of which determines the elemental number. In addition, neutrons which weigh almost as much as protons, have no charge. The space around the nucleus is taken up by negatively charged electrons, whose number is tightly correlated with the number of protons (usually close to equal).

What you are refering to as identical weight in identical dimensions is an expression of the property of density. The nobel metals have very high atomic numbers, and very similar densities. Usually, coins are rated very carefully for gram weight and purity, with size being a result of the weight chosen.

Thus, it is possible that the two coins actually do vary in size just slightly but too little to see with the hand and eye.

I am still facinated after all these years by the great myriad of things which these simple little protons and electrons can create. Even more beautiful than gold....is the chemical nature of water...fortunately a low cost good available to all.

Poor old Solomon

Matrix

(02/15/2000; 15:52:46 MDT - Msg ID: 25406)

NORMANDY ANNOUNCES NO FURTHER HEDGING

Just in....Robert de Crespigny today announced that Normandy believes the interests of Australian gold producers would be best served by giving consideration to strategies that minimise the impact of hedging activity and limit the quantum executed in any given time frame.

He also went on to say that with the majority of central banks and gold producers indetifying their intention, Normandy calls on bullion banks, when acting as principal, and hedge funds trading in gold to also make their intentions clear in the interests of market transparency.

He specifically said that there is no need at the current gold price and therefore no intention to conduct further hedging. He also said that he was very optimistic for the price of gold this year.

Typically the Australian Associated Press reported the above over the wire in the following light...

"...*Normandy says plans no hedging at current gold price
SYDNEY, Feb 16 AAP - Normandy Mining Limited said today it has
no intention at the current gold price to conduct further hedging.
Normandy said 60 per cent of its reserves are covered and it has
no need to conduct further hedging.
"Future hedging will be primarily influenced by development
decisions to guarantee cashflow, particlularly through the project
finance payback period," the company said.
Normandy chairman Robert Champion de Crespigny said however it
is likely there would be some underlying hedging to protect
investments in the future.
"If the financing of the project needs price support then we
would be hedging," he said.
"(But) we would prefer to do that through an option mechanism."
AAP P

No mention by De Crespigny and his direct reference to the activities of the hedge funds and bullion banks.

De Crespigny also said that Normandy had not hedged for three months.

Go Gold!!!!!!!!

ORO

(02/15/2000; 16:45:38 MDT - Msg ID: 25407)

Journeyman and Trail Guide a summary of sorts

Journeyman, I am in complete agreement. Which brings the question of what it is that Trail Guide's friends have up their sleeves and why. Also, what is it that would actually happen in the short and long run. So far as the ultimate end, the technology that made government and banking capable of excercizing their mutual power has been outdated long ago and the new technology will bring us back to a commodity money free banking system.

The balance of power has been slowly shifting to the free markets since the mid 60s. The emergence of NASDAQ and the automated financial futures markets in the 70s has made it possible to circumvent the traditional Wall Street and City of London Houses. They dismantled the costly regulatory structure that enforced their gentleman's agreements on the splitting of the financial markets among them. This was motivated by the understanding that a far more efficient electronic system would completely circumvent the grand old Houses and the governments with which they share power. The preservation of the Houses' market positions and the power of government control was not a possibility because the difference in efficiency between the automated free access systems and their own was great enough to withstand any legal intervention by the government - the discrepancy was as great as that in the drug trade.

Bankers had to undo the regulatory infrastructure that prevented them from competing with electronic systems, and once dismantled the bankers were capable of participating in the electronic economy, making up the lost fees with increased interest income (see transition of "real" interest rates from 0 and below to over 3% in the period 1976 to 1978 where these rates have remained) - at which point the dollar system was firmly reattached to gold - though well hidden from our eyes.

The electronic systems will carry the day. Eventually they will switch to a free gold banking system because the fraud of the bank-government-Cabal's fiat money system leaches too much from commerce, and now that electronic free markets have no barriers to entry left, it is on the verge of total collapse. Whether the Cabal survives or not turns on Cabal member's acceptance of the reduced position left to them. So far, they have attempted to stretch their current position as far as possible - and then some. They are taking what they can out of the current structure and massively moving their holdings of old and new economy corporaitons onto an unsuspecting public full of enthusiasm. A last effort at one more fleecing of the flock.

Trail Guide - you obviously understand the issues as they are, yet you claim that there is a "society" willing to take upon themselves their own fleecing. Obviously, you include government and banking as part of this "society", and point out that they had in the past, and still have the upper hand and will be able to impose their fiat money on us for the foreseable future. You are arguing that the fiat system is unresponsive to the fact of its own inefficiency reducing long term growth by an enormous margin - by half as far as I can calculate the effect. Alternately, you are making the argument that the system does not reduce efficiency but is necessary for growth.

I know that the fiat system is not capable of increasing the growth of output. It imposes a transfer of resources from producers to government, banking, and related interests and reduces the resources available for producers to further produce and for the global community to raise standards of living. The fiat system is a negative sum game and the free economy is a positive sum game. Their connection together produces less wealth than is possible without fiat.

My position is that society and the Cabal members are two wholly different things. Furthermore, I think the Cabal members are enjoying their last season in the sun and will come out with "gold burn" and heat stroke.

Trail Guide, your friends seem to have proposed that (their?) fiat game will continue in parallel to a free gold market devoid of debt. That sounds like a different Cabal structure - one who's participants would be Continental European banks and the Arab Oil interests. I will say in this context that without the gold debt system remaining in place, the Arab Oil interests are going to lose out on at least two thirds of the potential purchasing power of their gold, and up to 90% of it because demand for gold as active exchange money (in electronic form, of course) is far greater than demand for gold in the role of wealth money.

Your friends, Travel Guide, may have found a way to compensate by creating a gold bubble mechanism through the Euro gold backing and the marking to market of their reserves coupled with their active purchase of gold from the markets to raise the price to where it would be had gold actually been in use for exchange.

Cash gold only and pure debt money

The separation of gold from the debt markets can't succede without government intervention on a coordinated global scale. Even then, success would be limited as hidden gold denominated debt would still play in the markets.

Second point. The pure debt money is a self destructive mechanism. Without the lender of last resort it would periodically self destruct - probably in 4-5 year growth intervals followed by 1-2 year crashes. The lender of last resort coming in may extend this to 15-20 years with a complete crash at the end.

The system would not be suggested by your friends without a "connector" - a financial equivalent to a wire - to connect the debt money system to gold through a means other than exchange. The Euro reserve structure seems to provide the connection. If it turns into a fully gold backed reserve and debt instrument, which you indicate is part of the planned deal, then the Euro, as the future denominator of debt, would provide an emulation of the gold debt system. If it does not provide this function it will fail within the decade. If it does perform the function of translating the debt money into gold debt, it would follow the traditional pattern of cycling with 15-20 year upcycles punctuated by inflationary (or deflationary - less likely though) downward slides of 5-10 years in a Kondratiev like 50-60 year cycle that ends with collapse.

Since the ECB is intended to continue the role of lender of last resort and provides a link to gold denominated debt, it would necessarilly be used for the construction of the next financial bubble. It will continue to attempt to tax the world for the benefit of the EU government structure and the bankers that attach to it.

The electronic shift

The one big difference for this go-round of the fiat game is that the transaction costs of free gold banking were lowered so far down by the electronic technologies, that the only way for the system to prevent free gold banking from emerging is to constantly keep gold rising relative to fiat - this would provide a perceived gold interest rate cost (expected gold appreciation + gold interest rate) higher than the interest charged by the ECB centered banking system (expected Euro depreciation + Euro interest rate). This would eliminate most of the potential volume of gold debt, but also eliminate any useful purpose for the holders of cash balances keeping funds in Euro denominations. The result is very price inflationary during economic growth, and hyperinflationary during slow growth. Considering the German distaste for inflation, I don't see them doing this.

The remaining option is a "public service" type gold reserve system where the ECB functions as a lender of last resort only during disasters, and does not allow either government or the banking cartel to make much use of the potential benefits of their credit monopoly. Thus it would be eliminating the bulk of the motive for the existence of central banking. Would the ECB not be subverted to the interests of bankers, would it allow 1-2% of banks to fail every 5 years? Or will the public service be subverted, as it allways had, to the wishes of bankers and governments to steal the wealth of the global public at large?

Under this latter structure we would be using the Euro as mock gold depository notes that could trade at the 1% (probably no more than 2%) to 5% premium to private gold depository accounts and specie that simillar arrangements had in the past. Would the ECB and its banker partners be happy with such a measly return? Would they do it this way unless they feared a private free gold banking system would supercede the centralized banking
system?

Trail Guide, could you put together a summary saying - which way do you think they are going as far as mechanism (ref the options above)? Who are the players pushing for these decisions? What do they expect to get out of it?

The ECB is not structuring the Euro system to be a pure debt money. This means that the Euro bridges into the gold markets. So though debt would be denominated in Euro, Euro would be denominated in gold - leaving us with the same gold debt mechanism we have allways had?

Again, thank you for your outstandingly stimulating discussion.

R Powell

(02/15/2000; 16:53:34 MDT - Msg ID: 25408)

Sir Solomon

I'm not sure but I believe someone posted the breakdown of Inconel yesterday.

R Powell

(02/15/2000; 16:54:12 MDT - Msg ID: 25409)

Sir Solomon

I'm not sure but I believe someone posted the breakdown of Inconel yesterday.

Elwood

(02/15/2000; 17:16:05 MDT - Msg ID: 25410)

These Debates = Awesome!

Truly, my friends, it is not in the footsteps of giants we walk but in their very presence we stand!

Thank you, Trail Guide, ORO, J-man, Aristotle and ALL. Special thanks to MK for hosting such a thought provoking forum.

Elwood

canamami

(02/15/2000; 17:18:07 MDT - Msg ID: 25411)

What Is Going On With the POG ??!!!!!

I, for one, am at wits end over this. All these positive developments, and the POG is down over $6.00 today and down $2.00 tonight. I have no desire to wait any longer for a turnaround. Question: If recent events can't turn the POG around, what on this planet ever will? Maybe we are at the cusp of the major breakout, and I sure hope so because if it doesn't turn around soon I'll have to conclude it just never will turn around, and will act accordingly in terms of my investment portfolio. I'll keep my physical gold and silver coins as mememtos, but that'll be it.

Chris Powell

(02/15/2000; 17:30:11 MDT - Msg ID: 25412)

Thom Calandra of CBSMarketWatch boosts gold

http://www.egroups.com/group/gata/385.html?Mainstream press support for gold....

Amazing.

canamami

(02/15/2000; 17:33:19 MDT - Msg ID: 25413)

Now It's Down $3.50 !!!!!!!!

No amount of suffering that will ever befall the manipulators will be enough.

Canuck

(02/15/2000; 17:41:04 MDT - Msg ID: 25414)

Barrick

http://www.gold-eagle.com/editorials_00/howe021500.htmlThis is the most complicated mess I've see. Please 'link'.

Comments.
-------------
"In any event, the fact that Barrick bought options on paper gold -- virtual gold -- from someone who is either crazy or possessed of very deep pockets and a strong desire to cap gold suggests: (1) that the physical gold markets are so tight that Barrick could not cover in physical metal; and (2) that its so-called "new dimension" -- purchased calls -- is nothing more or less than Barrick running for cover. Market action at its strike prices -- $319 and $335 -- could be ferocious. With a major breach running toward $360 -- Barrick's 2000 floor price and the level where many think the gold banking system might implode --, Katy bar the door."

Cavan Man

(02/15/2000; 17:41:39 MDT - Msg ID: 25415)

canamami

I completely understand your frustration but just think; that (response) is precisely what the opposition hopes to elicit. Surely they sweep public forums like this one to ascertain the typical investor's temperature.

Cavan Man

(02/15/2000; 17:44:40 MDT - Msg ID: 25416)

canamami

Beware another (no pun here) left field event. I received an email from Howe last night (he, kind enough to return mine). RH said, only "massive buying" could break the alleged Barrick camp.

Truly, the metal needs a very large advocate(s).

Cavan Man

(02/15/2000; 18:01:06 MDT - Msg ID: 25417)

To canamami

"The sun'llcome out tomorrow."

From: ANNIE

C'est la guerre mon ami. N'est pas?

NewGold

(02/15/2000; 18:16:11 MDT - Msg ID: 25418)

Repost from Kitco, good insights on Oil and Russia

Date: Tue Feb 15 2000 13:07
Rick (@ TZADEAK has posted again,,,,,) ID#413328:
Copyright � 1999 Rick/Kitco Inc. All rights reserved

TZADEAK* @ Realities
Copyright 2/15/00 All rights reserved

ATTENTION Wall Mart Shoppers! We are currently giving away free 22kt "real"Gold bracelets with every purchase of 2 rolls Ashanti Bathroom Wallpaper, this offer will last until April, so tell all your friends and neighbours......
Yes "The Gold Spinners" continue to Mesmerise.....

As I predicted when it was below 300 ,PALLADIUM will lead the PM's.......today US650.....
Platinum far behind at 520.....
and Gold, well let's NOT discuss that in front the of the "children"....
I must admit for the record that my OIL prediction was "off" by 3 weeks, since I predicted when it was US19 ,that OIL would be US30 by January/2000......so sue me.....
and if I hear any more complaints, I'll cancel your subscription.....
and oh yes my "crystal ball"did come with a "guarantee"........
to the "A2other" gurus? who always follow my lead, one of these days ima gona leed you astraiiii............unless you confess that is........

Speaking "Geopolitically"......Putin on a show....
force that is....sit a spell take your shoes off....

the facts are that the Ruskie Mkt is up from 250 in 1998 to almost 2000 in 2000.....Putin is a "New" Russian, Christian, Religious, well educated, and a "tea" toddler...he has just increased the "sacred" price of "vodka" by about 40%....He "means" Business....Ruskies are Oil ,Gold and just as important "PALLADIUM" producers of 70% of the World's supply.....he also "likes" the Germans.....on that point alone I would be here a buyer of the "EURO" ......he also plans for more GOLD in the central bank.....I would also look for "them" to begin "attacking" Ruskie markets....
but with limited success......

What's "up" with Oil you ask.....well as I predicted Saddam has begun down the road to "cutting off' Iraqi Oil....he announced yesterday that Iraq would cut back 250,000 daily Oil barrels if the UN ( US )
did not "pay" Iraq....Saddam has exported US22 Billion in Oil BUT has only received US6 Billion in humanitarian "goods"......
Saddam is "really" trying to lift sanctions and more particular, lift the 30% ( US tax ) for the Gulf war .....who can blame him.....well maybe "them"....

The Cartel's Precious Golden Cow Souf Afrikka gets "nudged" on the Rand "nipple' and it gets Platinum "diarrhea"...."they" nudge SA Rand
to about 6.40 and all kinds of SA Platinum mines ar being "reopened" all over the place.....

Un chanteur....Ashanti.....the "gov" owns 20% golden shares of Ashanti, and are using the "courts"
much like "them"......the implications will......
sorry go to go for now.....

more later....

ciao

Return to Kitco Homepage
------------------------------------------------------------------------

SteveH

(02/15/2000; 19:07:39 MDT - Msg ID: 25419)

Rhodium

Incredible. Ode gold? Ode 1979?

Date: Tue Feb 15 2000 19:57
King Steven (Look at the price of rhodium $2400 an ounce!) ID#272388:
Thats nothing the asking price is $2625 an ounce.

Canuck

(02/15/2000; 19:23:18 MDT - Msg ID: 25420)

@ canamani @ All

Try to hang in there. As Farfel has mentioned it is the sentiment and momentum that we lack. Feel it in your heart,
if it's right hang on; if it's wrong bail out.

We have the Hawkins report Thursday, PPI & CPI Thurs/Fri, Ashanti mess to be decided very soon, Normandy is now on-line, gold stocks up today.

All the producers are reversing field, oil is plus 30, Pd and Pt +$600, this Rhodium craziness +$2500, comodities broadening, markets weakening, bonds haywire etc., etc.

Gold down $10, who gives a crap; don't forget why we came here .... POG @ $1000/2000/3000 ......30,000.

So Barrick joins Ashanti and Cambior, f**k them.

Canuck

(02/15/2000; 19:42:17 MDT - Msg ID: 25421)

To again echo Farfel

http://www.gold-eagle.com/editorials_00/drakulich020900.html"I am and have been expecting a "golden year" in this new millennium for the gold market. I forecast that January was likely to see sentiment reach the same Bearish levels of despair we saw prior to the explosive rise last September (it did). One only had to scan the Kitco board in recent weeks to get a feel of the despair of those still holding gold stocks, absolutely classic! And I highlighted that January would be an excellent time to accumulate gold stocks as the "weak hands" gave up right before the potential big up move. And I forecast that a minimum upside expectation would be a rally above the $400 level this year. Also, lets not forget the forecast of a major upside move in the CRB index, as the "paper asset" cycle gives way to physical assets."

dragonfly

(02/15/2000; 19:42:42 MDT - Msg ID: 25422)

Who we are

The discussion of late is quite stimulating. It is touching on such fundamental questions about what our 'society' actually is and how it best functions and survives. This notion that the pain must be shared in order to avoid a greater pain, if I understand correctly, seems odd to me. Maybe it is often the case that when elites get burned they get nasty (certainly true of most managers I have known - stretching the e word to absurd limits) and enraged enough to create a new order out of the wreckage of war, essentially an infantile reaction not much different in emotional content than a temper tantrum, albeit a deadly one for many. But should that understanding inform our actions and beliefs? Should fear of devastation overrule committment to the deepest principles that men and women have discovered as useful and productive in the pursuit of life and happiness? I think not. If the elites of this world have not become bored with their own antics by now maybe it is time that the many individuals who are just turn away from them. IMHO the solutions to all our many problems of living together on this planet rest with individuals not tribes. I know when members of my own family are wrong, occasionally all of them at once, and I do not stand with them in their error. Not for family, not for money, not for anything does a man give up the truth as he knows it, save the realization that he is wrong. When people can stand and brave the energies of living, without elites, then they can be free. This is available to each and all at any time and at all times. This is as true in a dungeon as in a castle. So, while I would admit that much of the "tribal" logic is historically accurate, I think it is a symptom of something else. More later.

dragonfly

(02/15/2000; 19:57:46 MDT - Msg ID: 25423)

Journeyman - msg id 25391

Enjoyed your post

beesting

(02/15/2000; 20:07:06 MDT - Msg ID: 25424)

Short message to Gold Mines interested in raising the price of Gold!

Current price on Platinum-$535 per ounce!
Current price on Plladium-$657 per ounce!
Current price on oil-$30 per barrel??

Why have all these items had such a significant rise in price?
Answer-Because of a real or perceived shortage of inventories.

Why can't the Gold mines do with Gold what OPEC is doing(limiting oil output) or what Russia is doing with Palladium and Platinum(limiting supplies)?

Answer-THEY CAN AND STILL SHOW A PROFIT, and here's how!

Most large Gold mines try to please the shareholders(mine-owners) by showing a quarterly and annual profit, at all costs, hence some use hedge-ing...etc as a way to show profit, in a low price of Gold, market. As most reading this are aware, this has caused an abnormal price decline for Gold. Lets suggest a different approach to the mine manage-ment.

Instead of selling all Gold produced as soon as it is produced, why not hold back in storage as much Gold as is economically feasible,and continue operations as usual.Then, when the quarterly and annual reports are due ADD IN GOLD IN STORAGE, at current market value to financial statements.
The more GOLD IN STORAGE added into balance sheets the higher the asset value of the Gold mining company, there by raising the value of the company(and hopefully share prices)-- AND at the same time restricting the current supply of newly produced Gold from reaching the buying public.
If only 5 or 6 of the biggest mines would use this approach, and create a short supply of newly mined Gold.....WAA..LAAA...a higher price for "spot" Gold and a higher price for Gold mining shareholders.
OPEC and the Russians are currently beating the paper derivative players using this approach!

Those that own shares in Gold mining companies, please suggest this approach to management, it is your right as a shareholder. Comments Welcome!!
Those in the Know.....Buy Gold.....beesting.

USAGOLD

(02/15/2000; 20:10:27 MDT - Msg ID: 25425)

Some Early Evening Thoughts on Ashanti....

Let's keep our perspective on Ashanti....Perhaps they worked their problems out for the time being (perhaps they haven't), but what we, as gold owners, gained in the long term is the over-arching perception that the gold carry trade/forward game is on the downhill side of this market's Continental Divide. (Aside: Time to slip it into third, keep control and glide down to the bottom). Let's not lose sight of what really happened today.

To wit: The new board of directors for Ashanti was elected because they have an anti-hedging stance. Normandy quickly followed with its announcement renouncing hedging.

To wit: These two facts out of today's gold news are probably more important in terms of their long term effect on the gold price than if Ashanti would have had to cover a massive amount of gold and thereby pushed the price through the roof. Why? Because Ashanti now won't be back to take away the punch bowl later!! They are committed to higher gold prices -- as a board of directors. As a company.
That's significant no matter how the press tries to characterize it.

Resolution: We are base-building here after a long winter in the gold market. Let's appreciate our victories both minor and major (I consider this a minor victory.) and realize that the financial press will always attempt to paint the picture anti-gold. The real story is that the mining companies are throwing in the towel. At the same time, let's not fool ourselves: The bullion banks et al will not go down without a horrific fight. If anyone thinks otherwise they haven't been paying attention around here.

Conclusion: Own the physical, sit back and watch. These events will continue to hold our collective interest as well they should. If you're not on a fuse, this stuff shouldn't bother you. Days like today ought to wet the appetite for additions to the physical holdings, not provoke lament.

In abstraction: I don't think this downside is going to last. Why? Those of you who are concerned about gold's reaction to the Ashanti news, let me ask you a simple question: Do you think Ashanti still has designs on becoming another quasi mining company/quasi hedge fund? When it grows up, does Ashanti still want to become another Barrick? I don't think so. I think the goldmeisters regained control there. So who were the winners today and who were the losers?

Bridging to Future Considerations: We'll see what the future brings. In my view, the Ashanti story is far from over. Those margin calls haven't disappeared. Not yet. Nor has the fact that this company to a large degree has capped its profit potential -- a company that provides a large proportion of that country's income. But as I say, this is a sideshow, and it's politics, and I've never known politicians to simply let something rest. The main event is that the carry trade continues to unwind. These prices will encourage physical buying. Let's see what tomorrow (and the unsettled politics) brings.

ORO

(02/15/2000; 20:13:15 MDT - Msg ID: 25426)

dragonfly - who they are

It is pretty well established that what floats to the top is not what makes for a great elite class. If Pres. Jackson had any sense he would have charged the whole of wall street and the leadership of both parties with treason - conspiracy to overthrow the constitution and the lawful government of the USA. That he was the one who ended up facing congress in trial for trumped up charges tells much of the story there is to tell.

TPTB are not in anyone's favor but their own. Their political flavor changes with their view of what they can get out of each policy package. They will set up a Soviet Union just as quickly and easilly as they would bring down the dictator of a pea size republic in the Carribean. They are, fortunately, not allways in agreement within their group, and some of them must recognize that if the world government their political arm has in mind actually comes into being, they would be among the first to be "disappeared".

Cavan Man

(02/15/2000; 20:16:27 MDT - Msg ID: 25427)

journeyman 25391

Enjoyed your post also. You might have a new fan.

Trail Guide

(02/15/2000; 20:36:44 MDT - Msg ID: 25428)

Freegold

ORO, Journeyman, All,
I enjoy this conversation, and will continue right along your debate line. But, your question,,,which way do you think they are going as far as mechanism (ref the options
above)?,,,,,,,, it will be outlined on the Trails page. I will again be writing there as FOA and this time things will be more in order. It needs to be because events do seem to be proceeding faster now.

Note:
I think ABX brought their calls as a "position strategy" put in front of their "intended" buying in of real gold to close some forward sales. They were going to make some hay on any gold spike from their actions,,,,,,but later were shocked to find that no official gold was forth coming! It seems that the Washington Agreement had larger teeth than anyone expected. Even their "well connected" board could not open these doors. So, they put a New York spin on the story! Is this a fact? We will know before long!
Readers should follow the reality here, all forms of paper gold derivatives (gold stocks included) are in good supply ,,,,,, bullion is not! The discount on coins does in no way
present the true picture of the physical market.

It seems that Goldfields SA understood this well in front of everyone. They were the first to buy gold at the BOE auction, close out their shorts (most of them) and even held long paper gold. Progressive thinking one would expect from the best. (Yes, for anyone here that remembers, I took a position in them in support of their actions and burned the shares. Never to be sold. My wife may sell after I'm gone, no doubt (smile))
Many other mines and Bullion Banks are now visibly caught in this transition and will have to quickly
struggle for position before the next "rule changes" are implemented. No, I don't know the what or when yet, but something is clearly in the works and the major players are creating uneasy feelings that are spooking some people (including some lesser mine leaders). The paper prices could easily swing wildly either way here.

Obviously, I expect some further curtailment of bullion supplies. However this could be in the context of "buy side curtailment". We shall see.

My feelings are,,,, as always, the best way for one to participate in this is with physical gold first in line, as the majority metal holding. If one is concerned about privacy then stock registration is out and indeed, bar registration violates the same ,,,,, then the old country coins are the best.

Later (on Trails) I'll go back and discuss things like Why $280 was important,,, and Why the intentions of oil including gold in their settle mix,,,,, and in general clear up many lose ends.
So, now back to working on the debate!

Trail Guide

koan

(02/15/2000; 20:50:19 MDT - Msg ID: 25429)

palladium $659 !

Palladium and platinum ($545) contiunue there upward move in overnight trading. This is a pretty amazing story. Cheers.

Marius

(02/15/2000; 22:11:14 MDT - Msg ID: 25430)

Consoling Canamami

Canamami,

Cash in one of your coins/bars/whatever, and get thee some scotch that's old enough to vote, and CHILL. I agree that your emotional response is exactly what the cabal ordered. Think of it this way: you're in a game of chicken, the object of which is to get your opponent to flinch first (read: sell or buy when THEY want you to).

Take consolation in the fact that even though their resources are far greater than yours and mine combined, their exposure is infinitely greater, and they can't control every aspect of the world's situation. Remember the Washington Agreement?

I close by saying to everyone, not just Canamami, I think a world view that depends on the complete destruction of your opponent** in order to vindicate your view of things is at best over-indulgent, and at worst pathological. For those of you who can't accept such an outlook, remember that revenge is a dish best served cold!

(**whether your opponent is a group like the cabal, or a financial system that the majority of society trusted and depended upon)

M

P.S. My home office door is papered with a variety of my favorite oddities to amuse, inspire, etc. I offer this from Thomas Paine, as it helps me to resist the urge to throw a fit when I can't get what I want NOW: "The harder the conflict, the more glorious the triumph. What we obtain to cheap, we esteem too lightly; 'tis dearness only that gives everything its value. I love the man that can smile in trouble, that can gather strength from distress, and grow brave by reflection. 'Tis the business of little minds to shrink; but he whose heart is firm, and whose conscience approves his conduct, will pursue his principles until death."

TheStranger

(02/15/2000; 22:25:12 MDT - Msg ID: 25431)

See Ya' Later Allocator

It was heartening to see Wall Street's big shift toward inflation beneficiaries today. Yes, many tech stocks managed to pull it out before the close, but many big names like Cisco, Microsoft and Qualcomm did not. Meanwhile, natural resources and basic materials stocks, like Alcoa, Exxon, and Newmont Mining, were up all day long.

Morgan Stanley strategists Byron Wien and Phil Roth have put out the word to brokers that tech is overdone. Chief Economist Stephen Roach sees continued strength in the world economy and expects inflation to surprise on the upside.

Unfortunately, mutual fund cash levels are at practical zero. So, the point is, money managers don't have the liquidity to just add oils, minerals, etc. to the mix. First, they've got to sell something. That's what's called reallocation, and it was happnin' big time today.

Thankfully, all dogs have their occasional surge, mining stocks included. But there is so little liquidity in this sector that funds can't wait anymore for a rise in bullion to get in. Thus, you can get a 2% rally in the XAU, like we did today, even though the metal drops seven bucks. What a refreshing sign of confidence that is. The implications for gold itself ought to be obvious.

I suspect tonight's apparently successful test of $300 will turn things up again tomorrow. Lets hope so, anyway. The sooner everybody sees this level as the floor, rather than the ceiling, the sooner we can get on with this bull(ion) market.

Cheers!

jaydeevee

(02/15/2000; 22:27:59 MDT - Msg ID: 25432)

Thank You . . . R Powell

http://www.usagold.comThanks for your generous reply to my post of a few hours ago.

Quicksilver

(02/15/2000; 22:59:28 MDT - Msg ID: 25433)

Jaydeevee

http://www.usagold.com I think the better goldstocks are going into accumulation as large sales are not crushing the prices as would normally occur. Their shorting efforts are like throwing water on a dry sponge. I was watching PDG carefully for the last hour of trading and there were 4 large sales "dumped" just as the pennet was breaking out. Two of 100,000 shares, one for 320,000 and one for 270,000 all within 15 minutes. The price dropped 1/4 and few small sales occured. Normally everyone bails out. So from 10 3/16 it broke out to 10 1/2 where it sits for tomarrow. The whole time the POG was constant. They go up if POG rises and flat if POG falls. Once they get over extended it should be opposite. They'll become crash prone (320), my guess.
The other reason I think is that analysts are starting to hype gold and gold shares. They have to find something positive to talk about. My favorite tech analyst on Radio Wallstreet has a live streaming broadcast and was bullish gold (Bob Brogan of Fahnstock). That show is extremely popular and he is the main analyst for the whole program (he is tech analysis Radio Wallstreet, he slams about 8 companies a show to short). Actually he was only bullish on physical not on the paper trash trade.
Placer Dome is making headlines as a "safe" goldstock. I'm loaded to the gills with it because it's in the limelight and to me that means low risk. If you want to feel sorry take a look at SWC, Sweetwater Mining, it's like an IPO that went from 42 to 50 in two days. I was looking it in the face yesterday at 45 saying naaaaaa has to fall back tomarrow. So where is the "hidden source of Palladium" that is supposed to suddenly surface at this price to take the glory?
I'm only trying to generate cash to buy physical.
Oro and the Purists are right. It's only paper till you have the metal in your hand. I sold my physical to pay a medical bill awhile back. Better to live in pain than to part with physical. But I sold the furniture before I parted with the collection.
As to the POG I think these little steps down will lead to a dump at the end, Ewwwwwww as Kaplan says "Omnious" then some bottoming pattern and a rally, a solid cruel to shorters rally that leaves firewood behind rally from a whipsaw. Why? Because they all want it to drop because they "need"to buy. They applaud Barruck and Gold-in-Socks because they want to cover cheap. But, it's musical chairs and more than a few speculators just arrived. The desperation of the coverers can be determined by how long it stays down after the dump. Confidence gets lost before it gets found. They say heavy buying in London was occuring around the 300 level days back. This last drop down should establish a lower resistance for the next time it bounces down off of 320. Don't worry either because it's going through 320 after a heavy shorting attempt gets absorbed. China want only .999 gold only 2000 tons for their national treasury. Or was that natural dowry? Or cosmetic jewelry? Or domestic tranquility? Good day to all, Buy Quickly-silver.

CoinGuy

(02/15/2000; 23:12:56 MDT - Msg ID: 25434)

Canamami

Canamami,

Hang in there! You know Murphy's law. About the time you get out, we'll have a big breakout. I have a large position myself, and I've waited out many storms. This one should be over and on the plus side by next Friday...

buy gold...that one guy did...yeah...yeah...used to sit in the hallway and stare at his closet full of it...used to talk down my precious beloved metal...now he's behind bars....serves the SOB just right...

pulling no punches tonight...buy and hold!

Coinguy

jaydeevee

(02/15/2000; 23:17:54 MDT - Msg ID: 25435)

Wow! Kitco graph shows SPOT up $5 in one spike!

http://www.usagold.comBought plenty of quality gold shares today in OZ!

jaydeevee

(02/15/2000; 23:20:54 MDT - Msg ID: 25436)

Spot now $303 after being as low as $297-50 in OZ today!

http://www.usagold.comCrazy stuff!

CoinGuy

(02/15/2000; 23:36:51 MDT - Msg ID: 25437)

Stranger

Liked your commentary tonight, but I'm sticking with Barton Biggs. Seems to be the only strategist coming out of MSDW with the straight scoop these days.

What are those trailing earnings again?

Coinguy

jaydeevee

(02/16/2000; 00:17:00 MDT - Msg ID: 25438)

First a spike UP $5 . . then straight DOWN $5 . . now UP about $4!

http://www.usagold.comThis volatility augers well for an interesting time when New York opens! View Yesterday's Discussion.

The Traveler

(02/16/2000; 01:22:22 MDT - Msg ID: 25439)

The Perfect Monetary System - Installment One

Greetings to all!

Since my last post (23712), I have been quite busy with new endeavors. Yet I have kept up with the Forum's more significant topics of debate. With your permission, I will give my humble opinion on topics to which I am qualified (22788) to speak. So, lets go......

The perfect monetary system of Aristotle, Trail Guide and Oro .....Installment One

Purists. Well meaning, well reasoned and intellectually sincere but at times the debate is reminiscent of those who crusade for world peace. Given man's inherent character flaws, world peace and a perfect monetary system will eternally be but a worthy ideal. When the dying dollar settlement system gasps its last breath next week or next decade due to the stranglehold of defaulted dollar denominated debts, will another settlement system be demanded? Yes, of course. Will it be perfect? Never.

Considering that most posters and lurkers here have only a vague understanding of the theory of money and credit and trade, how successful will the apostles of Jenny, Jerry and Ophra be at evaluating the merits of the system proposed by their esteemed leaders? How much more successful will those dysfunctional creatures be that agree to appear on their shows? Cardinal De Retz of the 17th century once quipped that nothing sways the masses more than arguments they can't understand.

Consider the historical record. The Nineteenth Century was the century of the wealthy a/k/a the creditor class. Thus while woman and most minorities then could not vote (and thus elect sympathetic redistributors of another's wealth), the gold standard prevailed. Remember, America's cherished Constitution originally set forth that only men of property could vote - some with only 3/5ths of a vote. As I mentioned in my last post, debt instruments written by and for the creditor class ("he who has the gold makes the rules") traditionally contained a "gold clause" that required repayment in cash or at he option of the creditor in a set quantity of gold of a defined fineness. Every member of the creditor class knew of the propensity of the debtor class (this includes national, state and local governments) to inflate away the purchasing power of the dollars to be repaid.

With the immigrant surge that began in the 1880's, the struggle between the creditor class and the debtor class intensified. In 1894, the first federal income tax was passed (2% on incomes exceeding $4,000). It was held unconstitutional by the Supreme Court one year later in RE: Pollack v. Farmers Loan and Trust Co., because it was a direct tax on income from real property that was unapportioned among the states by population.

Then in Chicago in 1896, Democratic candidate and populist William Jennings Bryan delivered his eloquent speech that demanded the free and unlimited coinage of silver (bi-metalism) in order to reflate the economy (more money in circulation) and thus give relief to the nation's farmers and laborers. Who has not heard the rally cry, "You shall not press down upon the brow of labor this crown of thorns; you shall not crucify mankind upon a cross of gold." In a delaying action, the creditor class won the day with the presidential election of "sound money" advocate William McKinley.

In response to the massive accumulation of wealth by industrialists and railroad tycoons (capitalists) like the Rockefellers, Cabots, Goulds, Morgans, Vanderbilts and Astors and inflamed by socialists writings such as that of Edward Bellamy (Looking Backward - 1888), Ida Tarbell (The History of Standard Oil Company- 1904) and Upton Sinclair (too numerous to cite), the Sherman Anti-Trust Act was passed and upheld by the Supreme Court in May, 1911, by a 9-0 vote.

This victory was quickly followed by the proposal in 1909 and ratification in 1913 of the Sixteenth Amendment - the power of Congress to tax any source whatsoever without apportionment among the states (Read: progressive taxation or a "scaffolding for plunder"). Two side notes - As 7% was then the maximum marginal rate, has the appetite of government been held in check or was the door opened for voters to begin voting themselves benefits taken out of the pockets of capitalists? Second, this same amendment was the foundation for a Supreme Court case in 1988 (South Carolina v. Baker) which upheld the right of Congress to tax interest income from state and municipal bonds if Congress saw fit to tax that income.

This amendment was the companion needed to put bite into the Federal Reserve Act of 1913. How would this private bank receive its risk-free interest payments if the full faith and credit of the US Government (Read: ability to tax progressively) was not in place and available for use? To complete the decade's trifecta, the Trading With The Enemy Act of 1917 was passed. This act gave the President the power to regulate or prohibit at his sole discretion any transaction in foreign exchange regarding gold or silver coins or bullion or currency. The victory of the poor and huddled masses was now complete.

The First World War (1914-1918) further damaged the creditor class as the British Pound Sterling, a casualty of war, lost its reserve currency status (apparently the sun did set on the mighty British empire) and the Bolsheviks with their "Laborers of the world unite!" political philosophy began fanning the flames of anarchy. The creditor class was scared stiff for it is hard to buy-off a crazed mob looting your compound.

The easy money of the Roaring Twenties bought some political relief as nearly all shared in the financial euphoria of the day. The Crash of 1929 and the subsequent New Deal remedies of the federal government (for example, alphabet soup make-work agencies, FDR's court stacking and the Social Security Act - which until 1971 was not indexed to inflation and required a maximum of $71 in FICA taxes annually) enhanced the victory that the debtor class won over the creditor class.

The creditor class still fought skirmishes though. Recall that General Douglas MacArthur ordered Col. Dwight Eisenhower to roll tanks though the streets of Washington D.C. to put down the mob of WWI veterans that were marching for their overdue benefits.

With the confiscation of gold by Executive Order #6102 dated 4-1933 (punishable by a $10,000 fine or 10 years in prison or both for not sending your gold to the nearest Federal Reserve Bank within 25 days of the decree in exchange for $20.67 of FR Notes) and the passage of the Gold Reserve Act in 1-1934 (which authorized FDR to revalue gold to $35/ devalue the US$ by nearly 60%) and by striking the "gold clause" in 2-1935, the complete defeat of the creditor class was achieved. Granted, occasional insurrections are attempted but they are quickly defeated.

Given the above summary of the intense four decade struggle between the creditor class (advocates of hard money - gold backing) and the debtor class (advocates of soft money - fiat paper with the propensity to inflate away or decrease in purchasing power), does anyone believe that the settlement system to come will reverse the outcome of this class warfare?

In summary, debating a perfect monetary system is for purists and academicians. Given the failings of mankind, a perfect monetary system is not practical in a nation that has democratized credit (its a right of all to have) and socialized credit risk (all share the pain of default).

Thanks for staying with this post to this point. Soon I will post a practical view of the role of the "Lender of Last Resort" and a view on what motivates bankers. My view has been garnered from over twenty years in the industry. Believe me, the motivation is deplorable but not nefarious as Sir Oro suggests.

Best regards to all.....

PS - Welcome back Trail Guide! The debate is livelier with your formidable intellect.

PSS- Sir Ulysses, did you happen to see Placer's recent press release regarding its Final Feasibility Study on BGO's world-class Cerro Casale gold-copper project? You heard about its revised 23 million P&P ounces here one month earlier (22789).

Zenidea

(02/16/2000; 03:28:54 MDT - Msg ID: 25440)

All

Gidday Mate's !.alot of sensory, thoughts , feels ( if a feeling is an evaluative responce to a thought) ?, going on here at home today; hence intentions and actions thriving it seems. Trail Guide, msg 25428, thanks :).Incidentially other peoples car exhausts catalyst units are starting to look interesting . The average car's in the USA is 24.00 worth right ?. How many cars how many ounces ?

Black Blade

(02/16/2000; 03:40:35 MDT - Msg ID: 25441)

PGM's on the rise again!

Pd is up +$15 at $662.00, Pt up +$10 at $545.00, but Au down -$1.50. Russia can't deliver for reason stated previously. Expect Pd to continue rising with Pt playing tag. Au and Ag should eventually rise in sympathy, perhaps as early as NY open.

Black Blade

(02/16/2000; 03:55:50 MDT - Msg ID: 25442)

Look at em' go!

Pd now up +$17.00, and Pt up +$15.00. Pd over $700.00 by weeks end?

Canuck

(02/16/2000; 04:05:45 MDT - Msg ID: 25443)

POG down ; XAU up

To echo The Stranger and a conversation I overheard:

" ... you can get a 2% rally in the XAU, like we did today, even though the metal drops seven bucks. What a refreshing sign of confidence that is. The implications for gold itself ought to be obvious."
------------------------------

Fred, "Want to hear the craziest thing Joe"

Joe, "What?"

Fred, "It hasn't snowed in almost 2 months and all kinds of
folks are running down to the hardware store to get a new snowblower."

Joe, "That is weird."

Fred, " ..and the guy at the sports store says he has sold more skis this past week than he can remember."

Joe, " Well I guess I'll meander down to the hardware store
and get a new shovel."

Fred, "Why?"

Joe, " ...'cause the BIG SNOW is coming!!"

koan

(02/16/2000; 04:13:16 MDT - Msg ID: 25444)

Palladium now $665

PGM stocks have still, really not moved at all. There are probably some PGM/gold/silver spreads which are accenting the mkts one way or the other. This move in the pgm's should help gold and silver - both metals have to break out - $340 for gold and $6.00 for silver before we can see a sustained move - in my opiniom. I bought most of my PGM stocks almost two weeks ago in a rush and was very surprised to see the metals continue up with almost no reaction by the stocks. There was a little today and I accentuate little - should be pretty good tomorrow if these prices hold. Cheers and good luck.

Canuck

(02/16/2000; 04:19:19 MDT - Msg ID: 25445)

Add on

...and apparently most folks in town have liquidated their stock options causing too many bucks chasing too few skis;
the price has INFLATED by 20%. Seems they don't care because the BIG SNOW is on the way.

tedw

(02/16/2000; 04:25:50 MDT - Msg ID: 25446)

The evil surpressors

http://www.usagold.com
The dark side of the force is at work. POG $300.50.

Now is not a time for doubt or despair. It is a time for faith. Buy the dips.

Black Blade

(02/16/2000; 04:40:14 MDT - Msg ID: 25447)

Asia PM news

TOCOM Precious Metals Review: Palladium surges to limit-up Tokyo--Feb 16--Tokyo Commodity Exchange Platinum and palladium contracts surged to another daily maximum price limit-ups across the board on Wednesday following overnight stronger NYMEX, dealers said. Gold sunk in step with spot market where prices declined below the key US $300 per ounce following overnight slip on COMEX, they said. (Story .2192)

Asia Precious Metals Review: Gold slips below $300 per ounce Tokyo--Feb 16--Spot gold extended overnight losses to below the key US $300per ounce level in early Asian morning on Wednesday. Long liquidation depressed gold prices following the overnight news of Dutch central bank sales here, while a lack of buying interest prevented prices from rebounding, dealers said. (Story .17135)

Black Blade

(02/16/2000; 04:48:32 MDT - Msg ID: 25448)

Gold Drops as Bullion Bank Traders Cancel Bets Price Will Rise

By Caroline Falls
Gold Drops as Bullion Bank Traders Cancel Bets Price Will Rise Sydney, Feb. 16 (Bloomberg) -- Gold fell more than 1 percent to its lowest price in a week in Asian trading as bullion bank traders said they sold the metal to cancel bets the price would go higher soon. The decline follows a drop in the price of gold in New York and London trading and extends a decline from a high of US$317.50 Friday. Bullion banks borrow, buy and sell gold for central banks, producers, jewelers and themselves. They make their own bets, both to make money and provide a service covering mismatches in prices between clients. ``Some people were long and decided to get out,'' said Paul Lee, a senior bullion trader at Dresdner Kleinwort Benson bullion bank in Sydney, citing local traders who had held gold in the hope of selling it at higher prices some time soon to make a profit.

``There's nothing fundamental driving it down. There's no producer selling here and we're aware (that) here's none going through other local bullion banks.'' Gold for immediate delivery fell as much as S$3.35 an ounce to US$298.40 an ounce, its lowest level since Feb. 9. It's down 7.3 percent from a four-month high of US$322 set on Feb. 7. Gold for April delivery fell 1 percent to US$301.10 in electronic trading on the Comex division of the New York Mercantile Exchange.

Oz Gold
Producers in Australia, the third biggest gold miners after South Africa and the U.S., accounted for about 1.5 million ounces of forward sales last week when prices were higher, Dresdner said earlier. Lee said he doesn't expect gold will go lower than US$295 an ounce in the present decline, amid increasing expectations gold is at the start of a rally that may last 10 years. Pledges by central banks to limit sales of gold from their reserves and producer promises to suspend or cap forward sales of gold are fuelling expectations gold is more likely to rise than fall in the year ahead at least. Suspension of forward sales
reduces supply of gold on the market. Normandy Mining Ltd., Australia's biggest producer of gold and the world's No. 10 by production, today said it has no intention or plans to make new forward sales at the current gold price. Barrick Gold Corp. and Placer Dome Inc., the world's fourth and fifth ranked gold producers, announced earlier this month caps and cuts to forward sales.``If the producers are sticking to their own words that they're not sellers at the current price, then ultimately you should see a higher gold price,'' Lee said, because it'll increase competition for available supply. Producer forward sales and central bank sales fill a shortfall in supply of newly mined gold to meet demand. In 1998, world gold mine production was a record 2,545 metric tons, compared with fabrication demand of 3,719 tons for jewelry, electronics, dentistry and coins.

``With limited central bank gold sales and lending and with less producer hedging, supply will be more constrained than in recent years,,'' Commonwealth Bank gold analysts said in a report, adding they expect gold to rally in 2000 to as high as US$345 an ounce.

Black Blade

(02/16/2000; 04:53:42 MDT - Msg ID: 25449)

Fairly good news from the land of OZ

The bullion banker in the previous news post doesn't expect Au below $295.00. Well that is a positive. Also published that Au shortfall between demand and production in 1998 well over 1200 tons, and Normandy ceases hedging. Looks as if the news isn't really that bad at all.

SteveH

(02/16/2000; 06:09:27 MDT - Msg ID: 25450)

Bloomburg (or is it Bloomberg)

(berg=mountain, hmmm?)

This morning in my attempt to get a few extra winks from a bout of insomnia cause by market mania and the ilk, I had left the TV on the berg'. Why I awoke to this dialogue, I am not sure, but wake me up it did.

Lehman Bros. was asked by the 'berg, "Do you think margin debt is a problem today?" after they showed its recent increase.

"No," they said, "...no, most people aren't using margin, they are borrowing money against their house...$20K borrowed against their house when their portfolio is much more isn't a problem...only if the market took a major correction would that be a problem...so it isn't a problem."

I sensed that somebody from the forum got to berg' and made them ask this question. They can't be accused of cheerleading if they ask these questions of people. I wonder how the Lehman fellow was qualified to answer it?

We can rest well knowing that most peoples' stock portfolios are so much greater than their debt and that $20K home equity loans finding their way to the markets isn't a serious issue (as long as the market goes up).

My take? Market is too big to fail. Simple conclusion, and a sad commentary on these cheerleaders. Shame on them.

Henri

(02/16/2000; 06:28:17 MDT - Msg ID: 25451)

SteveH Msg 25450

What the guy didn't mention was that the rise in RE pricing allows the guy to borrow 20K more than he already has. I think I heard somewhere that a further relaxation of bank loan standards allows loans in excess of 100% equity...120% has anyone else heard this?

Let's see if he had a fully leveraged house worth 100K and can now borrow another 20K??? I can see why wage inflation is rearing its ugly head. And the standard of living has not improved in the least. Tension and stress must certainly have increased as well...I guess you could say it has been "leveraged" to unprecedented levels. No one can afford to think anything less than full confidence in the markets.

Very few in todays society know the peace of mind that comes from living debt free. To laugh maniacally when called with an offer of a pre-approved credit line.

Trail Guide

(02/16/2000; 06:30:21 MDT - Msg ID: 25452)

Freegold (debate)

OH,,,Ho,,Ho! A big welcome to Traveler!

What a great post. Picture me jumping into Traveler's corner,,,, standing behind and pushing him forward. All the while saying "you tell em". Ha Ha. (no doubt he will have me in a head-lock later)

Thanks for a good effort Traveler, I'll post later.

Trail Guide

The Traveler (02/16/00; 01:22:22MDT - Msg ID:25439)
The Perfect Monetary System - Installment One

Henri

(02/16/2000; 06:47:28 MDT - Msg ID: 25453)

Clinton's overtures to Putin

http://www.infobeat.com/stories/cgi/story.cgi?id=2564287607-c15Gee, maybe he thinks sucking up to Putin will relax the Platinum supply pinch. The Russians have said they have not curtailed palladium shipments and have been delivering all along.

Question...Where is the next big supply of palladium going to appear?

Answer...temporary retraction of the emissions standards for new autos with retrofits required within two years. Refusal to allow registration of vehicles >10 yrs old will force many old style catalytics (platinum based)into the recycle bin for re-manufacture.

It reminds me of the joke that went something like this. All the parts of the body were arguing about which was the most important when the a--hole decided to just demonstrate its power. All parts then bowed to his supremacy.

The US congress will quickly bend the rules when faced with stalled automotive production lines waiting for EPA mandated emission controls. If 90% of the cars have them, then a temporary relaxation and required refit will not hurt too badly. Besides the fuel efficiency of the new engines is superior to the engines that forced the control standard in the first place.

As the Trail Guide says: Water...pure and beautiful.

A hint?

elevator guy

(02/16/2000; 07:55:57 MDT - Msg ID: 25454)

Musical chairs with options!

It seems that GS, and the cabal, have the ability to sell down the POG right before the near month option expiry. I dont have the time to look up the charts, but maybe someone else has noticed the timing?

So a rally in paper gold prices presents an opportunity for them too, in that they can sell lots of paper calls into a rally, which generates cash flow. Kind of like shaking option players upside down by their boots, until all the coins fall out of their (my) pockets.

After "recruiting" fresh players, and all have taken their seats, they "manage the price" downward, having bought their puts in advance. The call options they sold when the POG was high expire worthless, and the puts reap a harvest.

Then they let the price rise for a while, (maybe buying calls first), until new money has been drawn in, and the process repeats. I dont know how they do this without incurring some losses, but the losses are likely smaller than that which they take in.

And so it seems that the paper price of gold has absolutely no meaning at all, its just a farce, perpetuated by the cabal. It teases option players with small movements, and fleeces the naive on the way up, and on the way down. The POG does not indicate inflation, so much as it does manipulation.

Until they lose control, that is. Then they will change the rules. Why doesnt the CFTC (sp?) do anything? Only the naive would wonder this. All one has to do is open ones eyes, and the machinations of the cabal are clear.

This stuff is well known to such as Trail Guide, and ORO, et al. (I dont think I am saying anything new here, nor do I think its a great revelation) Thats why they dont even bother with option games, to my knowledge, but instead talk about physical ownership, currency systems, and Ashanti news. And many posters in here have contributed signifigant ideas, that can change our world through constructive change and reform.

Well, I'm just kind of talking out loud here. Have a great day, all. And as FOA said to option players- "Watch your top knot"

The Invisible Hand

(02/16/2000; 08:07:22 MDT - Msg ID: 25455)

euro and gold

The ECB would have 15 % gold in its reserves.
Last week: gold was up, the euro didn't move much.
This week: gold is down, the euro tentatively edges higher.
Is this the delayed reaction of the euro to last week's gold hike? Any thoughts?

Journeyman

(02/16/2000; 08:33:41 MDT - Msg ID: 25456)

Re: beesting (02/15/00; 20:07:06MDT - Msg ID:25424)

Excellent idea! Good thinking. Now how to sell it to the mining management?

Regards,
Journeyman

USAGOLD

(02/16/2000; 08:36:13 MDT - Msg ID: 25457)

Today's Market Report: Gold Goes Higher; Ashanti, Normandy Renounce Hedging

http://www.usagold.com/Order_Form.htmlMarket Report (2/16/00): Gold began its recovery in Asian and European
trade last night as traders digested the news of the Ashanti board
shake-up and the Normandy announcement that it would not expand its
hedging operations. When the dust cleared at Ashanti yesterday, it
appeared that the company had made an about face in the hedging
operations that nearly put the company out of business. The shake-up
included wholesale changes in the board of directors and an ousting of
several management luminaries responsible for the hedging fiasco which
has roiled the gold market over the past several months.

Though Ashanti, it appears, will not be in the market to buy bullion to
cover its positions (at least for the moment), the mining company has
also put its stamp on the trend among mining companies to support the
yellow metal in its future forward/hedge dealings rather than subvert
it. The Normandy action carried similar implications.

These two companies join a growing list of producers who have renounced
hedging strategies that in the past have dragged down the very commodity
they depend upon for a profit. At first, the market reacted negatively
to the news because Ashanti obviously would not be rattling around the
gold market looking for physical in the upcoming weeks -- a circumstance
which certainly would have sent the price in something of a rocket
trajectory. As the news settles in, however it seems the market is now
looking to the longer term implications for gold the result of the hedge
renunciation trend sweeping the gold mining industry and realizing it
may pave the way for a price breakout. The XAU -- a closely followed
gold mining index which quite often leads the metal itself-- reacted
positively to these developments almost immediately yesterday posting a
strong gain.

In other metal news, palladium was up another very cool $38 at $697 this
morning with no sign of any white metals being released by the Russian
government.

If you are looking for a pro-gold view of the various financial markets
as well as a summary of the events affecting the yellow metal, our
monthly newsletter might be of interest. News & Views -- Forecasts,
Commentary & Analysis on the Economy and Precious Metals has
been characterized as witty, urbane, intelligent and down-to-earth. Not
to mention it's Free of Charge If you want to keep up with gold, this
is the way a large segment of the gold owning public does it, and has
done it for over a decade.

Just click the link above and make the appropriate entries.

TownCrier

(02/16/2000; 09:09:32 MDT - Msg ID: 25458)

Hmmmmm...now let's see... How can we scrape up some much-needed reserves?

http://biz.yahoo.com/rf/000216/uj.htmlThe Fed, of course. Today the Fed used overnight system repurchase agreements to provide a quick injection of $3.75 billion to the banking system for their reserve maintenance requirements.

Cavan Man

(02/16/2000; 09:10:27 MDT - Msg ID: 25459)

US Energy Sec. in news again

http://www.news.excite.com/news/r/000216/news-energy-richardsonSubtitle of this article should be, "The Helping Hand" or, Algore, "This Bbls. For You".

Cavan Man

(02/16/2000; 09:12:44 MDT - Msg ID: 25460)

Last Post

http://news.excite.com/news/r/000216/news-energy-richardsonPardon.

Henri

(02/16/2000; 09:35:35 MDT - Msg ID: 25461)

Arabs got you over a barrel??? Switch to a pure plentiful source of enegy.

http://www.blacklightpower.com/This should give all a cause to pause. Interesting chemical properties,Yes?

koan

(02/16/2000; 09:50:05 MDT - Msg ID: 25462)

Palladium now $690

How does this story end?

schippi

(02/16/2000; 10:30:50 MDT - Msg ID: 25463)

Hourly Gold Sector Chart

http://www.SelectSectors.com/agpm70.gif Moving towards the apex of breakout

CoBra(too)

(02/16/2000; 10:49:19 MDT - Msg ID: 25464)

Barbaric -ASL-

There seems to be a certain parallel between Gold - the pariah among metals and Austria - the pariah in the EU - and the rest of the world.
Well, somehow it seems both are conceived as barabaric in the context of NWO.
Gold for its restraining properties on fiat and Austria, feared to break the socialist dominance in the EU (only?).
The difference of a small country vs. a small (physical) market is simple in todays world- take advantage!
The Ashanti drama seems resolved for the moment- (resolved because it may well have been another systemic risk)- Austria is needed to prevent same for majors for the time being.
An (ob-)scene(ario), I regret not being able to subscribe to!

R.P. & Leigh - tku - CB2 pariah of the year- back to barbarous lurking ...

Gandalf the White

(02/16/2000; 10:53:48 MDT - Msg ID: 25465)

Henri's Blacklightpower (Re:#25461)

IF you really believe this "power source", the Hobbits have a large number of bridges that you would love to buy!!!
<;-)

rsjacksr

(02/16/2000; 11:00:34 MDT - Msg ID: 25466)

Three Gold Stocks to Consider By John Dorfman

http://www.bloomberg.com/feature.htmlIt's clear from reading this article that dorfman doesn't read this forum, which means he is clueless on gold mining stocks, and this man runs an investment firm. Good Grief

koan

(02/16/2000; 11:18:26 MDT - Msg ID: 25467)

Palladium now $715

Pretty amazing!

beesting

(02/16/2000; 11:31:44 MDT - Msg ID: 25468)

Hi Sir Journeyman #25456

Have followed all your great postings here, just no time to respond.Sir Journeyman is refering to my post # 25424, message to Gold mining company management, on raising the price of Gold and Gold shares at the same time.

My answer; If we look at Todays Market Report by USAGOLD #25457 we can get an idea of share holder power concerning Ashanti....<>

If a shareholder holds 1 share(or more) of a Gold mining company, he/she has the right to voice an opinion(and vote) at a shareholder meeting...Majority rules when it comes to voting.If enough of the shareholders agree with a proposal it passes, and the necessary change is made in the company.

If enough Gold mining company share holders reading my # 25424 post agree with the proposals made, and pass the idea on to the other share holders until a majority consensus is reached, and a subsequent vote passes, the company would have to comply with the procedures outlined in post # 25424. How many reading this have ever been to a share holders meeting? Very educational!!!

We used to call it "POWER TO THE PEOPLE" but lately it seems to have been forgotten, in the quest for perceived wealth at all costs!!(real wealth IMHO is physical Gold ownership)
For What It's Worth....beesting.

Peter Asher

(02/16/2000; 11:49:18 MDT - Msg ID: 25469)

The Traveler (02/16/00; 01:22:22MDT - Msg ID:25439)

Supurb fundemental historic synopsis. I like your depiction of creditor class versus debtor class. You have hit on a key phenomena in the war between those who live by fair exchange and those who crave something for nothing. I/we await your further chapters!

onlychild

(02/16/2000; 12:57:42 MDT - Msg ID: 25470)

The Traveler

Excellent post! You a new shed light on facts that I was already aware of. I had never considered those historical events as the triumph of the debtors, but I see your point. One comment on voting: I hope you haven't confused the 3/5 representation for other than "freemen" with voting rights. You are correct about suffrage being exclusive of everyone but white male property owners, but the 3/5 clause applied to slaves (male and female) for the purpose of determining repesentation in the House. All other persons were counted as a whole person for the purpose of gaining seats in the House of Representatives. OC

Henri

(02/16/2000; 14:18:50 MDT - Msg ID: 25471)

Gandalf the White Msg 25465

Like all else time will tell. As a physicist, I can only say that the spectral data presented and the theoretical atomic model, while new, are no less convincing than the Bohr model. I particularly enjoyed the theoretical treatment of electron "orbitals" as a charge/mass density distributed evenly over the surface of an "orbitsphere" rather than the traditional singular electron mass in "orbit" around the atomic nucleus. This pretty much does away with the need for the "Uncertainty" principle yet does not undo other theoretical constructs. I am in possesion of the tome "The Grand Unified Theory of Classical Quantum Mechanics" and am investigating further.

The website references confirmational studies conducted at the DOE National Laboratories...he may be on to something.

What this group is doing, appears to be revolutionary. Interesting concepts and presentation.

For the time being, I am inclined to take a wait and see attitude.

As for those small hairy toed creatures, there was someone here looking for them yesterday. Sinister lot they were.

Hipplebeck

(02/16/2000; 15:12:51 MDT - Msg ID: 25472)

thoughts

thoughts;

where is the great technology god takings us?
How about...
You are a number, and without it you cannot buy or sell, or vote, or travel, or anything.
How about...Laboratories bioengineering experimental lifeforms.
A man being rich enough to clone himself and anyone else he wants.
A scanner that reads your dna from a distance.
genetically engineered food.

When you eat of the fruit of the tree of knowledge, you get cast out of paradise,
When you eat of the fruit of the tree of life, you get flaming cherubs.

Wouldn't it be nice to have a ground swell movement straight from the gold and silver
coin holders. Perhaps it would be best just to distribute what we have if there is ever a real
bad financial crash. Just so we could get some in the hands of everyone.

The US is obviously the great whore of babylon.
So seductive and enticing, but in the end, you just get f*****.

Little horn , big horn
UK US?

Wormwood? nuclear waste, bio, toxic waste, who knows, theres too many possibilities

So many distractions to take your mind off the important things like;
Why am I here.
So much fear of facing reality like;
Why am I here.

It aint big shiny cars

Isn't it amazing that they have built yet another fiat system on the power of gold.
Fed Notes have been discounted to nothing by the top moneypeople, and now
they are in the process of corrupting the gold paper market. It's sad, but gold
sure attracts some unsavory characters.

If OPEC lowers the price of oil after US energy sec. Richardson's visits,
it will be interesting to see the concessions that are made.
Iraq sanctions ended, is my guess.
A Little more pressure on Barak?

As long as we are chasing the money and the fame and the glory, we are still adolescents.
We create our own reality,
It's obvious that something bigtime is going on here. After all, we don't even know how
we ourselves actually work, yet it is here at our command.
What's harder than to have integrity and tell the truth?
To not participate in scams?

The golden rule is to do unto others as you would have them do unto you.

Al Fulchino

(02/16/2000; 15:23:16 MDT - Msg ID: 25473)

Henri (2/16/2000; 14:18:50MDT - Msg ID:25471

All: Off Topic/my apologies.

Henri, as a physicist you will undoubtedly find "Finding God in Physics" by Roy Master's a superb read. In fact I am so fond of the information in the book, that I will offer it as a gift to all who would like it, free of charge. Just email me at fulchinos@prodigy.net If anyone would like to pay for it themselves, it can be found at www.fhu.com

-Al

Hipplebeck

(02/16/2000; 15:25:35 MDT - Msg ID: 25474)

by the way

I now carry a gold maple leaf and a gold eagle all the time and show them to everyone. People have to experienc gold before they can appreciate it

Quicksilver

(02/16/2000; 15:36:03 MDT - Msg ID: 25475)

GOLD VS STOCKS: Inverse Relationship, when?

http://www.usagold.comNasdaq could be repeating mid Jan. crest pattern. Two hangman doji's indicate tomarrow could be a major selloff. Topped-out and ready to turn. Could also be the third and final top. DOW was supposed to build back up to the 11,000 level but a fractured breakout today is destroying confidence in blue chips. All hope is on the leader Nasdaq. I say the indians are behind the hills and Custer is blowing his horn. Arrows flying tomarrow on Nasdaq. When stocks and bonds go down together we should see an inverse relationship between the metals and equities. The Oh so excellent see-saw effect that builds believability in gold. The little POG rally from 299 to 302 is positive. Last two days POG fell badly on NY but not today. Are they running out of ammo or just reloading? Australia will eventually run out of gold to sell at the pace they are selling, so upward bias should resume. I would like to know who is buying at 1:00 New York Time to make those two $5 spikes in price? Could we assume that Ashanti cannot say or let out any good press for gold because they still have to buy tons of it? No major bank is going to let that hedgebook become an outdated wall calendar, especially when that bank is in trouble. As for the gold stocks. Bloomberg reports that the entire capitalization of the US goldmining corporations is equal to International Paper. Imagine if the combined fiat paper suspended in these market bubbles ever decides to purchase something real. Are we going to see Palladium-like action in gold? Not if, it's when. When psychology shifts. We believe in gold but the average middle class workahaulic does not. Whenever the indexes take a big hit they are supposed to bounce back. And when their brokers tell them "Well maybe this time it's different because it might not come back up for a long time they are saying." The DOW IS DONE! Nasdaq is next. No comeback, means little believability in the stockmarket. People naturally seek after some vehicle to put their money in with confidence and when what they have previously known doesn't work they begin to search for another. I'm just writing this because I know we all expected some bigger turn up off this bottom.

Trail Guide

(02/16/2000; 16:14:06 MDT - Msg ID: 25476)

Freegold (debate)

Hello Journeyman:
Just read again your post of: Journeyman (02/15/00; 11:10:43MDT - Msg ID:25391)
Good post!

You write:
-----But a bank, especially a central bank, is part of the extended order, and as Hayek suggests,

(TG note: I'm adjusting Hayek's quote to simplify)
" " " If we were to apply the unmodified, uncurbed, rules of the small band or troop, or of, say, our families to our wider civilization,,,,,, as our instincts and sentimental yearnings often make us wish to do, _we would destroy it_."
AND
" " " Yet if we were always to apply the rules of the extended order [Note: as Journeyman would put it,,,,trade with those we don't know face-to-face ] to our more intimate groupings, _we would crush them_." " "
AND
" " " So we must learn to live in two sorts of world at once. To apply the name 'society' to both, or even to either, is hardly of any use, and can be most misleading" "

F. A. Hayek, _THE FATAL CONCEIT The Errors of Socialism_

Now Journeyman writes:
----------The bank treats us, not as part of their "small band or troop," but rather as part of their "extended order" (and rightly so) when times are good ---- we'd better pay up or there goes the ranch. But when they're in trouble, they want to be bailed out, treated by us now as if they were
part of our small band or troop, or now that they're really big and might cause the whole neighbourhood to burn, treated as "too big to fail."-----------------

Trail Guide:
Good point Journeyman! BUT (smile)?? It's always easy to place the failings of a nation,,,,,, a company,,,,, a small group or even a families finances upon some "other extended order". We read a lot about this in the general media (and on the web), but I question just how much of this is in
moral reality.

When referring to how some large entity (big banks?) did them in,, people often camouflage their own emotions by presenting only their side. What if the tables were turned,,,,, and these "small band" victims were in this "extended order" driver's seat themselves. We already know the answer as to how the majority would act. They would fight for their "most profitable" best interest,,,,,,, right
or wrong! Sad, but true.

----It's a great life in this here great lands we call these United States" -- Mr. W. Rogers---

This is the "dirty little secret" that many of the most outspoken hide. And,,,, they play out this hidden fact at the voting booth in a democracy. Yes, they "privately" vote for anyone that will protect their "financial position" whether it's moral or not. Then we "publicly" shout about how this "extended order" is doing us in ,,,, but, it's exactly what "we" as a "small band" would do to them.

This is the reason I don't buy the "two worlds occupying one" in a democratic society. The people in power are a reflection of us. Go to small-town anywhere in the US and put "us" up there,,,, and "them" down here,,,,,, and nothing would change. Yes, I know that's not true 100% of the time as there are some fine solid people out there. But,, I bet at least 90% of the time. Yes?

This is why,,,,,, in my Freegold posts to ORO I use Society as a term to express the financial drives of the whole. "We is them", my friends,,, my neighbours!

Further:

(note: to gain context of this please read his post)
You write:
-----The writing of IOUs, that is, lending, is unavoidable, and when done "correctly," is good. (There is "consumer debt," which except for rare instances is in the long run inherently "bad," and "commercial debt" which is good or bad based, ultimately, on whether or not it increases
productivity.) But how are you going to stop Uncle Joe from writing an IOU and using his gold sovereign as collateral?--

TG:
When gold is trading in a free physical market,, outside the currency perception,, Uncle Joe can use his "Swiss 20 Franc Helvetia's" all he wants for collateral in a currency loan. In this context gold is no different from any other item of wealth we own. Be it a car, house, furniture or a
petroleum cracking unit in a "Texas City Texas refinery ,,,,,, we are borrowing the fiat currency not the item of wealth.

As long as gold is "ideally" implicated as some form of "official money", modern society will try to lend "it" (the gold) and borrow "it" (the gold). Then it becomes part of the debt itself and is entangled in all kinds of ,,, "oh where am I going to get the gold to pay off this loan",,,,, issues! This throws it right back into the arena of "currency manipulations" by officials,,,,, all in an effort to maintain the economic momentum. The very same thing we are into today.

Again, today gold still carries the baggage of past associations with "official currency / money schemes of yesterday year. As time has progressed, and our economy has developed, each passing stage of using gold in the official money / currency mix has become more convoluted. As I noted to ORO, it's a shame we cannot just use gold,, outright,, but modern society has proven that it will never leave it alone.

We have evolved to a point where no one,,,, gold bankers, gold miners, politicians or private savers even knows what the term "today's gold market" really means! We have distorted the physical gold market to the point that the trading of "paper contracts",,, that have virtually no call on real gold (ABX cash settle calls as example??) price the supply and demand of real gold. All in an effort to keep the dollar looking good. And do we blame them for doing it?

Think about it,,,, prior to the birth of another possible currency system (Euro),,,,,, looking from 1990 backwards,,,, the amount of economic loss that would have been associated with a dollar failure made the minor loss of killing the gold industry look,,,,, well,,,, like nothing! Kind of like sending in your best troops to be mowed down,,,,all to build time to assemble a full army.

Thanks for discussing Jman,,,,,,, I have more for Cman and ORO later.

Trail Guide

canamami

(02/16/2000; 16:15:48 MDT - Msg ID: 25477)

Apologies to Forum

Everyone,

I apologize to the Forum for letting emotions get to me and posting that fact to the discussion, which doesn't really accomplish anything except blow-off steam. Special thanks to Cavan Man, Canuck, Marius and Coin Guy for trying to calm me down.

The point is that money invested in both quality gold shares and physical would've given very good gains if one bought at the nadir. As the Stranger points out, the POG is up, and quality unhedged companies like Newmount have appreciated very nicely. Of course, to those who hold physical as long-term wealth insurance, any emotional distress over day-to-day price fluctuations is for the birds.

To explain the intellectual basis to my distress of the last couple of days, some of us (i.e., me) are into speculative pennies, whose cash reserves and capacity to survive is limited. Thus, a protracted manipulation puts 100% of our holdings at risk. Hence, my rage at the maipulators, who are threatening my financial well-being, and inferentially causing me great stress and demoralization, on occasion. They DO deserve to suffer for what they've done, principles of Christian forgiveness notwithstanding. Also, the lease rates (at least yesterday's) and the declining POG at a time of bullish news and developments point to official supply from somewhere hitting the market hard. If we can't nullify official supply or offset it with comparable demand, our rightful returns could be effectively denied for a long time yet, which for those in my situation is a serious matter.

Again, apologies to the Forum.

Broken Tee

(02/16/2000; 16:17:49 MDT - Msg ID: 25478)

Hipplebeck Msg ID 25472

Technology is out of hand. Example: the other day I took my vehicle in for a lube and oil change at one of those quick places. I had never been to that particular location, so no data was in there computer. When I informed them that I didn't wish to be in their data base because I wasn't interest in receiving mail from them, since I keep my own service records, plus I'd be paying in cash.. They wouldn't do the oil change, it seems if your not in the computer their insurance isn't valid. At this time I pointed out that they had both the vehicle make and license number. But still they refused and I was been speaking to the owner. I thanked him for his time and went up the street to another (different chain store) where they were more than happy to take my cash. Some folks have let computers take over everything to the point that they forget why they started their business in the first place.
Sorry I know this is off the common topic, but some things just leave you shaking your head.

Tomcat

(02/16/2000; 16:24:35 MDT - Msg ID: 25479)

Quicksilver: GOLD VS STOCKS: Inverse Relationship, when? GOLD VS STOCKS: Inverse Relationship, when?

If I remember correctly gold did not go up in 87 when the market crashed. I believe that fund managers who were strapped for cash sold their gold investments to improve their liquidity. That is why some of them hold gold; for time like 87. Later on I think gold did rise but the correlation you mention did not happen; at least not right away. In the past a strong correlation existed between gold and oil; not so any more. Traditional logic doesn't seem to apply to gold.

I am not saying the POG won't rise if the markets tanks. I am saying it won't happen immediately. I wish it were otherwise but consider that many funds who and into the dot coms are really going to be hurting, much worse than 87. Where will the get their sorely needed cash.

My opinion is that gold is great for the very long run but don't expect immediate results do to changes that are occuring now.

Gandalf the White

(02/16/2000; 16:37:20 MDT - Msg ID: 25480)

Henri's adventure

The Wiz, as a former dumb ol'e Chemical Engineer of far too many years, has seen many black magic theories, especially ones dealing with the breakup of plain old water. Funtastic things can be done with that precious stuff. But,those small hairy toed creatures only like reading the likes of "Timeline" and such, as Quantum Mechanics Theory is only for you younger folks. Those "sinister" ones looking for the Hobbits are most likely after the gold coin that each carries as they are now considered to be somewhat like the Elven of Ireland. Were they wearing a cap with a golden GS imprinted on it ? -- The Hobbits also like the way that you express yourself as a GREAT Knight.
<;-)

(02/16/2000; 17:48:49 MDT - Msg ID: 25481)

Thoughts and Observations

Oro, Aristotle, and Trail Guide thanks for your recent submissions, all very thought provoking information.

Oro

Is it true that you are writing a book? If so have you come up with a title? Something like "The Rise and Fall of the US Fiat Money System", or "The Dollar's Last Stand". Let me know when it is done, I would be interested in purchasing a copy. I have often suspected that you are either independently wealthy or a college professor or very bright or all of the above. How else does one find the time to research and discuss monetary matters such as you do, in terms of breath and depth?

Clinton and the Federal Government have been on a major Land Grab agenda in recent years, which in my opinion has no constitutional basis. Is it possible that the Cabal is looking for the land to be used as security to back the US$ currency?

Of Late the PPT seems to have discovered they can selectively prop up one market for the day and it is enough to prevent a major collapse of the equities markets in general. It seems they alternate every several days from the Dow/S&P to the NASDAQ. Yesterday it was the Dow's turn today it is the NASDAQ's turn. Now if they would just tell us each morning before the markets open which it is going to be!

Trail Guide
Nice to have you visiting this site again. I said in a post several weeks ago that I have decided you bring to the table a unique perspective. It may be prudent for one to at least listen to and evaluate the merits of that perspective. You have stated on a number of occasions to watch Oil to help see when Gold will make it's move. This seems to be proving true. However much was made in those early discussions of the Euro and how it would gain value as the Dollar loses value. That does not seem to be happening yet? In fact as you know the Euro has lost significant ground to the dollar. Why do you think that it is taking so long for the Euro to make that move that was being predicted several years ago?

I have also given some thought your discussion as to the very lofty prices that Gold might obtain in this once in a lifetime move you seem to be suggesting. Should Gold attain $600 dollars an ounce most Gold mining companies would become extremely profitable. Anything above that they might have to hire additional security. At $1,000 an ounce, I might be tempted to quit my day job and go to the hills where I have some gold mining claims. With pick and shovel and a pan a person may be able to get several ounces a week. With modern day equipment a person could likely do much better. At those lofty gold prices we would re-experience the gold rush in this country. Rather than people quitting their day jobs to day trade dot.com stocks they would be quitting their day jobs to go find gold.
If on the other hand the price of gold in dollar becomes great simply because of extreme hyperinflation or currency devaluation then all other hard assets would increase in value to the dollar as well. If that is the case what makes gold better than land, silver or wheat for that matter? I guess what I am saying is I can see gold going up significantly over today's prices (It hit what $800 in the past). So It could hit $1000, $2000 or maybe $3000. But how long could that be sustained? On the last run up how many people holding physical gold went out and cashed it in at $800? Help this Western Thinking mind.

Quicksilver

(02/16/2000; 17:54:00 MDT - Msg ID: 25482)

Tomcat

http://www.usagold.comYou're right. I remember that day in '87. I ran out and bought silver rounds and waited and waited. Everything I thought was wrong. There were heavy margin calls going out and metals got soldoff bigtime. But, when I was a teenager from '74 to '80 it was the hayday of coins, gold, and silver. With the presence of real inflation the inverse relationship did exist during those years. As soon as Reagan got in and dealt with inflation (by borrowing), the relationship no longer held. I'm no real fan of Ravi Batra but there are cycles that do exist. I think the FED is trying to fight deflation with inflation. Last year we almost had a liquidity crisis and Greeny decided to give the animal a cash injection three times. I think we are past the last cycle and into the next. So this move in commodities is telling me that maybe we are going back some 25 years and starting the process all over again but through a slow transition. I've read "The Great Reckoning" by Davidson and Rees-Mogg and they describe these cycles enough to run circles around Ravi Batra. I have no idea how far along the inflation path we are but I think we have many more skeletons jammed in the closet now than we did back in '74.

Since I realize I've just opened up a can of worms I should be willing to give attention to others theories that counter these. I think we need to strive for the truth about these ideas we have. And a differing view can be a welcome compliment to a discussion. If we seek we'll find and if we don't seek we may just fall asleep.

Henri

(02/16/2000; 18:49:31 MDT - Msg ID: 25483)

Gandalf the White Msg 25480

Actually they said something about a ring, then skulked off towards Shelob's Lair. Methinks it was of mithril. Anybody got the breakdown for Mithril? I'm guessing there's Rhodium in it.

RossL

(02/16/2000; 19:19:42 MDT - Msg ID: 25484)

Henri

Mithril
Mithril is a secret just like my precioussssss.

Trail Guide

(02/16/2000; 19:22:58 MDT - Msg ID: 25485)

FREEGOLD

Hello again ORO,

ORO (02/15/00; 16:45:38MDT - Msg ID:25407)

You write:
------The electronic systems will carry the day.-----------

Your Point-------
Eventually they will switch to a free gold banking system

Your Why------
because the fraud of the bank-government-Cabal's fiat money system leaches too much from commerce, and now that electronic free markets have no barriers to entry left, it is on the verge of total collapse. ------Whether the Cabal survives or not turns on Cabal member's acceptance of the
reduced position left to them. ------So far, they have attempted to stretch their current position as far as possible - and then some. They are taking what they can out of the current structure and massively moving their holdings of old and new economy corporations onto an unsuspecting public full of enthusiasm. A last effort at one more fleecing of the flock.----------

TG:
ORO, I have a hard time accepting the present currency system as a independent Cabal. Even in the context of viewing it as some small part of US government structure. Yes, they are a political block and their policies can be applied to them as an acting whole (FOA's "Dollar / IMF
faction"??). But as a "extended order" type cabal, operating on their own? Consider that every US citizen has a personal share in this structure that many of them have voted for themselves. Just as in my post to Journeyman, we must accept that the entire dollar reserve system has tied all of us to it's fate as much as we tied it to ours. None of us had to go into debt, overspend or use a non- energy efficient product structure. We as a people optioned for the most financial rewarding lifestyles,,,,, not the most moral ones!

Trying to go back and pick the points of where the "Cabal" crossed a line of no return ,,,, that made us all "go with the flow" begs the question: "When did everyone stop voting?" (smile)

You write:
------Trail Guide - you obviously understand the issues as they are, yet you claim that there is a "society" willing to take upon themselves their own fleecing.--------------

TG:
No, we turned the cheek as we agreed to fleece each other for the good of the system. All the while holding private emotions that somehow each of us could jockey for financial position while the others were not looking! What else could explain the insane rush into all forms of financial derivatives. No one is chasing this leverage for nothing. The "Western Mission Statement" says that our dollar, free enterprise system is the greatest,,,, let's keep it going,,,, but please let me make my million before anyone "responsible" exposes it for what it is,,,,, and shuts it down!

---------Obviously, you include government and banking as part of this "society", ---------- and point out that they had in the past, and still have the upper hand and will be able to impose their fiat money on us for the foreseeable future.-----------

TG:
Too a degree, yes! I covered this in a post today to Journeyman. We are to a point now where the governing powers cannot turn back. You, I and many here understand the dangers,,,,and openly discuss it, but most do not and will not. If we (from my end) have any purpose at all it's
not to stop this "irresistible force",,,, rather, to better light the trail before us. My contention, as an American, it that our dollar fiat currency will continue through out out lifetimes. In an substantially lower value and international use mode,,,,,,, but be in existence never the less.

ORO, our entire society structure was built on this dollar and we will slowly slide with it's inflationary fall. We will not just shift out of it,,, especially on a downhill run. Look at many of the third world countries that still locally use their almost worthless moneys, but use dollars in a parallel economic world. We will eventually do the same. Read Travlers 2nd post here The Traveler
(1/28/2000; 1:30:27MDT - Msg ID:23712),,,,,'see the part under "Now for new business -----" beautiful! It gives a good perspective.

You write:
------ You are arguing that the fiat system is unresponsive to the fact of its own inefficiency reducing long term growth by an enormous margin - by half as far as I can calculate the effect. Alternately, you are making the argument that the system does not reduce efficiency but is
necessary for growth. ---------------- I know that the fiat system is not capable of increasing the growth of output. It imposes a transfer of resources from producers to government, banking, and related interests and reduces the resources available for producers to further produce and for the global community to raise standards of living. The fiat system is a negative sum game and the free economy is a positive sum game. Their connection together produces less wealth than is possible without fiat.---------------------

TG:
We shift gears here and talk about the Euro system. We have to differentiate between a brand new reserve fiat currency and an outgoing one that has been aged from debt and it's constant attempted alignment with gold. Of course the Euro has all the bad qualities you mention,,,,,, but so did the dollar at the beginning! Are we comparing apples and oranges?///// No. Just as you posted earlier, the dollar was never on a traditional gold system. And even during most of the time it was,,,,,,, the world financial structure would not hold still.

Yet, the US economy did incredible things and did it using a constantly evolving ,,,,,,"in reality mostly fiat",,,, financial system. Yes, we robbed our citizens of productive efforts (including gold) to do it,,, but "in much of our beginnings" ,,, as a whole it worked well enough to give us a major world standard of living. The same thing is going to somewhat happen in Europe. And their gold system may end up as the best yet!

ALL:
My FREEGOLD discussion with ORO and others is not a change of venue for me. Actually, I am laying the foundation for much of the discussion I will undertake on the "Gold Trail". Here, as Trail Guide I am debating the issues as myself. As FOA I will be offering the Thoughts and Reasoning of others.

Also SteveH,
I never did thank you for that wonderful work in your "Open Letter". All of us gained insight from it.

Thanks for reading.

Trail Guide

JCTex

(02/16/2000; 20:47:11 MDT - Msg ID: 25486)

canamami

NO apologies necessary. Be willing to bet that a lot of us felt and feel just like you do for very similar reasons. I would download on the subject of those people, myself, but MK would remove me from this site forever. Bad language is considered bad form..........damnit.

Henri

(02/16/2000; 20:55:20 MDT - Msg ID: 25487)

The Traveler Msg ID:25439 and Trail Guide,Oro et. al.

Isn't it interesting that we cannot discuss gold and its role in society without discussing politics. Traveler, I really enjoyed the disection of the problem from the perspective of a battle between the "haves" and the "have nots". As you pointed out quite astutely the "have nots" have finally carried the day and fulfilled the admonitions of our forefathers. That a democracy as opposed to the originally intended Republic)leads to a looting of the treasury and the voting of its largesse to be distributed to the public, by majority agreement.

When we discuss the US$ and the debt structure it represents, it cannot really be called "fiat" I think. At the very first moment in a world far away from today, a man's word was worth more than a pile of gold. For on it rode not only his own reputation and his immediate family's but that of his parents and his progeny as well. Surely a man's promise to repay is not "nothing" as the word "fiat" is I think meant to imply. A fiat currency has no backing whatsoever and is a unit of value only by common agreement or more commonly by enforced usaged at the behest of the local powers that be.

I submit that a debt currency, while not having experienced a desirable end, was at first presented as an experiment, even if it was in the progenitors intent no more than a premeditated fleecing of an entire nation's wealth over several generations. It was a time when a gentlemans word meant something special again by common agreement and the knowledge of what reputation would befall the ilk of those associated with a scoundral not only by blood but by association as well. It was an exceedingly "polite" society and yes, armed. Much of this had followed the Americans from Europe where such a system had been in place for years.

Ah but this new society was born of the ideas embodied in the Constitution. These ideas themselves having their origins in old and not so old writings on governance from Europe. This new society was an experiment. An incredibly successful one at first. The guiding principle was individual freedom and responsibility for ones own actions.

I can not help but notice that on this side of the pond, we (the Americans...for that is the side from which I was thrust from the peaceful security of my mother's womb)that we have sown the seeds of our own destruction. Thank you Traveler for showing us how this occurred in a monetary sense. But there is more to it. It cuts to the very fabric of our Constitutional jurisprudence. The current EU type of culture and the US variety being both good experiments in human understanding are essentially incompatible.

The US culture/legal system has evolved under the concept that individual rights are paramount. The countries of the current EU do not allow for such strict indulgence in individual rights/privilege but instead seem more focused on what some call "Social Justice" that being (I think) to borrow a phrase from Mr. Spock of the planet Vulcan, "the needs of the many outweigh the needs of the few". The way I see it, there is nothing fundamentally wrong with either of these systems of governance. Indeed we have seen both types of organization flourish and prosper in real terms over the last twenty years. The problem only comes when there is an attempt by one or the other to incorporate some of the aspects of the other system. For instance, trying to legislate "social justice" and integrate it into a system fundamentally geared to favor the rights of the individual has led to unmitigated disaster and may be one of the major factors that is tearing the fabric of US society today.

We say we favor individual rights and responsibility (US system) yet we pass legislation that legitimizes the concept that individuals are not responsible for their actions or their "condition in life". We then institute all these bureaucracies to favor one "group" or another because "it is the socially proper thing to do"...it has "social justice".

The evidence is that these two systems of governance and jurisprudence are fundamentally incompatible from a legal perspective. Not to say the two systems cannot coexist peacefully side by side 'til kingdom come. However for one side to take "pot shots" at the other and criticize the way they do things only serves to encourage more attempts to take the best of both worlds and try to integrate these things where they cannot comfortably be integrated without violating their own fundamental precepts.

What it all boils down to in either system is that ultimately the individuals that make up "society" must take responsibility for what is done and for moving their "society" peacefully along to hopefully a more enlightened day without conflicts of any kind.

Not only is the world still experimenting with monetary systems, the world is still experimenting with order and governance. When we try to blend the best of two systems that we all can see both "work" we blur the point of the experiment which was to observe the effect of the diversity on each system. In short, the collective beaker explodes in our faces.

I do not have the answer other than it must involve people taking individual responsibility for doing what is right. In our system (US), people do the right thing often without it needing to be legislated. In both systems often people do not. This will continue.

Yes there is a problem that is tearing the fabric of American communities. From my observers platform, its name is "Social Justice" Not the principle itself, but the attempt to integrate it into a society with a basis that starts with individual rights and their concomitant responsibility. "Social Justice" removes the "responsibility" part causing extremely confused youngsters. We can no more successfully integrate "Social Justice" here than you could integrate legal precedents of individual rights that supercede the "common good" over there.

You can't have it both ways! Each system left to its own fundamentals works and together they work in harmony for greater good, but they should not "interbreed" for it weakens the entire "gene pool" of governance.

Now consider the ramifications of this once proud society facing literal bankruptcy, Yes Yes there I've said it. It is quite likely even without a reckoning of sorts that the enormous debt structure of the US monetary system cannot be brought to account. The only way out now is inflation to insignificance. Truth be known that even the Russians, as pathetic as we make out their circumstance to be are probably better off than the average American from an International debt standpoint. Why oh why they did not immediately disavow their foreign debt service upon the dissolution of the Soviet Union is beyond me...but that is another world. In a similar sense, the formation of a new confederation of states the EU can incorporate their collective prosperity and bank it on the new monetary concept called the "Euro". To be sure it is at first a currency of hard account but only by virtue of its method of retaining gold reserve..the so called nuclear grade weapon for currency defense. We are I'm afraid engaged in a great currency war...much of it being fought behind closed doors. Out of the Limelight so-to-speak such that a world financial upheaval is not created while an old system of account is replaced with a new system. But it is war nonetheless.

I find it ironic that, the old European values of honor and freedom from tyranny created the new republic and at once, having seen what they had created, began to sow the seeds of its demise by first debasing its currency, then its social fabric. In America, I'm sad to say, because of the social and legislative confusion and jurisconstipation induced by the comingling of "social justice" with individual rights and responsibility, we may not even really have to feel bad about what we have done to ourselves. We can blame it on the "system". It is not our fault. The finger can point to....hah! over there. A Rhodes Scholar!

It may well be that a free gold market and the Euro combo are better than belgian ale. But for how long? See how easily the gold market is manipulated. Indeed it might take 56,000 US$ gold to rid the planet of the American debt plague. But what then, yet another cycle. I am not bitter, even a mere middle school child can see the futility of pursuing the US$ farce to the end. I only hope it can die a graceful and timely death without widespread violence. One would have thought that it would have been the proponents of social justice that would have adopted the idea of collective debt currency and the proponents of individual freedom that stuck with immutable objective wealth in the form of gold coin of the realm. perhaps we can return ther when we roll out the new monetary plan for this side of the pond,yes We still do have gold (legendary at this point) but presumed by all to exist. Think of it compatible but diverse societies using compatible but diverse currencies in trade. Now if we could only delegislate about 20 years of social engineering from the books and get back to individualism and good old responsibility for our own actions.

But I am not so certain that our Rhodes Scholar likes losing ...or has he won? Its all so confusing. I guess it really doesn't matter in the end. I just hope his recent contact with Putin didn't involve a wink and a nod that says, Well I guess this means its US against them again ...whaddayasayweburytheoldhachet and figure out how we can contain this new upstart that comes out wearing such large britches and speaking of guaranteeing its own security. Whats up with that?

nickel62

(02/16/2000; 21:01:16 MDT - Msg ID: 25488)

quicksilver if I remember correctly gold was hot in the Spring Summer and

right up to the Crash in October 1987. The gold stocks were moving along with the rest of the speculation and after a brief inter-day rally came under exactly the type of cash raising selling you refered to.

nickel62

(02/16/2000; 21:01:57 MDT - Msg ID: 25489)

quicksilver if I remember correctly gold was hot in the Spring Summer and

jdoubleu

(02/16/2000; 21:14:19 MDT - Msg ID: 25490)

Quicksilver Msg #25482

As a first time lurker cum poster I had to express my tentative agreement with your analogy. I too have been drawing some parallels with the late '70s but have found other troubling inconsistencies as well. I definitely don't like the problems the argicultural industry is experiencing (not at all like the '70s) which in itself tends to deflate the world and I just don't see/feel the quasi-militance of the labour unions which could really start the inflation ball rolling. In addition I still go into the local Wally World and am somewhat astounded at the very competitive pricing of the majority of items (definitely not like the '70s). Conversely the oil price has had an aggressive uptick recently (very much like the late '70s) but I am told if you adjust for inflation (too lazy to calculate myself) we are not anywhere near the levels achieved in that era. Having said all this I would welcome some good old fashioned inflation as it was the most affluent period in my life and I too hold an inordinate amount of gold shares et al. But you know what I truly believe we are at the cusp of the mortal battle between the two flations and it just kind of feels like IN is starting to pull OUT over (to draw my former arm wrestling days).

jdoubleu

jdoubleu

(02/16/2000; 21:28:39 MDT - Msg ID: 25491)

msg #25490

Sorry, sorry. My first post and I blew it. The last sentence should read "But you know what I truly believe we are at the cusp of the mortal battle between the two flations and it just kind of feels like IN is starting to pull OUT (what the heck is that suppose to mean)etc etc. Of course it should DE not OUT. Too many blows to the head what can I say.

Elwood

(02/16/2000; 21:44:19 MDT - Msg ID: 25492)

Freegold

Thanks, everyone, for the great discussion. If being a purist is a crime, then call me guilty and have the bailiff lead me away.

It seems that on this road we travel we're unanimous on which direction to take, but, somehow, we've paused to debate the best direction to dodge yonder oncoming runaway truck.

On the one side of the trail there is a precipice that leads not to oblivion, but is just a short drop to a roadway that will lead us through a series of hairpin turns and curves back to this point at which we stand today. That is what the Euro represents. History has time and time again shown that this is the choice man is all-but-destined to make.

The other side, however, represents a different avenue of avoidance. It is a cave. To choose this path is to choose the uncertainty that lies in its darkness. To the mass of humanity, it seems, this darkness, even though its effects be temporary, is unacceptable because of the uncertainty it represents. During the few times in history in which man has chosen this path, great leaders have arose to lead them there and thence out again once the danger has passed. Wherefore are such leaders today? Are the spirits of Jefferson and Jackson truly dead?

Was Freeman Tilden truly correct when he wrote the following in his book, "A World in Debt"? "Nothing, has been more amply demonstrated during the past three thousand years than this: that the great majority of men do not esteem, or understand, or even desire personal liberty. What they value is the semblance of liberty accompanied by indulgence."

Solomon Weaver

(02/16/2000; 21:51:11 MDT - Msg ID: 25493)

tomcat and the relationship gold to gold stock to stock at large

Tomcat (from earlier in the day you write)

I am not saying the POG won't rise if the markets tanks. I am saying it won't happen immediately. I wish it were otherwise but consider that many funds who and into the dot coms are really going to be hurting, much worse than 87. Where will the get their sorely needed cash.
-----------------------
As I see it, the gold paper contract market (and in many and worse ways silver paper) is highly fractionally reserved, and in a very large stock market crash, accompanied by big hedgebook defaults, would simply ruin these paper markets which are so far removed from the actual metal markets.
Gold paper is a financial instrument which central banks and governments have an interest in. Silver paper is a speculative instrument which does not really interest central banks.
Given the relatively small amount of long contracts in gold that are deep into the money, I have a hard time believing that there are massive cash resources which can exit gold. What I see as the much more dangerous scenario is that in an unfolding meltdown, that a lot of new money moves into gold long contracts (which hands over sales proceeds to the short sellers) and as the gold paper gets out of control, the longs cannot settle their contracts. Thus the perception could be that one can lose their shirt in gold...when the truth is that one can lose their shirt in gold paper. A lot depends on how desparate shorts are to meet their obligations vs. how willing they are to hide behind hemmoraging hedgebook losses.
Time scenario, it could take 4-8 weeks for a total collapse in gold paper. It could take 4-8 months for a puplically accepted trading mechanism for real gold to reestablish where "traders" can get involved again. It could take 1+ years for the quarterly earnings of gold companies to really start to fly. When there is massive volatility in gold paper and gold, how can one trust the profit projections of miners?

Late and tired...Poor old Solomon

Marius

(02/16/2000; 21:58:32 MDT - Msg ID: 25494)

No apologies needed!

Canamami,

You aren't the only one who's a little testy over the manipulation thing--I just try to do my ranting in private to preserve my public face! Really. Ask my lovely wife. Don't sweat it, but don't fret it either.

One thing trading commodities has taught me: (even in an unrigged market) the market is under no obligation to behave in a way that you or your guru de jour think it should. It goes double for a rigged market like gold. The best you can hope for in that situation is to accurately figure the trend, go with it, and wait patiently for other opportunities. Gold & silver are hard to resist, because the bang for the buck in options can be so good. It was nearly my undoing a year ago, in both markets. Happily, I learned a lesson, and have so far avoided further calamity.

Like many other colleagues here will tell you, you (hopefully) buy physical as insurance rather than speculation, and hold it for the long haul. As I alluded to in my last post: hope you don't need the insurance. That seems like a sensible way to avoid getting too worked up over things.

Think of it this way: it's a 'what could be worse joke'. What could be worse than holding physical gold? Holding paper derivatives with a limited shelf life. That's what I've been doing this last year, so I've got as much right as anyone to be a little wigged out over the current situation.
The reason I'm not losing my cookies is that I know the end game is in sight, I've got an open order to sell my calls at "my price", and there are some 30-odd other commodities markets to play in if PM's become stagnant.

Given the good info. from GATA's contributors, the distinguished posters here, and other sources, I know that the hourglass of time is running just as hard against the cabal as it is my calls. Also, I've seen how low I can go and still come back. They haven't!

Keep laughing at the silliness of it all, and remember the knowing words of Lord Keynes: "In the long run, we're all dead!"

M

Elwood

(02/16/2000; 22:52:18 MDT - Msg ID: 25495)

Freegold, Trail Guide (02/16/00; 19:22:58MDT - Msg ID:25485)

Question re:

"Yet, the US economy did incredible things and did it using a constantly evolving ,,,,,,"in reality mostly fiat",,,, financial system. Yes, we robbed our citizens of productive efforts (including gold) to do it,,, but "in much of our beginnings" ,,, as a whole it worked well enough to give us a major world standard of living. The same thing is going to somewhat happen in Europe. And their gold system may end up as the best yet!"

Haven't you, yourself, argued that our entire standard of living is but an illusion based on that robbery of others?

Tomcat

(02/16/2000; 23:59:14 MDT - Msg ID: 25496)

Quicksilver and Solomon

Your messages reminded me of the fact that this problem is fairly tough to analyze. Please be assured that what I say is merely opinion and not based on any experience of any value. My view is probably overly simplistic but here it is.

1. Market Tanks
2. Margin calls begin to wake the walking dead who think their paper gold reprsents the real thing. Funds sell or trade their paper gold for less than spot and the value of the paper gold drops and physical drops as well (but not for long). However, the price of physical starts to hold as more and more fund managers begin to realize they have blown it.
3. To save the day Greenspan floods the markets with fiat. This triggers an avalance of repatriated dollars that flood an already inflated economy.
4. Later on the price of physical gold continues to rise while the value of paper diminishes. In the end the shorts can't cover with physcial and it price rises even faster.

That's about all I see for now. Comments?

Skip

(02/17/2000; 00:54:16 MDT - Msg ID: 25497)

@canamami, re: gold manipulation

To canamami, regarding message posted on: (2/16/2000; 16:15:48MDT - Msg ID:25477)...

Indeed, you are not alone in having very strong feelings about the gold manipulation. I could say "amen" to almost everything you said yesterday in msg ID:25477. Certainly these times try our faith to the outer limits. However long we languish emotionally and/or financially for our day in the sun, remember that we cannot take our gold with us to the "other side" when life is done. However, NEITHER can the shorts take their profits with them when their day is done, assuming they have not yet reaped what they sow. Everything we have in this life is temporary, in that even thought gold lasts for thousands of years, WE are here for only a short time. Our gold will stay here when we are gone.

This may not help you feel better, but it does sometimes give me food for thought when I get discouraged over my financial suffering so that the rich elite can get richer.

Eventually, this too shall pass...and hopefully we shall yet realize a reward for doing the right thing with our money. And if not, I can still sleep at night knowing that I have NOT squashed others for my own profit. The manipulators do not have the satisfaction of knowing that their money has come with integrity...and I believe that their day of reckoning will come to pass either in this life or the next one.

--Skip

View Yesterday's Discussion.

SteveH

(02/17/2000; 01:32:21 MDT - Msg ID: 25498)

respost

www.kitco.comSound familiar?

Date: Thu Feb 17 2000 00:27
Winston (Jim Rogers remarks on the Euro's Pros and Cons as a new currency...) ID#252445:
Copyright � 1999 Winston/Kitco Inc. All rights reserved
http://www.millenniumadventure.com/content/stories/article_austria_1.html
"What I can see is that if despite all the problems the euro works, it has to replace the dollar as the world's most important currency. That is, if the euro works it will become the world's chief reserve currency and the world's chief medium of exchange. What this means is that the world's central banks, which until December 31st, the day before the launch of the euro, held nearly 60% of their foreign-currency reserves in dollars, will over the next five years, say, sell off many of these dollars and buy euros. Our enormous balance-of-trade deficit has never been addressed by our government, but more and more investors are seeing the big picture, that the dollar cannot keep its value forever with these awful pressures against it, not the least of which is the enormous Japanese trade surplus and largest foreign-currency reserves in the world. Indeed, the dollar has already fallen dramatically over the last few months; I can't help but believe this is the beginning a long, long secular fall."

Usul

(02/17/2000; 01:36:48 MDT - Msg ID: 25499)

How long/high can the equities bubble go?

Technical analysis is better at predicting price ratios (e.g. fibonacci) than timing. What happens to the bubble next, at today's ridiculous valuations? Consider the result if today's ridiculous valuation were to double. You would then have a double ridiculous valuation. It is rather like "Dark Helmet" in Mel Brooks' spoof movie "Spaceballs", going from "light speed" to "ludicrous speed". Whatever valuation you like, it's still ridiculous. So, the bubble can go as high as you like, for as long as you like.

When it finally bursts, there won't necessarily be a prime cause. Analysts will latch on to any exogenous event as a "cause". However, there have already been many such events and there will be more. It just happens that there will probably be one or more exogenous events to blame the crash on when it does happen. The culmination is more likely to be a subtle flip in investor psychology, at a point when most people are pretty much fully invested, and suddenly, like a shoal of fish doing an about turn, everybody decides it's time to sell.

Trail Guide

(02/17/2000; 05:20:33 MDT - Msg ID: 25500)

(No Subject)

Hello Henri,
I printed that one ! So should everyone else(hopefully there will be more of those to come?). Henri (02/16/00; 20:55:20MDT - Msg ID:25487)

Now if we can just get Traveler to continue.

Thank You, sir Trail Guide

Black Blade

(02/17/2000; 05:32:42 MDT - Msg ID: 25501)

No Pd to be found, should continue up today!

TOCOM Precious Metals Review: Platinum/palladium hit limit-up Tokyo--Feb 17--Tokyo Commodity Exchange platinum contracts surged to another daily maximum price limit-up on short-covering Thursday
following overnight stronger NYMEX, dealers said. Palladium also stayed at limit-up levels during the day, they said, adding that trade volume remained at a thin level in the absence of sellers as TOCOM palladium did not catch up with the NYMEX's rally in the past few days, they said. (Story .2192)

Black Blade

(02/17/2000; 05:38:04 MDT - Msg ID: 25502)

Metals a little frisky this morning!

Pd up +$15.00 to $703.00, Pt up +$15.00 at 570.00, Au up +6.90 at $308.30, Ag up +$0.04 at $5.28

WGC: Gold demand up 21% on year to record high of 3,278.4 tons
London--Feb 17--Gold demand in 1999 rose 21% on 1998 levels to reach a record 3,278.4 tonnes, according to the World Gold Council's Gold Demand Trends. The 566.2-tonne rise came mainly from a 23% jump in year-on-year jewelry demand to 2,799.2 tonnes, helped by strong fourth quarter demand of 707.8 tonnes--5% up on the same period in 1998. Investment demand totaled 479.2 tonnes, up 8% on 1998 levels despite a poor fourth-quarter performance where demand fell 24%, it said. (Story .13722)

Black Blade

(02/17/2000; 05:43:23 MDT - Msg ID: 25503)

Today our plate could be full!

A little move in the PPI today could trigger a lot of action. Big Al will be speaking to the buffoons in DC today. Anything is possible. Hang on, the ride could get a little bumpy (volitile) today!

R Powell

(02/17/2000; 05:47:42 MDT - Msg ID: 25504)

Good morning Gold!

I awoke this cold New Enland morn to find either Hong Kong or London or both had done some fine work overnight. Gold up....Bid 307.75...Ask 309.25...+6.35. Perhaps I should sleep more often.

SteveH

(02/17/2000; 05:50:45 MDT - Msg ID: 25505)

I am hearing rumors

that gold is up $10 now. Any confirmation?

Henri

(02/17/2000; 06:23:12 MDT - Msg ID: 25506)

Trail Guide Msg 25500

Thank You, Sir You honor me highly, yet it is I who feel privileged to share my ideas among such noble souls as these at the Round Table

Henri

(02/17/2000; 06:34:50 MDT - Msg ID: 25507)

PM's visibility is a powerful draw.

Someone mentioned how they are carrying gold bullion coins around in their wallet and showing them to people. For the past year I have been carrying one of the most beautifully designed and crafted coins I have ever had the pleasure to heft and too have been showing it around.

It is the 1998 1 oz Platinum Eagle. This coin is remarkable in a number of ways, first that I was able to acquire it for $360 but the most striking characteristic appears on the eagle side.

If you hold it up so a bright light like the sun relects off the polished surface of the engraved sun, the feathers of the flying eagle also illuminate with a breathtaking beuty as if they had captured the brilliance of the sun itself and are making away with it.

I am so entranced with these units that I cannot bear to part with them...even at theser elevated prices.

Now if they only made a coin of Rhodium

Trail Guide

(02/17/2000; 06:45:40 MDT - Msg ID: 25508)

Freegold

-----Elwood (02/16/00; 21:44:19MDT-MsgID:25492) Feegold---
and
--Elwood (02/16/00; 22:52:18MDT - Msg ID:25495)--------

Hello Elwood,

You write:
----- During the few times in history in which man has chosen this path, great leaders have arose to lead them there and thence out again once the danger has passed. Wherefore are such leaders today? Are the spirits of Jefferson and Jackson truly dead?---------------(and)--Was
Freeman Tilden truly correct when he wrote the following in his book, "A World in Debt"? "Nothing, has been more amply demonstrated during the past three thousand years than this: that the great majority of men do not esteem, or understand, or even desire personal liberty. What they value is the semblance of liberty accompanied by indulgence."-----

TG:
Oh boy, Tilden said it right,,,,, "semblance of liberty accompanied by indulgence"! This very aspect of modern life is clearly visible in our money systems today,,, and will most likely be the norm for some time.

It's one of the reasons I brought up Freegold,,,,,, so we can all air our feelings and perceptions about money and life,,,,,, past and present. I submit that most goldbugs are not preparing themselves for the trail ahead. "Reality",,,, in today's context is that the world is going to use a fiat
system for the foreseeable future,,,,, come what may.

If we can understand the impact a currencies "timeline" has on it's value, we can position ourselves to dodge "at least" the "worst effects" of that speeding truck you speak of.

You write:
------Haven't you, yourself, argued that our entire standard of living is but an illusion based on that robbery of others?---

Yes,,,, AND eventually??,,,,, or perhaps most likely??,,,, the fiat Euro will also create the same illusion of wealth that the dollar has given today. But, the size,,,,,, scope,,,, perception of that wealth illusion is most evident at the end time of a currencies life,,,,,, not the beginning.

This is one of the reasons my friends question the over dependence,,,,,, the over positioning of ones wealth in dollar based wealth and gold derivatives for this transition. For myself, it amasses me what a difference there is from Western perceptions and much of the rest of the world. In America, for instance,,,, investors know little about the true need for "real gold" and put perhaps
10% into it at best. And even little of that position is real metal. Major private players elsewhere consider 30% a good mark for our present time. It used to be 90% (talking about the hard money portion of ones overall wealth) of our (American view) metal holdings was in derivatives with 10% in metal. In the 70s that meant gold futures and mining stocks as the paper portion and 7% silver, 2% gold and 1% other as hard metal. Today, many do the same thing and also "trade" extensively, thinking it's the way to catch up. What they do not realize is that the mechanics of the entire "gold market" as we know, it has changed dramatically. The risk today is that the whole gold market place,,, and all the equity structure that depends on it,,,,,, will fail and shut down as the dollar reserve currency system suffers the first (and largest portion) phases of it's long term
downward drift.

In ground reserves (ore),,,,, future delivery against contract gold,,,,, cash delivery against contract gold and it's implied later purchase of gold on the open market,,,,,, will all be discounted heavily in a mad scramble to exit dollar assets.

This recent paper evolution of our gold market is the natural, end result of an old dollar / gold relationship being mutated in an effort to prop up and extend our dollar system. Once this strategy was / is abandoned, it will collapse with and before the dollar,,,,,, and in doing so "take out" the perceived "equity in almost every gold derivative asset.

This is the reason why many major private gold investors today believe physical gold will far outrun all of it's modern contemporaries,,,,,, and do so by a huge amount. As such we (that's me too) now place 95% (again this is the hard asset portion of their overall wealth) of their hard
money in physical "gold" only! I not only expect gold to keep up with any hyperinflation of the dollar,,,,, but out- pace even that ,,,,,, by a large amount!

This position was promoted and considered very radical only a few years ago. Today, many are reconsidering it. Again, on the Trail I'll build quite a foundation to support this view.

Thanks Trail Guide

Henri

(02/17/2000; 06:52:50 MDT - Msg ID: 25509)

Interesting reaction to my display msg 25507 HELP!

Once when I showed the Platinum to a group of men, one remarked about the $100 denomination on it. He said "...so this is $100?" I said, well if you take it to a bank, they will give you a $100 bill for it. He then said "...How much did you pay for it?" When I said $360, he remarked, "...see I really don't get that, why would anyone pay that much for something that is only worth $100!"

I had no answer for him that was succinct and prepared but I put him immediately on my list of people to take aside on a convenient moment and begin to explain the facts of life. Having pondered this over and over I have only come up with an answer that a fellow knight of this table would comprehend. The retort is..."Exactly!"

But realistically, what can be said in a nutshell to those who ask this? Perhaps, "...if it said it was "worth" more than its market value, they would not be in circulation"

This might work but begs further discussion. Does anyone have a pat response? A good answer would be appropriate for any coin of any realm that had value beyond its official redemption denomination. Help?

Henri

(02/17/2000; 07:04:31 MDT - Msg ID: 25510)

Oops Msg 25509

Or is it, ...if it was "worth" more than its market value you would see a lot more of them in general circulation" See even I am confused and set back by the paradox. How can it be easily explained?

Black Blade

(02/17/2000; 07:07:47 MDT - Msg ID: 25511)

Pd up $52.50 to $745.50

http://www.quoteline.com/irtmecoe.aspPd on the go again!

Journeyman

(02/17/2000; 07:38:40 MDT - Msg ID: 25512)

Beginning of the Trail: Re:Henri (02/17/00; 06:52:50MDT - Msg ID:25509)

I like your first answer, "Exactly." There's a lot of learning to do in such a situation, and the majority of that has to happen in the mind of the learner. One of the most effective learning motivators is a question or problem. Your "Exactly!" answer, it seems to me, will immediately cause a chain of thought something like this: "Hmm, is Henri a fool to pay so much? No, I know him well enough to discount that. So WHY did he pay 3.6 times the value of the coin?"

An unanswered, seemingly paradoxical question stays with the mind for a long time. He's now slightly hooked.

It seems unlikely that he'll figure this out completely himself, but I'll bet with minor prompting on your part from time to time, you can hook the discussion to that apparent anomaly, and thus help him proceed with his learning.

A parallel situation which might help with this learning was when all the silver coins disappeared from circulation. Ask him why. Now I believe "junk" silver coins are selling at something like 4 times face value. Bringing this up might help mark the trail. Ask him why even old, used, silver coins are worth about 4 times their face value.

Another avenue to get him to explore might be, "Why would someone mint a coin with a face value cast into it that the minter knew at the time was too low by a factor of 3 or 4?"

Remember your friend has a long way to go. You're not going to get him to learn it all in one conversation, let alone one sentence.

Hmm. But a short sharp quip might be satisfying --- you've got me thinking!

Regards,
Journeyman

P.S. Welcome to the fray!! With your Henri (02/16/00; 20:55:20MDT - Msg ID:25487)

schippi

(02/17/2000; 08:24:26 MDT - Msg ID: 25513)

XAU breakout chart

http://www.SelectSectors.com/xautoday.gifBullish right acending triangle breakout in progress.

RossL

(02/17/2000; 08:29:28 MDT - Msg ID: 25514)

Journeyman, Henri

Once when I showed a group of friends a gold Eagle one of them asked why it was marked $50. I told him the price was 50 dollars in gold or 300 federal reserve notes. Some of them nodded in understanding and the others' eyes begin to glaze over.

USAGOLD

(02/17/2000; 08:30:37 MDT - Msg ID: 25515)

Today's Gold Report: Gold Higher This Morning; Asia Back on Radar Screen; Gold Demand Up 21% in 1999

http://www.usagold.com/Order_Form.html2/17/00 Indications
�Current
�Change
Gold
309.50
+4.50
Silver
5.30
+.02
Gold Lease Rate
0.3800%
-0.05
Gold Comex Stocks
1,373,484
nc

Market Report (2/17/00): Gold bolted higher overnight taking many
market participants by surprise. Hong Kong reported strong physical
buying accompanied by speculator short covering -- a tandem we expect to
see more of as we move deeper into year 2000.

Much of the increase in physical demand over the past year (the World
Gold Council this morning reports a 21% increase in worldwide gold
demand for 1999) has come from Asia. Investors burnt badly there by the
currency collapses that rolled from one country to the next during the
so-call "Asian Contagion" have been buying gold at a record rate. Now,
Vilmaz Akyuz, the U.N. economist who first flagged the Contagion in
1996, issues a warning that Asia could go back into the soup.

While Western governments busily congratulate themselves over keeping
their prime international lenders from skidding over the cliff the last
few years, the East still suffers real damage to its economy. Says Akyuz
according to a Reuters report this morning: "The danger is
complacency..economies are recovering, but people aren't." Akyuz went on
to say that "international policy-makers had so far failed to make
changes to the architecture of the global financial system that might
avert a repeat of the Asian crisis."

None of this is lost on Eastern savers who are stocking up on yellow
metal. (Once burnt shame on you; twice burnt shame on me.) As an aside,
the World Gold Council also reports a sharp increase in demand in the
United States where presumably investors are reacting to such things as
the potential trouble in Asia alluded to above, an over-valued stock
market which looked very shaky yesterday, and the threat of an
inflationary bubble as oil's rapid rise begins to show up at the gas
pump.

When you look at a gold chart these days, it appears that the iron clamp
applied to the yellow metal is slowing losing its grip. Vitality is
returning with a solid up trend in place and healthy price swings now
evident that will delight the technicians. As Haruko Fukuda recently
said "Gold is beginning to act like its old self again."

If you are looking for a pro-gold view of the various financial markets
as well as a summary of the events affecting the yellow metal, our
monthly newsletter might be of interest. News & Views -- Forecasts,
Commentary & Analysis on the Economy and Precious Metals has
been characterized as witty, urbane, intelligent and down-to-earth. Not
to mention it's Free of Charge If you want to keep up with gold, this
is the way a large segment of the gold owning public does it, and has
done it for over a decade.

Just click here the link above and make the appropriate entries.

Journeyman

(02/17/2000; 08:30:48 MDT - Msg ID: 25516)

Freegold -- on the road! @The Traveler, Trail Guide, ORO, ALL

@The Traveler, Trail Guide, ORO, Aristotle, Elwood, Henri,
dragonfly, Peter Asher, Mr. Gresham, ALL

Welcome indeed Traveler! I was beginning to feel that we
were all "piling on" Trail Guide, somewhat ungratefully
since he's been, in his alter ego, responsible for many
miles of the path that's gotten us here. Not only that, but
his persona is so good natured, it's like "piling on" Santa
Claus!

OK, so much for the gentlemanly bow and sincerely offered
respect. Now let's get on with the Freegold (debate)!

Traveler writes:

"Purists. Well meaning, well reasoned and
intellectually sincere but at times the debate is
reminiscent of those who crusade for world peace." -The
Traveler (02/16/00; 01:22:22MDT - Msg ID:25439)

It's true! Call me Don Quixote -- or perhaps Sancho Panza
might be more appropriate. On the other hand, people could
have labeled Keynes similarly when our ancestors were safely
and solidly, they believed, on the gold standard. To
overturn the economic establishment -- gold -- was the
"impossible dream" of Keynes' day:

"The composition of this book has been for the
author a long struggle of escape, and so must the
reading of it be for most readers if the author's
assault upon them is to be successful,--a struggle
of escape from habitual modes of thought and
expression. The ideas which are here expressed so
laboriously are extremely simple and should be
obvious. The difficulty lies not in the new
ideas, but in escaping from the old ones, which
ramify, for those brought up as most of us have
been, into every corner of our minds." -J.M.
Keynes, December 13, 1935 from the introduction to
his _THE GENERAL THEORY of EMPLOYMENT, INTEREST,
AND MONEY_

Today, ironically, the "habitual modes of thought and
expression" which "ramify, for those brought up as most of
us have been, into every corner of our minds," are the
remains of the inflationist dogma, prominent among them,
Keynes' ideas. These were some of the very same dogma used
by the banking-government cliques to justify fiat money.
Keynes "struggle of escape" was the struggle to escape the
discipline imposed on governments and bankers by the
painstakingly evolved gold standard. Instructively, it is
the dregs of these previously impossible Keynsian dreams,
perhaps "nightmares," from which we must now wage our own
"long struggle of escape." Back to the future.

The point? Change happens. Today's heresy becomes
tomorrow's orthodoxy. Yesterday's 1900s heresy, at least in
the U.s., was fiat currency and the orthodoxy was gold. Why
shouldn't today's orthodoxy, fiat, give way to today's
"heresy," gold?

Why should "society" _return_ to a gold standard from this
latest greatest fiat experiment? Because the lessons of the
history of both fiat and gold insist. Because gold's
clearly better, probably at this stage, even for the cliques
which have here-to-fore profited from fiat. Can we find
anyone to argue that this isn't the case, that fiat yields
better results -- more civility, higher standards of living,
more freedom, a more productive economy, happier people --
than gold?

I didn't think so.

The argument then becomes _how_ can we proceed back to the
future. Good news! It's probably gonna happen whether we
like it or not. We can definitely help things along I
think, but I've barely even begun to think about that. ORO
however seems to be quite far along one fork of that trail.
Jason Happy (ah, _Sir_ Happy ;)) was exploring another. How
about you?

Traveler writes:

"Given man's inherent character flaws, world peace and
a perfect monetary system will eternally be but a
worthy ideal. When the dying dollar settlement system
gasps its last breath next week or next decade due to
the stranglehold of defaulted dollar denominated debts,
will another settlement system be demanded? Yes, of
course. Will it be perfect? Never." -The Traveler
(02/16/00; 01:22:22MDT - Msg ID:25439)

Sorry to repeat myself Traveler, but noone is suggesting the
old gold standard was perfect - - or that the new version
will be either:

"The gold standard is certainly not a perfect or ideal
standard. There is no such thing as perfection in human
things. But nobody is in a position to tell us how
something more satisfactory could be put in place of
the gold standard." -Ludwig von Mises, Human Action A
Treatise on Economics, Third Revised Edition (Chicago,
Illinois: Contemporary Books, Inc. 1966), pg. 473

Thus we need not argue that the gold standard is perfect,
only that it's better, and that's an easy argument to win.
And it's _because_ of "man's inherent character flaws" that
you mention in your post that we need that return to gold.

Comparing the quest for world peace with the quest for a
return to a gold standard isn't really a useful comparison;
we've never had world peace, but here in America we thrived
on a gold standard for over a century.

When the dollar dies, we lose if we have quit the
battlefield without firing a shot, or even more
ignominiously, if we don't even show up simply because we've
become convinced the path back to gold would involve a "long
struggle of escape."

"Considering that most posters and lurkers [even -j.]
here have only a vague understanding of the theory of
money and credit and trade, how successful will the
apostles of Jenny, Jerry and Ophra be at evaluating the
merits of the system proposed by their esteemed
leaders?" -The Traveler (02/16/00; 01:22:22MDT - Msg
ID:25439)

Good point, but only about 7% of the population of the
Colonies was actually involved in the First American
Revolutionary War, and that includes the Torries. It's
clear that way fewer than 7% successfully engineered the up-
hill battle from gold to fiat between 1912 and 1933. It
would be nice to have a mass movement back to gold by people
who completely understood what was going on and why, but
this is highly unlikely - - - and, I believe, unnecessary.
As I've suggested before, I believe this will be an
evolution that happens whether we like it or not. "When?"
you ask? Remember my crystal ball got broken awhile back --
but things these days often happen faster than expected.

Two Questions:

QUESTION 1: What if anything, specifically, changed in 1933
that put us in a situation _requiring_ abandonment, after
more than a century of operation, of the painstakingly
evolved and smoothly functioning gold standard?

QUESTION 2: What makes it impossible today (we already know
it's desirable don't we?) to re-institute free banking?

Regards,
Journeyman

TownCrier

(02/17/2000; 10:03:49 MDT - Msg ID: 25517)

Sometimes, 'overnight' just doesn't cut the mustard...

http://biz.yahoo.com/rf/000217/ww.htmlThe Fed sent $2.0 billion packing for a week vacation among banking system reserves through their use of seven-day repurchase agreements.

(Pssssst....doesn't everyone just love the larger posting window? (My idea.) Thanks for the follow-through, Jeff.)

Henri

(02/17/2000; 10:50:43 MDT - Msg ID: 25518)

Paper? or real?

http://www.centralfund.com/quarterlyreports/3rd%20Quarter%201999.htmThis looks interesting. How would something like this hold-up in a runaway PM market?

Another question if I may?

Certain European based Oil Companies...RD, TOT, ELF etc are traded on the US markets as well as their European counterpart markets, Since the base companies will now "do business" in Euros, will these fare anybetter in a stock rout than Other issues. As for RD I remember the US$ price was influence as the Dutch currency exchange rate fluctuated, I am thinking that this high flyer though with a P/E loftily above the rest of the group would be a sell-off until P/E parity was established. certainly all of this group will suffer, but will they not recover if the formula previously presented (e.g. 1 oz gold = 300 Euro = 15 barrel oil) holds even while FRN valuations flounder? For that matter, what of the oil paper of US Canadian producers whose asset value of production explodes to the upside in FRN terms. Will they not be islands of stability when blue chip P/E parity stabilizes...screaming buys then? Or do I wish for sanity where none exists?

How about paper on Dupont (DD)? Here is a very old family business...I am certain they must be hooked into the backroom currency war. Look at their P/E it is low and has maintained this stature through the run-up. Already a bargain will it be a benchmark or a victim?

TheStranger

(02/17/2000; 10:55:58 MDT - Msg ID: 25519)

Greenspan Sounds The Inflation Alarm

http://www.federalreserve.gov/boarddocs/hh/2000/February/ReportSection1.htmGreenspan's Humphrey Hawkins testimony today is unequivocal for once. For numerous reasons, he sees inflation ahead and the necessity for further interest rate increases.

Stranger's note: At least Greenspan deserves credit for ignoring the PPI/CPI numbers. What he appears to miss, however, is the reason why his 1/4 rate increases aren't working. At these levels, it is not the price of money which matters in a hot economy. It is the availability.

law

(02/17/2000; 11:03:01 MDT - Msg ID: 25520)

Canamami, Skip, Marius, Henri, Traveler, TG, All: Inflation adjusted #s

http://www.gold-eagle.com/editorialsCanamami, Skip, and probably many others...yes, the frustration can be disheartening and demoralizing...but I believe Marius has expressed the most comforting attitude. I too, have been in this situation several times in the last thirty years. I also have "fiat" in physical, gold stocks, futures/options. After reading the many thoughtful messages here, believe me...I have thought many times about taking my losses in the paper and putting it all into the physical. But???!!!

* A warm welcome back to our devoted "Travel Guide", Tomcat...and the many new posters...Traveler, Henri, Quicksilver, and many others who have become a part of this interesting Forum.

** And a warm best wishes to all(since USA gold inception), who continue to weather the adversity of our existence, and relish the diversity of discussion.

*** Someone raised a Question concerning oil, adjusted for inflation (sorry, I don't remember who)...but, I thought all might be interested!

"Is a Bear Lurking Behind the "Goldilocks" Stock Market" by John R. Hummel
Here are the figures adjusted for inflation:

Soybeans 1973 1999
$12.90 $48.57
Crude Oil 1980
$39.80 $81.96
Gold 1980
$870.00 $1791.50

Pretty amazing figures...aren't they!

Thank You MK

An occasional poster and lurker...when time avaiable!

schippi

(02/17/2000; 11:07:20 MDT - Msg ID: 25521)

FSAGX & FDPMX Gold Sector Chart

http://www.SelectSectors.com/agpm70.gifBreakout followed by a pullback!

TheStranger

(02/17/2000; 11:10:50 MDT - Msg ID: 25522)

Where The Heck Are The Australians?

The Aussie Dollar has been so weak lately that Austrailian gold miners are reluctant to join in the global renunciation of further hedging. Perhaps they are afraid of a rebound in their currency. I don't know. But they better get on the stick or, for them, being "down under" may start to go beyond mere geography.

I hope those who own stock in these outfits will join the chorus of shareholders worldwide who are fed up and not going to take it anymore. These guys are messing in our mess kit.

Hipplebeck

(02/17/2000; 11:23:38 MDT - Msg ID: 25523)

greenspan

It's pretty obvious Greenspan knows where this is leading.
He didn't use the word bubble (too inflammatory), he used the word bulge."When we get over this bulge in wealth and everything settles back to normal" No lie, that's how he said it.

He flat out told Ron Paul that they had no way of measuring M3. Paul said "It's pretty hard to manage something you can't measure." Greenspan said "It's impossible to manage something you can't measure."

When asked about what to do with the supposedly for sure budget surplus for next year and what to do with it, he made a funny face and wavered his hands like "If there is a surplus next year.
He flat out said that they can't figure out where the US budget surplus is coming from. It doesn't show up in the Fed's measuring tools.

He made a joke about an IPO that came out and said "We don't make anything, We don't do anything" but still sold stock.

CoBra(too)

(02/17/2000; 11:24:26 MDT - Msg ID: 25524)

History and some of my history...

An explanation to all - I've been brought up as a son of an Austrian diplomat (-ist!-better version) and ventured into investement banking, after failing to graduate in forestry (landmen are still clos to my heart).
I became a gold bug in the early 70's and feel the stress since the 80's. Yes, i'm involved in a number of junior exploration situations I believe in - from Nevada to B.C. and to Ghana - and I am lucky to be part of a group working with Bob Needham, the founding chairman of Placer Pacific in the early 80's. Back in 1996 my paper was worth close to 20 million $, which I didn't take advantage due to insider conssiderations. It will be again - paper!
In the meantime, I felt to owe you an explanation and here it is:
Every major producer started small and "stumbled" by chance on their company making bonanza (Barrick being the most recent "Goldstrike" example )made a farce of their own opportunity and became a hedge fund under the guidance of non-executive directors a la G. Bush sr., Mulroney and others. - Since then big is becoming the problem - you don't risk your salary for a shot of heroism in a buraucracy. So big means - replacing your production rate by robbing juniors of their bonanzas, as ABX and others are doing today. This is just a thought, but it just may be another indication of major producer's l.t. strategy for helping the Fed's and BB's to manipulate the POG.
I, for one, don't want to see the gold mining industry in the hands of a bunch of derivative power players - "undermining" fair play in terms of developing nations, mining co's and lastly not in terms of keeping the fiat $ system afloat to the detriment of 90% of global populace.
If these words seem bitter - they are - democracy as understood is a measurement of demography - and as such (and in view of global industry mega mergers) small is expendable.
Gold -with or without (officiaal) standard will eventually reset the scales.
Hoping a new (alledged) pariah's words are still heard - if not heeded- here!
Kind regards -bleeding- CB2

PS: TG - great input - thanks - ORO Kudos
Stranger - would like to personally contact you -
MK got my electronic print!

law

(02/17/2000; 12:02:29 MDT - Msg ID: 25525)

Inflation adjusted Numbers

Let me try that again!Soybeans Actual: 1973@$12.90/1999@$48.57
If they would have been priced @$6.00 in 1973...would now be @$22.59

Crude Oil Actual: 1980@$39.80/1999@$81.96
If priced @$20.00...would now be @$41.19

Gold Actual: 1980@$870.00/1999@$1791.50
If priced @$300.00...would now be @$617.76

Hmmmmm...getting interesting!

TheStranger

(02/17/2000; 12:11:25 MDT - Msg ID: 25526)

CoBra(too)

Meine email ist daviddport@earthlink.net

law

(02/17/2000; 12:15:07 MDT - Msg ID: 25527)

Inflation numbers

Another !!!If you think it's a struggle maintaining and preserving wealth...try to imagine what farmers are experiencing!!!

Al Fulchino

(02/17/2000; 12:23:25 MDT - Msg ID: 25528)

Brief Interruption

Thank you gracious host for permitting the off topic post on physics.

I received many wonderful requests for the book "Finding God In Physics". I have more copies arriving next week and will send out to all who emailed me. The offer still stands to anyone who felt shy about making a request.Please do not be shy..... email at fulchinos@prodigy.net

And now back to our regular scheduled programming

Baron

(02/17/2000; 13:07:47 MDT - Msg ID: 25529)

au shortfall

This is my first posting to this forum although I have been lurking quite awhile. Black Blade(?) said earlier (5.38 GMT) (msge id 25502) that 1998 gold production was 3278.4 metric tons. Yesterday it was posted here by Black Blade (?) 4.48 GMT (msge id 25448) that 1998 production was 2545 metric tons and demand was 3719 tons. Am I missing something here? Could someone explain and/or tell me where I could find the real figures? TIA Baron

jdoubleu

(02/17/2000; 13:09:27 MDT - Msg ID: 25530)

Inflation?

Thank you for your inflation adjusted numbers (msg#25527). As they indicate the inflation we are seeing is not as earth shattering, comparatively speaking, as we may think. Tell a farmer how tough it is and he'll laugh until he crys. We are definitely seeing an uptick of inflation (CRB upswing, larger union settlements) but I suggest we won't see any type of an inflation inspired gold rush until the excesses of the financial world stop being paid for by the commodity producer of the Heartland. Barring a currency crisis it is possible gold will experience a laboured but volatile climb due to the large inventory of agriculture products America has and the good ol' boy system working it's manipulative ways.

Jdoub.

Henri

(02/17/2000; 13:17:01 MDT - Msg ID: 25531)

CoBra(too) Msg 25524 Just curious

I don't know if you are at all "hooked in" with the Austrian diplomatic regime either previously or currently, but on the off chance you are...perhaps you could shed some light here at least from an Austrian politics perspective.

Bear with me Knights, for the relevance of what follows bears on the politics of perceived EU stability and hence it's poster child the "Euro". I reference my previous post Msg 25487.

Here is my query. From what quarter comes the media and diplomatic attacks upon Austria, a previously venerated confederate of the EU? Is there a move afoot by parties with a vested interest in seeing the "Euro" experiment fail creating the perception of disunity of EU nations?

Certainly if Greece and Turkey can make amends (if only for public viewing, by what logic does the EU engage in risking the heretofore perceived unity of purpose within its current members. Is Freedom Party leader Joerg Haider such a pariah that the EU would make such a public display of dissention in the ranks when so much more is to be gained by tolerance?

For example, I can see how the recent recall of the Argentine ambassador could have been engineered by the West.

His foul? To cast Joerg Haider as a democrat, and call concern over neo-Nazi trends in the country "journalistic exaggerations". Is he right? I have much skepticism for what is doled out by the formerly free press on this side of the pond and view it more as journalistic persuasion by self appointed "thought police". I can imagine the tentacles of this beast reaching deep into the march on that side of the pond as well.

From what I have gathered, while some of the remarks made by Mr. Haider were subject to being taken out of context and twisted, was not his faux pas in voicing the alien (to the EU) viewpoint of "individual rights and concommittant personal responsibility". This in a way similar to the way the foreign concept of "social justice" was foisted upon US 20 years earlier? We can't have that now can we. Haider has publicly bravely acknowledged and apologized for way his points were taken and that he could be more restrained with his references in the future. Get over it you guys! We're depending on you to give us the transitional currency to weather this massive wealth transfer/evaporation.

What's the inside word? Is this a contrived attack upon EU stability? Sure these ideas are absolutely incompatible with the EU governance, but so is "social justice" over here.

Hey what goes around , comes around.

TownCrier

(02/17/2000; 13:24:36 MDT - Msg ID: 25532)

Testimony of Chairman Alan Greenspan: February Humphrey-Hawkins Report

http://www.bog.frb.fed.us/BoardDocs/HH/2000/February/Testimony.htmThe Federal Reserve's semiannual report on the economy and monetary policy before the Committee on Banking and Financial Services, U.S. House of Representatives
February 17, 2000

"I appreciate this opportunity to present the Federal Reserve's semiannual report on the economy and monetary policy.
There is little evidence that the American economy, which grew more than 4 percent in 1999 and surged forward at an even faster pace in the second half of the year, is slowing appreciably....

"Underlying this performance, unprecedented in my half-century of observing the American economy, is a continuing acceleration in productivity....

"Yet those profoundly beneficial forces driving the American economy to competitive excellence are also engendering a set of imbalances that, unless contained, threaten our continuing prosperity. Accelerating productivity entails a matching acceleration in the potential output of goods and services and a corresponding rise in real incomes available to purchase the new output. The problem is that the pickup in productivity tends to create even greater increases in aggregate demand than in potential aggregate supply. This occurs principally because a rise in structural productivity growth has its counterpart in higher expectations for long-term corporate earnings. This, in turn, not only spurs business investment but also increases stock prices and the market value of assets held by households, creating additional purchasing power for which no additional goods or services have yet been produced.

"Historical evidence suggests that perhaps three to four cents out of every additional dollar of stock market wealth eventually is reflected in increased consumer purchases. The sharp rise in the amount of consumer outlays relative to disposable incomes in recent years, and the corresponding fall in the saving rate, has been consistent with this so-called wealth effect on household purchases. Moreover, higher stock prices, by lowering the cost of equity capital, have helped to support the boom in capital spending.

"...safety valves that have been supplying goods and services to meet the recent increments to purchasing power largely generated by capital gains cannot be expected to absorb an excess of demand over supply indefinitely. First, growing net imports and a widening current account deficit require ever larger portfolio and direct foreign investments in the United States, an outcome that cannot continue without limit.

"...At some point in the continuous reduction in the number of available workers willing to take jobs, short of the repeal of the law of supply and demand, wage increases must rise above even impressive gains in productivity. This would intensify inflationary pressures or squeeze profit margins, with either outcome capable of bringing our growing prosperity to an end.

"As would be expected, imbalances between demand and potential supply in markets for goods and services are being mirrored in the financial markets by an excess in the demand for funds. As a consequence, market interest rates are already moving in the direction of containing the excess of demand in financial markets and therefore in product markets as well. For example, BBB corporate bond rates adjusted for inflation expectations have risen by more than 1 percentage point during the past two years. However, to date, rising business earnings expectations and declining compensation for risk have more than offset the effects of this increase, propelling equity prices and the wealth effect higher. Should this process continue, however, with the assistance of a monetary policy vigilant against emerging macroeconomic imbalances, real long-term rates will at some point be high enough to finally balance demand with supply at the economy's potential in both the financial and product markets. Other things equal, this condition will involve equity discount factors high enough to bring the rise in asset values into line with that of household incomes, thereby stemming the impetus to consumption relative to income that has come from rising wealth. This does not necessarily imply a decline in asset values--although that, of course, can happen at any time for any number of reasons--but rather that these values will increase no faster than household incomes.

"...With foreign economies strengthening and labor markets already tight, how the current wealth effect is finally contained will determine whether the extraordinary expansion that it has helped foster can slow to a sustainable pace, without destabilizing the economy in the process.

"On a broader front, there are few signs to date of slowing in the pace of innovation and the spread of our newer technologies that, as I have indicated in previous testimonies, have been at the root of our extraordinary productivity improvement. ... What is uncertain is the future pace of the application of these innovations, because it is this pace that governs the rate of change in productivity and economic potential. ... Monetary policy, of course, did not produce the intellectual insights behind the technological advances that have been responsible for the recent phenomenal reshaping of our economic landscape. It has, however, been instrumental, we trust, in establishing a stable financial and economic environment with low inflation that is conducive to the investments that have exploited these innovative technologies.

"...When productivity-driven wealth increases were spurring demand a few years ago, the effects on resource utilization and inflation pressures were offset in part by the effects of weakening foreign economies and a rising foreign exchange value of the dollar, which depressed exports and encouraged imports. Last year, with the welcome recovery of foreign economies and with the leveling out of the dollar, these factors holding down demand and prices in the United States started to unwind. Strong growth in foreign economic activity is expected to continue this year, and, other things equal, the effect of the previous appreciation of the dollar should wane, augmenting demand on U.S. resources and lessening one source of downward pressure on our prices.

"...A central bank can best contribute to economic growth and rising standards of living by fostering a financial environment that promotes overall balance in the economy and price stability. Maintaining an environment of effective price stability is essential, because the experience in the United States and abroad has underscored that low and stable inflation is a prerequisite for healthy, balanced, economic expansion. Sustained expansion and price stability provide a backdrop against which workers and businesses can respond to signals from the marketplace in ways that make most efficient use of the evolving technologies.

[check out this small slap on the government's wrist...]
"Before closing, I should like to revisit some issues of federal budget policy that I have addressed in previous congressional testimony. Some modest erosion in fiscal discipline resulted last year through the use of the "emergency" spending initiatives and some "creative accounting."...

"The new budget projections from the Congressional Budget Office and the Administration generally look reasonable. But, as many analysts have stressed, these estimates represent a midrange of possible outcomes for the economy and the budget, and actual budgetary results could deviate quite significantly from current expectations. Some of the uncertainty centers on the likelihood that the recent spectacular growth of labor productivity will persist over the years ahead...

The Fed Chairman's Unabridged Concluding Remarks...

"Another consideration that argues for letting the unified surpluses build is that the budget is still significantly short of balance when measured on an accrual basis. If social security, for example, were measured on such a basis, counting benefits when they are earned by workers rather than when they are paid out, that program would have shown a substantial deficit last year. The deficit would have been large enough to push the total federal budget into the red, and an accrual-based budget measure could conceivably record noticeable deficits over the next few years, rather than the surpluses now indicated by the official projections for either the total unified budget or the on-budget accounts. Such accruals take account of still growing contingent liabilities that, under most reasonable sets of actuarial assumptions, currently amount to many trillions of dollars for social security benefits alone.

Even if accrual accounting is set aside, it might still be prudent to eschew new longer-term, potentially irreversible commitments until we are assured that the on-budget surplus projections are less conjectural than they are, of necessity, today.

"Allowing surpluses to reduce the debt to the public, rather than for all practical purposes irrevocably committing to their disposition in advance, can be viewed as a holding action pending the clarification of the true underlying budget outcomes of the next few years. Debt repaid can very readily be reborrowed to fund delayed initiatives.

"More fundamentally, the growth potential of our economy under current circumstances is best served, in my judgment, by allowing the unified budget surpluses presently in train to materialize and thereby reduce Treasury debt held by the public.

"Yet I recognize that growing budget surpluses may be politically infeasible to defend. If this proves to be the case, as I have also testified previously, the likelihood of maintaining a still satisfactory overall budget position over the longer run is greater, I believe, if surpluses are used to lower tax rates rather than to embark on new spending programs. History illustrates the difficulties of keeping spending in check, especially in programs that are open-ended commitments, which too often have led to larger outlays than initially envisioned. Decisions to reduce taxes, however, are more likely to be contained by the need to maintain an adequate revenue base to finance necessary government services. Moreover, especially if designed to lower marginal rates, tax reductions can offer favorable incentives for economic performance.

"As the U.S. economy enters a new century as well as a new year, the time is opportune to reflect on the basic characteristics of our economic system that have brought about our success in recent years. Competitive and open markets, the rule of law, fiscal discipline, and a culture of enterprise and entrepreneurship should continue to undergird rapid innovation and enhanced productivity that in turn should foster a sustained further rise in living standards. It would be imprudent, however, to presume that the business cycle has been purged from market economies so long as human expectations are subject to bouts of euphoria and disillusionment. We can only anticipate that we will readily take such diversions in stride and trust that beneficent fundamentals will provide the framework for continued economic progress well into the new millennium."

Journeyman

(02/17/2000; 13:49:16 MDT - Msg ID: 25533)

The problems with measuring inflation

The PPI (Producer Price Index) held steady in January; because of a drop in tobacco prices, the core rate of inflation, excluding the volatile food and energy components, dropped two tenths of a percent (-.2%).

INTERPRETATION: If you use tobbaco in your manufacturing, the inflation you experienced in January was -.2%. If you don't use tobacco in your manufacturing processes, inflation you experienced was .2% higher than that at 0%.

Regards,
Journeyman

Phos

(02/17/2000; 14:27:26 MDT - Msg ID: 25534)

Baron (02/17/00; 13:07:47MDT - Msg ID:25529)

http://minerals.usgs.gov/minerals/pubs/commodity/gold/Hi and welcome,

The US government website in the link has some statistics on gold production (1998 mined=2400 tonnes). Add to that scrap recovery which is around 500-600 tonnes and other sources (see the site below for some outdated statistics 1992-1995) and total annual supply has run around 3300 tonnes for the past few years.
http://www.ebso.com.tr/business.web/Eurogold/world.htm

Sharefin has a number of good gold links, some with statistics:
http://business.fortunecity.com/wrigley/585/Markets/Gold13.htm

Demand has been running above production for some years. The world gold council has some numbers on gold demand:
http://www.gold.org/Gedt/Gdarchiv.htm

I am not sure if the supply/demand numbers are available all in one place although my feeble brain seems to remember seeing statistics in a paper somewhere. If I can remember where I saw it, I will post the source.

TownCrier

(02/17/2000; 14:32:46 MDT - Msg ID: 25535)

Speaking of the Fed Chairman....

CNN moments ago reported an interesting trivia item:
In reply to the question "What percentage of Alan Greenspan's portfolio is invested in stocks?" the answer was...

None.

No stock holdings. No mutual funds.

Do you think he sleeps well at night...or does he whine over "missed opportunities"?

andrew

(02/17/2000; 15:04:16 MDT - Msg ID: 25536)

gold down in Sydney 18/2/00

I don't know about the market report numbers because it is trading down in Sydney @ $300.25.

Hipplebeck

(02/17/2000; 15:06:07 MDT - Msg ID: 25537)

greenspan

I've learned one thing about Alan.
He reveals himself much more when he answers questions than when he reads his prepared statements.

Hipplebeck

(02/17/2000; 15:16:15 MDT - Msg ID: 25538)

opportunities

This may be the last killer buying opportunity in gold.
I watched the Greenspan show today.
He is telegraphing, big time, what he really feels.
I'm telling you, he knows more deeply than any of us here at the forum knows, what reality is.
He is going through the motions.
He is waiting in anticipation just like we are.
He knows he is involved in a sham.
He even gits giggly when making his subtle hints.
Greenspan's no dummy.

CoBra(too)

(02/17/2000; 15:48:07 MDT - Msg ID: 25539)

Henri - Valid questions

M. Henri,
I can only answer your first question - objectively- meaning I'm not part of any regime - diplomatic or otherwise-and diplomat(ist)s may call it corps, though not denying to have good friends in the "Corps".
In terms of Austria, a country trying to get to grips with reality after a Versailles treaty, un-voluntarily drawing new borders by some "Grande Nationes" whims, shortcutting natural obstacles by the legality of the victor, in essence leading to WWII.... Yes - I agree,my country should bear its share of responsibility for the holocaust - but please be fair enough to accept this is now the 3rd generation (benefit of the afterborn?)- no - in context - Austria has tried to stay independent from Berlin 1933 - 1938 (Dolfuss).
To answer your Q.: The EU today is dominated by social democrats? Yes? - I guess we've had the bad luck of reversing the dominance at a crucial time - setting us up as a target for ex-ultras like molotow coctail throwing Joshka Fishers, Umberto Bossi's and Le Pen's.
I'd much rather have a Joerg Haider, Populist, far from any extremist, which we too had in 68 -Borodajkevich- latest student revolt.
The only revolting truth I can find today - Power corrupts - see CDU - l.t. power corrupts l.t. see - proportional corruption after 50 y's of Spoe/Oevp government.
Good riddance - and give us a chance to reforms -
Maddy - you're not all dim -
Not sorry - not happy - CB2

Harley Davidson

(02/17/2000; 15:53:36 MDT - Msg ID: 25540)

@Hipplebeck, TownCrier

I agree with your assessment of Greenspan. No one who doesn't fully understand what is going on is going to get the position he has. It amazes me how he is continually bashed as stupid, naive, blind, etc.

TC, if I'm not mistaken, it is a conflict of interest for AG to be in the markets and, as I understand it, he is barred from participating.

R Powell

(02/17/2000; 16:24:37 MDT - Msg ID: 25541)

Baron Re gold numbers

The WGC gave some numbers this morning in an article entitled "1999 Gold Demand Sets New Record" They claim demand was up 20% last year (year ending 1999), or 566.2 tonnes to a total of 3,278.4 tonnes. They give more figures and comparisons. You can find this at www.kitco.com/market/news; then click on Yahoo Finance and the title of the article. The above numbers are 1999's increase over1998. 1999's numbers were 224.8 tonnes over 1997.Hope this helps and welcome, tried to post earlier but couldn't get through. Hope this does as I am a two finger typist.

andrew

(02/17/2000; 16:26:38 MDT - Msg ID: 25542)

price of gold down

Price of gold in Sydney is down to $300.25. What happened to my last post? It appeared then promptly disappeared.

Hipplebeck

(02/17/2000; 16:41:34 MDT - Msg ID: 25543)

(No Subject)

What kind of analytical tool is it that let's the price of cigarettes control the PPI?

R Powell

(02/17/2000; 17:00:21 MDT - Msg ID: 25544)

Shut down New York

I awoke this morning to find POG up about $6 from Hong Kong and London overnight trading. Then we got hammered again in New York. After the weekend, trade will once more circle the globe but skip N.Y. on Monday's holiday, so we'll have two sessions apiece overseas before entering the lion's den again. Now if the Australian miners would just ease up on their sales- perhaps POG could escape its jailers once again and avoid recapture. The large up and downs should be incouraging news. ?? They often seem to occur over a very short time. Are these large orders or are we becoming a thinly traded market? So many questions--so little knowledge. Thanks to all for any returned thoughts.

Farfel

(02/17/2000; 17:03:51 MDT - Msg ID: 25545)

Swimming in the New Paradigm...re: VENGOLD

The following post on KITCO says it all:

Date: Thu Feb 17 2000 15:14
phos (Radiumflipper - Vengold warrants - what a call!) ID#42307:
Copyright � 1999 phos/Kitco Inc. All rights reserved
I would like to thank you for the Vengold advice. I had noted that your earlier calls had been good ones and knowing that VEN had turned into another internut, I decided to throw caution to the winds and invest in the warrants ( which were pretty cheap anyway ) . Gold stocks should be doing the same thing and will some day soon. The A warrants were up 1800% at one point today. Who knows what tomorrow will bring?

I could not find the stock price that the warrants can be exercised at. Do you know a website which publishes this data. I could not find it at the Vengold site or SEDAR.
---------

So here we have a "genius" who invested his money in Vengold warrants without so much as a clue what the exercise price of those warrants are nor the expiration date for those warrants. (Hey, maybe they expire next week, wouldn't that be a joke?).

Can you fathom that? Is this not an example of lunacy beyond anybody's wildest imagination? What percentage of Vengold stockholders share this posters' maleducation and sheer indifference to due diligence and pragmatic investing? I would hazard a guess that well over 75% of the investors are of this ilk.

Let me draw several analogies: it is no different than buying a house without an inspection or purchasing a used car without a test drive.

Vengold is NOT an investment, this is plain simple casino gambling and the forementioned fellow might as well take his money and play roulette in Vegas. There is not one scintilla difference between the turn of the roulette wheel and an investment in this type of "company."

The entire rationale for investing in Vengold (now renamed ITEMUS) is completely antithetical to everything that gold stands for. It's success in the marketplace can only continue provided the sound operative "logic" of goldbugs is forever repudiated and diminished by the the raving crowd.

A company arrives on the scene and announces it has $50 million (US) for the purpose of incubating internet ventures. Yet it has no defined ventures in the pipeline nor any defined business plan. Instead it merely has several persons with some internet/technical experience attached to the announcement of its "name change?"

During the more reasonable pre-Clinton years, the company would have been described categorically as nothing more than a scam operation but instead today Wall Street venerates such nonsense.

Although I know that momentum investors or traders will decry my warnings and state that profit is all that matters,
I contend that more is at stake here. Until such mass idiocy ends, then we are truly looking at a situation where certain individuals are simply buying themselves fancier chairs on a great big Titanic.

For gold investors, avoid this one like the plague. Its success rests entirely upon the failure of all your other sound gold investments. This internet incubator sucks capital away from sound sensible investments and its success will maintain the current dismal status quo of a world gone mad with greed and devoid of any common sense.

Thanks

F*

Harley Davidson

(02/17/2000; 17:27:20 MDT - Msg ID: 25546)

(No Subject)

While the topic has moved to questionable investments, I thought I would offer the ultimate stock pick... Believe it or not, this is a real company!!! In January the stock was approx. 1 1/2

Netj.com corp. 5 3/4 up 5/8 !!!!!!!

CAPISTRANO BEACH, Calif.--(BUSINESS WIRE)--Feb. 17, 2000--William Stocker, legal custodian of NetJ.com Corp. (OTCBB:NETJ), Thursday announced that he has appointed Simon Blackman, 29, and Wendy Louise Paige, 50, to serve as directors of the company.

Paige reported that, "The company currently has no business operations, no employees and no operating revenues. The company has begun negotiations with reverse acquisition candidates; however, previously announced potential acquisitions have failed to materialize and there are no assurances that current negotiations will materialize in an acquisition."

Now there is a salesman!

Au-some

(02/17/2000; 17:34:04 MDT - Msg ID: 25547)

The Art of Precis

Applause to Traveler from a lurker for msg. #25439 because precise is nice.

Au-some

(02/17/2000; 17:36:45 MDT - Msg ID: 25548)

(No Subject)

Sorry, I mean concise is nice.

Farfel

(02/17/2000; 17:41:56 MDT - Msg ID: 25549)

Swimming in the New Paradigm Re: Leonard Kaplan

``The gold market was beset by rumors ( about Ashanti ) last night that touched off commodity fund buying,'' said Leonard Kaplan, chief bullion dealer at LFG Bullion Services in Chicago. ``We've come back off very sharply because the rumors are ridiculous.''

---------

What an odd statement to make! Coming from the main bubblemeister over at KITCO, who regularly appeared on that forum, urging everybody to dump their allegiance to gold and "ride the wave" of the internut and high tech lunacy, urging everyone to abandon all logic to the wind.

But when it comes to the gold market, Lenny Kaplan demands that we all adhere to strict rules of logic. He actually has the gall to use the term "ridiculous" in a disparaging manner??? Hard to believe given that for the past several months Lenny has been the main exponent of accepting the ridiculous bubble nature of the high tech mania. In fact he has gone on written record to note how ridiculous the Nasdaq mania has become.

A double standard? You bet but what do you expect from a man who trades gold yet so obviously despises everything the metal stands for.

Meanwhile, he is distinctly absent from the KITCO forum since he no doubt missed the recent gold moonshot that he so sadly failed to foresee....and so often declared would be an impossibility this year.

Thanks

F*

BTD

(02/17/2000; 17:43:09 MDT - Msg ID: 25550)

Inflation Calculator Page

http://www.jsc.nasa.gov/bu2/inflate.htmlThis is a cool site for calculating inflation frontwards and backwards using a number of different measures of inflation.

Trail Guide

(02/17/2000; 17:46:18 MDT - Msg ID: 25551)

Just nuts!

http://www.siliconinvestor.com/insight/contrarian/Hello Farfel,
I bet this tops your story:

From Bill Fleckenstein's site ----------

In the mania chronicles... A reader who is a rep for a discount broker in Toronto sent in the following:

"A couple of crazy calls today reminded me of how ridiculous everyone has become.

"One client asked me for a quote, giving me the symbol of the stock. He then asked me to check his account to remind him how many shares he owned. I didn't recognize the symbol and asked him the name of the stock (I can get it from the quote screen but it takes a couple of extra steps). He
replied that he didn't know the name of the stock, only the symbol.
Remember, he already owned the stock. Next we went on to another quote. This time he asked me if I could tell him what that company did. I checked a couple of news releases and told him it sounded like they were involved in faxes over the Internet. That was all he needed to hear, and he bought 100 shares at market.

"Another call today was from a client who wanted to buy some "aec.wt". I set up the buy and started to repeat it back to him before releasing it. I read the full name - including the word `warrants' - and then asked him if he was sure it was the warrants he wanted and not the actual trust units. I could tell he didn't know what I was talking about, so I explained to him what the warrants were. They were basically worthless and due to expire in March. At least he caught on quick and decided he didn't want them after all. I was
almost encouraged, but then he just went and bought some other penny crap. Oh well."

Au-some

(02/17/2000; 17:46:46 MDT - Msg ID: 25552)

(No Subject)

Sorry, I meant to say "concise"

Quicksilver

(02/17/2000; 17:46:53 MDT - Msg ID: 25553)

Tomcat

http://www.usagold.com I have some ideas of how a collapse could occur and maybe too many to fit together into a crash scenario model. It would still be worthwile I think to find the corners of the puzzle and work along the edges to determine some limits of what should or should not take place. I'll start with my own ideas and end with an excerpt from a book "The Great Reckoning" in another writing. As I see it, what Greenspan said today was to calm the markets as Nasdaq looks like it's going to roll over and play dead. The fear of repatriated currency from abroad, keeps the Fed wary of inflation. They cannot simply print money to solve their problems without triggering a run to dump the dollar. So as we become a third world country our monetary policies will adapt and transform to look like one. The Fed must keep Big Float outside the domestic US one way or another. Either with a strong dollar that leads people to want to hold on to them, or with strict currency controls. The economy is hooked on inflation when it's not hooked on borrowing. As we approach the limits of borrowing, only printing or monetization or high taxes are left. The Fed cannot raise interest rates as they would like to because they will trigger an implosive credit collapse. Business slows, profits fall, loans can't be repaid, liquidation ensues, inventories sold at auction, further depressing prices, increasing price competition,lowering profits for competitors. It moves into real estate. They go under. Banks can't collect loans, layoffs, enemployment, the spiral begins and leads to say half a million personal bankrupcies per month or more. The whole system is leveraged to the maximum.
Then the smarter thief says to the stupid ones. We can find untapped equity!!! Repeal the Glass-Steagul Act to rob the last room! So GM and Ford and Sears can now become banks loaning out more money to extend the cycle a little longer. Now they take the weakened banks from millions of consumer defaults(last year) and merge them with surviving corporations. The bubbles don't all pop at once. Consumer debt is compounding faster than consumer's ability to repay. So we have a runaway national debt and a runaway consumer debt with a few thousand billionares overseas shaking their bonds at the Fed saying "You mess with the value of these bonds and well sell them and spend the money". Fed says no, no don't do that we are going to get tough at home. But the trade deficit is the economy. Retail sales they say accounts for 2/3rds of the economy (I don't believe that but it's what they say). So when consumer credit dries up, consumer spending stops, merchandise sits on shelves, no corporate profits, layoffs to boost earnings. Once it gets going it compounds at an exponential rate as consumer debt interest runs away. People will cry out for inflation to pay off their debts. Government could listen instead to foreign debt holders to get more debt floated. Emperors only see the need to provide bread and a circus at home. So the Fed will add more sandbags to the dikes to keep big float out and tell the peasants they will provide more police to help mop up the blood in the streets. The next sandbags will be currency controls I believe. This would be an attempt to keep flight of capital away from conversion to the Euro. They would need to control E-commerce also. The stock market they can prop up by lifting the companies in the indexes, while the rest goes into freefall. The Fed will have to let the consumer debt bubble pop first because it is the biggest one and is a domestic problem not affecting big float so much. If the Fed "just prints money" they will destroy their access to foreign capital markets like the EURO. We would be flooded with our own paper. They will decide who they would rather offend and that decision will determine whether we have an inflationary or a deflationary collapse. Either way the POG returns to true valuation levels but these levels will be so high that the only place, I believe, you will find the gold standard functioning like a well oiled machine will be at the free market in the open-air bazaars that will pop up and transactions in gold will be illegal. Dealing in honest money (gold)is righteous in the sight of the One who created gold to be used as money. The freedoms you surrender are the ones you no longer have. As the Fed attempts a slow deflate of the stock market to avert a total panic, they will compound the consumer debt bubble like an incompetant nurse tugging on someone's broken leg to see if it's really broken. They have to to appease foreign bond holders, the ultra-rich in their club-globe. Europe right now is in the process of selling Euro denominated debt instruments for dollars to invest back into USA. So they become indebted to themselves then they will loose their money over here in th e collapse. But not if they sell first like I believe they did in '29. Ask any wholesale American old-gold coin dealer where the coins come from in quantity. European Bankers saved up all the gold certificates they could get and redeamed them in '33. They were smart they got our physical gold.
This gold buying in Asia can get the doors of Ft. Knox opened in a hurry and we'll see what's inside. The Chinese could get the rest of it. They take turns.
So I think the stock market could have more of a "bleed down" than a crash because it is the fine china that backs our fiat. The numbers coming out in months will be utter lies. We could see markets reacting to the true state of affairs in jolts and spikes as fund managers realize the truth. I'm bullish on gold because I see big float redemption in the works. I think the paper gold market will run out of liquidity in possibly a derivatives crash. The Fed will be unable to bail out all the big banks and news of that could spike gold up. We have bullish fundamentals and propoganda for news with the deluded fund managers left to figure out where to invest.

I guess I wanted to see correlations between indexes so much that I "saw" them. I apologize to everyone for acting like some guru analyst. I'm sorry. I got fed up with the analyst's pander and wanted to be a real one. I know alot of patterns but it's arrogant to predict so much. So, no more daily guessing. Good Day to all. Quicksilver

canamami

(02/17/2000; 17:49:28 MDT - Msg ID: 25554)

Which Central Bank is Dumping?

The lease rates went down again today. The POG is down again. All this in the midst of bullish news and developments. It all points to a CB or CB's dumping, which is what occurred after the Washington Agreement, and is what broke the Washington Agreement rally (Kuwait announced sales, Russia was selling, and a few others sold, including the BOE).

Does anyone venture to guess which CB is guilty this time?

A somewhat unrelated question: If gold is to backstop the Euro in Arab eyes, why would the ECB even allow the sale of 2000 tonnes over 5 years?

Cavan Man

(02/17/2000; 17:51:33 MDT - Msg ID: 25555)

Trail Guide and Freegold

Can I paraphrase you by (mis) quoting someone who once said, "We have met the enemy and he is us."

Cavan Man

(02/17/2000; 17:59:38 MDT - Msg ID: 25556)

canamami

With the rising price of oil and the "troubles" in the gold market, I believe the time is near to validate the Another/FOA future shock scenario or not. Should this current year expire without a wimper from the BIS/Euro/Oil camp, I would definitely reconsider that particular reason to own gold. My intuition tells me the time is drawing near.

However, there are many other good reasons to own gold at this juncture, Yes?

Cavan Man

(02/17/2000; 18:04:32 MDT - Msg ID: 25557)

canamami...in other words.....

It looks like it's time to fish or cut bait (for that crowd).

As FOA was fond of saying, "We shall see."

canamami

(02/17/2000; 18:34:25 MDT - Msg ID: 25558)

Reply to Cavan Man

Hi Cavan Man,

I wasn't really trying to attack the FOA/Another thesis in my post, though I have always had trouble with the secret gold-for-oil aspects of it, partly because I have trouble following it and partly because it sounds too elaborate to have been executed. On the other hand, the thesis as I understand it, or at least much of the thesis, seems to provide some sort of connecting rationale for some discordant and seemingly unrelated events in the world, and FOA/Trail Guide has provided a number of insights I would never have been exposed to but for this Forum. The reported Saudi threats or suggestions to cut off 25% of oil to the US is one possible corroboration of that theory. There are also other plausible theories around: gold manipulation to protect the shorts, to prevent the sending of an inflation signal, to facilitate big government or socialism, to destroy competitors, et al and etc. Then there is the demonetization of gold theory, also.

It seems to me that there is gold manipulation, for reasons I wrote about in previous posts. I'm just not sure (a) why it's being done, although there are the theories I noted above, or (b) who will win this war.

To get back to my previous post of today, it does appear a CB is dumping gold right now, as lease rates/declining POG are following the standard pattern. The question is: Which CB, and why?

Thx,
canamami.

R Powell

(02/17/2000; 18:37:10 MDT - Msg ID: 25559)

Cavan Man

"We have met the enemy and he is us". Was it Pogo who said this?

Solomon Weaver

(02/17/2000; 18:47:47 MDT - Msg ID: 25560)

some thoughts about where silver and gold go

NEW YORK (CBS.MW) -- Reduced gold-producer hedging and the recent strength in the platinum group boosted gold to a four-day high on Thursday.......

As of Feb 17/00 4:29 pm ET Last Trade 3050

In other news, Comex gold stocks, as of late Wednesday, were flat at 1,373,484 ounces. Silver stocks were up 1,980,980 to 77,473,895 ounces.
------
Solomin Weaver notes:
Current value of gold in COMEX is about $420 million.
Current value of silver in COMEX is about $406 million.

The amount of paper which "trades" over this is about 10-20x the dollar value of physical gold, and about 2-5x the dollar value of physical silver held at the market.

This can give the illusion to a trader that silver is trading closer to the metal base....or is more backed up by metal.

Today's COMEX physical gold is about 45 tons, or about 1% of the world's yearly demand. Today's COMEX physical silver is about 2,500 tons, or about 5-10% of today's yearly silver demand.

So to the casual glance, silver looks to be a more reasonable market, in the sense that there is actually metal to back it up.

It also tells us that to the players who matter, silver has a fairly important status in the PM markets next to gold.

What I forsee as being the big problem with Silver markets is that unlike jewelry and minting (gold), a large amount of silver today is used by industries (who have enjoyed a very low silver price). If the silver price were to start to rise quickly and stay at higher levels, we can bet the the industries who need a supply of silver will start to hedge their forward supply, trying to lock in favorable pricing, and if they suspect that defaults are coming, will demand delivery where possible, or go onto the spot markets directly.

One scenario which I think we could see play out for silver, but not as likely for gold, is that when both paper markets get extremely volatile and loaded with massive out of the money positions in paper contracts, that both the mining companies and the industrial users will see that it is almost suicidal to try to use the paper market...instead, they will enter into "partnerships of nessessity" where they structure direct forward sale/purchase agreements between eachother, outside of the paper market, and at secret prices that are not disclosed until quarterly stock reports are written. At this point, the "prices" in the paper markets are completely meaningless.

Two reasons why I think this can happen.

1. Most of today's players in silver are long or short at entry points around $5-$8 per ounce. If there would be a massive rush for physical silver, driving the prices way up to $20+, and massive demand for delivery locking up the trading....I think it is financially possible for the FED to step in with enough cash to rescue the bad hedgebooks (excuse is to prevent unwinding of gold and other contracts in the same portfolios) and to FORCE A NEGOTIATED SETTLEMENT AT A SILVER PRICE OF LESS THAN $20. Thus, a large paper short situation might be settled to a large extent with a compromise price in cash.

2. Since silver is no longer a reserve asset, central banks do not care as much about its value (or lack of value) unless it is perceived to affect the price of gold.

We could call this process "the cleaning out of the silver market". Once again, the paper trading would be used "mainly" by parties who produce or consume silver, and the actions of speculators would be more tightly controlled. At this point, the silver markets would be free once again to reach an "honest" price equilibrium. Given the fact that a large amount of the yearly requirement has been satisfied by the 50 year long liquidation of large reserves which are now exhausted, we can expect that the silver mining industry could take a few years to catch up with demand, especially as key consumers would see the value in creating some stock. In those years, the price of silver could move up into a very nice range of $20-30/oz. But given that some large mines today can get stay in business at silver prices of $5, it is hard to imagine silver staying at $20+ for more than a couple years.

On the other hand, gold money is just too big, and since many players will demand physical repayment and not accept cash, and the cost of the bailout will be massive...and simulataneous with other massive bond, oil, currency problems, we can bet that even as regular commodity markets settle back into a trading situation (since the world needs to drive, and eat), the gold paper markets could get locked up in massive political discussions. If you do not believe this, just take a look at how many times Ashanti has been granted a "delay" in settlement. Just like Japanese Banks have stayed in business with massive non-performing debt assets, the "world" can continue to function for a while even if the gold paper markets are in grid-lock. It will take MUCH MUCH LONGER for gold trade to get back into full gear (given the massive issue of multiple title which fractional reserve lending and selling created).

FOA often tells us that the new value of gold in the new gold market could be at very high levels which would be unbelievable in today's gold pricing paradigm. But I think that this new gold market can only emerge when the paper one collapses...and along with the collapse comes this big huge problem over who actually has title to the fraction of physical gold...as it becomes obvious that "whoever gets title will have a very valuable asset" and that "much of the title is held by democratic governments on behalf of their citizens, and congressment and senators love an obvious and simple issue", we can bet that the fight will be long. Perhaps what will happen is that gold for which the title is clear will begin to trade on a new market (in Euros?) and a new price will emerge....as this new price emerges, if it rises very high, it is sure to cause massive uproars in the old markets where owners of long paper begin to see what their claim should be worth. Many of these longs will be parties who bought long gold paper to "protect themselves" from the losses in a DOW/NASDAQ crash, and many may be needing to liquidate them to meet margin account debts.

I would expect that only after the majority of paper claims have been settled in the old gold market, then will the new market be able to trade freely. Then gold may make that rise FOA describes...and if the rise is strong...the cost of buying gold will become almost prohibitive to the small investor.....and the small investor will begin to move towards silver as liquid hard wealth.

The arguments that Another makes about gold being the culmination of wealth will be equally valid to the little guy and silver if the POG is in the $5000+ range.

I think that one of the best things about owning both gold and silver is that based on the differences, there is good chance that one of them make a large run to a higher level while the other gets locked. At that point, one has the option to sell some of the one that ran and get some of the laggard.....and yet, in general, they will both experience the same long term trend of going up from where they are today.

Poor old Solomon

canamami

(02/17/2000; 18:48:55 MDT - Msg ID: 25561)

Further Reply to Cavan Man

Cavan Man,

A further reply. About 65% of the Washington Agreement sales involve the Swiss. I believe that FOA/Trail Guide has posted that this gold will be "moved" to the ECB, and that the ECB will also buy gold in the not-too-distant future. So this is one possible, at least partial explanation to my question concerning CB sales under the Washington Agreement, assuming one accepts the premise that holding large gold reserves will drive up a currency to uncompetitive levels, allegedly the problem the Swiss are alleged to be facing.

I do accept your point that the FOA/Another thesis must be clearly corroborated or proven before too long, to retain its credibility. Karl Popper identified "falsifiability" as the criterion of a valid theory. In other words, one must state that "if X happens my theory is false", or "if Y doesn't happen, it's false", or "if Z doesn't happen by a certain date, my theory is false", if one wishes to demonstrate the validity of one's theory. There are various ways to state this point, but at some time one must identify clear criteria which will demonstate the validity or invalidity of the theory.

Cavan Man

(02/17/2000; 18:51:21 MDT - Msg ID: 25562)

R Powell

Hello. The author is Oliver H. Perry and the context is a naval engagement during the War of 1812.

Cavan Man

(02/17/2000; 18:53:57 MDT - Msg ID: 25563)

R Powell

"We have met the enemy and they are ours."

If you were making a small joke I
completely missed it like a dummy!

Cavan Man

(02/17/2000; 18:56:45 MDT - Msg ID: 25564)

to canamami

Yes, I agree with you on all counts. It is a complex strategy and, it is time to show a few more cards.

Elwood

(02/17/2000; 19:33:20 MDT - Msg ID: 25565)

More on Netj.com; Simply Amazing

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Michael%20Lewis&touch=1&s1=blk&tp=ad_topright_bbco&T=markets_fgcgi_lewis99.ht&s2=blk&bt=blk&s=27857ed65abcf0d09e5d312570bcdd6c

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Michael%20Lewis&touch=1&s1=blk&tp=ad_topright_bbco&T=markets_fgcgi_lewis99.ht&s2=blk&bt=blk&s=27857ed65abcf0d09e5d312570bcdd6c

agbull

(02/17/2000; 19:34:22 MDT - Msg ID: 25566)

Silver may go _ Mr. Weaver

Mr. Weaver, I like your thinking and cannot find a point to disagree upon. However, it has occured to me that if I were a large miner of silver (gold) I might sell silver backed bonds to the big users , public could participate as well.

For example sell, 25M worth of silver backed bonds at say
$10 per ounce, for year 2003. The company say a Kodak is buying future silver directing from the mining company, at a locked in price and funds are directed to the miner for exploration, expansion, etc. This way the mining company can stay away from the bullion banks et al. The bonds would be cancelled by actual metal delivery and nothing else. No currency of any kind would be accepted. Might be a interesting way to finace mining companies in the future where the the end users get delivery of the metal bypassing the Comex and LBMA all together!

Cavan Man

(02/17/2000; 19:46:42 MDT - Msg ID: 25567)

canamami

What do you recommend by Karl Popper?

Also, some Canadian economic Official source made a very unambiguous comment about looming inflation in Canada today. Did you see it?

On POG: "The waiting is the hardest part."

Tom Petty and the Heartbreakers

Cavan Man

(02/17/2000; 19:57:40 MDT - Msg ID: 25568)

Poor Old Solomon

Couldn't the gold market be radically and quickly altered by large amounts of buying? This would cause Comex default wouldn't it? Not possible? This is the gold market we're talking about right?

You make good and valid points.

Peter Asher

(02/17/2000; 20:03:39 MDT - Msg ID: 25569)

Caven Man, R Powell

Pogo, circa 1954, paraphrased Perry with the "He is us." It was at the time of commie hunting and looking for bad guys under the bed. As I recall the quip became quite famous at the time.

R Powell

(02/17/2000; 20:04:56 MDT - Msg ID: 25570)

Sir Cavan Man

"We have met the enemy and they are ours" Oliver Perry "We have met the enemy and they is us" (yourself Msg ID 25555) and Pogo(I think), comic strip character.

Solomon Weaver

(02/17/2000; 20:09:15 MDT - Msg ID: 25571)

Henri - a very simple answer

This might work but begs further discussion. Does anyone have a pat response? A good answer would be appropriate for any coin of any realm that had value beyond its official redemption denomination. Help?
------
Henri - ask your friend if he could believe that an old one cent penny from 1900 could be worth much more to a collector. Then ask him what he thinks the price of a one cent item in 1900 would be today...like when did a beer cost a nickle????
The simplest arguement is that there is face value and there is market value. When you want to buy silver junk coins, you buy a unit which has a face value of $1000. It either has 2000 halves, 4000 quarters, or 10,000 dimes...and it always has the same face value. But, the price for the unit is based on both its silver content (about 720 ounces) and any "premium" which the buyer may be paying. In the case of the collectors penny, almost the entire price is "premium".
This problem of face value can get in your way if you try to sell your coin to someone who does not understand this.

But, much to my surprise, I was told that in the silver run days, many Joe Publics actually understood that a mercury dime was really worth several dollars...and some were willing to accept them at these levels in lieu of fiat. Perhaps those days will come again.

Poor old Solomon

Solomon Weaver

(02/17/2000; 21:01:18 MDT - Msg ID: 25572)

cavan man....reality vs. virtual reality

Cavan Man (2/17/2000; 19:57:40MDT - Msg ID:25568)
Poor Old Solomon
Couldn't the gold market be radically and quickly altered by large amounts of buying? This would cause Comex default wouldn't it? Not possible? This is the gold market we're talking about right?

You make good and valid points.
_____________________

Cavan Man.....of course the GOLD MARKET could be radically and quickly altered by large amounts of BUYING. But to understand the real problem, we have to talk about two markets (paper and physical). If, for example, in a mild and extended valuation meltdown, where stocks and junk bonds crash, and prices for goods rise, where there is still enough "fiat liquidity", we might assume that a large amount of "new money" moves into the gold market. But most of this new money will be buying gold paper contracts (partially because some will use margin) and also for the digital convenience. 99% of these buyers will "think" they are now "owners" of gold. They are only owners of a "claim" on gold. And if there are more than 2 owners claiming the same gold (because of the dollars they paid for a paper claim), who decides the real owner...or do they both get half.

The really ridiculous thing (for us gold bugs) is that the near term futures and options market for gold (1-2 months out) which is a purely paper market where "supply" is strictly a function of how many are willing to put "dollars" on the sell side, is able to fix the "spot" price of gold, which is the price that a coin dealer will reference when buying or selling bullion coins, and which mining companies will agree to for immediate delivery. So big gorillas like Goldman Sachs and Bank America can fabricate massive new supplies of paper gold on computers and throw them into the "gold market", and we gold bugs feel like someone is beating up on our physical.

The paper markets traditionally fulfill two roles. First, they absorb inventory...for example, an Arab nation can "sell oil" on thier dock to a "middleman" who pays cash and holds title, and who believes he can sell it for more when it gets to destination port...the same middleman may have already contracted with the destination in advance of the purcase. The second role is that the market sets prices for the public so that two parties who are negotiating outside of the market can use the price as a midpoint in negotiation.

The problem in the gold market is that the first function of actually managing or brokering real sales is a farce when the amount of transactions just on the LBMA in one day represent almost 25% of the entire worlds physical demand. And we must assume that a massive amount of the gold which is really sold and delivered is never shown as a transaction on an official exchange. And with that first function removed, the POG becomes almost only a function of $dollars backing supply paper (shorts) vs. dollars backing demand (longs).

Now let us just sit and pretend that both the POG and the POS would rise 50%. So Silver at about $8 and gold at about $450. Let us also assume that enough of the players holding short side, had some long side contracts protecting some of their short exposure, and that in the price rise, additional short covering was done. Let us be very generous and assume that "only" 5,000 short gold paper tons remain and "only" 30,000 short silver tons remain. 5,000 tons of gold at $150/oz out of the money is $22.5 billion. If we go to a POG $600 were at $45 billion. If we think about 10,000 tons we get to $45 billion. In silver were talking 30,000 tons at $3 out of the money, which is only about $3 billion.

The point which all true gold bugs must consider here is that all of those short sales are paper contracts....many may have words written in them that repayment must be made in gold...but in the end they are paper. IF A PERSON IS HOLDING PHYSICAL GOLD AND HE CAN PROVE THAT HE PAID A SELLER FOR IT...HE HAS TITLE. But not so with paper. So the point which I hope to make clear is that even if silver took a 100% or 200% run inside of a few weeks, it is financially and politically possible to use less than $20 billion dollars and force a cash based settlement on paper claims.

But even with a milder %50 rise in gold, especially if it happens because of new buyers entering the market, instead of short covering buyers, it risks putting the entire "paper gold market" into gridlock as emergency meetings happen in central banks and large money center banks all over the world. Since gold is a very emotional and political asset, and ties very closely with fiat, the large overhang of gold which has "multiple ownership contracts" written (those computer generated naked shorts) freezes up the market. You also get the problem that if a big gold shorter has protected himself by buying calls from a counterparty who is going bankrupt, then his "paper gold protection" backstop may not be functioning.

Thus, gold bugs may watch in dismay as the real value of gold gets discovered, causes massive havoc in world markets, causing massive volatility, creating a market where it is hard for physical dealers to know what to charge, and with political calls to make gold sales illegal until the dust settles.....only to find they can't easily sell gold for a while. At the same time, silver explodes too, has the same problem, but because it is so much easier politically and financially to stand back up, that new silver physical market gets back on its feet much better.

REPLY TO AGBULL

I believe what you are calling a silver bond is in your description only a simple forward sale agreement where the buyer is not a BB, but the end user. What I could see happening if silver moved up a lot and was very volatile, say between $20-30, that some large mines (or a non BB organisation mediating for them) would negotiate some multiyear supply agreements below the market price...say $15 for 3 years. This has an advantage because it allows both the mines to enjoy a decent profit and to let key customers stay in business.

Poor old Solomon

TheStranger

(02/17/2000; 21:41:14 MDT - Msg ID: 25573)

South Carolina Uber Alles

How slowly grind the wheels of government. How slowly, that is, until political correctitude is at stake. Nobody seems to have any trouble yanking diplomats out of Austria. Yet, what about the stars and bars of South Carolina. I don't recall any of those high-minded presidential contenders down there this week coming out and saying "hey, let's tear that damn thing down."

The fact is, there is hypocracy aplenty in this world, and nobody is innocent. Austria is a proud democracy that deserves better treatment than this.

Go Gold!

Black Blade

(02/17/2000; 22:14:27 MDT - Msg ID: 25574)

Stranger

I have to agree with your Austria assessment. It is good to see people cut against the grain and think for themselves once in a while. BTW, I don't believe that Austria is a democracy, but a representative republic similar to the rest of Europe.

TheStranger

(02/17/2000; 22:24:22 MDT - Msg ID: 25575)

canamami

I couldn't help relating to your desperation the other night. If Michael provided a forum for spouses, I suspect you would be getting a fuller picture of just how traumatized I get just about every day.

In fact, sometimes, when the dialogue in here gets particularly academic, I just roll my eyes and think, 'do these guys really have as much at stake as I do, or are they just in here for intellectual exercise?' Don't get me wrong. I appreciate the efforts expended. It's just the pressure I am under. I feel like an experimental monkey being deprived of love or something. Somehow, though, I do manage to wake up an optimist every morning. Thank goodness.

I think Greenspan pretty well convinced everybody today that, if he even smells inflation, he will stop it cold. Surely, that (and the PPI numbers) had something to do with the failed gold rally. Still, I am not buying it. As I have said before, these quarter point increases are nearly pointless. We've had four of them already, and as AG himself admitted today, the economy is, if anything, strengthening.
There is only one thing one can make with a recipe for inflation, and that is.....inflation.

$300 is now a significant bottom for gold. You can quote me.

TheStranger

(02/17/2000; 22:26:31 MDT - Msg ID: 25576)

Right. Thanks.

Black Blade

(02/17/2000; 22:57:05 MDT - Msg ID: 25577)

Metals starting to get lively again!

Check out PM's in overnight trading! Au up +$2.15 at $302.75, Ag up +$0.04 at $5.26, and you just can't keep the PGM's down.....Pt up $20.00 at $570.00, Pt up $25.00 at $715.00, and Rh up $100.00 at $2500.

Quicksilver

(02/17/2000; 22:58:47 MDT - Msg ID: 25578)

Schippi,Check the Sept. Flag Pattern for your Goldstock!

http://www.usagold.comI looked at this carefully and it seems to be an ascending triangle but actually it's a mini-version of the Sept. flag that held and then fell apart. It's rolling over just the same. Three mountain top on PDG and it's over. I'm looking for a small gap up Fri at the open, a little rally, and she is gonna sink fast. Our only hope is as R Powell wrote some decent buying on the other exchanges for Tues morn. POG may go up for the metal but PDG and HM show the same duplicate of Sept. and it's not gonna hold long. Could be the rollover before the breakout but I'm not riding it down with 1000+ shares. You need a detailed candlestick chart not some wide lined sales promotion from an analyst. Sue me if I'm wrong. I've been staring at these charts 6 days a week for 8+ hours a day since I broke my ankle Oct.4. I read every candlestick chartbook except Sakata's Chart of Charts because I'm saving the best for last.

If we see what we want to see we will deceive ourselves.

For anyone investing for the long term, may you know the patience of the sea turtle. Though he travels over many miles he does finally arrive to where he was going.

Journeyman

(02/17/2000; 23:01:25 MDT - Msg ID: 25579)

Fre Money Re: Solomon Weaver (2/17/2000; 21:01:18MDT - Msg ID:25572)

Your message reminds me of the following "brain teaser" I orginally heard when I was working on the road crew as a summer job during college:

A man has $10 but needs $15. He gets a bright idea. He takes his $10 and pawns it for $7.50. He sells the pawn ticket to another person for another $7.50. He now has his $15. Where did the extra $5 dollars come from. The pawn broker got $10, in return for the $7.50 he loaned out, and when the new pawn ticket holder gets the money out of hock, he'll get $10 too. Where did the extra money come from?

Regards,
Journeyman

P.S. I nominated your story about the silver derivatives for HOF, but I think your "silver story" must have been posted too early for many to take notice of it. Maybe pick a better time and re-post it??

Simply Me

(02/17/2000; 23:47:03 MDT - Msg ID: 25580)

Journeyman's Riddle

How much will it cost the guy who bought the pawn ticket to redeem it for $10?

Journeyman

(02/18/2000; 00:09:26 MDT - Msg ID: 25581)

Free Money Riddle @Simply Me

The pawn broker wants the $7.50 he loaned out for the pawned $10 before he'll take it out of hock and give it to the new owner.

Is this reminiscent of fractional reserve banking, COMEX gold and silver operations?

Regards, J.
View Yesterday's Discussion.

Simply Me

(02/18/2000; 02:10:17 MDT - Msg ID: 25582)

Riddle@Journeyman

Ahhh...and if the idiot who bought a $10 pawn ticket for $7.50, requiring an additional $7.50 to redeem it, then finds a bigger idiot who will buy it for $8...would his next job be at Barrick!?!

simply me

Simply Me

(02/18/2000; 02:18:55 MDT - Msg ID: 25583)

Pardon the Brain Freeze @Journeyman

Ooops, no...if he sells it for $8 he works for Goldman Sachs...if he sells it for $6 he works for Barrick.

Thanks for the fun puzzle!
simply me

Black Blade

(02/18/2000; 04:49:25 MDT - Msg ID: 25584)

Pd exports to resume, we shall see.

Russian to resume platinum group supplies-Kasyanov

Reuters Story - February 18, 2000 05:19

MOSCOW, Feb 18 (Reuters) - Problems surrounding supplies of palladium to markets will be resolved "in the nearest future" and supplies of platinum group metals will be "completely restored" to their previous levels, Finance Minister Mikhail Kasyanov said on Friday. Kasyanov, who is also First Deputy Prime Minister, was answering a question on when a presidential decree authorizing exports of platinum group metals, including palladium, would be signed.

Russia has stopped exporting spot palladium in recent weeks, and has not officially exported platinum for over a year in the absence of legislation allowing its export, and prices have soared as a result. The head of the state precious metals and gold reserve, Gokhran, said earlier this week that he did not expect the presidential export decree to be signed for weeks or more, sending the palladium price spiraling to an all-time high fix of $735 per ounce.

Only three institutions in Russia, the central bank, Gokhran and producer Norilsk Nickel have stocks of platinum group metals, and only Norilsk, which has a long-term palladium export quota, has continued exporting despite the market disruptions. Russia supplies 70 percent of the world's palladium and some 20 percent of platinum

Black Blade

(02/18/2000; 04:58:04 MDT - Msg ID: 25585)

No Mo Gold from Belgium! Nada, Zilch, Zippo, all done!

Quaden says Belgium has no immediate plan to sell more gold
Brussels--Feb 18--Belgian Central Bank Governor Guy Quaden Wednesday confirmed that the Belgian National Bank has no immediate plans to sell more gold. "We have sold quite a lot in the last 10 years because of our big gold reserve, but there are no plans today to sell gold again," Quaden said. (Story.16090)

Black Blade

(02/18/2000; 05:03:11 MDT - Msg ID: 25586)

TOCOM Pd limit up, Pt limit down! Guess they don't believe the Russians either

TOCOM Precious Metals Review: Palladium still surges on short-covering

Tokyo--Feb 18--Tokyo Commodity Exchange palladium contracts continued to surge to another daily maximum price limit-up on short-covering amid a lack of selling, while profit-taking led TOCOM platinum to limit-down across the board following a weaker NYMEX overnight, dealers said. Gold overall was steady due to the firmer US dollar/yen pair despite a softer COMEX overnight, they said. (Story .2192)

Black Blade

(02/18/2000; 05:08:02 MDT - Msg ID: 25587)

Japan's Tanaka to hike recycling capacity for platinum/palladium

Tokyo--Feb 18--Major Japanese precious metal refiner, Tanaka Kikinzoku Kogyo has announced it plans to hike annual production of platinum group metals (PGM) by 20% to 61.2 tonnes at its recycling refinery Ichikawa Plant in April as a result of the recent completion of an expansion project. (Story .10946)

Jason Happy

(02/18/2000; 05:27:19 MDT - Msg ID: 25588)

Journeyman: riddle me this!

I have your 10/7.50 riddle figured out. At first, it was quite a surprise, this "creating-money-from-nothing" example, without a government-backed guarantee or licence...

However, nobody would buy, for $7.50, the right to spend (redeem) another $7.50 for $10.00.

Thus, the man who needed $15, but only had $10, who pawned his $10 bill for $7.50, would not be able to sell his pawn receipt for nearly so much, (7.50 in your example.)

The MOST he could get, for his pawn receipt, from someone who wanted to break even, would be the difference, $2.50.

Thanks for the brain teaser. And the one a few days ago, which, somehow, I'm still mulling over...

The "no usury" guy, Jason Happy.

ss of nep

(02/18/2000; 05:54:38 MDT - Msg ID: 25589)

"STOP RUN" - - - CPT - - - GS ( 02/17/00 PM )

http://www.geocities.com/~CyclePro/Charts/SP500/Outlook.htm
- - cut from the linked story - -

[A few comments: There are likely other CPT floor participants in addition to GS. Running stops is what floor traders live for. Stop running is a common occurance for any tradeable security, but commodities and futures contracts are easy targets. GS routinely trades almost every commodity futures contract. GS can perform their CPT duties using their own capital or through "key" customer acounts -- which make tracking much more difficult. When the stock futures are falling rapidly, there usually are not a lot of stops placed just above the market, thus when a stop run rally begins, the gaps between stop clusters are generally quite wide and the stop run can cover a lot of ground in a very short period of time.]

Journeyman

(02/18/2000; 06:25:20 MDT - Msg ID: 25590)

Free money SOLVED!

Sir Happy! :)

As per your Jason Happy (2/18/2000; 5:27:19MDT - Msg ID:25588), yep! Who would, ONCE THEY DISCOVERED THE "TRICK."

The "give me usury or give me death" business partner is still ticking, last I heard.

Regards,
Journeyman

Journeyman

(02/18/2000; 06:35:04 MDT - Msg ID: 25591)

Free Money SOLVED I: Simply Me is 1st across the line!

Simply Me (2/18/2000; 2:18:55MDT - Msg ID:25583)
>Pardon the Brain Freeze @Journeyman

>Ooops, no...if he sells it for $8 he works for Goldman >Sachs...if he sells it for $6 he works for
>Barrick.

Nice spin!!!

>Thanks for the fun puzzle!

My pleasure!!

Regards, J.

Black Blade

(02/18/2000; 06:45:53 MDT - Msg ID: 25592)

PGM's getting hammered at NY open. Somebody believes the Russians!

Pt down -$39.00 at $511.00, and Pd down -$15.00 at $675.00.

canamami

(02/18/2000; 07:13:03 MDT - Msg ID: 25593)

Quick Questions for the Stranger

I believe that you (or someone you spoke to) posted that there has always been gold manipulation. Is the current level of manipulation (assuming arguendo there is manipulation) unusual, in your experience? For how long can the inflation-induced "pop" in the POG be suppressed?

It seems to my amateur self that there is manipulation, and that CB's must be involved directly or indirectly, knowingly or unknowingly, in this game because they alone have the ready supply of gold to effect the manipulation. However, we now have statements from the Washington Agreement banks and the Fed setting out the parameters of gold selling, and the IMF has been "taken out the picture", so to speak. Also, most of the major miners are renouncing hedging. Asssuming all these parties are being truthful, at some point supply for manipulation must dry up. The question for us all: At what point is "at some point"?

canamami

(02/18/2000; 07:22:46 MDT - Msg ID: 25594)

CTV reports the POG up $3.30

JCTex

(02/18/2000; 08:09:14 MDT - Msg ID: 25595)

Bulletin from Bill Murphy

Le Metropole members,

As we have been reporting to you, the
"Hannibal Cannibal" bullion dealer camp is in
utter disarray. Our side received word today,
via a Cafe member, that Gavin Stuart, chief gold
options trader for Dresdner Bank, was just
given the hook.

Previously, the Caf� has reported that the chief
gold trader for UBS was fired and that mega bear
gold analyst, Kevin Crisp of J.P Morgan, is now
on permanent vacation. We also have received more
input that there will be further dismissals at
J.P Morgan's bullion operation. J.P Morgan is
co-chair of the Counterparty Risk Management Group.

It is very clear that bullion desks around the
world are feeling HEAT. They will feel much
much more.

The official sector "general" still desperately
trying to hold down the price of gold is losing
his lieutenants all over the place. Hard to fight
a war without soldiers and strategists.

That is not to say they are defeated. Gold was up
$2.50 this morning before the U.S opening at 7:30
to 8, Society Generale, Morgan Guarantee, et all,
came in right on cue to knock the gold price down
going into the U.S opening, in the hope of
attracting more selling.

So far today, their ploy has not worked as gold
is presently trading up $3.20 on the day. According
to John Brimelow, demand for gold in INDIA
continues to surge and the premiums are as high
as he can remember.

Just in. A surprise. Chase Bank, the massive
seller yesterday, has turned around as a massive
buyer today buying everything it can.

Stay tuned!!!!!!!

Le Metropole Cafe

All the best,

Bill Murphy
Le Patron
www.LeMetropoleCafe.com

TheStranger

(02/18/2000; 08:11:07 MDT - Msg ID: 25596)

canamami

I can't really speak for central banks. My guess is they behave by herd instinct, which, for us, is now a good thing. Lately, the herd has decided to stop sales and leasing and that must be putting peer pressure on mavericks such as Britain and Holland. (By the way, if any CB sold yesterday, it was probably Holland.)

Shareholder meetings are coming up soon for most gold miners. Managers will be eager to show they are joining the bandwagon by reducing their hedges.

Bullion Banks are a different story. They are nothing more than brokers who have talked their clients into losing positions and are trying to limit the damage. The manipulation there will be in the form of encouraging clients to be patient about reversing hedges. They will also keep contaminating the thinking of their affiliated research departments so that nobody recommends gold to the public. I don't think bullion bank solvency is at risk, but their raison d'etre sure is.

As aggravating as this bullion bank behavior is, it should not be a worry. It is clear from the public pronouncements of their customers that the jig is already up. In other words, it is you and I who now hold the cards.

TheStranger

(02/18/2000; 08:22:51 MDT - Msg ID: 25597)

No Crashes Please

If you own gold, you do not want the stock market to crash. Such an event would take the inflation pressure off the Fed. It would bring on a terrific bond rally. It would instantly bring back serious long-term smart money investors who have been steadily selling this bull market. It would also impoverish many who might otherwise have become interested in buying gold at some point.

What we want is a continued erosion in most stocks that takes time to play out. This is the background which will make gold stand out as an opportunity area. It is also the environment which has already given us a 20% rally in gold.

The good news is the slow deterioration in the advance decline line already indicates that many stocks are too far gone to contribute much to a crash anyway.

USAGOLD

(02/18/2000; 08:42:37 MDT - Msg ID: 25598)

Today's Gold Market Report: Swinging in the Dark

http://www.usagold.com/Order_Form.html2/18/00 Indications
�Current
�Change
Gold
302.80
+3.00
Silver
5.27
+.02
Gold Lease Rate
0.4300%
+0.05
Gold Comex Stocks
1,373,484
nMarket Report (2/18/00): Gold firmed overseas in overnight trade on
continued strong physical buying and short covering at the $300 level.
The market is being helped by a Belgian announcement that it had "no
immediate plans" to sell gold -- though those of us familiar with the
Washington Agreement (gold financial reporters notwithstanding)would
consider the Belgian central bank comment redundant. While Alan
Greenspan attempted to talk down stocks yesterday in his annual Humphrey
Hawkins testimony before Congress (by threatening to raise interest
rates), the actual CPI came in this morning a mere .2% month over month
-- a figure that will surely have the skeptics scratching their
collective heads over the accuracy of government financial reports,
particularly inflation reports. Meanwhile, our loquacious, well-studied
and pre-emptively inclined chairman of the Fed -- ever the slave to "the
numbers" -- continues to swing blindly in the dark at inflation
hobgoblins his host government keeps telling him do not exist. I wonder
if Mr. Greenspan is keeping a separate set of books.

So it goes.........

Have a nice weekend, my fellow goldmeisters. We'll see if New York and
London knock the yellow back down -- in kill the messenger fashion --
like they did yesterday. This is a long weekend. The markets re-open
Tuesday. See you then.......

If you are looking for a pro-gold view of the various financial markets
as well as a summary of the events affecting the yellow metal, our
monthly newsletter might be of interest. News & Views -- Forecasts,
Commentary & Analysis on the Economy and Precious Metals has
been characterized as witty, urbane, intelligent and down-to-earth. Not
to mention it's Free of Charge If you want to keep up with gold, this
is the way a large segment of the gold owning public does it, and has
done it for over a decade.

Just above and make the appropriate entries.

Henri

(02/18/2000; 09:00:17 MDT - Msg ID: 25599)

The Stranger Msg 25575

I apologize for the academics if I was in part a contributor to it. Although lately I have waxed political. I really feel that I am just the average Joe with some trading experience under my belt. I cannot allow the markets to upset me...been there, done that! My financial moves these days are accumulation of real money at low price with fiat chits. I work to get more fiat which I exchange for more real money.

Your message casts you as a deer caught in the headlights of a semi. Be strong...don't flinch! And by all means don't stand in the middle of the road. After the semi goes by it is safe to come out and play again.

Markets can be cruel. They thrive on weakness of resolve. It is much easier to do if you are in a strong position. Physical. margined trading and heavy leverage only work in calm markets. Its the volatility that kills you.

I learned this the hard way being long in grains during the '96 or was it '97 bull market. It was a textbook how to lose your shirt going long in the greatest bull market in grains ever.

Have played my hand very conservatively ever since. I would much rather take delivery of a bullion coin than risk the $300 on an option for a paper delivery contract that in all fairness may not be worth the paper its printed on...that is if it even exists in anything other than digital entry on a book.

e-gold just got in some Austrian Philharmonics and is redeeming them for 1% over spot. They got 10 in, I got the first 2, now there are 7. my basis established earlier is about $290.

The semi's travel the paper highway. I prefer the relative safety of a mountain meadow where I can blissfully watch the traffic from above. Except on cloudy days.

As for Greenspan and inflation, I tend to agree with you, I think it was in his comments following the presentation where he pretty much said it is beyond control and monitoring at this point. Much more effective at controlling the forces driving monetary expansion has been the whipsaw action exerted on the bond markets by mixed signals coming from Treasury and the Fed. It's like the good cop bad cop routine with derivative players being held in custody while street punks rip off their hidden stashes. This has got to be killing the big players that were long 30's and short 2-10's. The inversion has called the under the table traders to account. The damage report will take three months to assemble and another three months to be released. The strategy, I feel is to whipsaw the markets to release the shackles of hidden derivatives markets. It is all out war behind closed doors and no quarter! Let's just imagine for a moment that Summers and Greenspan are actually not in bed with the nefarious "colluders" and are seriously racking the markets to bring out all the evil stifling derivatives and rate swap bandits.

I cheer their policy of non-regulation of these markets...think of it, if they were regulated, then the Feds and Treasury would be accountable for the losses and would somehow be coerced into bailing out the too-big-to-fail. With an unregulated market, caveat emptor! You reap what you sow. I am a fan of what they are currently doing...I reserve the right to change my mind frequently!

R Powell

(02/18/2000; 09:02:39 MDT - Msg ID: 25600)

ss of nep Re link given in (Msg ID 25589)

Thanks! I don't usually get good information on the mechanics of How the manipulaters manipulate. This explains how GS and others move market prices by triggering "stop orders" and calmly states that this practice is a daily occurence in any and often many markets--especially the commodities. The article mentions our gold market repeatedly. Good insight, Thanks. Canamami, this may partially answer your recent questions of When does it happen? Also, POG can be held down with paper transactions even while physical sources are becoming more and more scarce. However, this becomes (IMHO) more dangerous for the "shorts" as supply fades and market sentiment changes. The longer the game is played, the greater the final reaction will be.

starshine

(02/18/2000; 09:03:05 MDT - Msg ID: 25601)

election McCain vs Bush

I have followed this site for about a year and this is my first posting (I have learned alot, thanks!), I think tuesday's gold market could be quite intesting if McCain wins in South Carolina. McCain could really upset the "box" the fed, banks, and treasury seem to run on the price of gold. Bush is the insider's choice, McCain could shake up the status-quo.

Henri

(02/18/2000; 09:25:07 MDT - Msg ID: 25602)

RPowell Msg 25600 Canamami

I think the paper vs physical market price interelation will be the key. As the cafe points out, open inerest on comex is way down signalling the exit of a large segment of paper players. I envision it will unfold according to Gresham's (sp?) law. When the paper/forward price is higher than the physical all is well for paper. When the physical brings more than paper the house of cards will collapse . Its exactly like the face value vs real "market" value of coins. They are not in circulation when they are worth more than face value

TheStranger

(02/18/2000; 10:47:48 MDT - Msg ID: 25603)

Welcome, Starshine!

You've been in this room for a year and this is your first post? Boy, are you a wallflower! Anyway, welcome. Your point about the Republican apple cart is well taken. Either way, tomorrow should be a pivotal day for politics in America.

If there are anymore wallflowers out there, how 'bout jumpin' in. The water's fine!

Henri

(02/18/2000; 11:55:54 MDT - Msg ID: 25604)

Storm clouds gathering

Friday's IBD futures charts show something ominous in the wind. Usually when the dollar begins to fall the Japanese yen rises. I am seeing rising Euro and Swiss Franc but falling yen with the US dollar. If what "Another" predicted back when is to become true then there should be signs of the alignment of the two currencies fates. I am beginning to see this now. Another sign is gold up and the dollar down. Previously these were semi linked due to denominational relationship. Because of this relationship when gold rises and the dollar falls, it magnifies the gains of gold in dollar terms. In euro terms, we see smooth sailing for gold...a realignment so-to-speak. US$ investments...look out below.

Henri

(02/18/2000; 12:13:40 MDT - Msg ID: 25605)

Apologies to MK Msg 25575

In all fairness, I have to point out that Centennial's price for the Philharmonics beats that of e-gold on an instantaneous basis. My decision was easy when I had bought in at the lower gold rates. But with the current pricing and instantaneous turnaround Centennial has the ticket. looks like I broke the rules Michael. I will bear banishment with appropriate humility. I am not an agent or salesperson for the competition. it would be interesting though to be able to have "account" with Centennial to lock in current /oz prices for future delivery.

TownCrier

(02/18/2000; 12:17:47 MDT - Msg ID: 25606)

Greenspan battles against confiscation of wealth

http://biz.yahoo.com/rf/000217/bi5.htmlREP. BERNARD SANDERS (I-VERMONT): "Could you briefly tell us what policies you would recommend to Congress to do away with or ease the disparity of wealth that we are currently experiencing?."

GREENSPAN: "Let me start, Congressman, by saying what I would not suggest. What I would not suggest is means which would somehow obliterate the wealth of those who are in the upper income groups or upper asset groups, because there is no evidence to suggest at all that if you were to take the top 20, 50, 100, 500 people and essentially eliminate all the wealth that they had, that that would improve the standard of living of anybody. Merely obliterating wealth or merely confiscating wealth strikes me as a wholly inappropriate policy if the purpose is to achieve higher standards of living."

It is somewhat troubling that the good Fed Chairman felt compelled to remind a congressman that it is "wholly inappropriate policy" to confiscate a person's wealth. Mr. Greenspan would tend to be aware of the Washington whisperings...is this something of substance that he felt he must argue against at his best opportunity? Kinda makes those pre-33 gold coins all the more attractive...

Trail Guide

(02/18/2000; 13:18:44 MDT - Msg ID: 25607)

On The Gold Trail! Go get em John!

http://www.tocqueville.com/brainstorms/brainstorm0057.shtml

----------------The LBMA(London Bullion Market Association) recently reported a 22% decline in physical trading activity for the first month of this year. The average value of gold transfers fell to $6.3 billion from $8.1 billion in december. If this acute decline in physical trading volume continues, it is not hard to imagine the wheels coming off of the bullion dealer's machine.-----------------

Also:
--------A short squeeze caused by a contraction of credit among and for the gold intermediaries, the bullion dealers, is on the horizon. ------------

Also:
---------Still, each new rise in the price of gold is being
greeted with cries from the bearish camp that physical
demand is falling away. But the bullish case for gold calls
for the crowding out of physical buyers by short covering
and investment buyers.---------------

Also:
-----Gold is a currency, a monetary reserve asset and a credit instrument in the way it has been utilized by bullion dealers.------------------

Also
-------Apocalyptic expectations are unnecessary to project a dollar gold price that includes four digits. It will only require the inevitable unwinding of bearish producer and dealer hedge structures amidst a change of market perceptions on the desirability of financial assets.

John Hathaway

Solomon Weaver

(02/18/2000; 13:31:40 MDT - Msg ID: 25608)

THE SILVER SHORT SCAM

http://www.gold-eagle.com/gold_digest_00/butler021800.htmlIs there anyone here who is in regular contact with GATA? If so, I think that GATA should publicize and comment on this issue with silver....Butler is being very direct to the point here....

Doesn't this begin to sound like a good story for 60 minutes??

REPOST: Author is Ted Butler

The Silver Short Scam

The following letter to the Chairman and President of the New York Mercantile Exchange is self-explanatory. While I did not get a response, I did not expect one. I've learned that from writing to and about Barrick, the CFTC, and the financial institutions who have manipulated the price of gold and silver. In another time, that non-response would have been the end of the matter. But we're not in another time, we're in the time of the Internet, where uncensored communication is unstoppable. I don't care if they respond, as long as they react (like Barrick).

If the gold and silver manipulation is to end sooner, rather than later, it will likely be due to specific observations, and not repetitive generalizations of wrong-doing. I think this matter goes right to the heart of the manipulation. I don't understand how it can be allowed to continue. Here's my latest offering of specificity:

February 14, 2000

Mr. Daniel Rappaport
VIA E-MAIL

Chairman
Mr. R. Patrick Thompson
President
The New York Mercantile Exchange
One North End Avenue
New York, NY 10282-1101

Dear Sirs;

I am writing to you about a most serious matter involving a dangerous situation in the silver market on the Commodity Exchange Inc. (COMEX). It is my hope that you will resolve or explain this situation in a timely manner.

The Commodity Futures Trading Commission (CFTC) released on Friday, February 11, 2000, their Commitments of Traders report (COT) for positions held, as of February 8, 2000. This report indicated that Four (4) or less traders in the commercial category held a net short silver futures position of 42.5%, of the total open interest of 85,895 contracts, or 36,505 contracts. This is the equivalent of 182,525,000 ounces of silver, or twice as much as Mexico, the world's leading producer, by far, produces in an entire year. That the possibility exists that this net short position is held by fewer than 4 traders is alarming to the extreme. Since the COMEX has reported silver warehouse stocks in the range of 75 million ounces for the past year or so, and it is widely accepted that the COMEX is the world's largest repository of silver inventories, it would appear that there is a mismatch of epic proportions in the size of the concentrated naked short position of these un-named traders and available supplies. I would doubt that these traders control more than 10 million ounces of the COMEX inventories.

That these big naked shorts also appear to fall into the dealer category, rather than producer category (since no publicly held mining company has disclosed such a short position on the COMEX), is most alarming. After all, banks and insurance companies do not produce silver as part of their normal business functions, thus raising the question of how they could possibly satisfy delivery requirements if called upon as the contract demands. It should be noted that in no other commodity, does the situation exist where a small number of traders are naked short the equivalent of what the leading countries produce in an entire year.

I have participated in COMEX silver futures and options on the long side for over 15 years. It appears that, based upon this report from the CFTC, that these dealers have rigged the game by their uneconomic concentrated short-selling. People who buy COMEX contracts have a reasonable expectation of their contracts being fulfilled. This COT report suggests otherwise. A reasonable person would conclude that a financial institution has no business being naked short such an outsized amount of a physical commodity that they don't possess or produce. Therefore, I am calling upon you to explain or rectify this situation.

It is important that participants in your silver contract have confidence that those contracts will be fulfilled and honored as called for. This COT report undermines that confidence. Therefore, I call on you to do two things. First, identify publicly just who these concentrated naked silver shorts are. Second, publicly announce that you are aware of this situation and that the COMEX, as a result of that awareness, guarantees that these contracts will be fulfilled and honored as called for. As a result of this notification, it is my intention, that if a market emergency develops in which the rights of long contract holders are compromised, I will hold you and all directors liable for damages on a personal and corporate basis.

In order not to inflame this dangerous situation, I will give you until Thursday, February 17, 2000, noon EST, to notify me of your intentions of dealing with this situation. At that time I will pursue a public effort (including making this letter public) in the hopes of ending this clear manipulation. I must confess that I have very little confidence that you will police and rectify this situation, based on your exchange's history. However, to be fair, I will afford you the opportunity to police yourselves.

Very truly yours,

Ted Butler

Cavan Man

(02/18/2000; 13:32:02 MDT - Msg ID: 25609)

Hello Trail Guide

Some time this year IYHO?

Good to see you friend.

Solomon Weaver

(02/18/2000; 13:43:19 MDT - Msg ID: 25610)

Thinking along with Trail Guide

Trail Guide:
Also
-------Apocalyptic expectations are unnecessary to project a dollar gold price that includes four digits. It will only require the inevitable unwinding of bearish producer and dealer hedge structures amidst a change of market perceptions on the desirability of financial assets.
----
Solomon asks...

If the POG were to rise to $1000, any short contracts which were written at about $300 would have $700 underwater...also if ANY leverage were used this $700 could be a lot more.
For every 1000 tons of "uncovered and not-yet-settled" short gold, that implies a $700 million x 30 million ounce = about $21 billion loss.
Given that there are over 10,000 tons short now, and assuming that much money would be lost by shorts covering on the way to $1000, can we really expect such a large $20+ billion payout to be made???

Perhaps apocalyptic expectations are UNNEEDED to get to $1000, but certainly about 1/2 way between $500 and $1000 such expectations will be created, no?

Poor old Solomon

TownCrier

(02/18/2000; 14:15:16 MDT - Msg ID: 25611)

Sir Solomon Weaver (Msg ID:25610) you make a good observation...

http://www.usagold.com/GermanNightmare.htmlbut, to take your own line of thinking one step further where the catastrophe unfolds, such a huge payment obligation as you've cited does not look so intimidating a few steps furtherdown the timeline. Think of those huge mark-denominated debts that were so easily paid off after the hyperinflation of a 1923 Germany. In such a scenario, you will admit, paper-denominated "wealth" is wiped out, but essentially so are the debt obligations...they become so easy to repay as to be nearly inconsequential. If such an end-scenario were reasonably expected, in order to keep the genie in the bottle such shorting could continue by the bullion banks with near impunity--good times while they last, and a relatively "clean slate" after the fall. Of course, when the fall comes, those with physical assets such as gold will preserve their wealth....gold for liquidity, and other property for necessity. Life can be so simple...

SteveH

(02/18/2000; 14:21:00 MDT - Msg ID: 25612)

Can't verify but...

First though,

Did I see Palladium up 26 then down 26?

Gold closing strong.

Murphy says more Bullion Banks firing their bullion departments. Disarray.

Good link TG!

and on the subject of protecting the second an unconfirmed report just in ...

CITIBANK SHUTS DOWN WEAPONS-RELATED BUSINESS ACCOUNTS
* also porn, politics
by Angela Hunter Richardson

A letter's text flowed across my screen and shocked me to my boot soles.
>From the local Citibank branch to Nevada Pistol Academy, it read:
"Your Citibank checking account will be closed ten calendar days from the
date of this notice. This action is necessary due to Citibank not
maintaining accounts for businesses that deal in weapons."
This can't be true, I thought. This is a paranoid rumor, like so many you
find on the Web. So I called Citibank and was transferred to the company's
Business and Professional TeleSales Dept. I read the letter's text to Senior
Business Officer Lynn Mackey and asked if this was a local branch policy or,
unbelievably, a Citibank policy.
She replied, "It's a Citibank policy: I don't know when it was implemented
or why, but we have three basic industries that we do not target market;
that's one of them. The other two are political and pornography."
Okay, I said, I can understand not target marketing certain businesses,
but why are you closing down existing accounts? How long has this policy
been in effect? She didn't know, and wouldn't say how long she had been
with the company, promising instead to find and give me an address later
through which I could discuss this matter with the company's legal
department.
She did say, "[The Nevada Pistol Academy's] account number is one of a
series of accounts that had been around for a long time; I do not know who
is sending these accounts to be closed now, or why. The information I just
gave you is part of our training material, and I am not in a position to
know why it was made a policy."
My question: Does this fall under the "We reserve the right to refuse
service" convention? If so, and if it's legal, is it right? And even if so -
why is Citibank lumping weapons sales and training, which are rights
indirectly guaranteed under the Second Amendment, in with pornography and
that other flesh-bartering, secret-deals business, politics?
Pornography is against the law in many places.
Many politicians subvert, traduce, inflate and distort the law.
The Right to Keep and Bear Arms IS the law, however, so why is Citibank
discriminating against people whose business involves guns?
This is a free market society. For Citibank loftily to hold up its nose and
politely brush the dirt of pornmongerers and lie merchants' money from its
lily-white hands is one thing. I strongly resent, however, their including
in that distasteful group those people who sell - and train others to use -
the tools that bought this country its freedom.
Mark Rogers, Director of Public Affairs for Citibank, had not returned my
call as this story went to press. Stay tuned for more on this breaking
story, or visit Xoutdoors.com and its online magazine for updates.
###

a friend said about this:

This sort of thing will continue to snowball, until the court recognizes the RKBA
as a civil right - which it most correctly is. Once the RKBA has civil right
status, that can be used as the basis of a barrage of lawsuits against this sort of
tripe.

However, it will probably get much, much worse before it gets better. We will see
a time where the potential for profit for every gun dealer, gun club, firing range,
pawn shop, department store, etc. is FAR out-weighed by the potential for liability
from civil suits, not to mention that there will be no insurance companies willing
to carry gun-related businesses for any amount of money, no shipping companies
willing to ship, no financial institutions willing to do business, etc.

They will have eliminated gun manufacturers, gun distributors, gun dealers, gun
ranges, thus GUNS, without having passed law one.

Who needs gun control when you've got "stigma"?

Regards,

xxxx

Farfel

(02/18/2000; 14:22:43 MDT - Msg ID: 25613)

Thought for the Day RE: VENGOLD

Although most internet stocks were weak today, VENGOLD (now reincarnated as an internet stock named Itemus) was surprisingly strong.

At the same time, most gold stocks were very strong today.

So Vengold investors must ask themselves this very compelling question:

Was Vengold strong relatively strong today because many typical ignorant investors thought they were buying a gold stock...or was it strong because most typical ignorant investors thought they were buying even more blue sky?

That's a difficult question to resolve, but somehow the answer seems to be of some importance.

Thanks

F*

Farfel

(02/18/2000; 14:29:15 MDT - Msg ID: 25614)

Thought of the Day Re: VENGOLD

Although most internet stocks were weak today, VENGOLD (now reincarnated as an internet
stock named Itemus) was surprisingly strong.

At the same time, most gold stocks were very strong today.

So Vengold investors must ask themselves this very compelling question:

Was Vengold relatively strong today because many typical ignorant investors thought they
were buying a gold stock...or was it strong because most typical ignorant investors thought they
were buying even more blue sky?

That's a difficult question to resolve, but somehow the answer seems to be of some importance.

Thanks

F*

Simply Me

(02/18/2000; 15:03:23 MDT - Msg ID: 25615)

Why a Dollar Coin?

http://www.coincoalition.org/testimony.htm#VIFrom the website of a coalition of merchants (and who knows who else) for the promotion of the new Dollar Coin.

..." The public will have the option of carrying $2 bills, because cash retailers will have room for them in cash drawers once $1 bills are eliminated."

My view: Why do they want to induce us to get used to two forms of currency that the public has previously rejected. (ie: the dollar coin and the $2 note) Do you think they see a high inflation rate coming and want to make it appear "not so bad" because the $1 is now relegated to the "change saving can" that sits on your dresser, and the $2 item that used to cost $1 is still paid for with the smallest note in your wallet?

Now here's the interesting part of the website:
"U.S. coins today are essentially tokens that have little intrinsic value. However, when coins are put into circulation, the public pays the government the face value. Seigniorage is the difference between the face value of a coin and its cost. In the case of a $1 coin, which costs 8 cents to make and distribute, the profit (or seigniorage) is 92 cents.

This profit is not considered revenue, because in theory, at some point, the coin might be redeemed (although redemptions are a minor factor), and the government would then have to refund its face value.

The receipts from coinage amount to an interest free loan from the public to the government. Issuing 10 billion new $1 coins would produce $9.2 billion in receipts, which would flow into the Treasury's general fund. Treasury would spend the money in lieu of borrowing. This would save Treasury the interest it would otherwise pay to borrow that amount and hold down the national debt. The savings are large, since interest on Treasury 30-year bonds is over 6% today.

The coin assumes value at the point when the coin is swapped for its face value with the public, because the government stands behind it and will refund its face value on demand. After the transaction with the public occurs, the government has the face value of the coin in its possession and can use the money to finance the deficit. These interest savings, in addition to savings from printing, paper and processing, should be counted when computing the savings to the government from issuing a new $1 coin.

Paper Notes. Receipts from paper money also are used to finance the deficit, but the procedure is somewhat different. When Federal Reserve notes are placed into
circulation, the Federal Reserve receives face value from the public. The receipts are invested in Treasury securities, which earn interest. Each year the interest earned on those Treasury securities (called "portfolio earnings") is rebated to the Treasury, thus financing that portion of the deficit. In 1995, the Fed rebated the $23.382 billion it earned on about $400 billion worth of Federal Reserve notes outstanding. Most economists use "seigniorage" when talking about paper money, too.

Replacing a Federal Reserve note with coin is a wash, from an accounting standpoint. The government saves money from The Efficient Currency Act because three $1 coins will be needed for each $1 bill removed from circulation (based on the Canadian experience). $1 coins tend to "pool" in vending machines, pay phones, etc. (MY COMMENT: and the change-savings can on your dresser) more than $1 bills, so more coins are needed. This "increase" would not be inflationary, because the money supply (M1) would not change; each $1 coin would have to be purchased with existing money. A greater percentage of M1 would be held as $1 coins, from which the government would profit, just like American Express would by having more uncashed travelers checks in circulation."

My comment: Oh, I get it! The government wants to put MORE money (dollar coins)into circulation, so that it gets to keep the value of the money that's NOT in circulation (dollar coins too heavy & bulky for your wallet). Also, ever wonder why everyone's so hot to put the new State Quarters into collections instead of circulation? Does anyone know if this kind of money manipulation by the government actually takes any sizeable amount of cash out of circulation?

Maybe the financial whizz-kids out there already knew this. But I'll bet it's news to lots of lurkers and newbies to economic intracacies, like myself.

Thanks in advance for comments.

@Trail Guide: Sure glad to see you back! Welcome! And thanks for all the effort you put in here.

@Journeyman: I win a cookie? (Kudo=acknowledgment, also Kudos=cookie/candy bar)
Thanks, it was delicious!

simply me
simply me

Solomon Weaver

(02/18/2000; 15:10:20 MDT - Msg ID: 25616)

yes town crier

TownCrier (02/18/00; 14:15:16MDT - Msg ID:25611)
----------------
Yes....this will be the very interesting thing to observe.

On one side, we will have the situation where a large number of gold paper contracts are understood by the investment public to have been defaulted upon...i.e. just like bonds gone bad, they could trade at extremely low values versus physical.

But, on the other side...anywhere where the contract says "repayment in gold" and the counterparty insists (like a Central Banker whos politicians are saying.."we must recover our national gold"), then this liability only grows with the gold price.

Above and beyond that, this gold thing will be "extremely political" if it explodes fast enough to get out of control.

It will be very interesting to see if the Europeans will take advantage of the emergency in the gold markets to set up a brand new exchange (probably in Zuerich) to take over while the LBMA and COMEX sit in a coma.

----

A few posts back I posted a "hot off the press" item by Ted Butler...I have also posted some this week on the hypothesis that an explosion in silver could be just as bad, but since the mess is easier to clean up after, trading in silver may resume in a new fashion much faster than gold.

It is my opinion that owning and watching silver is one of the greatest hedges available to a gold bug at this time.

Poor old Solomon

Cavan Man

(02/18/2000; 15:33:39 MDT - Msg ID: 25617)

Solomon

How do you personally invest in the silver metal?

I have considered many times but always decide against because of the high premiums whether Eagles or, by the bag. Is that right? Can't you buy a bag of silver coin? Seems that the last time I looked at this option the premium was high also.

Another concern; when silver does go up significantly, every longtime silver holder will be coming out of the woodwork to sell perhaps allowing the buyer to buy behind spot or at a very modest premium. The situation might resemble the physical marketplace in gold (coin) we know today. What do you think?

Aristotle

(02/18/2000; 15:34:00 MDT - Msg ID: 25618)

A little help, please.

In scanning through the posts today, I find myself largely confused by the letter to the NYMEX president from Ted Butler. Doesn't Mr. Butler realize that thousands of people can bet on the very same Superbowl? It doesn't get much clearer than this: where he states "People who buy COMEX contracts have a reasonable expectation of their contracts being fulfilled [the implication is metal delivery]" I offer this alternate view as one more accurate--'People who enter COMEX contracts have a reasonable expectation that their counterparty will pay up [cash] when the price changes.' And what's more, the price changes are based upon the supply and demand for these wager contracts. Metal has very little to do with the COMEX marketplace.

The more clearly a person grasps this, more clearly you'll grasp a portion of the point I was making in my recent series of posts. Or else I am COMPLETELY out to lunch with no grip on reality.

Trail Guide:
I'm glad to find that these recent thoughts are in harmony with the view you have on events; past, present and probable. I hope to very soon join in to help explain my position (as if I needed to add yet more wind to a long post that I thought adequately covered the bases!), though you have made an admirable champion in my absence. Obviously, this topic was one you had planned to visit in depth at some time down the road. I hope I didn't undermine any natural progression of ideas you had planned by tossing this out on the Table too early. Seemingly, very few are ready to see things this way. A pity, because as we've tried to show, it the clearest, most natural way for Gold to have its sustainable day in the Sun.

More on this as a full schedule allows.

Gold. Get you some! ---Aristotle

Cavan Man

(02/18/2000; 15:39:22 MDT - Msg ID: 25619)

Sol

Can Comex gold and COT relative to gold be measured as precisely? Thanks

Hipplebeck

(02/18/2000; 15:43:53 MDT - Msg ID: 25620)

Swiss Banker types

are sure smart.
As this plays out, they are going to be in the ideal position. The only ones with gold left to sell in a sellers market.
No wonder the Swiss are famous bankers.

Cavan Man

(02/18/2000; 15:44:03 MDT - Msg ID: 25621)

Aristotle

No, you don't need a grip. Rather, you deserve a standing ovation for your yeoman efforts on behalf of gold.

The Comex is a casino. Surely anyone going through the turnstile realizes this fundamental point.

RossL

(02/18/2000; 15:50:49 MDT - Msg ID: 25622)

Simply Me - the new brass token

Your quote from a website:
"This profit is not considered revenue, because in theory, at some point, the coin might be redeemed (although redemptions are a minor factor), and the government would then have to refund its face value."

HA HA! The treasury will redeem the 1 "dollar" brass token with what? A federal reserve note?

Gandalf the White

(02/18/2000; 16:04:53 MDT - Msg ID: 25623)

RossL's Question !

NO Ross ! --- Four state quarters !
<;-)

Aristotle

(02/18/2000; 16:06:47 MDT - Msg ID: 25624)

Cavan Man--thanks, bud! Simply Me--nice post

A while ago I tried to encourage some posters to wrangle around with the meaning of this concept of seigniorage within our current realm of modern currency. Unfortunately, I didn't have time to hang around and facilitate the debate, and apparently nobody else had any interest in it. But your recent post touches on the key issue, so I'll just wrap up that old loose thread right now.

From your post, as the cited website explains it:

"The coin assumes value at the point when the coin is swapped for its face value with the public, because the government stands behind it and will refund its face value on demand. After the transaction with the public occurs, the government has the face value of the coin in its possession and can use the money to finance the deficit. These interest savings, in addition to savings from printing, paper and processing, should be counted when computing the savings to the government from issuing a new $1 coin."

In truth, this is seigniorage to the same extent that issuing a bond to the Fed is seigniorage...and I'll happily leave it up to others to decide whether or not that is seigniorage. Fundamentally the two acts are the same, its just that one of them takes the more scenic route.

What is the point of all this? I don't rightly know...

Perhaps it is just another excuse to say, "Gold. Get you some."

Yep. ---Aristotle

R Powell

(02/18/2000; 16:14:25 MDT - Msg ID: 25625)

Aristotle Re Ted Butler's letter

Yes, thank you, I was wondering the same. People also buy and sell index numbers like the $index, the DOW, and the S+P where instead of not enough supply to cover contracts there is no supply at all. Most textbooks say that speculation exists in futures contracts to supply liquidity to the market so that the buyer can buy or a seller can sell at any time with some risk passed on to the speculator. This has been my understanding. Mr. Butler's letter implies otherwise that contracts for should never exceed supply?

Journeyman

(02/18/2000; 17:17:26 MDT - Msg ID: 25626)

Aristotle: seigniorage

http://www.ny.frb.org/pihome/fedpoint/fed01.html
I have interst, but must eat, sleep, etc. You of all people know how much time good posts can eat!PLEASE don't get me too interested.

The way you account something determines in large part what it is. So, if you're willing to accept FRB NY account structure, then they admit the seigniorage from creating paper money goes to the FR. Since the site (link above) also says it costs about four cents to print any denomination, you can get an idea of the profit margin, say for a hundred dollar bill, for example. This is interesting since the Treasury prints them.

But today, only approx. 8% of dollars are physical paper, the other 92% being megabyte in nature. This is where things begin to glaze my brain over. Who creates the megabyte? Since megabyte is the vast majority, it's clearly (and unfortunately) become the important part of the money supply to look at.

There are complications even with paper. Who pays the four cents to replace it when it wears out? Is there new seigniorage gained? What are the offsetting "distribution" expenses incurred by the Federal Reserve, etc.

But give me something I can buy for four cents and buy even only $1.00 worth of goods for, and I'll be happy ---- and RICH in short order.

This is as far as I've gotten.

I think ORO uses seigniorage to refer to all related profit from the advantages inherent in fiat central banking. But I'm about 3 months behind studying ORO -- and fading fast.

Anyway, you're seigniorage post is at the top of my pending file, which is now approx. 300,000 bytes.

I'm reading, but have about 1 month's leveraged living to catch up on! Looks like ORO may have taken a breather too.

High regards,
Journeyman

Farfel

(02/18/2000; 17:17:56 MDT - Msg ID: 25627)

More Idiocy RE: VENGOLD aka Itemus aka Scamitus Inc

Date: Fri Feb 18 2000 17:59
Jack (itemus Inc.) ID#254293:
Copyright � 1999 Jack/Kitco Inc. All rights reserved
If anyone here is going to invest in gold producers who plan to become Internet Venture Seed's, two important criteria are involved.

1. Cash
2. Management with experiece in high tech ventures

Without these inportant criteria you are blowing in the wind.

A good possibility is Vengold, now itemus Inc an Internet seed.

If gold goes positive, their Lihir investment will shine and their cash potential might increase over two fold. The Lihir ADR was close to $40 bucks when gold was $380, today the Lihir ADR closed at $11.
Also the experienced high tech managers at can muster up another $50 million on top of their present cash and cash potentials.

Also there is the possibility, that if the market gets hit that gold will likely shine and itemus Inc. will benefit from a rise in Lihir and itemus may be able to seed new ventures on the cheap.

-----

As of today this company is worth close to three hundred million dollars on the basis of a 50 million dollar cash hoard, internut wishes and internut dreams, and a piece of LIHIR.

The problem with the proceeding analysis from KITCO is that even if gold goes to 600 tomorrow, then assuming that internut stocks might crash in such a scenario, well, at best VENGOLD is already fully valued at its current stock price today and at worst it could be severely overvalued by as much as 100-200 million dollars.

Again, if you invest in this idiocy, then you are simply asking to be taken to the cleaners by the shrewd opportunists who invented this gold company qua internut venture.

If this Vengold thing is not the loud bell ringing the final top of the internet mania, then I am completely deaf.

Thanks

F*

Aristotle

(02/18/2000; 17:31:49 MDT - Msg ID: 25628)

R Powell--you made an excellent example

On some of these futures contracts, there is no "supply" at all--such as derivatives on an index. If that doesn't make the point, nothing will. Silver does not hold my interest, so I'll leave those specific battles to others. But where the parallel Gold market exists, it should be clear to most people by now that the market valuation on the Gold in their personal treasury is falsely established by a paper market that has little connection with actual metal. Based on prevailing paper perceptions, metal sellers are over a barrel, selling at a mathematically derived spot price based on futures contract "prices." The upside is that those who use Gold as their fundamental savings (such as I do) can get Gold at these terrifically flawed prices.

One of the points of my recent set of posts was to show that both the dollar and Gold could/should be stabilized by removing any last vestiges of paper attachments (loans, derivatives, etc.) from Gold. A purely physical metal market would tend to be stable and based on a slow and steadily increasing world supply from mining, and its value would grow as the world's population sought the ultimate form of money to represent their savings. Paper currencies, meanwhile, would continue on their merry way--subject to inflations and deflations of supply, but most generally they would continue to inflate, inspiring most people to opt for the no-brainer choice of Gold as their savings asset. And with Gold as this ubiquitous, independent and parallel "currency," the paper currencies which continue to circulate will be spared some their debilitating *shocks* that currently result when today's derivative games spill out into the open. Unshackling Gold from paper will always provide a point of stabilty for all markets, all nations.

My argument earlier wasn't for the excellence of a fiat system of currency. It was about the excellence of Gold being freed of its paper attachments. One of ORO's points to me, which I intend to address a bit better later, was that the system I described was unnatural and required too many new rules. He then proceeded to lay down about a dozen of his own for a system he suggests would be better. He has missed my point entirely. Gresham's law is a natural one that simply helped me forecast the fate of Gold once the paper attachments were abolished. And as for the difficulty of abolishing these Gold-based derivatives? Just image the Washington Agreement: Round Two. It's that simple. Done in the blink of an eye. "Lightning in the night," as a friend would say.

Gold. Get you some! ---Aristotle

Journeyman

(02/18/2000; 17:32:05 MDT - Msg ID: 25629)

NEWS FLASH: U.S. Treasury robs Federal Reserve

Simply Me,

An interesting point is that the seigniorage from dollar COINS goes to the U.S. Treasury, while seigniorage from dollar BILLS goes to the Federal Reserve.

On the surface at least, the move from paper dollars to coin dollars is a transfer of wealth from the Federal Reserve to the U.S. Treasury.

Regards,
Journeyman

Aristotle

(02/18/2000; 18:19:34 MDT - Msg ID: 25630)

You're a sharp man, Journey-guy!

"The way you account something determines in large part what it is."

Exactly right. And depending on the level at which we choose to examine the books, we could say that it is 100% "seigniorage."

Fractional reserve lending is a phenomenon that only exists when you look at the banking system as a whole. Any given individual bank can't actually lend money "out of thin air." They can only lend a fraction of actual deposits. The efficiency of the banks to allocate their remaining deposits among their customers seeking to withdraw funds creates the essence of what we call an expansion of the money supply due to fractional reserve lending. Having the Fed available as the lender of last resort ensures that the survival of the system is not left to the off-chance when reallocation efficiencies break down in a crisis of confidence.

In actuality, it is the government acting in concert with the Fed that creates the original currency that acts as our monetary base. By issuing a treasury bond (at essentially no real cost, but only a simply promise to buy it back at face value) to the Fed, the Treaury can get Federal Reserve Note Dollars that never existed before that point in time.

I simply wanted to call attention to the difference between what seigniorage used to be (the portion of bullion brought by a private party to the mint that the government kept instead of minting it into coins--sorta like an expense fee) versus what people tend to call seigniorage today. Is it 100% for the monetary base created through Treasury bonds held by the Fed, or is it just the real difference in real value between the dollars originally received from the Fed, versus the real value of the dollars used to buyback the bond?

Interesting concept. Depending on the behavior of prices in the real economy, this seigniorage could be positive or negative.

Gold. Get you some. ---Aristotle

RossL

(02/18/2000; 18:55:55 MDT - Msg ID: 25631)

Journeyman - Msg ID:25590

Give me liberty or give me death!
Journeyman - I see how you are. When you were young, did you ever throw rocks at hornet nests?

TownCrier

(02/18/2000; 18:56:50 MDT - Msg ID: 25632)

Hear ye! Hear ye! Weekend reading for all!

http://www.usagold.com/halldiscussion.htmlHere in The Tower we have been impressed with the level of discussion over the past two weeks in regard to gold's role in the monetary system. While this page is still under development to include the most recent days, you may benefit by seeing the thread of discussion as it has been captured for this special archive in an easier-to-follow format. Thanks to Sirs Aristotle, ORO, Trail Guide, Elwood, Journeyman, USAGOLD, and on and on. It seems that nearly everyone had something to offer.

Enjoy your reading.

Canuck

(02/18/2000; 18:59:08 MDT - Msg ID: 25633)

Quote from Big John

Apocalyptic expectations are unnecessary to project a dollar gold price that includes four digits. It will only require the inevitable unwinding of bearish producer and dealer hedge structures amidst a change of market perceptions on the desirability of financial assets.

John Hathaway

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

When John Six Pack understands this message Katie WILL have to bolt the door!!

Have a golden week-end friends!!

Canuckster.

And again for old times sake .....

" Here I sit by the fire (Miller Time)...
Watching the SHORTS freak and perspire....
I'm happy tonight...gold's out of sight..
Walking in a golden wonderland....."

YAAAAAAAAAAAAAAAAHHHHHHHHHOOOOOOOOOOOOOOOOOOOOOO!!!!!!

Solomon Weaver

(02/18/2000; 19:39:23 MDT - Msg ID: 25634)

Reply to Cavan Man and other silver contemplatives

Cavan Man (02/18/00; 15:33:39MDT - Msg ID:25617)
Solomon
How do you personally invest in the silver metal?
------
(SW) My current investment was inspired by early y2k worries and I was able to pick up some junk bags in early 1998 with no premium before the premium started to rise as much as to 50%. I also got some brand new Eagles which sell for about $8 when silver is $5...so a $3 per coin premium which is actually about 60%.
------------
(CM) I have considered many times but always decide against because of the high premiums whether Eagles or, by the bag. Is that right? Can't you buy a bag of silver coin? Seems that the last time I looked at this option the premium was high also.
---------
(SW) http://www.monex.com/prices.html
this link gives prices at Monex which is a large dealer.
If you go there you will see that the "premium" now on a bag of $1000 face value coins is a few cents over bullion prices. The disadvantage I see with the junk coins is that they are only 90% silver (where the eagles are 99.9%) and so they may not be useful for some industries. I have always "assumed" that jewelers might actually like the 90% alloy used for coin because it is more durable. It would cost about $3500-$3800 to buy a junk bag today. So about the same as 12 ounces of gold coin. The silver will weigh about 60 pounds and the postman is bound to ask you what it is that is so heavy. Some coin dealers (and I'm sure this includes Centennial Metals here at the forum) will also send you some fraction of a silver junk unit. What I see as some advantages to silver junk coins.

1. There are often a large number of 1960-1964 coins in very nice condition. The best can be set aside and make nice gifts from a gold/silver bug....today a silver quarter costs about $1. Imagine that day in the future when you can give someone one and say "here's a little token of my appreciation - and by the way, don't go out an put it in a coke machine because it is really worth $5."

2. There are also gobs of older coins. I was able to put together a nice collection of Franklin Halves (one of those blue books full) with a fairly nice quality coin in each year and mint. Obviously, these come nowhere near what such a collection of uncirculated coins might be worth. Thus, if you are trying to teach your children the joys of collecting old coins...can you think of a better way.

3. Silver quarters only contain about 18/100 of an ounce of silver. First, they are only 90% silver, and secondly, they only weigh 1/5 of an ounce, not a "quarter" of an ounce. But, I believe that during a real silver run, when the general public wants silver, that the "premium" on these coins could rise again to give them the value of about 1/4 of pure silver.
-------

(CM) Another concern; when silver does go up significantly, every longtime silver holder will be coming out of the woodwork to sell perhaps allowing the buyer to buy behind spot or at a very modest premium. The situation might resemble the physical marketplace in gold (coin) we know today. What do you think?
----
(SW) These are good points but let us think for a minute. We should remember that when the price is going up significantly, this means that the number of buyers is increasing too. I have a friend who paid $25/ounce for some 100 ounce bars back in the Hunt days. He has the bars sitting in his closet...maybe 2 or 3 bars. He's the kind of guy who will do like you say. If you are a silver holder, you too should ask yourself after a period of rapid rise if you would sell off some of your least favorite items to take profits.
The idea of coin selling behind spot is irrational in the sense that the cost of minting a coin creates a natural premium. This must only be a temporary thing and I believe that it could happen with silver too at come point. But stop and think, if you could get $100 nice new silver Eagles for less than you would pay for a $100 ounce bar, you should jump at the chance, shouldn't you?

There is one more point which I seem to keep coming back too...and I hope some of you out there agree with me:

Silver is the poor man's gold. For jewelry and for hard savings. Imagine a world where the "purchasing power" of gold has risen 10 fold, and where the dollar as fiat has lost 50% of it's value against "fiat basket". So, in today's psychology that means gold at $6000 per ounce (and still slowly climbing). By that time, buying a 1 ounce Eagle will be almost impossible for the blue collar family, unless they are really serious about it. On the other hand, a silver Eagle might cost $100 or so. So, it is still an option for the little guy...even to buy one every year or one for every kid every year..just like today's gold bugs. If this scenario comes to pass, it will be a shame for gold bugs who do not own silver..because they will be so rich that they will only be able to trade their coins with the other rich...if you have silver, you can sell a few nice coins to people you know, and even give it to them at a slight discount to market...

I think that the great unknown in the next few years for both gold and silver will be the amount of NEW INVESTMENT DEMAND. And I still think that when the little guys get tired of Amazon.com and would rather get 10% of their money back into PMs, then the demand (especially for the poor man's gold) could rise dramatically.

Poor old Solomon

Canuck

(02/18/2000; 19:53:51 MDT - Msg ID: 25635)

Butler's email

Is Butler saying that these 4 traders because
of the naked shorts, leveraged to the nth degree could not supply silver nor cash and consequently default is imminent.
Longs (in the money) receive squat. Perhaps it's not the cash or silver that is Butler's concern it is only the fact that these 4 entities, without backing, pose the risk of complete failure of COMEX?

If you and I make a bet worth a sizable sum of money I want to see the color of your cash.

Am I on the right track?

Solomon Weaver

(02/18/2000; 20:02:27 MDT - Msg ID: 25636)

I have been waiting for years for a dollar coin...when do we get the $5 coin?

Simply Me (02/18/00; 15:03:23MDT - Msg ID:25615)
Why a Dollar Coin?
----
Hey Simply Me. I really enjoyed all the thoughts about why a new $1 coin.

First thought. The FED prints 18 billion bills each year. 9 billion of them are $1s. Yet the FED prints about $300-$400 billion face value currency each year. So they spend half of the dollar printing budget printing 5% of the face value. For this reason it is absurd to condsider introducing a $2 bill. Also, these bills do not much more than replace those coming out of circulation.

Second thought. Many countries already have coins which are worth more than a dollar. The most dramatic I know is Japan where the 500 yen coin is worth almost $5, and there are no longer 500 yen bills. America is just getting up to speed on the benefits of larger face value coins.

NOTE: I remember the first time I went to Europe and spent a week in Amsterdam. Since it was not uncommon in the USA for me to keep a few dollars worth of quarters in my pocket, that habit got me in real trouble when I got out of Holland and down to Italy, and upon inspecting my pocket of Guilder, I discovered almost $50 worth of Dutch coins, which the bank in Italy would not exchange.

To tell you the truth, it is actually a nice feeling to sit down to coffee with a friend, and be able to pay the whole transaction with a coin....seems more real...

I hope I start to convince you that we are entering a great new era...

Poor old Solomon

Solomon Weaver

(02/18/2000; 20:27:20 MDT - Msg ID: 25637)

A thread on Butler's letter begins to build.

R Powell (02/18/00; 16:14:25MDT - Msg ID:25625)
Aristotle (02/18/00; 17:31:49MDT - Msg ID:25628)
Canuck (02/18/00; 19:53:51MDT - Msg ID:25635)

Great comments today. Especially Aristotles first paragraph.

Here is my read on Butler's letter to the President of the New York Mercantile Exchange.

That a limited set (CARTEL, CABEL?, which could also allow collusion) of players dominate the net short position. That their net short position may actually be 20X the amount of bullion they actually have, and that that same position is currently almost 2.5 times the amount of physical silver held at the COMEX reserve. And that these players are DEALERS who have no "real" need for silver, but who carry an obligation so large that even the world's greatest silver producing nation would be hard pressed to "complete the transaction with silver".

He is very obviously trying to call attention to the fact that silver paper has become a form of very risky gambling and no longer is a true commodity market.

Given the much larger amount of gold trading and the fact that the market value of silver in COMEX deposit is almost the same as in gold, I would be willing to bet that this issue that he raises is even worse in gold...only that in the case of gold the Cabel may have more than 4.

What seriously concerns me is that in all other commodity markets, there is always enough physical to follow most of the trades that want delivery. But in gold and silver, the paper is out there in orbit compared to physical. It is a very dangerous situation, and could easily put a lot of in the money contracts into the deep freeze.

My advise to any small guys trying to play the long paper side: Go for gold mining stocks instead...the good ones are mining real gold.

Poor old Solomon

Quicksilver

(02/18/2000; 20:29:39 MDT - Msg ID: 25638)

Observations about those two spikes on Kitco 24hr chart

http://www.kitco.com/gold.graph.htmlI believe they are computer programs scheduled to "buy" at a certain time. On Feb 16 on the Hong Kong Exchange at 1:00 and 2:00 NYT. The flat top on the first spike shows us it was a limit order with a limit so many dollars above the market (the height of the spikes)and that they were not willing to pay any more (the flat top). A few days prior, this same spike occured but was filled in and flat from one spike to the other meaning supply could not overcome demand until all the orders were filled. This intense buying in Asia is different from Australian and London buying because of the willingness of the Asian buyers to pay a few dollars more just to get all their orders filled. Maybe the gold is going to middlemen who put such a markup on it for jewelry that they don't care about the few extra bucks. This implies to me that it was physical gold bought and not a paper gold contracts.
Only thinner markets can be manipulated easily, where all major players are on the same side. Once we get some major players going long, it will neutralize the shorting. So if we have net buying on three exchanges with NY neutralized, maybe this three day Kitco chart will start looking more like a barber pole. Got paper goldstocks? Eventually sell some. Quicksilver.

Chris Powell

(02/18/2000; 20:59:54 MDT - Msg ID: 25639)

Hathaway sees four-digit gold price

http://www.egroups.com/group/gata/391.html?Tocqueville Asset Management's John Hathaway
says the gold market is so short that a
four-digitprice for gold is quite possible
without any general economic catastrophe.

R Powell

(02/18/2000; 21:01:44 MDT - Msg ID: 25640)

Canuck Re Mr. Butler's letter

If I called my broker to place an order to sell naked orders in any market, the order taker would check my account balance and then tell me that I don't have the necessary funds. There are margin requirements necessary for buying or selling contracts and for selling uncovered options which have the potential to gain value for the buyer (and then require more margin from the seller). Those sellers Mr. Butler speaks of must have on account the speculative margin for whatever they sold. Should the situation move against them they will recieve a margin call for more funds or their position will be offset (bought back if originally sold). It may be that they are covered with long positions unknown to Mr. Butler or have very deep pockets or perhaps tight stops to let them escape the position with a small loss if the price moves against them.In theory, there are money requirements if you want to enter the game. In the real world even prize-winning economists have gone big time belly-up and needed a lender of last resort. Perhaps Mr. Butler fears this may happen and is indirectly questioning whether margin requirements are sufficient.??

Chris Powell

(02/18/2000; 21:02:28 MDT - Msg ID: 25641)

The Economist says gold should be higher

http://www.egroups.com/group/gata/391.html?... even if they do snicker at "conspiracy
theory."

Cavan Man

(02/18/2000; 21:05:27 MDT - Msg ID: 25642)

Town Crier 25632

MK, you must be very happy. Most amazing! I tell you all we are going to win.

Will have to print this and take to the skys.

Marius

(02/18/2000; 21:07:00 MDT - Msg ID: 25643)

Random comments to Town Crier & Starshine

Starshine,

Let me add my welcome to Stranger's. I must, however, respectfully disagree re: McCain. 2 brief thoughts:

1) McCain's early success seems largely due to the crossover of Democrats (and Independents) to vote Republican in the open primaries that have occurred so far. I'd bet that these same are unlikely to crossover in the general election. (Read: the Dems would MUCH rather face McCain.)
Don't bet on this kind of McCain strength in the traditional primaries.

2) McCain IS so establishment it's laughable. Maverick, outsider? He got reelected to the Senate by boasting that he was an experienced insider who know what strings/people to pull to get things done. You don't hang out for 18 years being an "outsider".

The above comments in no way constitute an endorsement of GWB.

Town Crier,

Is it possible that you were unaware Bernie Sanders is an "(I-VT)" because there is no "(S-VT)". S signifying Socialist, who has wet dreams over the confiscation of wealth. Do not get thy noble boxers/briefs in a twist: it ain't gonna happen on Bernie's say-so! I only wish AG wasn't such a gentleman, and had taken a golden opportunity to really humiliate the creepy little toad! (Every time I need a reminder that my home state of NY isn't totally whacked, I just remember VT. Smile.)

Have a great weekend, all. If I'm not back soon you'll know I perished shoveling snow. Yuck!)

Solomon Weaver

(02/18/2000; 21:09:44 MDT - Msg ID: 25644)

This ain't no game of "red light - green light"

An interesting paragraph from the Hathaway article entitled Apocalypse No

"The dealer hedge position was built over three to
five years. It cannot be reconfigured easily. For
example, the problem-ridden Ashanti hedge book is in
worse condition today than when it was initially
understood to be a problem four months ago. If it were
easy to fix, it would have been done by now. Instead,
it is more in the red today, $400 million estimated,
versus the less than $200 million in the red four months
ago, both figured at today's gold price."

It sounds as if the counter parties took some money off the table in the meantime, seeing as Ashanti is going under anyway.

Chris Powell

(02/18/2000; 22:51:55 MDT - Msg ID: 25645)

Correcting URL for post from Economist on gold

http://www.egroups.com/group/gata/392.html?Sorry about that, folks.

Simply Me

(02/19/2000; 02:34:32 MDT - Msg ID: 25646)

Dollar Coin @Solomon Weaver, Journeyman, Aristotle, RossL et al.

All comments read and throughly enjoyed! Thank you!

Poor ol' Solomon: Maybe I could get used to the new Game Token Dollar if, as Journeyman says, the profits go the US Treasury instead of the RobberBaron Fed Bank. At least we're gettin' a little closer to MY pocket. My distrust of any change the government comes up with is just my old "hippy" values aging ungracefully into Cranky Old Libertarian.

Power to the People
Go REAL PHYSICAL Gold!
simply me

View Yesterday's Discussion.

Simply Me

(02/19/2000; 03:08:12 MDT - Msg ID: 25647)

PLEASE read "hippie" where I wrote "hippy".

How embarrassing. Sure gives a whole new meaning to that sentence doesn't it?

Mr Gresham

(02/19/2000; 05:42:17 MDT - Msg ID: 25648)

Solomon #25636 -- small correction

http://www.federalreserve.gov/boarddocs/press/General/1999/19990813/Solomon --

Not really essential or contrary to your argument, but I remembered the Fed printing stats from last year were different than your "18 billion bills each year. 9 billion of them are $1s. Yet the FED prints about $300-$400 billion face value"

Fed's Aug. 13 press release:

"The Federal Reserve Board announced today it has ordered nine billion currency notes, with a face value of $67 billion, for Fiscal Year 2000.

"The order, sent to the Treasury Department's Bureau of Engraving and Printing, represents a return to historical ordering patterns. Last year, the Board ordered eleven billion notes worth $267 billion to meet normal business needs and to prepare for the possibility of increased demand around the Year 2000 rollover.

"The face value of the new order is considerably smaller than the previous year because the Board decided not to print additional $50 and $100 notes. The inventory of larger notes is sufficient to meet anticipated demand over the next federal fiscal year, which begins October 1. "

I wanted to get the correct numbers in perspective, as I watched the currency questions closely last year pre-Y2k; indeed, when I started posting here in August, that was how I selected my handle.

I was wondering if the "paper" (electronic) dollar market was about to separate from the "physical" (paper) in a first-order derivative away from the discussion on this forum about the paper gold market separating from the physical.

There is still only about a 5% representation within the US of its e-money bank deposits, but the public determined last year that holding the Fed's paper was little better than holding a receipt from a bank. It will be interesting to see what future provocation might challenge that complacency.

Isn't it amazing that they can print such a small amount this year ($67 billion) and think the currency needs are covered (probably right), but of course they're concentrating on the 1s,5s, 10s that are in such horrible shape now.

One of the tenets of government coin/currency manufacture is not to let a shortage of any type develop at any point on the denomination spectrum. A shortage or hoarding of any scarce "money" (even pennies) could tug at the entire spectrum and snowball into the bank runs they avoided last year. Why take chances, they figure?

I've had so little time this month to read thoroughly all the wonderful-looking posts by you and everyone else. Damn, what a tease! If I don't stop reading about "money" once in awhile, I'll never have time to make some.

Cavan Man

(02/19/2000; 06:15:14 MDT - Msg ID: 25649)

To Black Blade or All

SWC really took a hit on Friday. I suppose on news coming out of Russia. Comments on supply/demand fundamentals for platinum and palladium from anyone? A broker friend of mine thinks the metal price could see $1000.00 this year.

Thanks

Henri

(02/19/2000; 06:16:51 MDT - Msg ID: 25650)

Marius Msg 25643

When you say "open Primarys", You must mean in Sates that allow registered Dems to vote for republican candidates. Of course crossing over can be done in closed states by reregistering at least 90 days before the primary. As an independent, I find I can only vote for referendum issues during the Primary. I am also frequently asked by those obstructing my passage into the township hall thrusting pamphlets in my face telling me who to vote for..."What are you doing here?" This in response to "Democrat or Republican?" The difference? A different set of idiots thrusting pamphlets at you. Yes it is illegal to block the way to the voting booths...but no one here seems to mind. Except us minority independents. I just say..."I'm here to vote the referendum issue, My vote will count in November Just like yours."

So my point is, depending on which states are "open" would this cross-over vote become a factor in the primaries.

SteveH

(02/19/2000; 07:29:37 MDT - Msg ID: 25651)

repost

http://www.prudentbear.com/markcomm/markcomm.htmThis is an absolutely must read, without hestitation and without time wasted. Thanks to Chris and GATA for pointing it out!!!!

-- snippet

Hats off to Texas Congressman Dr. Ron Paul. In yesterday's Humphrey-Hawkins testimony, Dr. Paul asked Dr. Greenspan for some clarification on the Federal Reserve's policy regarding what has been inarguably massive excess money supply growth. We found the exchange very interesting. We commend Dr. Paul for his commitment to sound money, although he is seemingly the only individual in Washington with this view.

Dr. Ron Paul: "We have concentrated here a lot today on prices, and you talk a lot about the price of labor, labor costs. And yet that is not the inflation according to sound money economics. The concern a sound money economist has is for the supply of money. If you increase the supply of money, you have inflation.

Just because you are able to maintain a price level, (a) certain level that because of technology or for whatever, this should not be reassurance because we still could have our malinvestment, we can still have our excessive debt and borrowing. And it might contribute even to the margin debt and these various things.

So I think we should concentrate, especially since we're dealing with monetary policy, more on monetary policy and what we're doing with the money. It was suggested here that maybe you're running a policy that's too tight. Well, that � I'd have to take exception to that, because it's been far from tight. I think that we have had a tremendous growth in money. The last three months of last year might be historic highs for the increase of Federal Reserve credit. In the last three months the Federal Reserve credit was increasing at a rate of 74%. It is true, a lot of that has been withdrawn already. But this credit that was created at the time also influenced M3, and M3 during that period of time grew significantly, not quite as fast as the credit itself. But M3 was rising at a 17% rate.

Now, since that time, of course, a lot of the credit has been withdrawn, but I have not seen any significant decrease in M3. And I wanted to just refer to this chart that the Federal Reserve prepared on M3 for the past three years. And it sets the targets. And for three years you've never been once in the target range.

You know, if I set my targets and I perform like that as a physician, my patient would die. I mean, this would be big trouble in medicine. But here it doesn't seem to bother anybody. And if you extrapolate and looked at the targets set in 1997 and carried that set of targets all the way out, you only missed M3 by $690 billion. I mean, that's just a small amount of extra money that came into circulation. But I think it's harmful. I know Wall Street likes it, and the economy likes it when the bubble's getting bigger. But my concern is, what's going to happen when this bursts? And I think it will unless you can reassure me.

But the one specific question I have is will M3 shrink? Is that a goal of yours, to shrink M3? Or is it only to withdraw some of that credit that you injected for the non-crisis of Y2K?"

Mr. Greenspan: "Let me suggest to you that the monetary aggregates as we measure them are getting increasingly complex and difficult to integrate into a set of forecasts. The problem that we have is not that money is unimportant, but how we define it.

By definition, all prices are indeed the "ratio of an exchange of a good for money." And what we seek is what that is. Our problem is we used M-1 at one point as the proxy of money, and it turned out to be a very difficult indicator of any financial state. We then went to M-2 and had the similar problem. We have never done M-3 per se because it largely reflects the extent of expansion of the banking industry. And when in effect banks expand, in and of itself, it doesn't tell you terribly much about what the real money is.

So our problem is not that we do not believe in sound money. We do. We very much believe that, if you have a debased currency, that you will have a debased economy. The difficulty is in defining what part of our liquidity structure is truly money. We have had trouble ferreting out proxies for that for a number of years. And the standard we employed is whether it gives us a good forward indicator of the direction of finance and the economy.

Regrettably, none of those which have been able to develop, including MZM � has not done that. That does not mean that we think that money is irrelevant. It means that we think our measures of money have been inadequate. And, as a consequence of that, we, as I have mentioned previously, have downgraded the use of the monetary aggregates for monetary policy purposes, until we are able to find a more stable proxy for what we believe is the underlying money in the economy."

Dr. Paul: "So it's hard to manage something you can't define?"

Mr. Greenspan: "It is not possible to manage something you can't define."

All we can say is that Greenspan should be ashamed.

SteveH

(02/19/2000; 07:32:35 MDT - Msg ID: 25652)

repost

http://archive.twst.com/notes/articles/jad470a.htmlHathaway interview

SteveH

(02/19/2000; 07:41:34 MDT - Msg ID: 25653)

repost

http://the-privateer.com/gold6.html"...It will grow exponentially faster if Gold has actually surmounted its $US 300 "ceiling" and turned it back into the $US 300 "floor" it was for so long. We are at a very important "crossroads" here. Stay tuned."

SteveH

(02/19/2000; 07:44:45 MDT - Msg ID: 25654)

24K

www.kitco.comDate: Sat Feb 19 2000 01:23
24K (What was the U.S.'s largest export (dollar value) in Dec. 99?) ID#81124:
According to Steve H[***] in an article posted on that other golden site mentioned here occasionally, it was.....GOLD! ( 103 Tons )

*** I believe it was the largest growth in an export.

He also said that China recently announced that they were going to purchase 1000 tons. Let's see... When Britain says they are going to sell 25 tons, the price plummets $15, so when China says "buy" the price should jump by 40 times the other way, right?

Anyone heard these facts verified anywhere else?

Black Blade

(02/19/2000; 07:48:35 MDT - Msg ID: 25655)

Cavan Man and SWC

Indeed, the shares took a breather for now. Still they are up from the $16 to $18 range where I bought in, not too shabby! Never-the-less, the Russians announced their intentions to deliver. We've heard that story before. I'll believe it when it happens. The whole of Russia is coming apart, corruption is pervasive throughout. Anything of value is either stolen or into the black market. It is very difficult to tell the difference between organized crime and the Russian government. We have seen that several billions of IMF dollars can easily evaporate without a trace. Meanwhile the miners at Norilsk Nickel (major source of by-product nickel) aren't being paid, usually are not very productive due to extreme inefficiencies of the Soviet era production facilities. Since Russia is the source of 70% of the worlds Palladium supplies and only 20% of Platinum, it is not that strange that Pd prices have held up fairly well compared to Pt prices. In fact, didn't Pd prices rebound late friday to finish at $710.00? Obviously several investors don't believe the Russians will deliver either. I think that $1000.00 per ounce Pd is possible but could be a bumpy ride from here. As far as SWC is concerned, they have been slow to access the East Boulder extension ore body that is a continuation of the JM reef. Once they get the drifts completed they will effectively be able to ramp-up production significantly. The upgrades to their milling operations appear to be completed, so now it's a matter of how quickly they get to mine the E. Boulder Ore body. I have considered increasing my position of SWC if it pulls back some more (below $35.00), however, I just bought some physical Au and Ag and am a bit tapped right now (maybe I should sell some of my Techs that got hammered yesterday! :-) ouch!). Of course PGM's should do well into the future as well. Ballard Power (T.BLD), Fuel Cell and Power Plug, are three players in the fuel cell technology and they appear to be making some good progress. This will add more pricing pressure to PGM's if found to be viable and cost effective. In short, I think that the PGM game is far from over.

Good luck! Going Ice fishin' now, will check in tonight.

tedw

(02/19/2000; 08:11:23 MDT - Msg ID: 25656)

Educating Alan Greenspan

http://www.usagold.com
Alan Greenspan seems to be having trouble defining what money is (see Steve H. link below).

Alan (in case your reading this), real money is gold and silver. The other stuff is paper chits or entries in computers. If you would like to know more about this read the US constitution. In case you dont know what that is
its a very old historical US document. They may have a copy somewhere in Washington DC. Ask Ron Paul about it, he will
know.

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

Speaking of real money consider the following.

The average ratio of gold to silver is 68.8 to 1 over the last 5 years. The average price of silver has been $5.45.
Therefore silver is not currently undervalued. Using the gold/silver ratio the POG should be about $360 right now.
The average price of gold over the last 20 years (throwing out the highest year and the lowest year) is $340. I suspect we will see $340-$360 gold soon.

Cavan Man

(02/19/2000; 08:13:07 MDT - Msg ID: 25657)

SteveH

I read the PB last night. Kind of scary; Paul made AG look bewildered with that line of questioning. Perhaps he is.

Trail Guide

(02/19/2000; 08:26:47 MDT - Msg ID: 25658)

(No Subject)

http://www.usagold.com/halldiscussion.htmlTownCrier,
Thanks for the "Hall Discussion" page. I can now see where lot's of clarification and more discussion is in order.
http://www.usagold.com/halldiscussion.html

Aristotle,
Bet you knew what I meant in:

Trail Guide(02/11/00) - Msg ID:24996)--- The Gold Trails

-----Thank you Aristotle! A fine work that's worth a long study, my friend. Aristotle, your five part series is ????trechantly???? ritten and offers readers a glimpse into a future that must be. Will be!---------

Hope you did understand it,,, because I didn't! (smile)

Should be -- trenchantly --- vigorously effective and articulate,,,,, sharply perceptive!

In the future ,,,, as I have always done in the past ,,,,, will try harder to use as few "extra descriptive" words as possible. It's bad enough for us to read between the lines of thought,,, and fill in (in our minds) the simple bad word use and misspelling (we all offer),,,,,,, but fast typing descriptive terms wrong ,,,,,, just kills the whole presentation completely. No?

Formal papers are given a good going over,,,,, several times before print. Here, in this convention hall,,,, we not only say what we think,,, we are also saying what we are feeling about the subject as well. Same as if we were in person.

(ha! Ha!) Reading and listening here is no different from my talking to a large group. Going back,,,,, hearing some of my tape recordings of the past ,,,,,, often think "I can't believe anyone actually understood what I said" (smile). But, all in all,,,,, most do,,, I do also ,,,,,, human dynamics in action.

I have stopped all new projects and will be writing a lot,,, fairly soon. Next post coming up.

Quicksilver

(02/19/2000; 08:33:10 MDT - Msg ID: 25659)

Australian Exchange's Spike Down

http://www.usagold.comOn Feb. 16 on the Australian Exchange we saw a long spike in price downward. Some may be saying "Is that price instability? Why so low a spike all the way down to 295?". I believe this spike down was an attempt by a buyer with deep pockets to purchase all the gold he could get his hands on below 301. One of the big boys decides that gold may never get this cheap again and that he should have bought more yesterday. He tells his brokers to divide into two "teams" one team is the "sellers" and the other one is the "buyers". He decides to sell like a few tons of gold at the market all at once through the seller team. The price plummets down and triggers all the preset to sell orders placed by small buyers who use leverage and margin who are scared of a price drop. Small buyers set a sell order just below the price they paid to prevent large losses. The big guy knows these preset sell orders are waiting for him as the price falls through them. So as the price is falling, the buying team is buying back the same gold contracts the selling team sold plus all the contracts from the small guys sell stops that were triggered plus any panic sellers. If it takes the big guy 2 tons to crash the price through the stops he doesn't care because the buying team is going to end up with say 2 3/4 tons when all the buying is done, with panic sellers and stops triggered making up the 3/4s. It all happens very quickly and is a game played often to get the gold away from speculators. What it means is that gold had a "shakeout" and went from weak hands to stronger hands. The speed of the buyback tells buyers on the next exchange that somebody did a shakeout play in Australia. I'm not saying that it always precipitates a price rise but it is bullish as long as it happens at a lower price level. Dell Computer was notorious for the market maker passing his bids through the stops of longs (set below the market) or shorts (with stops set above the market) in an effort to gather stock to sell before a rally or to dump stock before a crash respectively. If this downspike wasn't a manipulation to buy, then it may have been caused by a negative news announcement and possibly that "bad news" was used instead of selling the 2 tons to shakeout contracts from weak hands. I think it is all very manipulated and always was so we need to read the signs to see why it is being manipulated and what are the signs that the manipulators are loosing grip. Big dinosaurs leave big footprints.

If anyone wants to add to or correct this feel free.

When gold goes way up it's a little too late to go to our favorite coin dealer and ask him when he will be getting some more gold in. The local coin cronie is going to say "Just check back with me when the POG is up another $50" "have I suffered a few years? Is it time for me to make a dollar?"

"Those have already been sold I really shouldn't even have them out in the case, but I've got these over here................"

I'm not content to sit back and feel it's ok to loose money in gold because "it's all manipulated". There is always an angle and a winning plan available to those willing to apply themselves and assimilate the data. What you don't know can hurt you. I appreciate all the input from the purists with the excellent ideology about gold. It's .999 fine. And the high level market discussions.......I can only learn from minds more knowledgable than my own.

The American concept "Focus on supporting the weak, and let the strong become weak even make the strong weak to bring everyone to the same level". It is the psychology of loosers!!!!!!!!!! Nowhere in nature will you find any similarity to what socialism has done to our schools and our society. Not that nature is so fair but it is free. We have preferred parking for disabled people yet disabled people don't drive. I say these special parking spots should go to reward acheivement. Give them to highschool honor students. No, no that is not American. Support the underprivileged and let the strong die.
I was told during my second year at Penn State University that my chances of getting a job in Forestry were slim to nill unless I joined the Peace Corp. which would give me preference over minorities and women who were getting the jobs due to quotas. This was confirmed to me by others more in-the-know than my counselor as well. So I adapted, changed my major and graduated.
What we have in this forum is sort of like a one room schoolhouse for understanding the markets and morals of gold. The weak can learn because the strong keep themselves strong and are here to learn from. Nothing in these discussions has to be "dumbed down" for the wannabee spoon-fed investor who is used to pandering night school professors who couldn't teach their way out of a wet paper bag. Because we have to REACH UP to grasp the higher concepts. Things that are so easy usually aren't worth doing. Only way it works friend. So I'm glad people are writing stuff way over my head. One day I might read back over some posts and it's all going to gel and I'm going to know just a little more. So don't give up on learning. Buy truth and sell it not. Thanks to all. Quicksilver

Cavan Man

(02/19/2000; 08:53:29 MDT - Msg ID: 25660)

Trail Guide

We'll throw another log on the fire for you. Welcome friend.

Trail Guide

(02/19/2000; 10:03:17 MDT - Msg ID: 25661)

Freegold

http://www.the-privateer.com/gold6.html#latest

Boy,,,,, the privateer is now hitting right on some of the discussion we have been having here. See his whole post,,, good site.

His words:

----------And Gold's history as a tradable financial asset only really goes back to the "floating" of world currencies in early 1973. --------------

TG:
As the whole gold / currency entanglement threatened our economy and began to come unglued,,,,, they just did what we have been talking about. Instead of setting gold free to trade as a physical asset alone, it was turned into a "financial asset". This exposed it to all the lending,
borrowing and derivative entanglements.

Most every thinker from that time to present uses that period to mark the beginning of Freegold trading,,,, what really happened was far from this. Gold never did become freely traded in the perceived context of just buying and selling gold alone. In parallel to the physical market a
paper market grew that eventually set the price for buying and selling Freegold,,, physical gold. In this respect, gold never did detach from the currency markets. Official policy could still be used to control it's price, therefore making the dollar look good,,, and extend it's life. Yes, one could buy gold, but it's price was marked to the fiat currencies no different than when it was part of the money system. The only difference was that the private market makers provided the hardware (various paper gold derivatives) while the Official markets provided the software (keeping gold lending rates well below currency market rates with the use of small actual sales and "grey" guarantees to supply if needed). In addition this played on the publics ("society") perversion to sell their "hard" , fully paid for" gold holdings and hold the newly offered "soft" (leveraged with less cash on deposit) paper gold. As such the "gap" (physical deficit) has been filled from old private holdings. Holdings that are / were much larger than the CB stash. This supply fact is largely backed up by looking at the gold holdings of "ALL" Central Banks over the last ten+ years. The actual average amount of CB gold hitting the market was never enough to cover the deficit. Not even close. Mostly, other CBs (and large entities) brought the offered gold.

This is the period that low gold prices were,,,, allowing some entities a recycle their dollars back into gold without impacting the price. Some used the paper gold function while others used actual hard gold buys. Oil is good example. In return for the worlds "official policy" oil production was kept high and prices low. Even in the face of a demographic growth in oil use that should have driven prices much higher. In reality, these low prices were backing the dollar reserve system with cheap oil,,,, settled in dollars only.

Cheap gold,,,, cheap oil and World CB support has been used to maintain and extend the dollar reserve system until another currency was available. Today, one is. It's no accident that one year after the Euro was born:

,,,,,,,We find oil prices steadily rising to match it's true economic relationship to world economic growth and use.

,,,,,,,We find the Euro becomming more and more of a financing preference.

,,,,,, We find oil production unresponsive to US demands. Even hinting to cut supplies further!

,,,,,,,We find this modern two tier gold marketplace,,,,,,, built from the mid seventies,,,,,, being abandoned ,,,as it's useful purpose to support the dollar is no longer needed. The Washington Agreement will be seen as only the first of many changes.

,,,,,,,We find the dollar driven into a more overvalued position as world dollar use and therefore liquidity begins to dry up. Prompting the US Fed to pump the money supply in an effort to replace international dollar reserves. We have but to look at Japan and it's Yen to see a similar situation. Here a nations currency is constantly driven upwards,,,,, not from the value of economic function
,,,, rather from financial destruction. Even now the BOE takes steps that may lead to major (hyper?) inflation. Our fate acted out on a much smaller scale? Is this the reason Another said that the dollar would rise first,,,, before it's end, and gold's beginning?

,,,,,,,,We hear talk in Euroland (German citizens) that it's not that their Euro and gold have fallen,,,, rather it's that the dollar has created a US financial bubble similar to Japan in the late 80s,,,, and this crisis is driving the dollar and it's financial sector into a mania. Perhaps an hyper mania?

Also from the Privateer:

-----------Gold has always been a great boon to the world's economic prosperity. And for that precise reason, it has always been a great threat to government created and administered financial systems. ---------------

TG:
To date, if physical gold supply is further curtailed,,,,,,if physical gold demand rises,,,,,, it's price will do so independant of the paper marketplace. This will destroy the modern dollar supporting two tier gold market. A market created to extend the system, not maintain it indefinitely.

In addition I add that governments can,,, have,,, and do use gold to their best interest if the strategy is to unseat an established but failing money system. We shall see.

Also:

-----It is an "asset class" (like stocks, bonds, and "cash") but it cannot be controlled. ------------

TG:
The "true value" of physical gold alone could never be controlled. If,,,,physical gold, trading as Freegold can again act as it did in the very beginning. It will perform it's wondrefull function outside the official money arena,,,, it becomes what it really is,,,,,, an "asset class" as wealth money. A wealth asset,,,,, not an unworkable financial asset.

Also:

-----What has and is being controlled are Gold DERIVATIVES. And as long as the demand for physical Gold can be met, the price can be controlled by the use of these derivatives. -------

Also:

----Since 1980, the demand for PHYSICAL Gold has never got out of hand, and the use ofderivatives to control the price has been developed to its present level. -------------

TG:
Something the world is "on the road" to changing today.

Also:

------The problem now is that unlike most other financial derivatives, which can be "settled" merely by the issuance of more debt paper or, in a final extremity, by the printing of actual currency, Gold derivatives rest on PHYSICAL Gold, which is in finite supply.---------------

TG:
Truly the weak link in dollar support that Euroland will break.

Walking the gold Trail!

Trail Guide

RobertG

(02/19/2000; 10:09:28 MDT - Msg ID: 25662)

Black Blade #25655 - Stillwater Mining Co

Agree with your viewpoint on SWC. Slightly off the subject, have you ever visited the area where the mine is located? It is located in one of the most beautiful places in the U.S., near Nye, Montana. Nye is so small it is not on most maps but is about a one and a half hour drive from Red Lodge or a two hour drive from Big Timber. Big Timber is where Robert Redford filmed the Horse Whisperer. The Stillwater river exits the Beartooth Mountains about 10 miles north of the mine and is a great river for white water rafting (don't let the name of the river fool you). If you are ever in the area it is well worth the trip. The rafting is best in late June and July. Also well worth the effort is the drive from Red Lodge to Cooke City, Montana over the Beartooth highway.

Trail Guide

(02/19/2000; 10:58:10 MDT - Msg ID: 25663)

(No Subject)

Cavan Man,
Not too many logs my friend(smile), I have to leave. Last post for today.

Hello Aristotle,
You are right about Ted Butler. I truly thing he and many other traders are a generation that grew up thinking that paper trading of all kinds is equal to the real thing. Yet, look around us,,,,, in reality our whole economic structure is always in the courts fighting over contract clauses someone could not make good on. Rents, leases, buy outs! Even on time delivery of new aircraft often defaults! Just because it's in writing,,,, guaranteed,,,,,, and has good counter party support doesn't mean a contract is the same as "in my hand"! Contracts are just agreements between two parties and mean nothing until concluded.

Far too many players take paper gold as a sure thing. They lost the perception that these items are just a bet on the price change performance, not delivery performance. It was barely real in the beginning and has lost even that early perception now,,,, by a factor of 1,000%. Still, we read of how it's all illegal and "they" are doing us in! Yet, I can place $2,000 down and create a contract for delivery ,,,,,, and that could be all the wealth I have ,,,, period. What's illegal about that?

We usually hear these arguments in court when somebody is losing big. They try their best to match a moral concept against a legal concept and hope the jury is out to lunch (smile). It's the same in Las Vegas,,,,,,, a guy loses big,,,,,, then tries to tell the jury that the house should have stopped him,,,,,, because he didn't know the house rules were established against him winning!

The real answer to all of this is,,,,, "boy don't play these games in their house, if you don't want to lose". Yet, people still gamble the futures and options in gold and get mad when they find out that the rules were always against them. Ha! Ha!,,,, they never cry a moral story when they are
winning???

Same thing today for the gold mine stock holders. How many would have said a word if the paper gold markets were manipulated in their favour??????? Not a word I bet! Yet, still illegal, no?

ALL: They tell this tail for their own advantage. Gold can't rise that much so use leverage ,,,,,, Gold can't rise that much so buy silver ,,,,, Gold can't rise that much so buy gold stocks. Then gold falls,,, they lose over and over from trading in and out and cry it's all illegal ,,,,,, we pack physical in and wait for the world to swing our way and pray for more of this illegal stuff to keep the price down!
Next play ,,,,, gold spikes way up ,,,, crashes the entire paper marketplace ,,,,,, destroying the finances of most mines and players in the process ,,,,,, same cries again ,,,,,,, it's all illegal ,,,,, they forced it too high!!!!! It will never end!

As Another said "Out bet? They can never cover. Because we play "our" game in "their" house"

Also: Aristotle ,,,,, you write, 'I hope I didn't undermine any natural progression of ideas you had planned by tossing this out on the Table too early"
I saw some while back that you had caught on to what was happening. Funny, there is but a very small group, world-wide, that are working on this. I guess thoughts travel through space and time?

Go for it my friend.

Thanks Trail Guide

canamami

(02/19/2000; 11:37:37 MDT - Msg ID: 25664)

Reply to Trail Guide

Trail Guide,

The debate concerning the morality of CB gold sales and leasing turns on whether the CB's should convert what I'll call "currency gold" (accumulated when currencies and gold were more intertwined than they currently are, and often the product of expropriation or other governmental coercion) into what I'll call "multi-use gold" - i.e., commodity and jewelry use, and private savings not denominated in currency terms.

I believe it is improper for CB's to convert "currency gold" into "multi-use gold". First, this gold represents in a concrete form the accumulated savings of those who created wealth at a time when gold and currencies were intertwined, and thus dumping it on the market for "multi-use" purposes is a method of frittering away past savings. Second, an industry has arisen (i.e., gold mining) based on the premise that the CB's won't place this gold on the "multi-use" market. Therefore, CB gold sales serve to wrongfully destroy the gold mining industry.

Although I understand and appreciate your assertions of hypocrisy against those who cry about manipulation simply because they lose from the manipulation, I submit there is a principled moral argument against CB sales which transcends self-interest.

Of course, enemies of gold like "Hutch" on SI believe the failure of the CB's to put their gold on the market is a form of price-fixing in favour of the gold mining industry. For the above reasons, I disagree with the view put forward by people like "Hutch". Rather, I submit CB's should be restricted to using gold for inter-CB settlement, and for gold coins denominated in the national currency.

Thank You,
canamami.

Journeyman

(02/19/2000; 11:54:21 MDT - Msg ID: 25665)

Australian Gold Gambling @ Quicksilver

Re: Quicksilver (02/19/00; 08:33:10MDT - Msg ID:25659)
Australian Exchange's Spike Down

Quicksilver,

1st, if you saw that spike only on Kitco, it's suspect -- whom ever
minds the store over there must be tipsy now and again. However, if
the spike was "real," - - - -

I have acquaintence with a similar operation in another
area of gambling. In the mid to late 80's, a group labeled
"the computer gang" by the authorities, in line with said authorities
standard M.O. (Meghod of Operation) to "demonize" anyone they don't
like, was busted in Las Vegas for inter-state bookmaking.

What "the computer gang" had been doing was interstate betting, not a
crime at the time. In fact, "the gang" used to brag to each other that
they put more bookies out of business than the FBI, and it wasn't a
hollow brag. On one trip to N.Y. Doc. Mindlin drove back in a powder
blue Mercedes convertible, all that a particular bookie could come up
with in lieu of the cash he owed.

The FBI, as is quite often the case, looked like a bunch of keystone
cops in a poorly written comedy. But on to the relevant point.

"The Gang," actually bet college football & college basketball using
an at the time state of the art computer program that was run on time
rented from CDC (Control Data Corporation.) At first it was a small
operation, but with a proven 17% edge, it grew fast.

It grew so fast that in a few years "the gang" outgrew the ability to bet
as much as desired using just the capacity of the Las Vegas casino sports
books.

But by this time, many of the folks placing the bets were known to the
Vegas "wise-guys" like Lem Banker, etc. and word would go out and other
smart money would piggy-back on "the gang's" bets. This made it even
more difficult for "the gang" to "get down" on the games they liked
because when the big money hit the Sports Books, the books would change the
line (spot price).

It was at this point that the operation expanded to betting out-of-state
over the phones, and I know very little about that part of the operation.

However, the "street team," the group who actually went around all over
Vegas placing bets at all the different sports books, now became a
different sort of asset. Only about 10% of the total action was now
done by the street team. Their value was, paradoxically, that they
were known as the wisest of "wise-guys."

By this time, the time between when "the (street) gang" placed a bet
and that bet was picked up by the piggy-backers and passed all around
was down to about 10 minutes. That one bet would change the line all
over the country and make it difficult for "the (whole) gang" to get
down as much as they wanted.

What's a poor "computer gang" to do? Use it, of course. So in selected
games, the "street team" would bet the WRONG way causing the line to move
the right way (from "the gang's" viewpoint) and they would get better bets
and even bets on some games they couldn't otherwise bet at all.

My guess is that, since "the gang" was sharp, but no sharper than those
that play derivatives, etc., such games, with refinements I'm sure,
go on all the time in the markets. Therefore, Quicksilver, your
scenario is, at least to me, quite plausible.

If anyone is skeptical of the "computer gang" description, you can see
some foot prints, a bit distorted but recognizable, by going to the
following URLs and searching for "computer gang":

http://www.ireland.com/sports/other/1999/1111/kimball.htm
http://www.cyberbar.net/directcl/mace.html

There was also an article on "the gang" around the time of the trial
sometime in 1990 in Sports Illustrated, I believe.

Dr. Edward O. Thorpe, auhor of "Beat The Dealer," the 1968 book that
first demonstrated the game of balck jack could be beaten, became a
very successful and resented upstart market-maker by applying mathematical
analysis to the markets in the 1970s. Gambling and the markets have
always been closely related, even though only lately has that fact
been more widely recognized.

Regards,
Journeyman

R Powell

(02/19/2000; 14:21:57 MDT - Msg ID: 25666)

Quicksilver Re Msg ID 25659

I suspect you are correct in thinking the big money manipulates the market to enter their positions at more favorable prices. I think many trading firms do the same just to flush out both long and short positions if for no other reason than to create more transactions (and of course transaction fees). If you or I want to enter by buying perhaps a call option, we can hitch a ride to a lower price by using a limit, open order and then letting our "friendly market movers" bring the price to our offer. Also, your post (supposition) brought to mind "Reminiscences of a Stock Operator" which I think is the most enjoyable (and educational) book I've read concerning stock and commodity trading. Many "free" markets, aren't but just as I don't argee with all the IRS rules, I try to study them carefully because I have to file and don't want to without knowing the rules of the game.

Tanglewild

(02/19/2000; 14:45:14 MDT - Msg ID: 25667)

Gold to rise

http://news.excite.com/news/ap/000219/11/goldNew article out today. Global demand to increase.

Harley Davidson

(02/19/2000; 15:15:02 MDT - Msg ID: 25668)

Greenspan on Oil:

Alan Greenspan's testimony to the House Banking Committee on Thursday was replayed today on C-Span and one portion in particular got me thinking. When asked about his thoughts on the current oil situation, he expressed concern for the short term due to dangerously low inventories at the present time but, in the long term, he was less concerned because he believes we will migrate to other sources of energy which will reduce our dependence on oil and OPEC.

My reaction to this statement, specifically regarding his long term view, is that if he is correct, I wonder what the members of OPEC think about this. Will they decide that the only source of revenues they have has a limited life expectancy and drop the price to keep the industrialized world and its SUV and minivan owners happy? Or will they hike the price to the moon to make the most profits from their oil while they can?

I have read that they think $25 dollars per barrel is a fair price as they don't want to send the industrialized world into recession, thus reducing the demand for their oil and causing the price to fall further. In the early '70s, this may have been a valid consideration but I don't think it applies today.

Any thoughts?

Quicksilver

(02/19/2000; 17:07:39 MDT - Msg ID: 25672)

ramblings and fries

http://www.usagold.comThey can manipulate the markets, but the gazelle can jump faster than the lion chasing him.

I despised daytrading after I heard about what it was. I was going to be an investor. So I got my online account after I broke my ankle. I bought some PDG at 11 3/4 before it went to like 17. I sold it at 16 1/2 as it was coming down. I had learned the IPOs fall like a rock after the run up so I was well conditioned to sell for a profit. Then I went back and bought in real heavy to every goldstock waiting for the Big One to hit. At the top, market orders only. Well, I had Cambior and Ashanti and stock I couldn't even find the website for. I finally figured out what a hedge was and perceived of some greater risks involved with owning them. I made great money when I followed the fundamentals but after I did so well with PDG I threw caution to the wind. I finally decided to study charts like a Korean med student after they fell back from their highs. Lost alot but sold it all and escaped the "crash of Cambior" by a few days. The crash of Ashanti almost put me in a shanty. So knowing that "I don't know" I set out to learn the patterns. Then for every pattern there is the same shaped "false" pattern to decipher. In my best two weeks I earned over 3000 on a $7000 account. My account has never gotten big because I have to withdraw to pay bills. My psychology was right and I never disobeyed my plans. If it started going bad, I was out in 2 1/2 minutes in cash. Then I wouldn't touch a trade until I developed a new play. Like in football, nobody just plays football in a serious game, they have plans. I'm an excellent bricklayer but my joints are wearing out and I don't feel like 24 anymore. I can never pay off my wife's medical bills throwing bricks in a wall. There isn't much intelligent life on a construction site. I got tired of smelling burnt rope. Who are all these people who want to stop me from taking money away from J.P. Morgan, Goldman Sacs, and First Suez Bastan???????? Like these giant houses of pirates really need to steal from everyone. All the 25yr old kids they hire to manage (manipulate) the markets.....they don't know much. Their senior advisors can't watch the computer all day long. How did they "get into so much trouble" they're fat cats, lazy and corrupt.

I'm for Robinhood and his merry band of stock riders. Owning common stocks in today's market is for the financially insane. The DOW belongs somewhere around 6000. Business to business high tech commerce has no more validity than a game of shuffleboard.

Surfing a stock with caution, now there is a formidable pastime. That is right I actually can make between 7 and 10% on my entire portfolio in one day. Being back in paper gold at 3:50 that's the spice that makes the rice taste nice. Because there is too much risk in not being in gold. It's better than land. I cannot buy and sell the same bag of gold coins 3 times a day. So the paper gold is the next best thing to being there. I guess it should be illegal to earn a living providing venture capital to markets. Like a dentist looks in my mouth and wants $150, and that's real work. On one hand a goldbug will hate a manipulator and on the other he will despise anyone who can take money away from a manipulator. Why is it that way, is there so much skill in burying a jar of coins in your backyard? Relax, you are going to triple your investment. A real chartist can earn over $200,000 a year with a fair ammount of stress. Have you ever laid over 1100 twelve inch block between 3 guys, thats over 350 block per man by 1:30 in the afternoon? Just so you could go home early and fall asleep? Sort of a meaningless existance don't you think? Up 65 feet in the air on scaffolding built by crackheads. People falling, the ambulance arrives once a month. Not quite as meaningless as riding stocks around but a whole lot safer. I built this computer from the motherboard up. By God's grace if I may earn a living trading stocks to invest in physical gold with money provided by the big boys who rob all of us, that's a happy days life for all of us. Being rich in heart and kindness is the only true riches. Owning physical gold, the only true investment. You can despise me, I know bitterness is "in". But I still know you are going to write to each other and I'm going to listen because I know you are all so brilliant.

Like the kid on the Titanic said,"Have ya made any money wit yer drawings?" What's your strategy besides burying stuff? Have you ever measured the loss due to burying forgetfulness? Where did I bury that gold? Man I hide it so good I can't even find it. I was too paranoid to write a map. Ah the life of a goldbug, such a life is me.

Cavan Man

(02/19/2000; 18:30:31 MDT - Msg ID: 25673)

Quicksilver 25672

So, gazellemeister, what do you recommend in equities.

Good post!

Farfel

(02/19/2000; 18:33:49 MDT - Msg ID: 25674)

MORE Info Re: VENGOLD or ITEMUS

I spoke with a young fellow who said he will not sell his VENGOLD until it reaches 100 and expects it will do so before the end of the year. This kid has never seen any proximation of a rational or bear market in his life and represents the standard youthful internet investor.

Well, anything is possible in a crazy world but it is important to understand compelling differences between VENGOLD and most other internet companies.

Most internet companies are launched via long-awaited IPOS's.

On the other hand, ITEMUS was not exactly launched, it was "converted" from an existing gold company into an internet trading vehicle.

Secondly, the "genius" behind most internet IPO's is the imperative of providing far less stock than the market desires at absurdly low prices. The average internet IPO provides somewhere between FOUR MILLION AND EIGHT MILLION shares of stock to the public upon launch. So a stock priced at $10 given such a low float is bound to soar upon first trading day.

In Vengold's case, there are already approximately 200 MILLION shares!!! Thus, there is far far more share liquidity in the marketplace than is normal for any internet IPO. That fact makes it almost impossible for any tech fund(s) to manipulate the stock higher via control of a low share float. So it is hard to imagine Vengold will achieve the type of super high share prices that other internet IPO's have achieved.

Already the company is trading for 900% more than it did when its was a pure gold company. Given that for every dollar rise in the stock price, TWO HUNDRED MILLION dollars of extra corporate net worth is created, then that little fact suggests that the highest figure the company could achieve in the most zany internet market is around $5.00 a share since that price would create a company worth ONE BILLION DOLLARS.

Remember, Itemus is no more than an internet incubator, analogous to a venture capitalist where only 1 of 10 projects usually make money or break even.

Moreover, many of Vengold's shareowners have suffered for years holding stock that has flatlined below 25 cents. It is certain that over the next while many of Vengold's original investors will sell into these unusual price increases.

Thanks

F*

R Powell

(02/19/2000; 18:41:30 MDT - Msg ID: 25675)

Mr. Quicksilver Re work

Hi brickie! I'm going on thirty years of pouring and finishing concrete, flatwork, in New England fighting the weather (frozen ground) right now. Elevator guy is also in construction. If hard work and study can produce a living in commodities, then I'll do it. You and I have traded physical pain for currency, now maybe we can get paid for studying- I'd do it anyway for the satisfaction of seeing my work lead to the right prediction. Actually, I also like finishing concrete, self-employed, often a one man show -Have trowel-Will travel. There are many great minds thinking aloud here and many years of trading experience- also a wealth of information from both posts and links. This is probably a good time to say Thanks to All and to M.K. for the space!

Solomon Weaver

(02/19/2000; 19:47:36 MDT - Msg ID: 25676)

MR. GRESHAM

Mr Gresham (02/19/00; 05:42:17MDT - Msg ID:25648)
---------
Mr. Gresham - I always wondered about the similarity of your handle to the noted Mr. Gresham.

Thanks for your little correction on the amount of money printed. My main point was that by minting $1 coins, there will be a lot of money saved in the costs of printing $1 bills.

Yes, it is really amazing how thin that little veil of paper and coin money is that covers the massive digital money we all use. Even more surprising is how little people really understand that.

It seems that we humans have embarked upon a great experiment of some kind as we move to electronic money exchange...In truth, the invention of coin is only a few thousand years old...brief compared with our biological history as a species.

Poor old Solomon

(02/19/2000; 20:04:19 MDT - Msg ID: 25677)

Tuesday's equities markets?

On Friday the equities markets dropped close to 3% and no one on this site even comments on it? If much of the new money that went into those markets in November, December and January was margin money as is being suggested my some, this 3 day weekend will be a long miserable one for some of those speculators trying to decide how to deal with margin calls. How about a little discussion on how equities will react on Tuesday and how that might impact Gold?

Solomon Weaver

(02/19/2000; 20:21:47 MDT - Msg ID: 25678)

A three tiered gold (silver) market

http://www.the-privateer.com/gold6.html#commentTHE WORDS OF THE PRIVATEER - "Gold has always been a great boon to the world's economic prosperity. And for that precise reason, it has always been a great threat to government-created and administered financial systems. It is an "asset class" (like stocks, bonds, and "cash") but it cannot be controlled.

Before you say, "Wait a minute, it certainly has been controlled", back up a minute. The demand for PHYSICAL Gold has outstripped supply every year for well over a decade. What has and is being controlled are Gold DERIVATIVES. And as long as the demand for physical Gold can be met, the price can be controlled by the use of these derivatives.

The risk to the present financial system of Gold holding its historical floor of $US 300 are twofold. First, for 20 years and more, a Gold upsurge from $US 300 has always been BIG - and FAST. Second, it is always in these moves where the demand for PHYSICAL Gold emerges. At Gold's past bottoms, that demand has not lasted. In the late 1970s, when PHYSICAL demand threatened to get out of control, capital was lured back into the Dollar by sky high interest rates. Since 1980, the demand for PHYSICAL Gold has never got out of hand, and the use of derivatives to control the price has been developed to its present level.

***********The problem now is that unlike most other financial derivatives, which can be "settled" merely by the issuance of more debt paper or, in a final extremity, by the printing of actual currency, Gold derivatives rest on PHYSICAL Gold, which is in finite supply. The risk of an upsurge in demand for PHYSICAL Gold as stock and bond markets grow more fragile is growing.***********

It will grow exponentially faster if Gold has actually surmounted its $US 300 "ceiling" and turned it back into the $US 300 "floor" it was for so long. We are at a very important "crossroads" here. Stay tuned."
--------
Solomon's thoughts...

The above are final words from a post that Trail Guide made some extensive comments on today. I reposted them because I think that they represent a great summarization of what we are all thinking here...

Trail Guide talks about a "two tiered" gold market...here I understand him to mean "physical" and "paper"...I wonder if we should really speak of a "three-tiered" market??? By this I mean:

Tier 1. Any trade/transaction which is characterized by the "physical" transfer of gold (or silver) in exchange for a payment. (Here, I will consider the issuance of a "certificate of ownership" for real gold, held in a real vault, certified by a trustworthy bullion bank, who does not issue more claims than they have metal in the vault as part of the "physical" market.

Tier 2. Any promise to buy or sell at a set price in the future (normally called a futures contract). These are obviously the types of contracts which mining companies enter into when they "forward sell" their product. What characterizes these contracts is that in many cases, the seller is able to recieve a large portion (even all) of the payment today...although the "physical" comes only at a later date. There are two types of players in this first form of paper market who have created problems. The first is mining companies who have "borrowed money today" and will pay back in gold in the future. The other are bullion banks who have entered the physical market by removing supply from a CB (to be sold in the physical market) but who have leased the gold and are therefore obligated to return it.

Tier 3. The true derivatives market of options. Puts, calls, sell-stops, etc. etc. etc. Delta hedging would appear to be a method which takes some of the risk out of gambling. This is the true realm of "virtual gold". This is where we can all understand that we are talking about "gambling" on some level. This is the realm where the arbitrage neural networks control the POG against FIATS. This is the realm where gold ties to dollar ties to oil ties to Euro.

There has been some interesting discussion about the letter that Ted Butler sent to the President of the New York Mercantile Exchange. Some voices have correctly stated that the gold market has long been a market where most players are really only trading paper, and most understand the gamble, and most don't want gold delivered. These are the people who are talking about the gold market as seen from Tier 3 down. Then there are those who seem to understand Ted who say that the "real purpose" of the gold market (or any commodity market) is to facilitate the exchange of a physical good at correct prices, and that to the extent that paper contracts on physical delivery begin to exceed the ability to really settle in physical, the market is in danger of eventually defaulting. These are people who see the gold market from Tier 1 up.

I think that the great struggle is going to come right in the middle, where paper and physical meet. This will be a very exciting adventure to watch.

Poor old Solomon

R Powell

(02/19/2000; 21:30:24 MDT - Msg ID: 25679)

Solomon Weaver ,three tiers (Msg ID 25678)

Well said! I would add that almost all futures markets carry an open interest (total number of outstanding contracts either long or short) that exceeds total supply. This is due to speculation (required to supply liquidity) and is offset (settled in currency) as deadlines for delivery approach. How many people really buy 5000 bushels of corn or 37,500lbs. of coffee at one time? But without speculators a farmer might not be able to sell when he wants/needs to and a cereal maker might be unable to buy when supply is needed OR if they can buy/sell when necessary they might find huge price instability Without the speculator's presence. The metals markets are in this respect the same. The open interest might reflect coming price changes but does not cause the price change. Many speculative positions does not surpress gold price. What has depressed POG has been many years worth of production in just a few years, a condition that hopefully has ended. In the final analysis, many believe that the laws of supply and demand determine price of physical (Tier 1) which should be reflected in the futures (Tier 2) and the options' trading (Tier 3). The recent events ( W.A., cutbacks in hedging, change in market sentiment, etc.) should be positive for the POG and should be welcomed by viewers from all three tiers.

ThePrivateer

(02/19/2000; 22:42:09 MDT - Msg ID: 25681)

Checking In

I have "lurked" here on occasion in the past but never posted before. However, Kitco is getting to be a bit much over the weekend so I had a good look around a few hours ago.

Gratified to see the comments/links to my latest Gold Commentary. I would appreciate it if a link was given instead of cutting/pasting the commentary itself - it is copyright :-), but I know how the Internet works.

Anyway, hello to all here.

Black Blade

(02/19/2000; 22:53:04 MDT - Msg ID: 25682)

RobertG Re: msg 25662

Yes, I have been there. I have toured the mine and the property. The geology is quite impressive. The ore body is in a "Layered Mafic Intrusion (LMI)" with alternating layers of chromite, dunite, and anorthosite. It may have formed by a process of osmotic diffusion, a theory proposed by Peterson(?) out of U. of Idaho. The JM reef appears to be somewhat continous over a few miles and is sandwiched in the LMI. The Beartooth's are quite impressive and Red Lodge is very nice (except in winter). There are very impressive veiws from above the timberline. Stillwater Mine creates quite a moral dilemma for the hardcore environmentalist who hates all mining, since PGM's are used for emission controls. Also the mine is almost nonvisible unless your practically right next to it. I guess I could take these environmentalists more seriously when they are living in tree tops and wearing grass skirts. Take care.

BTW, not enough ice today, but found open water. Caught two nice pan-sized browns.

SHIFTY

(02/19/2000; 23:09:42 MDT - Msg ID: 25683)

quicksilver

Do you know anything about a company named BAND-ORE RESOURCES Ltd. ? A friend of a friend told me he thought it was a good small company out of Canada. Trades on TSE under symbol " BAN ". If you have any thoughts on this one, I would like to hear them.

Black Blade

(02/19/2000; 23:18:12 MDT - Msg ID: 25684)

Quicksilver Re:msg. 25680

I generally agree, except PDG has a bit more breathing room at $480 hedge. They can unwind hedges and ramp-up production in short order and deliver into their positions with their high quality properties (such as Pipeline and Pogera). However, this is not the case with ABX (even with Pierina), hedged at $360 -$380, closer to $340 once yeilds on investments are discounted. If POG rises substantially somebody will bite the bullet with all their calls at $319 and $340.

VISX, tough call, I really like their product, had the surgury myself, PE of 17.2, and good cash flow. If the patent suit goes in their favor, it should be a rocket ride. I have considered it, and especially at below $20.

Franco-Nevada (T.FN) is looking good at these prices as well, something else to considered, no hedges, no debt, royalties and profits go straight to the bottom line.

More speculative is Madison Enterprises (V.MDE), in New Guinea next door to PDG's Pogera Mine, excellent drill results, proven management, etc. possible takeover target by PDG or could run on its own.

Gandalf the White

(02/19/2000; 23:47:37 MDT - Msg ID: 25685)

One more IMPOSSIBLE stock for Quicksilver !

This is a TRUE story ! (only the characters have been changed to protect the inept) -- One day a little over a month ago, one of the Hobbits overheard two daytraders talking at a local coffeehouse. These two daytraders were talking about a "hot" stock that was doing something like "marketing" cigars on the internet. -- The company had reached a stock price of about $3. and was thinking about this plan to do a 20 to 1 stock split !!! --- EVERYONE knows that that means great things to the daytrader corps. (BUT it really just reduces the price of the stock per share.) The two daytraders were talking about getting the word out that this company was going to FLY !!! The evesdropping Hobbit listened intently trying to hear the company's name and finally was only able to hear the ticker symbol. --VCSY-- Well, he told a few other Hobbits and they said that they would watch the stock for a while. -- Throughout the latter part of Jan '00 the stock on light volume moved to about $5. on not much additional news. At the start of Feb '00 the price started to show quite a bit of volatility and the price reached a high of about $13., went back down to $6., and up to $12. on slightly increasing volumes. Well, by that time the young Hobbits had pooled $20,000 and throughout late January, purchased a total of 2,700 shares at an average price of less than $8. OF course Gandalf had advised them NOT to throw their hard earned earning away like this, and get more pocket coins of PHYSICAL gold, BUT they were caughtup in the excitment of the chase. This last week the stock did actually have the 20 to 1 split (NOT A REVERSE SPLIT!!) bringing the price per share to about $0.60 -- AND then the volumes tookoff !! Over 20 Million shares trading both Monday and Tuesday and the price slowly moving up as FAR more buyers were showing than sellers. Wednesday, Thursday and Friday the volumes increased to over 50 million shares trading per day and the Friday close was near the weeks high at $2.53 !! FINALLY, on Friday, some of the Hobbits took Gandalf's advise and near the close, sold a few of the 54,000 shares. Of course they were laughing at Gandalf's yelling of "SELL, SELL, SELL it all" !!
Let us see, in one month,... 2,700 x 20 x $2.50 = $135,000. less the starting $20,000. and commissions,.... well you can figure it out.
Poor ol'e Gandalf is beating his head against the White Tree and saying, "Oh, what am I to do ? Irrational exuberance will be the death of me yet".
<;-)

Dollar Bill

(02/20/2000; 00:16:18 MDT - Msg ID: 25686)

gandolf the green with envy

Good story Gandolf,
But, someone is out thier money. So your advice is still
sensible.

On another subject, dont you think that bill Murphy of
gata is irresponsible because the vulnerability of our
whole system to say, saddam, with his billions getting
wind of the leaseing situation and blowing up the
derivitive market and trashing the west by trying to
buy all the gold available.

You got kids? Isnt it a bit unnerveing to see that the
gold leaseing and priceing situation could upend thier
whole future.
The euro guys are in deep in the south american debt
situation and in case you didnt know, Brazil and other
CB's in south america are big gold derivitive players.

The germans dont actually GIVE gold for euro's and for that
matter they dont deserve to be the reserve currency
because of their limited and selfish world views.

What really are we after here. The fantasy of an "honest"
currency like I see posted here by some?

The amount of suffering that would be caused by an upending
of the current fiat system is not something to just
casually ignore.
I see it is popular here to call fiat backers names like
"cabel" and "hannibal cannibals"<(sp), but, it is short
sighted to ignore the full reasoning of the fiat big boys
in keeping gold down.
To call it what it isnt is not smart.
I didnt pick the name dollar bill but I kind of like it.
I am bill burke from hartford conn.
I bought gold because of the advice here and I am ok with
that, but what gata and even this forum is doing is
......well, I have my doubts about the wisdom of makeing
the vulnerability of the system public knowledge.
Especially when there are very rich and destructive types
in this world.
What do YOU think about that.
Whomever. ORO and others are of course welcome to reply.
I would appreciate your thoughts. I read you every day
anyway.View Yesterday's Discussion.

SteveH

(02/20/2000; 00:36:31 MDT - Msg ID: 25687)

Brings a tear to the eye, brought to us by Mozel

www.kitco.comhttp://www.spintechmag.com/0002/lr0200.htm

Dollar Bill

(02/20/2000; 00:44:39 MDT - Msg ID: 25688)

speaking of the germans...

The germans have a terrible tax situation on thier
citizens and also businesses.
The french and other euro countries are....well, you have
to admit they are not all that smart and enviable in the
way they have set up thier socialist leaning government employment sector.
The italians have always had short lived governments and
non tax paying citizens and on and on.
The whole lot of them are not pillars of global freedom
and what military help are they in any kind of a global
sense?
To upend the reserve currency situation and put THEM in
charge....is that wise? And for whom?

Black Blade

(02/20/2000; 00:49:56 MDT - Msg ID: 25689)

This could be interesting! What are the likely outcomes for PM trades?

CFTC's Rainer to unveil futures deregulation plan Tuesday Washington--Feb 18--Commodity Futures Trading commission Chairman William Rainer will unveil his plans to restructure US futures regulation on Tuesday, CFTC aides said Friday. He is expected to propose several tiers of regulation for both exchange-traded futures and electronic systems for trading derivatives.(Story .15667)

Trail Guide

(02/20/2000; 07:11:59 MDT - Msg ID: 25690)

Welcome

ThePrivateer (02/19/00; 22:42:09MDT - Msg ID:25681)
Checking In

Hello Privateer and Welcome!

It seems that a good number of people use your work to argue the "gold game" (often against me). They often send me parts of your thoughts as evidence. After visiting your site (for some time) I can see why,,,,, you have also been following the politics of gold from way, way back, no? You are not alone, I think Michael Kosares was following it from the 2nd day of his birth (big smile)

I present your position, mostly in agreement,,, but add that it is one of many parts of the gold trail we all now walk. If I may, I will post some of your work (with link) in the future?

I did check my recent item and it did include your link. (I got a little nervous and had to check. Thought I put it in, and did.) (smile)

thanks for posting
Trail Guide

nickel62

(02/20/2000; 07:21:47 MDT - Msg ID: 25691)

On a lighter note I have noticed that many of the posters here

seem to share a fair amount in common. Not only in our views about gold but about many other things as well. With so much being discovered as being genetically derived. I wonder if we all might share some atavistic gene that leads us to independant behavior and pursuit of the golden future? Just a thought.

Phos

(02/20/2000; 08:55:05 MDT - Msg ID: 25692)

Dollar Bill #25686

You said:
"......well, I have my doubts about the wisdom of making
the vulnerability of the system public knowledge.
Especially when there are very rich and destructive types
in this world."

Isn't that precisely the point of this and other similar groups including investment newsletters/advisories. It is to alert their subscribers/readers to situations that put them at risk, financial or otherwise. To use an analogy: would you rather sit in your house in one of states subject to them, in tornado season with the radio off, when it might be warning of an impending tornado headed your way? Should we keep our heads in the sand and pretend there are no trains bearing down on us?

Don't know about you, but I would like to be as prepared as I can for what lies ahead. I appreciate the wisdom of the posters here as well as the Bill Murphys, Frank Venerosos and David Tices who are warning of major storms ahead. I hope they are wrong but they all put forward pretty cogent arguments for big financial dislocations on the horizon. Unfortunately, because of my limited education and knowledge of the financial and banking world, derivatives and such, I sometimes do not understand all that I am reading but I respect the expertise of the people who are warning me.

USAGOLD

(02/20/2000; 09:47:38 MDT - Msg ID: 25694)

Quicksilver...

In case you might not have noticed, this is gold site, not a stock site. You are reading USAGOLD, not USABUBBLEMANIA. Please.....don't bring that stuff around here, even on the weekends........

As an aside, Perhaps you do not know that the SEC frowns on such displays of "knowledge??" Particularly if you are sans security license. I mention all this to protect USAGOLD as a web site and the integrity of this Forum. Your #25680 is about as far over the line as you can go -- even if you have a license -- with the specific buy/sells. I can't believe you didn't know it. It will be removed and rather than give you a private warning, I make it public so all will know this cannot be tolerated.

All: Beware of stock touters here at USAGOLD. Just because something shows up on the screen here doesn't mean its always important, sanctioned or usable information. Nor do we know what agendae the posters bring to the table (not that I'm questioning Quicksilver's). We can't police this site 24 hours a day, nor do I want to. The first time I get a call from the SEC or the CFTC on breaking the rules, we are going to have a problem here. There are enough investment pros and experienced investors reading this at any given time to put a stop to someone obviously over the line. The management would greatly appreciate your vigilance and help in this regard..... Thanks, MK

dragonfly

(02/20/2000; 10:11:08 MDT - Msg ID: 25696)

Pogo

A few observations on the discussion about society, cabals, haves and have-nots, nattering nabobs and what-have-you. Thanks to all who are posting on this matter. Indeed, it seems that the closer we get to the beast that we are hunting on this gold trail the less need there is to follow the spoor so closely and the greater need becomes a more "heads up" approach, 360 degrees so to speak. We sure wouldn't want this tiger sneaking up on us now, would we? We also wouldn't want any stampede it causes to catch us unaware. It's important to estimate consequences, understand the terrain and be attentive to larger details, in our case these are often historical and are dual-edged in that much is lost in the all-too-human tendency to lump things together and simplify the complex. The hunt changes as we get closer to our prize and it's increasingly relevant to note the specific as well as the general nature of things. That it's not just a tree, it's an oak tree for instance, and a falling one at that! Before my metaphors leave me out on a limb I will hasten to the point(s).

Having spent a good deal of the last 20 years studying the thoughts and motivations of people and organizations from every political persuasion I could find, I would be very reluctant to use some of the terminology and come to some of the conclusions presented here recently. While I too abhor the compliance, venality and willful ignorance of society-at-large and individual-at-small, the causes are many and often quite wicked indeed, leaving the thoughtful student of history and human nature at a bit of a loss vis-�-vis accurate analysis of how things came to be what they have become.

I see some truth in what some "leftists" are saying as well as what "rightists" and "constitutionalists" and "libertarians" and "anarchists" and "religionists" and "environmentalists" and "communitarians" are also saying.

Does that sound like confusion?

What side were each of us on when the genocide was occurring in Guatemala?
More importantly � what did we as individuals do or not do?

Will gold enthroned solve this kind of thing? Will it end the sanctions on Iraq?

Should simple people be sacrificed to "progress" as defined by the plutocratic socialists ( dressed as conservative Republicrats ). At what point should it get violent � ahh the dreaded violence � dreaded only when we think about it on US soil perhaps, yes???

Dangerous times indeed. Dollar Bill has some valid concerns. The world idealized in many posts here will still be full of thugs and maniacs and mafias and CIAs and KGBs and mercenaries. It will still be conditioned and coerced by force applied and force threatened. It will be ever more dangerous as the uncertainty increases. You see, violence and reactions to it will likely play out long before some enlightened leadership, some philosopher king, comes to pull our fannies from the fire. No, we're probably all going to get a bit toasted before this thing is over.

As my friend Flora used to say, "God help ya when you get what you ask for".

I hope not to offend any of the gentle folks who post here but may I ask a simple question? If the powers that be have the ability to pull off what they have pulled off - how can any of us lay the blame for the state of affairs on ignorant have-nots? That is "The Devil Made Me Do It" kind of logic don't you think? Can you see the tragic irony of that excuse for the world as it is? Picture elites saying " Holy Mackeral !!! We better set up a socialistic state or these ignorant have-nots are going to overwhelm us and take what we have". The same elites who have responsibility for uncountable murders and wars and lootings perpetrated to cripple and eliminate said have-nots as well as weaken those who have more.

I would posit that those most to blame are the ones who have had the knowledge and financial capability to confront the enemies of humankind on every front, but were/are too engrossed in the stock pages, the sports pages, the business pages. Pogo was right.

At the same time I agree with Phos that it is wise to pay attention and live to hopefully create a better world. I would just caution that we should be aware of our own complicity in the one that is falling apart before we take it upon ourselves to lead others to the promised land.

Strad Master

(02/20/2000; 10:48:52 MDT - Msg ID: 25697)

For your Sunday amusement/amazement!

http://www.dnai.com/~zap/gold.htmALL: Anyone want a laugh? Take a look at this site. On the other hand, maybe they are serious. Someone here might want to experiment a bit. If so, let us know the results. (If it works I expect a commission!)

SHIFTY

(02/20/2000; 11:12:59 MDT - Msg ID: 25698)

Quicksilver

Thanks for the input. I dont realy need more gold stocks, I have a bunch of GSR , GOLD , HGMCY. Also a few pounds of AU. Just waiting for the lid to blow off!Thought it might be a good little cheep one. I will keep my eye on it.Thanks again. $hifty!

tedw

(02/20/2000; 11:26:26 MDT - Msg ID: 25699)

Gold Stock

http://www.usagold.com,
Anybody have any input on owning Junior gold versus the larger producers?

I notice that GSR trading at about 1.5 has been up to 20 before and it seems like stocks like that have a lot more room on the upside, and seem to be fairly well respected by some commentators. Comments?

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

Anyone interested in the lawfulness of the dollar, a site with some good info is: www.devvy.com

harold

(02/20/2000; 11:51:33 MDT - Msg ID: 25700)

GSR &Jr.'s

TedW....I clicked on the forum to ask precisely the same. I know there are those on this forum that can answer ?'s Re: the Jr.'s ie.; are they producing?, what are their costs of production?, are they hedged and if so heavily?, should their share price react positively to any rise in the POG?, etc. Anyone that can answer it would sure be helpful. I, as I hope are many others, am spreading the news Re: gold. Technically, GSR,CAU, and some others this week closed above their 100bar moving averages for the 1st time in years. Also, there has been heavy volume near historical lows for many of these shares. I take these, as well as other technical indicators, as positive. I believe that investor interest has to turn positive 1st however, before we see any real rally in the shares. Yes, there were some "pops" corresponding to the gold rallies recently, but none very significant. Interestingly, Dan Dorfman, some's "guru" has come out in favor of gold shares, though he recommended Barrick. I think the important thing is that here is a stock guru that many of the investing public listen to, and he is recommending gold shares. I believe bearish sentiment is still high but close to a turning point. My dumb question, as a layman, to the fine people of this forum is this: Have any of these Jr.'s been profitable as producers over the last few years while POG has been hammered, and if so which ones and shouldn't they be more so if there is a sustainable rally in POG

Trail Guide

(02/20/2000; 12:44:17 MDT - Msg ID: 25701)

(No Subject)

Hello canamami,

You write in your: canamami (02/19/00; 11:37:37MDT - Msg ID:25664)------------

-------The debate concerning the morality of CB gold sales and leasing turns on whether the CB's should convert what I'll call "currency gold" (accumulated when currencies and gold were more intertwined than they currently are, and often the product of expropriation or other governmental
coercion) into what I'll call "multi-use gold" - i.e., commodity and jewelry use, and private savings not denominated in currency terms.----------------
------I believe it is improper for CB's to convert "currency gold" into "multi-use gold". First, this gold represents in a concrete form the accumulated savings of those who created wealth at a time when gold and currencies were intertwined, and thus dumping it on the market for "multi-use" purposes is a method of frittering away past savings. Second, an industry has arisen (i.e., gold mining) based on the premise that the CB's won't place this gold on the "multi-use" market. Therefore, CB gold sales serve to wrongfully destroy the gold mining industry.-------------

TG,
It seems to me that much of the whole argument on gold swings on whether the CBs are indeed dumping gold in the traditional sense,,,, that is, actually selling it into the industrial marketplace. This is much of the real thrust of everyone's discussion. I think it leaves out most of the picture and shrinks our ability to understand what is happening.

If one looks at the world through a long pipe we only see a small amount. It's called a narrow view. Gold thinking has today forever changed as Western people now think they are more educated,,, sophisticated and only need to see what is right in front of them. Put the pipe down and it's amazing what's out there.

Well, it all started many years ago when most investors had never even heard of "forward sales". We all received a good education given by the mining and brokerage industry as to how one should invest in gold,,,, and from this position it's no wonder the price of physical gold is now so easy to control.

The modern gold industry could be compared to a hypothetical "shoe" industry,,,,,

like this:

------Every family was taught that there was much more leverage (and profit) from putting the families finances into buying the shares of companies that make shoes. It seemed that almost everyone would have to buy shoes at one time or another and this demand would certainly drive
shoe prices sky high. In time, thought has indeed evolved. Today our logic dictated as a must that it was even far better for one to buy shoe mining companies than owning the shoes themselves. Slowly, over many years,,,, families held less and less pairs of shoes and more and more company
stocks. Logic moved further until,,,,, they lowered their shoe buying until each family shared only one pair, but owned a bunch of shoe co. stocks. In addition,,,, "indirectly, through third parties" ,,, they owned contracts for the delivery of real shoes. Indeed, this was smarter because their money was invested for a higher return in other areas,,,, and they could always exercise their contracts for more shoes if needed. Especially if "changing times" required the ownership of more than one pair per family.

The future as my evidence for today:

(A). As time and events later proved,,,, things were not as everyone thought. Later in this cycle, it turned out that many of the shoes everyone had contracts for,,,,,, were mostly the product of other families selling their excess shoe holdings. Not the governments selling so much themselves. Worse yet, those shoes had multiple contracts written on them so as to make the delivery impossible. To
cover all those contracts, shoe brokers and companies had gone into OTC and futures exchanges to buy "financial" hedges for shoe delivery. In a twist of logic, even though those hedges could only be settled in cash, these contract buyers figured that at least their "financial book" would be
covered if a shoe default occurred. But this did nothing for all the families that didn't read the small print that said shoe delivery contracts would "through national emergency" or perhaps "security exchange rules",,,,,, also be settled in cash under adverse conditions. Well,,,, most of these very sharp investors accepted even these conditions. They figured that with even a cash settlement, and well before national rule changes,,,, they could pay their taxes on the profits and still buy the shoes in an open market. And using the same logic that placed them in this position,,,,, figured they would buy even more shoes because their cashed in paper leverage gave them more money! Now, after the fact it didn't work out that way. Shoe prices ran ten times faster in the middle of the default settlements,,, so even with some players making 1,000% in cash,,,, shoes were nowhere to be found. If they were found, these cash profits brought even less pairs than if they had put the origional money in them in the first place

(B). Further,,,,, time later revealed that in the late 90s demand for shoes had indeed "skyrocketed", world-wide. Fortunately, many of the people in the Western nations of the world had "brought into" this logic of having only a few pairs of shoes per family and holding their other "shoe wealth" in other paper forms. Some in Dow stocks,,,, some in shoe stocks,,,,, some in shoe contracts,,,, some in shoe derivatives and other options. This effect diverted much of the real shoe demand by spreading out the buying into paper form. It allowed many existing shoes to be diverted overseas where people wanted to get rid of extra dollars and indeed, hold real shoes as their families wealth. Now, after the fact,, we know that the real demand figures from Shoefield
services were completely skewered because they only counted real shoes shipped,,,, not the paper shoes purchased!

(C). Further,,,,,, events later proved that the Central Banks really knew the value of shoes to the world after all. Even during this period, records later proved that the CB mostly sold shoes to each other,,,, with only a small amount (relative to demand) flowing into the real markets. It seemed that they really only rented a very small amount of shoes (relative to demand) to keep the rates down. Perhaps it was the power of suggestion?

All this was in an effort to keep world demand from destroying the "Whole Marketplace" for shoes. This policy was helped enormously as most of the Dollar / IMF banks were more than willing to supply "this paper shoe marketplace they had created earlier",,,,,,,, with paper shoe
commitments because of the profits this created. The CBs saw that "Western investors" would satisfy most of the real demand through their willingness to hold paper shoes,,,,,, and indeed, if shoe prices stayed low,,,, these same investors did indeed,,,, gladly sell their "old shoe bar
holdings" into the huge world demand. Further helping to keep the shoe prices low. All in a effort to give some foreign dollars an illusion of shoe buying power. The rest of the other dollar world,,,, that understood the message being sent by the CBs,,,,, traded their fiat for shoes,,,, over time,,, as able. Now, after the fact,,, they were right. The gold ,,, err err shoes, that is,,,,, they purchased and held in physical shoe friendly government hands more than offset the value lost as the world gold
market fell apart,,,,, taking the dollar with it.

Indeed, it's strange to see that today (year 200?) after the fact,,,,,,, the dollar is still trading,,,,, and still the main currency of the US and a losing holding for many other dollar tied countries. Now, with oil, shoes, goods and services still being sold to them in dollars we now know that talk of dollars being phased out was all wrong! The only thing that changed was dollar asset values and an realignment of world trading structure as it applied to using currency reserves.

Today, most all products brought and sold in dollars are either done in Euros first then changed to dollars,,,, or indexed to the new world Freegold market price. Of course price inflation has virtually destroyed a major portion of the US economic structure,,,,,, rendering it unable to
compete very well world-wide. Indeed, whatever price advantage dollar depreciation gives them, it's completely lost because inflation continues to make production profits non-existent. Slowly, they are using up all their gold reserves in an effort to prop up local industry with profit supports. Still, in time US manufacturing infrastructure will become only a shadow of past glory days.

(D). But time stops for no one,,,, and the shoe market had indeed evolved further. ------ As in all things, greed got the better of the "World gold marketplace" as the ones (banks) that made the market went hog wild creating paper gold for their clients. It seems they entangled every financial facet of the industry into this operation. It eventually became impossible to function outside this new
creation. When the end came, most everyone had had some exposure to the vitality of this paper gold market. When the two tiered marketplace finally failed, it took almost,,,,, "ALMOST" everyone in the industry with it.

What started as an official "grey" policy to keep gold prices low,,,,, had mushroomed into a "we cannot turn back situation"! When it's existence became in the "national interest" of the US (dollar / IMF) we now understand,,,,, because it's failure did indeed rock the dollar world,,,,, not to mention it's old illusion of value. Up until then, dollar assets outside the US had a choice of staying put or
moving into gold as a reserve. But prior to that time society forced the old gold system to fail,,,, so no one could make a good point for returning to a system the world was not willing to live with!

Further, if they did move into gold then, the shock would not only kill the marketplace from where they got cheap gold, it would destroy the function of the world economy because it had no other dollar system to use. So, they supported the dollar and it's gold market even though they didn't like doing it.

(E). Closer to home now,,,,,,, and back from the future::::: This is the broad view.

World political warfare being what it is,,,,, and lasting through out the ages,,,,,, an event has occurred that changed everything in strategic thinking. The Euro was born and became a success!

Now,,,,, this Euro is no dollar, I know,,, and it has many, many problems,,,,, true. But the one thing most people don't understand is just how much political "will" there is out there to escape from the dollar held world. And do it before dollar debt makes it self implode in an inflationary
blaze. Every major world player today, knows that for the last 25+ years we all have lived in a dollar house with a ticking inflation bomb about to go off and burn it down. Every bid of new debt piled ever higher on this system ages it's timeline and takes it one step closer to going off. Yet, it also is trip wired so that if we all exit at once it goes off while we are at the door, leaving many inside. Only recently has an unwired window been found for all of the world (that wants to and can) to escape

On this measurement everyone has completely missed out thoughts. If the Euro proves equal or better than the dollar ,,,,,, good! But, it doesn't have to be even close for most of the world to eventually run to it. They want out from under the dollar system ,,, so bad,, they will eventually
throw caution to the wind to escape it. Understanding this dynamic is key to seeing how the shoe market (gold market ,,, (smile)) is going to evolve. Supply and demand,,,,, legalities and moral truth,,,, fiat moneys verses hard moneys,,,,,, are all nothing in political warfare and national financial self preservation. If gold happens be used as one of many items to help unseat the dollar,,,,,, to
quote from the bible,,,,,, "it shall be done!"

Once the gold market implodes, it will set off a chain of events that will propel investors into using the Euro as a world reserve, come what may. From that time forward any mention of paper gold will be looked at with total disbelief. Anything outside of up front, cash on the head physical trading will be only be found in the back alleys. Euroland will embrace gold with a new physical marketplace that will endorse a bull run in prices like nothing ever seen in modern times. It will not be inflationary anymore than YAHOO stock prices are, precisely because gold will trade as an asset, not a currency. Official BIS / ECB policy will hold that gold is this asset wealth we have been
talking so long about. This is exactly why they now hold it as a asset reserve outside their Euro and mark it to the market. In the future it will be used to settle payments no different than if one gave another Yahoo shares or the deed to their house as debt payment. But, it will no longer contain an official currency function. The political will to control it's price for the sake of world currencies will
be gone.
---------------

So, canamami,,,,,, are the CBs selling gold that -------" " represents in a concrete form the accumulated savings of those who created wealth at a time when gold and currencies were intertwined, and thus dumping it on the market for "multi-use" purposes is a method of frittering away past savings." " ?????? ----
Could be my friend, but there is a lot more to it than that!

I think that by putting down the pipe of narrow vision investors can see that they can participate profitably in a future financial structure,,,,,, but only if they can see the future in a broad sense. Most, " "I say MOST" " of the gold industry will suffer massive dislocation and investor loses. But not all of it. Still the risks are so great (as many such as yourself have found out),,,,,, that the correct
position is having the majority of my hard assets in physical gold and the rest in a very small position of paid up gold shares. Even today we read account after account of sleepless nights and worry over whether ones 100% holdings in mining shares will work out. Desperately hopping that
the stock markets will not crash,,,, and inflation will return before the paper gold market forces prices down one more time,,,,,, and did I make the right move,,,,,and is this the right stock,,,,,, are they really hedged,,,,,,, and will my penny stock last long enough. And all for what?? The hope that the world has not changed and ,,,,, mining stocks will run before gold prices like they did before and ,,,,,, and they won't let me down by only going up at the same rate (or a little bit faster) than much safer bullion?

If ,,,,, " " IF " " what we offer is just a theory as yourself and many other proclaim,,,,,, do you think I am going to be hurt holding a chest of MK's old world coins and just a few mining shares? Truly in this world today,,,,, "a man's just got to know his limitations!" Yes? And you ladies also!

Indeed, had the world been different,,,,,, I think there is not a mining co. leader out there that would not have wished for another outcome. Nobody in their right mind encourages consumers to buy their company stock first, instead of their main product. Had all investors brought physical gold (shoes) first and held a small position of shares for a lifetime (instead of trading), the entire market would have been forced from real physical demand to re-adjust. The lending industry would self destruct long before this. And perversely, too the dollar would have been devalued in gold,,, perhaps changing the future?? We will never know the end of that story.

Having said all of this,,,,,, I am very positive about GATA,,,,, a few mining shares and the prospects of gold coins (and bars) in general. We'll have lots of time on the Gold Trail to see the good side of all of this.

Thanks ALL: for your time Hiking with me!

Trail Guide

harold

(02/20/2000; 12:46:16 MDT - Msg ID: 25702)

Thank you Mr. Greenspan

Sure enjoyed reading AG's reassuring answer to congressman Ron Paul's questioning during HH testimony last week Re: M3, liquidity, recent FED injections - "you can't manage what you can't define."

Cavan Man

(02/20/2000; 13:00:06 MDT - Msg ID: 25703)

Trail Guide 25701

Seems like what the Greeks call, "Sophia".

Cavan Man

(02/20/2000; 13:17:45 MDT - Msg ID: 25704)

Trail Guide

What do you mean by "paid up gold shares"? Thanks!

RossL

(02/20/2000; 14:01:23 MDT - Msg ID: 25705)

Black Blade (Off Topic)

I had the surgery too. I didn't go with the local doctor and the VISX laser. I went to Canada last April and the Doc used the Technolas 217 laser (now called the Bausch and Lomb 217). 20/15 left eye and 20/20 right. The Technolas has a 9mm ablation zone vs. 6mm for the VISX. The ablation zone is the area of the cornea that is vaporized by the laser. The bigger zone is important for people with big eyes.

Now... back to the gold discussion...

CoBra(too)

(02/20/2000; 14:43:12 MDT - Msg ID: 25706)

TG - Many thanks for your "shoe" industry allegory.

Your essay sheds light far beyond the next turn of the trail and allows a glimpse towards the next destination for all to see. Even if some fellow travellers may choose to take upon the additional burden to toil with pick and shovel to replenish some of the wealth, used as nutrient along the way. A nugget uncovered with your own labor on a promising site, just off the main trail, but nobody else's "claim", may even be more rewarding than loping all the physical along the way.
At any rate the puppetmasters and their "bully" puppeteers are playing their puppets on their last and final
"shoe"-strings, while some of the puppets are now trying to escape their bonds - there are others never having acepted the lead-string.
Thanks - CB2

RossL

(02/20/2000; 14:56:15 MDT - Msg ID: 25707)

Cavan Man

I presume that "paid up gold shares" means no margin.

Cmax

(02/20/2000; 15:17:25 MDT - Msg ID: 25708)

Who was that masked man??????????

See....go off sailing in the Caribbean for a couple of weeks and just see what happens: Mr. Trail Guide, I see FOA's mind and wit in your writing, but also a decidedly better handle on english communication. Did I miss something here....like an introduction? Are you FOA reincarnated, then spliced with some famous linguist's genes?

Whoever is behind that mask, please keep it up.

RossL

(02/20/2000; 15:31:15 MDT - Msg ID: 25709)

Dollar Bill - Msg 25686

Say WHAT? Mr. Murphy from GATA is irresponsible? For What? For telling the truth to people who do not want to hear? For exposing the lack of a solid foundation in the USA monetary policy?

Mr. Dollar Bill, telling the truth is not irresponsible. The irresponsibility described in your message rests with those who worship government and who those believe in paper money.

Leigh

(02/20/2000; 15:34:44 MDT - Msg ID: 25710)

Cmax

Welcome back, Cmax! Yes, Trail Guide's really FOA reincarnated! He seems so much happier in his new persona; maybe that's the change you notice. I think (though I'm not sure) that he's getting a new "Trail Hike" section. Upward and onward to 30,000!

Cavan Man

(02/20/2000; 16:30:39 MDT - Msg ID: 25711)

Ross L

Thanks. Sure you're right. I didn't connect probably because I wouldn't buy stocks on margin; my loss I suppose. Thanks again.

Farfel

(02/20/2000; 16:54:26 MDT - Msg ID: 25712)

@DOLLAR BILL RE: Defining Irresponsibility...

Dollar Bill (02/20/00; 00:16:18MDT - Msg ID:25686)

On another subject, dont you think that bill Murphy of
gata is irresponsible because the vulnerability of our
whole system to say, saddam, with his billions getting
wind of the leaseing situation and blowing up the
derivitive market and trashing the west by trying to
buy all the gold available.

You got kids? Isnt it a bit unnerveing to see that the
gold leaseing and priceing situation could upend thier
whole future.
The euro guys are in deep in the south american debt
situation and in case you didnt know, Brazil and other
CB's in south america are big gold derivitive players.

The germans dont actually GIVE gold for euro's and for that
matter they dont deserve to be the reserve currency
because of their limited and selfish world views.

What really are we after here. The fantasy of an "honest"
currency like I see posted here by some?

The amount of suffering that would be caused by an upending
of the current fiat system is not something to just
casually ignore.
I see it is popular here to call fiat backers names like
"cabel" and "hannibal cannibals"<(sp), but, it is short
sighted to ignore the full reasoning of the fiat big boys
in keeping gold down.
To call it what it isnt is not smart.
I didnt pick the name dollar bill but I kind of like it.
I am bill burke from hartford conn.
I bought gold because of the advice here and I am ok with
that, but what gata and even this forum is doing is
......well, I have my doubts about the wisdom of makeing
the vulnerability of the system public knowledge.
Especially when there are very rich and destructive types
in this world.
What do YOU think about that.
Whomever. ORO and others are of course welcome to reply.
I would appreciate your thoughts. I read you every day
anyway.

--------

USA GOLD poster, DOLLAR BILL, raises various compelling issues that deserve to be addressed.

The notion he advances that Bill Murphy or GATA are irresponsible for revealing the current vulnerability of the financial system to gold loans is simply laughable...and pathetic.

Did Bill Murphy force the central banks to loan most of their gold over the past decade?

Did Bill Murphy compel the bullion banks to short the loaned gold into the market to a point where they have little chance of buying it back at current low prices?

Did Bill Murphy hold a gun to various gold producers and make them overhedge their available gold production?

Did Bill Murphy create moral hazard in the financial markets by regularly intervening to preclude equities from moving to their natural lower equilibrium values?

Did Bill Murphy rescue Long Term Capital Management and send a signal to all speculators that the government would always be there to preclude financial loss, so therefore go mortgage your house and max out your credit cards and stick the proceeds into the stock market?

The litany goes on and on...

DOLLAR BILL advocates that we all simply maintain a blind eye to the morally corrupt status quo that has benefited special interests to the detriment of those who were never "clued in" to the fixing of the markets over the past decade.

Most pathetic, he further makes an appeal to the notion that we should turn a blind eye for the sake of "our kids." What a joke! Whose kids is he talking about?

Certainly not the kids of the gold miners who have lost their jobs or gold investors who went broke during the scams perpetrated by Wall Street.

Certainly not the kids of the farmers whose land was sold in bankruptcy auctions because Wall Street decided to allocate most of its capital to internet stocks instead of real goods producers.

Certainly not the kids of the bankrupted foreigners who lost everything during the currency raids perpetrated by major American hedge funds?

And the list goes on and on.

Finally, DOLLAR BILL worries about revealing the deficiencies of the current financial system since he thinks "there are rich and destructive types in this world."

DUUUUH???

It's too late, Dollar Bill, because those rich and destructive types you fear already have seized control. They rule Wall Street and the Clinton government...or haven't you noticed yet?

Do you think the prosperty of the day trade investor is something that just happened through the great generosity of the current Establishment?

Do you think the millions of American SUV drivers who gleefully waste one of nature's most precious resources do so simply because the Establishment suddenly discovered huge new major oil fields?

Do you think the legions of millionaire internet investors who sprung into existence recently did so because they truly reinvented the wheel, as opposed to being cogs in the wheel of Wall Street's latest Ponzi scheme?

No, DOLLAR BILL, it's all one huge zero sum game, no matter that the New Paradigm scamsters suggest otherwise. In order to maintain a low inflation society, those who gain usually do so solely at the expense of those who lose.

The so-called "New Prosperity" in America comes on the backs and defeat of many domestic hards goods producers...it comes on the destruction and misery of millions of foreigners whose economies were ravaged by American hedge fund imperialism...it comes via the ravages of various commodities and currencies through carry trades created by a group of "rich and destructive types" on Wall Street, aided and abetted by either the most inept or corrupt goverment....take your pick.

But the bottom line is this: if the financial system moves into a period of chaos down the road, then blame the perpetrators, not those who simply reveal the real warts and blemishes of the system created by a collection of corrupt greedy scamsters.

In fact, if anything, those who are the truth tellers are heroes since they reveal truth in the face of great opposition and threats from those who may no longer benefit once "the game" operates by the fair rules originally intended to guide it.

Thanks

F*

Cavan Man

(02/20/2000; 17:04:42 MDT - Msg ID: 25713)

Hey Farfel

I know you are not reading this post. However, I'd like to say to you; Give 'em hell Farfel!

You are so very right. Many thanks.

Harley Davidson

(02/20/2000; 17:21:16 MDT - Msg ID: 25714)

@DOLLAR BILL RE: Defining Irresponsibility...

Dollar Bill, In your message ID:25686 you said

"... but what gata and even this forum is doing is
......well, I have my doubts about the wisdom of makeing
the vulnerability of the system public knowledge.
Especially when there are very rich and destructive types
in this world."

I suspect anyone that operates in international circles is fully aware of the situation. Rather, it is those like myself who may not have contemplated such events prior to visiting USAGOLD who benefit from the sharing of such information by having a chance to prepare for such eventualities.

I, for one, appreciate and look forward to further posts from Trail Guide and others.

JCTex

(02/20/2000; 17:33:34 MDT - Msg ID: 25715)

Strad Master (02/20/00; 10:48:52MDT - Msg ID:25697)

Hey Stradmaster,
I have an even better deal: I have a little-bitty black box that will change dollar bills into sheets of gold. You don't have to mess with all of those nasty chemicals and dirt that way. I'll swap you one for one of your fiddles.

JCTex

(02/20/2000; 17:35:25 MDT - Msg ID: 25716)

Dollar Bill - Msg 25686

bull

Trail Guide

(02/20/2000; 18:09:59 MDT - Msg ID: 25717)

(No Subject)

ALL: Thanks for your thoughts. Cmax,,,,, (smile)

Cavan Man (02/20/00; 13:17:45MDT - Msg ID:25704)
Trail Guide
What do you mean by "paid up gold shares"? Thanks!

TG:
The very best brains for management,,, mines in operation for decades,,, unhedged,,, profitable now and at much lower prices,,, massive reserves going out decades,,, paying a dividend,,, outside the sphere of US / IMF influence,,, likely to have a good relationship with Euroland investors in the future,,, large payroll that supports a big segment of host countries citizens making further nationalization and taxation contradictory to national interest,,, takes world class steps in support of
a physical marketplace!!!!!!

All in all, a company that wouldn't mind if investors brought it without any leverage,,, and did so as an after thought behind ones buying the same bullion product they sell,,,, especially if they (company investors) would only hold for a good long time. -------- Not many around like this,,,, uh? (smile) Yes, they do exist.

Cavan Man,
"Paid up gold shares" belong to investors that have purchased their "very private bullion coins first" as the largest part of their position and still have resources to buy more coins later. Shares amount to a small, but "concrete" portion of our long term hard wealth,,,,,, held with no leverage,,,,,, no sleepless nights! In other words, putting you in control of a successful hard wealth investment plan. One you can live a lifetime with! The secret of the worlds truly wealthy is in their being in control, not how much they have. Each of us has the power to place ourselves,,,,, one on one,,,, eye to eye,,, with the the most powerful. Because it was never how much you have,,, rather how much control you have over your wealth that makes or breakes you.

Most all of us are blessed with the time to build a powerful position, no matter how short our life or how little we make. Unreasonable use of leverage is the "hangman of fools" and "the destroyer of our free spirit".
I'll talk more on this,,,,,, along the trail,,,,, be sure of this!

Thanks Trail Guide

Trail Guide

(02/20/2000; 18:19:48 MDT - Msg ID: 25718)

(No Subject)

CoBra(too) (02/20/00; 14:43:12MDT - Msg ID:25706)

------A nugget uncovered with your own labor on a promising site, just off the main trail, but nobody else's "claim", may even be more rewarding than loping all the physical along the way.----

TG:
You are a free spirit indeed, CoBra(too)! May the wind always be at your back!

Thanks for discussing,,,,,,,,, Be back in a day or so.

Trail Guide

Mr Gresham

(02/20/2000; 18:21:04 MDT - Msg ID: 25719)

Dragonfly -- Pogo / TG -- Demonetizing of shoes

TG or anyone --

Do you know if Europe and other countries had a forcible bullion coin "retirement" a la FDR when they demonetized gold?

Dragonfly --

"when the genocide was occurring in Guatemala?
More importantly � what did we as individuals do or not do?"

[VENT MODE ON]

I lived in LA at the time and met refugee families who had lost children--brothers/sisters--parents to the murderous Rios Montt regime and others before it. I read an interview in which a Guatemalan Indian woman said "For every gun your country sends, one of our children dies." Mayan Indian villages which had survived the conquistadors 500 years ago were exterminated under the Reagan-encouraged anti-communist assault. Babies were swung by their feet and their heads bashed against stone walls (U.S. eyewitness)

I was halfway through the year of my best-paying programming job. I quit (other health reasons, too) and stopped paying the taxes that paid for these atrocities. I did not pay again (worked and lived cheaply) until Reagan was out of office. Not much improvement since RR, of course, but it was kind of avoidable to me as an issue of conscience. I think I still have one, but the issues are not so clearly drawn today.

Something about meeting the real people who had fled out of there. I don't think they were deceiving me with propaganda. Their scars were too real.

However the survivors in Central America now are the people working piece-rate 15 cents an hour jobs for global/US corporations to make the goodies we've been talking about here. No Marxist rebels threatening "freedom" anymore, right? Mission accomplished, eh?

I remember the leader of the Contras (Nicaragua), Adolfo Calero -- former head or owner of the Coca Cola bottling plant there -- saying he was glad the Sandinistas had boycotted US companies coming in to set up there. "That way Pepsi won't get a hold on the market share before we can take back Managua." You f**king American idiots, paying for a bunch of scum like that to kill some of the finer people (teachers, health workers) who've inhabited our hemisphere in the past century.

[VENT MODE OFF]

Sorry fellow goldmeisters, justice doesn't come automatically by any system. But occasionally you get to be part of helping a system come in that makes life a bit easier for more people, and gives them a breather to think about their next step in life. We shouldn't have to be heroes just to get by, and the mass of people WON'T be heroic, so being a bit smarter ahead of the scammers might help us work with those facts of life and improve the odds of things going better for ourselves and others.

However, if little bits of heroism are called for, my antennae sense traces of potential within these golden portals, and I would not be surprised someday to hear of a fellow knight stepping out of the common pack to perform a duty of conscience in noble splendor.

Chris Powell

(02/20/2000; 18:34:19 MDT - Msg ID: 25720)

GATA chairman to speak at NYC conference

http://www.egroups.com/group/gata/393.html?... and you're invited.

Cavan Man

(02/20/2000; 18:43:00 MDT - Msg ID: 25721)

Hello Trail Guide

I have said to others here, privately; either you accept TG at his/her word and benefit from the insight your assumption implies or, you do not. You know where I stand.

"Lightning in the night", it is the only antidote and best tactic given the prevailing sentiments yes?

PS: Shalom

Cavan Man

(02/20/2000; 18:45:34 MDT - Msg ID: 25722)

Also, TG; If you please?

RE: Confiscation in the 50 statesI am not so sanguine about this issue. Do you still hold to your "outrunning the bear" funny?

Thanks.

Chris Powell

(02/20/2000; 18:47:45 MDT - Msg ID: 25723)

GATA chairman speaks at NYC dinner

http://www.egroups.com/group/gata/393.html?... and you're invited.

law

(02/20/2000; 18:53:10 MDT - Msg ID: 25724)

To reinforce Farfel's terrific message: ID 25713

With all due respect to Dollar Bill: I'd like to try to condense the "Paper Scam" of the last 25+ years into the "Big Picture"...the one not seen through the end of a pipe.:)
Although there are many complexities, I believe the thrust of financial/governmental abilities (bandaids) have occurred in 3 major areas of control/manipulation.
1. Credit expansion with derivatives in interest rates and mortgages. Fannie Mae, Freddie Mac, and the Federal Home Loan have been "loaded up". "The total face value of drivatives at our nation's banks is $35.4 trillion. Including brokerage and insurance companies, trading in these derivatives has turned the global financial markets into a $120 trillion-plus-casino"---Martin Weiss.
2. Credit expansion using "paper gold" derivatives... leasing, forward selling, options, etc. (LBMA, COMEX, OTC)
3. Treasury paper...although I believe this area, because of its transparency, was/is to precarious for the government to rely on.

All of this to keep "oil", U.S.(taxpayers, consumers, financial/stock market) interests happy...without paying the "pied piper" for the excesses, and actually creating a "false" prosperity at the expense of people in the rest of the world. Is it any wonder that derivatives/hedge fund transparency has been stonewalled?

And who will take "RESPONSIBILITY" for what I believe will become a derivatives "mess"...probably putting it to mildly???!!!

Great posts!!! TG, Farfel, Dragonfly

Al Fulchino

(02/20/2000; 19:05:06 MDT - Msg ID: 25725)

Ronald Reagan

This isn't a forum for or against Former President Reagan, so I will not leave a long post that conveys my love and repsect for one of the finest Presidents this country has ever seen, UNLESS it turns into that type of forum. I do not believe our host will allow it to become so. And thankfully. BUT, in order to make my views clear, if it does degenerate into a Reagan bash, THEN everyone better stand aside, because I do not ever sit idly by when he, or his name is mistreated.

Chris Powell

(02/20/2000; 19:05:45 MDT - Msg ID: 25726)

GATA's Murphy speaks at NY financial conference

http://www.egroups.com/group/gata/393.html?And you can attend and get a nice dinner
for just $100.

http://www.egroups.com/group/gata/393.html?

Mr Gresham

(02/20/2000; 19:16:55 MDT - Msg ID: 25727)

Sir Al

All due respects to you and those you love, Sir Knight. One of the things I value most is learning from the respected assemblage herein. One of the things I am glad to be relieved of is caring about the news blather from outside these walls in an election year. You have experience I can learn from only by hearing you. Speak on all things appropriate to those gathered here, and I will listen!

Chris Powell

(02/20/2000; 19:24:46 MDT - Msg ID: 25728)

GATA's Murphy speaks at NY conference

http://www.egroups.com/group/gata/393.html?Want to pay $100 for a meal in Manhattan?
Then you can attend!

law

(02/20/2000; 19:33:57 MDT - Msg ID: 25729)

FYI (For Your Information): To All

In my last post: YES!!! That was a $120 TRILLION-PLUS-CASINOBANKS TAKING LARGE RISKS WITH DERIVATIVES
($ in credit risk from derivatives per $ of risk-adjusted capital)
J.P. Morgan $8.43
Chase Manhattan $4.03
Bank of America $1.11
Citibank $1.69
First Chicago $1.43
First Union $0.24
---Martin Weiss

MK: I hope you don't mind that I post this, because I think it's related to and a part of the gold derivatives mess!

Cavan Man

(02/20/2000; 19:42:06 MDT - Msg ID: 25730)

Al:RWR

I know a fair bit about this man's history. I also know what his family is going through as I have a mother-in-law that experienced the same malady. God be with them.

President Reagan had a simple agenda and he stuck to it; he hated taxes, big government and communism. He focused on what was (is) important and vital. Unlike some of his Hollywood contemporaries (e.g., JW), he was not an opportunist.

Were he with us today, I believe he would seek a means to reconcile gold and US monetary policy. Perhaps I am naiive but I believe it to be so.

We owe the greatest prosperity in American history to you sir. God Bless You, Ronald Reagan.

law

(02/20/2000; 19:51:28 MDT - Msg ID: 25731)

Al Fulchino and Mr. Gresham

Gentlemen can agree to disagreeGentlemen: I respect and enjoy your posts immensely...nice to see your keeping it friendly!

Henri

(02/20/2000; 19:59:22 MDT - Msg ID: 25732)

Dollar Bill

When I read your message, I thought to myself. Are these the same kids that would bear 75-80% taxation rate to pay the piper when all the deferred payments that were postponed to allow this renaissance (our so called surplus)can no longer be deferred? Don't you see that when the chickens come home to roost no of those hucksters will be here to answer. Our grandchildren have been sold into servitude to finance our current largesse. Right now it appears to be those in foreign lands bearing the pain...but I assure you that pain will come home to roost as well. Is this the future you wish to preserve for your progeny. Wake up and smell the coffee.

law

(02/20/2000; 20:07:44 MDT - Msg ID: 25733)

Cavan Man/RWR

Cavan Man, I also enjoy your posts immensely. I had just posted a short message to Al and Mr. G concerning gentlemen agreeing to disagree. I only take small issue with your most recent post. I too, have the utmost respect for RWR as I did JCarter. But, I think their histories in government entail many circumstances external to their individual control or being. The issue of prosperity is arguably a ponderous one as is the "meaninglessness" of deficits.

Best Wishes, law

Leigh

(02/20/2000; 20:25:33 MDT - Msg ID: 25734)

So...What's Gold Doing?

Does anyone know why the POG on the Night Quotes chart hasn't updated tonight?

Peter Asher

(02/20/2000; 20:30:03 MDT - Msg ID: 25735)

Hi Leigh ---

Tommorow is a holiday here so there may be no future trading which would be the MRCI trading. Don't know why Kitco isn't showing Asia though.

law

(02/20/2000; 20:32:34 MDT - Msg ID: 25736)

Leigh

Gold night quotesIt may be that the markets are closed tomorrow...President's Day?

Solomon Weaver

(02/20/2000; 21:01:26 MDT - Msg ID: 25737)

Welcome Privateer

Solomon Weaver (2/19/2000; 20:21:47MDT - Msg ID:25678)
A three tiered gold (silver) market
http://www.the-privateer.com/gold6.html#comment
------
Hey Privateer,
I think it is great that you have come out of lurker status here...sorry that it took some "rougue" snippets of your words to get you in....I just felt compelled to copy your last few paragraphs in for all to see, because they were very good words.

I hope you will continue to discuss with us. It would be great to see you get in and help us critique some of Trail Guides ideas.

Poor old Solomon

Goldiehawk

(02/20/2000; 21:11:31 MDT - Msg ID: 25738)

Leigh

http://www.kitco.com/gold.live.htmlTry this one for Asia, down on the page.
Good luck

Mr Gresham

(02/20/2000; 21:17:41 MDT - Msg ID: 25739)

More "shoe" talk

...something about "walking a mile in another's moccasins"...

Boy, would I like to do just that!

oldgold

(02/20/2000; 21:26:45 MDT - Msg ID: 25740)

Farfel

Great post! Getting down to the nitty gritty as they used to say in the 1960s

Dollar Bill

(02/20/2000; 21:32:39 MDT - Msg ID: 25741)

farfel

How about trying to imagine that you are actually
talking to someone face to face when you post.

Try not to imagine an audience chanting "kill kill" as
you type.

I read contrary investor.com and prudent bear.com
twice a week and the whole list of guys at the
gold eagle top analysts research site.
Also the golden sextant.

After buying it all completely, I have found that some
issues are not handled and there is also questionable
ideology in the gold religion.

Even some of the golden sextants comments seem short
sighted. I was waiting to post them here next.

Along with any and all leftovers from the early today post.
And I guess responses to different comments and ideas.

Solomon Weaver

(02/20/2000; 21:41:41 MDT - Msg ID: 25742)

Trail Guide - it is in the best interests of the CBs to have healthy mining companies.

Trail Guide

I appreciate your sound advice on holding gold...and to a much lesser extent gold shares...because there are so many people out there who think that the whole game is how fast they can multiply their dollars and to them it is so much "easier" to play with paper...

You used the interesting method of letting the future be your proof of what you say today. In that future, I see a lot of poor suckers who "decide" to buy gold in a gold bull market frenzy and after handing over their dollars to buy in, are left with a coupon that "should" make them rich, if they could just "sell" it to someone who can "really pay them".

I will agree with you that if one wants to buy gold, one should not use paper (unless one is daytrading - and understands that is not really buying gold). But, I do think that investing in mining stocks can be a very reasonable way to enter the coming time (after getting a physical core in place).

The reason I say this is because the architects of the Euro will benefit much more if they allow the dollar to "erode" rather than collapse. You seem to have said in the past that a dramatic revaluation of gold (upward) does not have to cause massive currency upheaval (if gold is no longer treated like a currency).

Just like drug companies today make nice profits because they make life saving medicines, I think that when the fiat architects once again understand the valuable role that gold can play in stabilizing world trade if it is used to settle payments between fiats, that at that time, the world will be experiencing a strong physical demand for gold and that companies who are able to mine new gold will for a while have the glamour of today's drug companies.

I do understand that governments will sometimes do very harsh things when they are in trouble. But, if the situation gets so bad that the US Federal Government is nationalizing gold mines, then it will probably be a very difficult time for people who have wealth in gold. What I could see is some type of international legislation being pushed by central banks to insure that all the gold "they" leased gets really paid back...but in that case, it is in the best interests of the CBs to have healthy mining companies.

I am glad you are here with us, and I sometimes wonder if our trail may pass the house where Another lives.

Poor old Solomon

ThePrivateer

(02/20/2000; 22:58:07 MDT - Msg ID: 25743)

An Old Story, With New Twists

Interesting to see Farfel go off with both barrels at the individual who was chiding Bill Murphy for being "irresponsible" by bringing the possible "collusion" in holding down the Gold price to light. I too was chided for being "irresponsible" in my youth, but not for telling the truth. Nobody loves a "Cassandra" though, and as Ayn Rand said, there is only one evil, and that is the refusal to think. You can't fight against that.

It used to constantly amaze me that knowledgeable people could not see the obvious fact that Gold is being politically manipulated. With all due respect to Mr Murphy and Gata, this is NOT a recent phenomenon. Amongst many other examples, the London Gold Pool of the 1960s comes to mind. Manipulating Gold prices is not something that the Central Banks and Gold miners dreamed up in the mid '90s.

On another front, I was recently emailed by a subscriber with a bit of very interesting information, out of Barrons. It seems that after having been flat or on a slight decline since 1987, foreign Central Bank holdings of Treasury debt have skyrocketed over the past two weeks. In the week ending Feb. 14, they were up almost 80 billion (or about 13%).

On top of that, swap spreads are blowing out, they are almost back to the levels they were late last year and around the time of the LTCM bailout of late '98.

Mr Greenspan/Summers is going to be a very busy boy this year.

ThePrivateer

(02/20/2000; 22:59:51 MDT - Msg ID: 25744)

Correction To Previous

Sorry, that reference to Central Bank holdings being flat since 1987 should, of course, have been *1997*

elevator guy

(02/21/2000; 00:17:36 MDT - Msg ID: 25745)

Farfel #25712

Here Here! Well said, sir! You raised some of the most important points, which demand reasonable answers.

Whether it is better to villify (sp?) Bill Murphy, a messenger of truth, and GATA, a force for justice, as troublemakers who rock the boat,

Or whether to consider the great crimes of the elite who maintain the status quo of larceny and subjegation (SP?)

(Sorry, the kids ran off with my dictionary.)

The present system of currency is not evil in and of itself. And of course fiat currencies will continue to exist as a convenient system for national and international payments. But does this system have to be devoid of conscience, and abusive of its constituents? No! It is corrupted by greed and dishonesty in high places, and the small people pay the price for the mis-management, or even better, it purposefully directed management.

Print more paper money than you have value. Spend more than you earn. Bash the paper POG, so as to make the dollar look strong. Export your debt and mistakes. Mortgage all the foreseable future away, through deficit spending, and make the children pay for it for generations! Is this type of currency "planning" necessary? My simple average mind tells me no.

Sure, the current holders of the scepter are smart. They know more about managing a country than I do. They know more about international monetary affairs than I. But when I smell something rotten, I know it right off.

In all of past history the common people had no notion of the actions and crimes of the elite, not a shred of evidence of the actions taken, nor the effects, because it was all too far removed from the sphere of concsiousness of the common man. The average man only has time for a beer, after working hard for 1/2 the year paying for taxes from Fed, State, sales, excise taxes, capital gains taxes, the list goes on and on. If you add it all up, it amounts to almost half of the years salary of an average joey six-pack. Ah, but the masses are content, because they have never known the true value of their labor, and not knowing true value, thay can not discern that they are being robbed by TPTB, who has their hands in their pocket, who rapes their future, and steals their hard earned value without firing a shot. How sad for the children of the common man!

The advent of the internet has provided anyone with a phone line and a computer the priveledge of learning the truth of money, (Not evil in and of itself), and has started a kind of revolution of awakening for the common man. An education in gold is akin to an education in value systems, and this study is lit by the light of truth. This is not good for TPTB. For eventually, they will not be able to "spin" the story, nor villify the messenger, for fear of the people.

Eventually, the people will storm the gates of the forbidden city, no longer afraid of the royal guards, for the spirit of righteousness has entered their hearts, and given them courage. On this day they will receive just payment for their labors. How wonderful for their children!

Farfel, I dont see your post as going for the jugular (As implied in post 25741) as much as it is bold enough to state some disturbing facts about our currency system.

Hats off to my vigilant friend, if I may call you that, Farfel. Go get 'em, devil dog. View Yesterday's Discussion.

tedw

(02/21/2000; 00:32:57 MDT - Msg ID: 25746)

Present monetary system evil

http://www.usagold.com
I want to disagree with preceeding comments about the current monetary system not being in and of itself evil.
IT IS EVIL, AT LEAST IN THESE UNITED STATES.

1)Our present government is not authorized to create fiat
money. In fact, they are forbidden by the United States
Constitution from doing so. Any conscientious student of the US constitution knows that to be the case. See Juliard v. Greenman 110 U.S.421 (1884) and the dissenting opinion of Supreme Court Justice J. Field for an accurate history
of how the US government was banned from printing fiat money.Intellectually honest people cannot disagree on this point for it is truth.

2) Fiat money is the mechanism by which the government steals from us via inflation. Stealing is the correct term.
Now if there is anyone out there that wants to build a case that it is not evil for the government to subvert the constitution and steal from us, I would like to hear it.

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

On another note, although I have seen analysis of the average ratio of silver to gold, I have not seen one on the ratio of oil to gold. Does anyone out there know what that might be?

tedw

(02/21/2000; 00:47:01 MDT - Msg ID: 25747)

Julliard v. Greenman 110 US 421

http://www.usagold.com An excerpt:

"From the decision of the court I see only EVIL likely to follow. There have been times within the memory of all of us when the legal tender notes of the United States were not exchangeable for more than one-half of their nominal value. The possibility of such depreciation will always attend paper money.THIS INBORN INFIRMITY NO MERE LEGISLATIVE DECLARATION CAN CURE.If Congress has the power to make the notes a legal tender and to pass as money or its equivalent, why should not a sufficient amount be issued to pay the bonds of the United States as they mature?
Why pass interest on the millions of dollars of bonds now due, when Congress can in one day make the money to pay the principal? And why should there be any restraint upon unlimited appropriations by the government for all imaginary schemes of public improvement, if the printing press can furnish the money that is needed for them?"

1884

beesting

(02/21/2000; 01:07:41 MDT - Msg ID: 25748)

To Sir Steve H.--Hurtado v. California (1884)

http://www.soc.umn.edu/~samaha/cases/hurtado.htmlSteve, you may have seen this before, it's a very long read on Rights to Life, Liberty, and Property...enjoy...beesting.

Black Blade

(02/21/2000; 02:25:28 MDT - Msg ID: 25749)

Oh come on now!

BOE says gold auctions not causing undue dips in spot market price

Dubai--Feb 20--Clifford Smout, head of foreign exchange at the Bank of England, defended the UK Treasury's decision to sell gold through auctions by claiming that the average price achieved by the auctions was the same as that achieved by the market. He noted the auctions averaged US $274.99 per ounce versus the market's $275.32 over the period since the BOE made its announcement. (Story .10970)

Black Blade

(02/21/2000; 02:33:25 MDT - Msg ID: 25750)

PGM's strong in Asia, Brokerages suffer as a result, Gold next? hmmm....

Bridge newsTOCOM Precious Metals Review: Gold stronger; palladium hit limit-up

Tokyo--Feb 21--Tokyo Commodity Exchange platinum contracts Monday were weaker compared with Friday's close, but they did recover some early-morning losses on bargain-hunting, dealers said. Palladium hit another daily maximum price limit-up, while gold was firmer, in line with gains in spot gold, they
said. (Story .2192)

Asia Precious Metals Review: Gold edges firmer; platinum recovers

Tokyo--Feb 21--Spot gold firmed up marginally in sluggish trade on Monday in Asia following Friday's steady US market, dealers said. Platinum recovered slightly from Friday's late US market levels on bargain hunting, while short-covering prevented palladium from extending Friday's losses, they said. (Story .2200)

Palladium rally leading TOCOM brokers to suffer shortage of funds

Tokyo--Feb 21--The recent sharp rally in palladium prices has led some small-sized brokerage houses on the Tokyo Commodity Exchange to suffer a shortage of funds when trying to pay for their daily TOCOM settlements, local futures industry sources said Monday. Huge losses by some TOCOM players incurred by daily price limit-ups in the past 6 consecutive days may hurt their finances, which could lead them to cut back on trading, they said. (Story .11193)

Black Blade

(02/21/2000; 04:43:42 MDT - Msg ID: 25751)

Pd at $800 per Oz! Now, you didn't really believe the Russians would deliver, did you?

FOCUS-Palladium fixed at new high

Reuters Story - February 21, 2000 04:13

LONDON, Feb 21 (Reuters) - Palladium surged into European trade on Monday to fix at a new all-time high, reinvigorated by views Russia must first come up with promised supplies before tightness would abate in the metal used to clean car exhaust gases. Palladium was fixed at $800 an ounce, up 19 percent from Friday afternoon's fix of $670.00. The market has been driven to a series of all-time highs this month as rising demand for new vehicles has sent car makers scrambling to buy up supplies made scarce by haphazard exports from the world's largest producer.

"There is plenty of buying around...and it is evident that the buying is short covering," analyst Ross Norman of Precious Metals Research said. A traded added, "There is buying this morning...it is the same old story -- there is no metal around." The market was nervous and thin, with buyer/seller spreads widening out to an unprecedented $30 as the high quote reached $790.00/$820.00. On Friday palladium closed weakly at $675.00/$680.

"Many in the industry did not buy, and they got caught in a classic squeeze," Norman added. The price had tumbled on Friday to $670 after Russian Finance Minister Michail Kasyanov said the country would sort out export problems swiftly and bring them back to normal. But dealers were skeptical that deliveries would restart soon, with Russia a notoriously erratic supplier. They pronounced Friday's fall an exaggeration and predicted the uptrend would soon resume. Russia, which accounts for two-thirds of the world's palladium supply, has failed to deliver the metal in the first six months of each year since 1997 due to bureaucratic red tape.

"The downside was overdone on Friday...but also the market does not trust Russian statements on shipments," another European bullion dealer said. Even though the market has gained some $130 since Friday, there is still a short position of some 10 to 12 tonnes, while lease rates for the metal have risen to around 15 percent from 10 percent on Friday, Norman noted. "There is no reason for it (the price) not to firm further unless Russia delivers metal in the next few days," he added.

Platinum, another key ingredient in auto catalysts, failed to keep pace after jogging along behind palladium for most of its six-month climb. Platinum hit a 12-year high of $573 at the European fix last Thursday. It was fixed at $527.00 an ounce on Monday. Fifty-eight percent of world palladium demand comes from car manufacturers, who also face ever more stringent standards for car emissions. Palladium is also used in electronics and 15 percent of demand is from dentistry, where the industry is looking at substitutes.

The Invisible Hand

(02/21/2000; 05:14:02 MDT - Msg ID: 25752)

FOA and Trail Guide

I'm NOT a native English speaker, so please excuse me if my linguistic knowledge is wrong.
It has always appeared to me that FOA used the past perfect / past participle of the verb "to bring" were he had to use the past perfect / past participle of the verb "to buy". (My own messages contain of course even worse errors)

The messages
Trail Guide (02/19/00; 10:03:17MDT - Msg ID:25661)
Freegold
Trail Guide (02/20/00; 12:44:17MDT - Msg ID:25701)
(No Subject)
seem to disclose/reveal the same error.

FWIW
and please accept again my apologies if it's my own knowledge of the English language which is lacking.

I hope Michael will not revoke my posting privileges.

ss of nep

(02/21/2000; 05:45:29 MDT - Msg ID: 25753)

@tedw

http://www.gold-eagle.com/editorials/gold_cost_oil.html

Old, but has charts, gold / oil

TownCrier

(02/21/2000; 06:23:45 MDT - Msg ID: 25754)

The complete thread of this fascinating montetary discussion to-date

http://www.usagold.com/halldiscussion.htmlBetter pack a lunch...it is 450k of recommended reading.

ss of nep

(02/21/2000; 08:13:42 MDT - Msg ID: 25755)

Off Topic

http://www.worldnetdaily.com/bluesky_dougherty/20000219_xnjdo_citibank_f.shtml

"This action is necessary due to Citibank not maintaining accounts for businesses that deal in weapons. "

I wonder where the Big Defense Contrators (IE- Raytheon)
do banking (?), Oh its probably OK for them !

USAGOLD

(02/21/2000; 08:28:46 MDT - Msg ID: 25756)

Today's Gold Market Report: Wall Street's Gold Carry Trade Cleaning House

http://www.usagold.com/Order_Form.html2/21/00 Indications
�Current
�Change
Gold
305.00
+1.50 LonAM
Silver
na
na
Gold Lease Rate
0.4300%
na
Gold Comex Stocks
1,373,484
na

Market Report (2/21/00): Gold is up slightly in London. New York is
closed today for the holiday.

Of interest is an interview of Anglogold's Kelvin Williams in which he
states in no uncertain terms that producers have a learned a lesson from
the Ashanti debacle and that lesson is not to view hedging as "price
bet" but a "financial tool." Says Williams, "Just as one should not be
over-borrowed, one should not be over-hedged."

Such ruminations are sure to put a new spin on gold for the year 2000
and we stick firmly to our conviction here that the supply/demand
fundamentals will play a stronger role in the pricing of gold this year.
The official sector is certain to play significantly less of a role on
the supply side and growing Asian and U.S.accumulation play a decidedly
more influential role on the demand side.

Over the weekend, Bill Murphy at LeMetropole Cafe reported that many of
the traders/analysts who have fed at the trough of the carry trade and
the gold options' market at major Wall Street banking firms have been
given their walking papers including such anti-gold luminaries as Gavin
Stuart at Dresdner Bank, Kevin Crisp at Morgan Stanley and the chief
trader at UBS. As we have said repeatedly on this page, to gold's
eternal benefit, the carry trade is a dying business, or better put, a
market management system on its way out at most of Wall Street's trading
firms. Its architects are being sent down the river with it. 'Tis a sign
of the times...and a very good reason to now fill that place in the
portfolio labeled "yellow metal" while the price is still reasonable.

In my view, we will continue to see short covering on the dips as the
institutions short the market move to square their books. That protects
the downside while the disintermediation of the carry trade opens up the
upside.

Have a good day, my fellow goldmeisters.

If you are looking for a pro-gold view of the various financial markets
as well as a summary of the events affecting the yellow metal, our
monthly newsletter might be of interest. News & Views -- Forecasts,
Commentary & Analysis on the Economy and Precious Metals has
been characterized as witty, urbane, intelligent and down-to-earth. Not
to mention it's Free of Charge If you want to keep up with gold, this
is the way a large segment of the gold owning public does it, and has
done it for over a decade.

Just click above to sign up.

elevator guy

(02/21/2000; 09:29:20 MDT - Msg ID: 25757)

@ tedw, msg #25746

Thanks for bringing that to my attention. I didn't know that. Ah, the things one learns in the Forum!

What I was more or less driving at was that money, (lets say its gold for now), is not evil in and of itself. There is an often misquoted verse that actually says, and correctly paraphrased, means "The love of money is the root of all kinds of evil" That verse got rather mechanically translated by the King James translators sa as to miss the full flavor of meaning, and then on top of that, it gets misquoted, until the effect is that there are many people who feel that money is evil. Which is not what the verse says, or means. Thats all I was getting at.

So if it was wrong for me to say, based on your presentation of that court case and constitutional position, that our present system of currency is not evil, I still think I was right where later in the post I more correctly stated that "money" in a general sense, (that could include gold), is not evil in and of itself.

Again, thank you for the scholarly rebuttal to my erroneous assertion about our currency system. A very important point
you make, that I will need time to research and ponder.

elevator guy

(02/21/2000; 09:32:24 MDT - Msg ID: 25758)

My previous post

Maybe many dont know the oft misquoted verse, where some say that "Money is the root of all evil". Please consider this as the background context when reading my previous post.

tedw

(02/21/2000; 10:45:56 MDT - Msg ID: 25759)

The root of evil

http://www.usagold.comelevator guy

You are right: It is the LOVE of money that is the root of all evil,not money. Another way of saying that is ambition (putting what we want ahead of principle or what is right is the root of evil), and we can all surely see the truth of that from our lives. ---

What profit a man if he gains the whole world and lose his soul?

Cavan Man

(02/21/2000; 12:12:16 MDT - Msg ID: 25760)

Newport News Shipbuilding

It was just announced that Bill Gates bought a very large stake in this solid, rather slow growth, industrial company. He is now one of the two largest shareholders.

Is this portfolio diversification or indicative of something else? Stranger?

ss of nep

(02/21/2000; 12:20:16 MDT - Msg ID: 25761)

Newport News

The only builder of Flattops in North America.

The "Earlr Warnibg Report" has been pushing this company
for more than a year.

ss of nep

(02/21/2000; 12:21:27 MDT - Msg ID: 25762)

thats -- early warning report --

ss of nep

(02/21/2000; 12:23:34 MDT - Msg ID: 25763)

(No Subject)

http://www.chaostan.com/

gidsek

(02/21/2000; 13:36:14 MDT - Msg ID: 25764)

ECB Au Reserves

http://www.gold-eagle.com/gold_digest_00/chapman022100.htmlThis from Gold Eagle;

"The flip side is, that gold isn't any longer a monetary reserve. Why is the euro backed a a 15% gold reserve? And, why is the ECB attempting to double that figure? The answer is obvious , gold still has a monetary role."

This is the second refence to I've seen inre an increase in EURO gold "backing" Are any Knights or Ladies posessed of a discussion of it's import? A link perhaps? I'm a little surprised that this rumor (if that's what it is) has been greeted with little discussion or enthusiasm and I'm afraid that I may have missed reading an important post or two.

confused

gidsek

ORO

(02/21/2000; 15:48:58 MDT - Msg ID: 25765)

The Big Deal

http://members.aol.com/curgold/doc12.jpgDetailing final confirmation of deal to sell 61,651 Tonnes (1,476,954,900 troy ounces) of gold by Marcos agents and front company to a consortium of 200 "VIPs" and 1900 dealers/brokers acting through the Bahamas. The deals were carried through only in part at the time. The deal was to stretch for up to 20 years with a sum of $5 billion dollars as deposit. The trade price was set at $442 per ounce, $400 net going to Marcos.

Only 11,800 Tonnes were transacted before the consortium was "busted" by the CIA.

http://members.aol.com/curgold/doc5.jpg

The sales continued in sporadic transactions of 1000 tons deposited at nearly all of the major banks on earth. This is an example of one sale "rollover" through Sino Sigapore Bank with agents having accounts at Chemical Bank (Citi), Hang Sang Bank, The Bank of East Asia (HK), and Po Sang Bank (HK).

http://members.aol.com/curgold/doc1.html

The negotiations started in the late 70s. Supposedly with assistance from the CIA in running the marketing operations to US advantage in leverage with both buyers and the seller - Marcos. The attempted end-run around the CIA was halted for the supposed purpose of resuming direct CIA involvement. The odd part here is that there seemed to have been a disconnect between the CIA and the bankers, since the IMF, the World Bank, and the BIS were involved in the transactions.

The original program was supposed to consist of 1000 Tonnes a month of gold deposits till the transfer was complete.

The sales and bank deposits were done piecemeal. Among the recipients of deposits are
Rothschild, NE London, HK branch, 6,000 Tonnes.
Sanwa Bank, Tokyo, HK branch, 2,000 Tonnes documented, possible 22,000 Tonnes total transferred through that and other Japanese banks.

1989 marks the Marcos' end in power, having become international refugees. They had finished cleaning out the accessible gold from the Phillipines in 1986 and could leave.

The total cumulative gold extracted by the Marcos explorations was calculated by someone as 132,000 Tonnes. There was an alleged Saudi offer to buy the whole amount at a 40% discount - at $260 in the early 80s. The counteroffer was $310. Do these numbers seem familliar?

Current lawsuits against Marcos' Heirs revolve around a 60,000 Tonne quantity.

By my count, online documents amount to 94,000 Tonnes extracted from the Phillipines.

To put these amounts in perspective, the total "official" estimates of gold mined throughout the whole of history is 140,000 Tonnes.

What comes from these possibly true reports is a world completely different from the official one. The ability of the world gold markets to absorb some 130,000 Tonnes in the period 1976-1989 is nothing short of phenomenal, at 10,000 Tonnes per year - assuming it all arrived at market during this period. I found evidence of only some 35,ooo Tonnes actually being sold at $442/oz or so, the rest may still be hoarded. If so, the 35,000 tonnes would still come to an injection of 3,000 Tonnes per year. A good reason to believe the Oil Royals cleaning out of their dollar accounts over this same period.

The dynamic and dates that FOA gives - the 1989-1990 initiation of the gold futures for oil futures deals with the Oil Royals at a new - higher - gold price - would be perfectly matched to the end of the Marcos Regime and the halt of the gold flow. Not having further access to the

If the remaining 50,000 Tonnes of the original agreement included were consumated in this short period of the Asian Crisis, where prices were set between the initial Saudi demands and the Marcos counter-offer, it would join with the other Marcos sales to explain much of what we have seen to date in the gold markets, including some additional motives for the Washington Agreement (banks were out of Marcos gold supply) and the first concerted OPEC move to raise oil prices now that the gold deliveries were no longer forthcoming.

The start of the negotiation period for this gold flow coincides with the peak of the gold price in 1980 and 1981. The behavior of the market in the 1981-1982 period corresponds to the "buy the rumor sell the fact" market behavior where the memoranda and terms were agreed in Feb 1982 - just one month before the gold price bottom of March 1982, and was hurtling upwards through Feb 1983 as finalizing the agreement was delayed. The month of the final draft agreement coincides well with the sudden steep drop in gold prices from the end of Feb to the 1st of March 1983, whereupon the purchasers would have started hedging the deliveries on the deal.

The gold price highs of the post 1983 period were "mysreriously" capped at $400 in the 93-97 rally and plateau, and overshot the $442 mark only twice, and for a few months in 1983, just before the deal was signed, and in 1987-8, just after Marcos leaving office. The plateau period coincided with a 4000 tonne per year advance in outstanding (netted) gold derivatives from 1994 till 1997, indicating an expected delivery at the end of this period of some 20-24,000 Tonnes at a set price of $442 - this would allow an arbitrage between the delivery dates and delivery price and current gold prices and interest rates so that the $380 POG would be equivalent to a delivery at $442 two years forward. The $442 price is also an interesting number in that it marks the forward contract price for many of the larger gold miners (perhaps they mine the Marcos vaults ??). The 3000 tonne annual investment in gold by Arab Oil would fit perfectly within this picture. The Marcos gold story simplifies the picture significantly from the complex structure I "reverse engineered" - which still came up needing an additional physical gold source or a rather gullible Arab Oil buyer.

Aristotle's question of where the petrodollars went would be answered completely by these quantities. The rather absurd trade proportions between the gold derivatives and "official" estimates of the physical market would fall back into proportion if the physical gold banking sector were ten times larger than official numbers indicate.

Travel Guide, what do you know of this? - and anyone else, ideas? info?

ORO

(02/21/2000; 16:00:10 MDT - Msg ID: 25766)

Trail Guide - sorry

Wrote your handle as Travel Guide.

Probably because of my upcoming trips now in the frantic last minute preparations stage.

nickel62

(02/21/2000; 16:19:20 MDT - Msg ID: 25767)

If anyone has forgotten the value of this forum or the posters likeFOA re-read this post from October and ask yourself where else you could have gotten this type of insight at the time.

Hello MK,
Yes, I think we are in the middle of an extended workout. None of the BBs are in a rush to cover these (carry trade and other) bad loans because in doing so they must borrow gold to do it. There is no way they could bid the physical market. If they did it would completely dry up what
gold is supplying the retail markets. If they must return gold they must borrow to do it and create same problem in the lending arena. Their image is seen on the borrow side and the rates spike. We saw this recently. So they fall back into the financial workout mode and the rates relax.
The ECB/BIS really nailed this entire play to the wall. An entire industry was built on expanding the liquidity for international traders as our Washington officials looked on with approval. The top people knew why gold was originally (starting years ago) being taken down, yet they smiled as
these funds (and others) "coat tailed" the fall. And why not smile, these trades were using huge leverage to build (and support) the American market mania. The ECB said "enough is enough" earlier this year, but no one listened. I guess they thought these people (ECB) were nobodies? Then the BIS said they were going to cut it off short and the US asked for some time to work it out. Ha! They worked it out all right! Our treasury head watched them flood the gold paper onto
the markets like madmen.
What amazes me is that most of these "big inside" operators create the market and really didn't know why the original gold (and loan guarantees) was being supplied by the Euro arena. I always thought they did and their stories to clients about "CBs no longer using gold" was just a "good retail story". When the ECB and the BIS told Greenspan "it done", it hit these BBs like a nuclear blast! I don't think anyone yet understands that these people are now the sole backup for an entire asset class that cannot be made whole. On the surface, they may have to make good on 5 or 10 billion. But underneath, the ECB could crush them by running gold into the thousands. That's why I say "it's all over people", because this bull is going to run the equity of the dollar creating banks into the ground. And the US FED has no power to stop it. There is no way the US will use one ounce of it's gold to support a "banking crisis" if a "currency war" becomes the result! Some think that if we have one it's as bad as the other. They should study "currency war" history, preDollar!
The BBs can go for the ride slowly (and be controlled) or they can kill themselves by attempting to cover. What a master play this has been.
-------------------------------------------

--So FOA....This new gold market; it is a free market, yes?

--In the Robert Mundell speech for which Steve H provided a link, the laureate said as early as 1997 there would be a new gold market and that central banks would look to settling with gold at free market prices. He suggested that this would occur in the 21st century. Was it last year, the gave Prize was awarded to Black and Scholes -- and then LTCM -- where Scholes was employed --promptly went under water? Now Mundell wins the Nobel Prize while the gold carry trade
implodes. The former honed tools for statist economics; the latter honed tools for free currency and gold markets and a much-needed competitor for the dollar. One became the tools of the status quo; the other the tools for a new economy.----------- ----------------------

Boy,,,, Michael, I have to tell you, Mundell knew the story and no one listened! Now the whole Dollar/IMF system is in change and most of the nonEURO US trade partners have bet their entire economic society on a prosperous, buying American public. The next few years will be history to
remember. By the way, any thoughts on a "Britian in the EU"? (smile)

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

-----In talking with colleagues in the gold industry, the feeling is that it will be a long time before the Wall Street trading firms and mining companies sanction again something like the gold carry trade -- at least to the degree that it was utilized in the late 1990s. Perhaps this was a usable idea that had got out of control? There is little doubt that the European action with respect to gold,
sanctioned by Alan Greenspan who attended the Washington meeting, was aimed at the hedge funds and foreign exchange traders at the big banks. Leveraged trading was beginning to frustrate some nations' foreign policies and the mechanisms previously established to keep crisis situations from getting out of control. What good is it to try to save a country like Indonesia with fresh loans, stiff political and economic sanctions when hedge funds can easily destroy the Indonesian currency through derivative plays and leverage and undermine the intent of the international agencies. (Please don't construe from this that I back IMF actions during this Asian contagion lending crisis. I do not. I simply offer the foregoing as an explanation for the cb's actions.) So they acted to cut off the life-blood from the speculators -- the gold and yen carry trades.

The two pronged attack on the bullion banks, foreign exchange desks, hedge funds, et al co-incided with the latest jawboning by Alan Greenspan with respect to the stock market. He has to be getting a little fed up with being laughed at and ignored by the speculators whenever he warns
of the excesses in the equities markets. Perhaps now they will find out the central banks still have teeth?

This all goes hand in hand and marks a turning point. The financial world has changed in the last few weeks and I think the man on the street is just now finding out that something has happened. At the moment I can say with pleasure that the markets have become infinitely more interesting, and with no pleasure that they have perhaps become infinitely more dangerous.---------------
-----------------------

Dangerous is the right word, MK! Indeed, I did little more than "extend" my context into your "just written" perception. As events have unfolded we can clearly see what this gold market means to Euroland. Traders are busy trying to build a strategy to gain from a move in gold while the very trading arena they use may go up in smoke! I know that the BIS wants gold over $400. Yet, for the same reasons they didn't buy at $280 they don't have to buy physical now. The BIS is responsible for all gold movements between CBs, it's in their charter. Few know what they are doing untill after the fact. Today, they can let the BB "paper crunch" do their work for them. Soon. How fast it gets there will be determined by how the BBs can workout their problems. I suspect we will see rental rates rise each time one of them has to slice off some capital. When this process is wide open Another said he will be writing again (above $360 should do it). The changeover of oil to Euro settlement is the next area to discuss and I am intrested to follow how this ties with gold.

On another note:: With the EU recently (last week?) accepting South Africa into a "favoured nation" trade status, I suspect that any of the SA gold shares that survive this may be left alone (just a guess). The EU needs the SA minerals as much as oil and that country may become very important to them. We will watch as this all plays out.

Also to ALL::: Everyone is down on Bill Murphy for the wrong reasons. They don't have to do anything but continue to discuss this in public to be a huge success! What ever else can be done will indeed help more! Investors can and do think, read and hear much better than most advisors give
them credit for. With the "right insights", they will know to move their assets as events unfold. Walking assets have more impact than standing armies. So don't discount what GATA is doing.
From my perspective, most all mines will have a rough time (not only from hedges) in this new bull. If people keep reading GATA they will at least know to run from BB controlled shares as they will be the first hit. I always say, bullion first and foremost. But, human nature as it is, the biggest and most free mines are the next place to be. They won't run as bullion will later, but everyone can't
be totally in gold. It's a physics problem at these low values! So "GOOD WORK" Bill, I know the sweat is running on the other team!

she-gold

(02/21/2000; 16:24:30 MDT - Msg ID: 25768)

ORO

http://members.aol.com/curgold/Amazing. Never seen anything like this. How public are these documents, and why haven't we heard anything of them before? Would it be worth sending the link to Matt Drudge?

Anyway, keep up the strong work ORO!

Where's FOA?

she-gold

(02/21/2000; 16:29:14 MDT - Msg ID: 25769)

ORO

www.usagoldIf one believes the Marco's smoking gun documents, there's a helluva lot more gold floating around than we know. What does one make of the reported 10,000 tons gold shorts out there? no big deal? Would indicate there's a whole lot more liquidity than previously reported.

Anything more recent goings on?

Harley Davidson

(02/21/2000; 17:15:18 MDT - Msg ID: 25770)

ORO Message ID 25765:

All. Just a little more info:

"members" is where AOL host member's web pages. If you go to the root, "http://members.aol.com/curgold", there is an index to multiple pages of these documents and pages of pictures. I haven't had time to check it all out yet.

4Ducat

(02/21/2000; 17:17:57 MDT - Msg ID: 25771)

humor

Http://www.goldminingoutlook.comSteve Chaplin admits that selling his brain was a big mistake.

"I got the idea after someone told me I was out of my mind"

"I never realized that after I sold it I would have so much trouble spending all this money"

"I just couldn't think anymore" "I didn't know what to buy" "I really need my brain back"

If anyone has seen it or knows the one who has it. Please write a brief message and send the mind back as an E-mail attachment to the above website.

Don't worry Steve us goldbugs can find it. We're used to looking down all the time anyway.

CoBra(too)

(02/21/2000; 17:35:37 MDT - Msg ID: 25772)

@ORO - Marcos' Gold

ORO - Even if I do recall a major bullion transaction offered at discounts some 15 y's ago across the globe, it would have taken more than all Phillipinos turning to garimperos and shredding all of the Phillipine Islands to some 5.000 feet below sea level to come up with these numbers of gold.
It reminds me of TG's analogy of the shoe industry - Imelda M., alledgedly owned more shoes than her subjects alltogether.
With all due respect - ORO - were talking of THE precious metal - gold - and the story reminds me of the BRX
scam - again surfacing at a time when shorts probably started to lose same.
GS & Co. must just love this tale :-) CB2

CoBra(too)

(02/21/2000; 18:31:56 MDT - Msg ID: 25773)

Excerpt from Ghanaian Times - Fri. Feb. 18

Under the title "High Court vacates ruling on Ashanti" and
explains the announcement.
Later on under caption "President welcomes developments":
THE President, Flt. Lt.J.J. Rawlings, has welcomed with satisfaction and keen interest, the positive developments at Ashanti Goldfields Co. Ltd (AGC) and the chaanges in the composition of the Board after negotiations between AGC and interested shareholders.
An official statement issued late yesterday said that as a significant shareholder the Government of Ghana has been very supportive of the company and had played a constructive role in efforts to resolve the problems which arguably should never ave arisen.
"Government sincerely hopes that the calibre of the proposed Board ofDirectors will ensure that such problems will indeed not arise again.
Government, in common with other shareholders, is keen to see AGC overcome its problems and restore its financial health."
On the issue of Government's shareholding in AGC (titled the "Golden Share"), the President assured all shareholders and potential investors in AGC that "the 'Golden Share' is a facilitator and not an impediments to the corporate development of AGC."
Accordingly, the statement said, the Government of Ghana was prepared to give consideration to reviewing the status of the 'Golden Share' at the appropriate time.
.....

Interesting official diplomatic "tough talk" IMHO - MK, I'm researching the clause for the Golden Share and will post findings - if any. Best CB2

Henri

(02/21/2000; 18:39:32 MDT - Msg ID: 25774)

Phillipino gold

OK suppose it is true. Where did that much gold come from? surely not the Phillipine Islands. I know there are volcanos there but don't know of even one major mine there.
But then, there is a lot I don't know. has anyone ever heard of a gold mine in the Phillipines?

Solomon Weaver

(02/21/2000; 18:40:25 MDT - Msg ID: 25775)

Numbers on Marcus web page do not jibe...

http://members.aol.com/curgold/Had the entire deal gone down, it would have represented 4,923,183 bars each weighing 25 pounds, or 123,079,575 total pounds, or 1,476,954,900 troy ounces. At the listed purchase price per troy ounce, this transaction was worth over $552 million US dollars, or over a half a billion.
--------
The above text describes what the author of this webpage on Marcus gold deal thinks of the numbers. The author calculates out almost $1.5 trillion troy ounces and then talks about the whole deal being less than a $1 billion.

My sense is that this deal may have been authentic but that the numbers are way off base in this account.

The world of gold has always been secret and even gold bugs must consider that unknown hoards do exist. It just strikes me that at this day and age, any very large hoard would be known of because its owners would be sorely tempted to borrow against it for fiat.

Poor old Solomon

Phos

(02/21/2000; 18:42:17 MDT - Msg ID: 25776)

ORO -Phillipines Gold

If the Marcos story were true, the Phillipines would have been the richest nation on earth - the gold exceeds Fort Knox by 7.5 times. All central banks in the world supposedly only have about 30,000 tonnes.

"The total cumulative gold extracted by the Marcos explorations was calculated by someone as 132,000 Tonnes."

This is 4.224 billion ounces. The biggest mines in the world contain only a few million ounces. Where would gold of this size possibly come from? Bre-X claimed over 100 million but then, in reality, they didn't have any.

Sounds a little far fetched. How did you come by these documents? This story is as good as the Skolnick-Bush story with Alan G feeding $billions to the Bush family (which also has document images of wire-transfers). Is someone feeding funny tales into the internet to test the waters?

Is that story coming from ORO? Hackers can 'borrow' pseudonyms to post with.

Canuck

(02/21/2000; 18:56:18 MDT - Msg ID: 25777)

@ gidsek

Yes the ECB 'doubling the gold backing' was mentioned briefly a couple times. I think there was not much talk in case we 'jinxed' our luck. I don't know.

The '..where is the Fort Knox gold' discussion ended rather quickly too. Seems the Fort Knox bi-annual rantings is possibly what the government is used to, yes?

Canuck

(02/21/2000; 18:59:43 MDT - Msg ID: 25778)

@ gidsek

Perhaps our friends at GATA can pose the 12th question to Mr. Greenspan and Mr.Summers. (Fort Knox)

Cavan Man

(02/21/2000; 19:00:01 MDT - Msg ID: 25779)

nickel62

Sure sounds like the poster knows the subject doesn't it?

Cavan Man

(02/21/2000; 19:01:46 MDT - Msg ID: 25780)

POG

Up in Asia.

4Ducat

(02/21/2000; 19:05:46 MDT - Msg ID: 25781)

The Euro,the Dollar, and Gold

http://www.usagold.comThere seems to a conflict of interest between the effect of ECB gold sales and their support for the Euro. If selling gold indirectly supports the dollar by giving "gold liquidity" to the paper gold derivatives market, then why would the ECB's sell any gold at all? I think their introduction of the Euro is the subtle benefactor of their gold sales. They don't want a strong Euro at this time. It is on an "introductory special offer" below parity to the dollar. Because organized labor was crying for higher European exports, more jobs, the ECB's gave in and withdrew support for the Euro. The ECBs began the Euro too strong and caught the backlash of labor.

So I believe they know exactly what they are doing and once the Euro is fully accepted as satisfactory substitute for the US Dollar, then we may see the ECB's wanting to push it far above parity to attract capital investment in Europe.
Currencies would be the bullets in a war for trade. The ECBs could then increase their gold holdings or stop leasing gold to give a "psychological gold backing" to the Euro thus pushing it past the dollar as we sink in the mire of our muddy fiat.

Anyone's thoughts on this would be appreciated, do you think this idea may have some validity? Or could you correct it? Thankyou, 4Ducat

Canuck

(02/21/2000; 19:06:13 MDT - Msg ID: 25782)

@ Chris Thompson

Perhaps GATA's legal team should examine the 'audit' definitions; I would assume that since no audit has been done (since '71??) that the government is 'skating' around a loophole. Perhaps that loophole can be closed?

Just pondering out loud.

USAGOLD

(02/21/2000; 19:20:55 MDT - Msg ID: 25783)

4Ducat...

You raise an interesting consideration. Why would the ECB sell any gold at all? Good question.

One consideration might be the debt/reserve asset ratio to meet convergence criteria -- a complex assessment that Britain is going to find about. One of the interesting recent comments out of Europe came from the Belgian central bank when they said they will not be selling any more gold and that the gold they have sold is a type of surplus that they felt the need (leeway) to reduce. Both Belgium ( a gold seller over the past decade) and Netherlands (another gold seller over the past decade) had been gold accumulators during the 1970s when the rest of Europe kept their gold reserves in stasis. In other words, Netherlands for example sold off the gold it had accumulated while its European neighbors were keeping their reserves in check. It seems that Europe for whatever reason wanted its members at gold levels of the late 1960s, early 1970s.

The telling statistic is the reduction of the gold reserves held by the Anglo-American countries during the late 1960s and early 1970s to keep the dollar at $35 per ounce. This support effort expended 8000 tons of U.S. gold and dissipated the British, Canadian and Australian hoards -- a policy still in motion as this post is written. (The BOE auctions being its most recent -- and complex -- manifestation.)

Good question, 4Ducat. Welcome to this esteemed Table Round.

Solomon Weaver

(02/21/2000; 19:45:01 MDT - Msg ID: 25784)

Gold backed Euro

http://www.gold-eagle.com/gold_digest_00/chapman022100.html"We soon will know if the ECB will require the European central banks to deposit 747 tons of gold into the ECB to increase reserves to 30% in gold. If if happens that is that much gold that will not be available for sale or lending. At the same time it will really strengthen the euro changing its future in a major way. Making it a real currency and a real competitor with the dollar."
------
So, along with this snippet from a Robert Chapman article posted today at Gold Eagle the recipe for Euro gold as I see it is this:

Today's European Central Banks and the BIS hold a total of 12,000 tons of gold as currency reserve.

The New currency called the Euro (which can be considered like a joint venture between the existing CB's of Europe) is backed by about 750 tons of gold, and discussion for another 750 tons to be contributed by the CB's is in place.

Here is a simple hypothesis: Originally, the Eruo CBs expected that starting with a 15% gold backing today for the Euro, that the market should have reacted in response to the Washington agreement by moving gold up to $400-500 (or close to double the $250 of pre announcement days), since the strategy was to have the Euro backed by 30% (by gold value appreciation), and the architects of the Euro now see that a gold price of $400-500 threatens to undermine international banking (if gold carry trade unwinds furiously), they have decided to take a conservative approach. This also means that once things do start to crumble, they will eventually be able to double the intended float of new Euros and still meet the 30% target.

It is in the best interests of the Euro designers to slowly injure the dollar and let it slowly bleed. It is also in their best interests to keep the float small to start with. It is in their best interests to offer only so little Euros that most countries are still going to hold large amounts of US Dollar reserves. The Euro folks are going to have to give the Japanese enough time to mentally adjust to the new era.

Also, as these European CBs find that the Euro continues to be a profitable joint venture, they can "buy more shares" by transfering more gold in.

The secret to the whole move is to erode the dollar enough that the level of debt default begins to rise in the USA, but not enough to cause "force majeur" style reactions....that way, the ever strengthening Oil backed Euro can buy defaulted assets at firesale prices around the globe...because like true Americans, Fortune 500 companies will sell off overseas assets first.

Anybody care to debate the merits/follies of this train of thought??

Poor old Solomon

Bonedaddy

(02/21/2000; 19:53:16 MDT - Msg ID: 25785)

Phillipine Gold

Funny how the amount of newly discovered "shadow" gold pretty much balances the paper market commitments. Concocting a story where a "bad guy" like Marcos was hoarding this much gold does show a little more imagination than saying we found it in our Aunt Tillies basement. I wouldn't be suprised to see a few more stories like this "planted" in the ranks of the gold hearts. After all, we love a good conspiracy as much as anyone don't we? Good detective work ORO. The best diversion is the one we must work to "discover". The effort required to create such an elaborate ruse should tell us as much about the position of its perpetrators. Let's see. Who could create such convincing documents? Uh, an international BANKER maybe? Who would be short thousands of tonnes of gold? Uh, an international BANKER maybe? Who would want Gold Hearts to believe that there were no more paper claims than there was gold to back them? Uh, an international BANKER maybe? Worst case scenario: The "evidence" is all true and the paper gold deficit is balanced. Since almost no one other than Gold Hearts are cognizant of the imbalance anyway, if it were to suddenly go away the price stays the same. I'd say some body is feeling the heat. Maybe it will drive the price lower for a while so I can buy more. This just in from NASA: A giant GOLD asteroid threatens earth.... news at eleven.

flierdude

(02/21/2000; 20:03:18 MDT - Msg ID: 25786)

Oro

Why would you, of all people, post that crap again? Thats as old as the crap in Marcos' underware. This latest trip around the net, of this fabrication, should be a buy signal to all. Gold breaks out soon after the Marcos' gold lie is circulated. "Their" running out of ammo, so why not run the lies one more time....maybe it will slow em down.

ROTFLMFAO at the table that is round.

This story reminds me of the elaborate "Alien Autopsy Video"

Cavan Man

(02/21/2000; 20:20:44 MDT - Msg ID: 25787)

USAGOLD

Will GB have enough fold to enter the Euro should they so decide?

Cavan Man

(02/21/2000; 20:21:51 MDT - Msg ID: 25788)

Last Post

That's gold not fold. Sorry for the clumsy thumbs.

Cavan Man

(02/21/2000; 20:28:13 MDT - Msg ID: 25789)

(No Subject)

They are a patient and careful group turning a large wheel slowly that covers a lot of ground.

I think you have a good hypothesis. I have just one more thought....the paper gold market such as it is; it's doing their bidding and in all likelihood will continue on without any direct action by the Euro/BIS block. Time is on their side. As FOA was fond of saying and I paraphrase; "let's sit back and watch the show".

Cavan Man

(02/21/2000; 20:29:40 MDT - Msg ID: 25790)

Solomon Weaver

Boy, I'm sober as a judge and keep making mistakes tonight. SW, my "no subject" post was in response to your last.

Solomon Weaver

(02/21/2000; 20:42:15 MDT - Msg ID: 25791)

no message reply to no message - Cavan Man

the paper gold market such as it is; it's doing their bidding

Cavan Man, I agree completely...why should "they" do anything to cause harm, when "we" (our chieftans) are doing enough as it is.

I thought of a nice analogy...perhaps Trail Guide will understand it...it is like watching a snake crawl out of its skin. It takes quite a while, but things look fresh in the end...the snake...the underlying global ecomony...must continue to live.

Poor old Solomon

Cavan Man

(02/21/2000; 20:52:29 MDT - Msg ID: 25792)

Solomon 25791

These kings and princes from other lands, they are smart as us but, and, that's a BIG but, they are infinitely wiser. IMHO, they possess the wisdom of the ages. A major difference between Europeans generally speaking and Americans is this; Europeans have a much better understanding of history and how history can be a guide to the future because they have lived so much of it. Here in the US, the history we are all taught in school is geocentric and hence, egocentric. You've really got to be interested to get the right stuff and enough of it. Why study history? I'm making it today! So it goes.

Thinking worse than usual 'cause of mental fatigue.

Solomon Weaver

(02/21/2000; 20:55:13 MDT - Msg ID: 25793)

2 years ago this month Warren Buffet became the worlds largest silver bug

http://www.gold-eagle.com/gold_digest_98/butler051698.htmlWhat Warren Buffett has done, more than anything else, is alert anyone intelligent enough to listen about a world class investment opportunity. I can just about hear him describing silver as an ongoing business or stock. "Here is low price venture that is guaranteed never to go bankrupt. It will always have a ready liquidation value. I can own it in size. It is 98% below its inflation adjusted high price of twenty years ago. I never have to worry about bad management taking over. Shares outstanding are being reduced by twenty per cent a year. It requires no time, no maintenance and little ongoing expense. It is like no other asset and is a prudent diversification. It is impervious to currency and political upheaval. It has stood the test of time for utility and desirability. It is known and wanted by every inhabitant on the earth. It is out of favor currently with the establishment. It has the largest naked short position ever known in history. The risk/reward ratio is so good it's scary. Forget compliant, it's Y2K enhanced. And, although it probably shouldn't matter at my age, it is the sexiest investment I own."

Maybe somebody can come up with a better investment than the current best bet of the world's best investor. Even so, my hat's off to Warren Buffett, and if you're a silver bull, yours should be too.""

TED BUTLER
-------
Ted, I hope you don't mind that I snip the end of this article discussing some of the rational behind what Buffet did.

Does anyone out there have any information about what the status of the BerkHath 100 million ounce position is....nowadays???

Gold has regained a strong position, and silver still languishes....with lease rates still at about 5%, the paper market is pretty tame for silver....

Poor old Solomon

Solomon Weaver

(02/21/2000; 21:10:54 MDT - Msg ID: 25794)

Cavan Man - I wave the flag - and the river is open for the righteous

Cavan Man - I agree that collective Eurowisdom is much higher...but Americans have an uncanny ability to thrive and adapt. Granted, our big boys have sold us out, but it is important to remember that the green revolution, modern medical biotechnology, computer chips, PCs, Apple/Microsoft style programming, and now Internet technologies were all invented (or at least first mass marketed) in the USA.

I live out in the country where a guy can still earn $6 an hour...who in Europe can make it on that amount of money?? Out here, you can buy a nice 5 acres plot for around 5K to build a house..where in Europe?

A worldclass company in my region has built a new research and development complex and hired over 1000 new technologists to "invent the future"...

If you saw a Grizzly with one broken arm would you hit him thinking he can't fight? Well, I think that Another is right that the powers are now concerted in pushing the dollar back...but it will take a lot more to push our citizens into some sort of mass poverty...we have to much richness in our ways of thinking...fresh....entreprenurial...from what I know of European businesses the big talk is how to catch the American way of doing business...team structure...etc. etc.

Poor old Solomon

USAGOLD

(02/21/2000; 21:18:11 MDT - Msg ID: 25795)

Cavan Man...Let me play political scientist for a moment...

I sometimes wonder if all the foot dragging on both sides of the English channel might be the result of concern over that issue, i.e. at what percentage will UK be brought in as a European partner. At first they wanted in at 15% -- I don't think its going to happen. At the same time, Great Britain has tremendous assets -- including North Sea oil and other substantial international holdings -- that they could bring into play other than gold and that will be weighed in the balance. The primary question is sovereignty -- and there is a large, growing and formidable group with nationalist Thatcherite inclinations in Britain, as there are throughout Europe.

By the way, I think it will be interesting to see what happens in the polls once the Democrats and Republicans pick their candidate and Buchanan emerges as the nationalist in the U.S. race. There are still two divergent political/economic trends afoot in the West -- one nationalist, the other internationalist -- and in my view the question is far from decided though you wouldn't know that watching the evening news. There's little doubt which Buchanan represents and we will not know how deep those strains run in the this country until the polling starts after the primaries. We may be in for some surprises on that score.

I was surprised at the virulent reaction to Austria's Haider both in Europe and here -- it appeared to be a knee jerk over-reaction on the part of the internationalists. At the same time, I don't know much about Haider and might be under-reacting. He did cut a deal though with a legitimate European political leader who did not see his own position greatly undermined by taking him into the government. These nationalist movements are cropping all over Europe and the real problem might be the nationalist threat to the European Union as much as any concern over nascent Fascism. In other words, the fear could be that if Haider stays, it fuels nationalist movements in all the other countries -- alot of architecture could be threatened.

I wouldn't be surprised to see Buchanan poll in the neighborhood of 8%-10% out of the chute and get as high as 25% by election time taking votes from both the Democrats in the form of Reagan Democrats and Republicans in the form of disaffected conservative Republicans. It is interesting that Buchanan has kept his powder dry watching the Republicans and Democrats tear themselves up in these primaries. Gore could waltz through the breach as Clinton did in the last two elections, but I think both parties underestimate the pull Buchanan will have in both electorates -- a pull Perot, who primarily siphoned off Republican votes only, didn't have.

I think they'll keep Buchanan out of the debates for one simple reason -- it will add about another 5%-10% to his numbers if he participates. Only Gore could even give him a run for his money from what I've seen so far.

Let's face it without Buchanan, this election will look more like a run for the high school presidency than a contest for the most important political office in the world. With him, at least some of the real issues will be discussed.

koan

(02/21/2000; 21:19:23 MDT - Msg ID: 25796)

palladium

Last I saw Palladium was up $72 - almost $800 per oz!

Solomon Weaver

(02/21/2000; 21:41:02 MDT - Msg ID: 25797)

The primary question is sovereignty

USA GOLD you said:
"The primary question is sovereignty -- and there is a large, growing and formidable group with nationalist Thatcherite inclinations in Britain, as there are throughout Europe."

Have you ever read the book called the Sovereign Individual by Davidson and Mogg?

In it, they explore the restructuring of the "privelege of Sovereignity" towards smaller entities. For example, very wealthy families, certain cities...

What I see as the greatness of the EURO is not that it is the new national currency of the United States of Europe, but that it is the first attempt to have a single currency operating over several nation states.

My expectation is that Europeans will fight it out and realize that at the Federal Level, they need to have a minimum of laws...most laws at federal level should be targeted towards free trade, and certain basic rights.

The very wierd but wonderful thing about todays globalizing is that it is both unifying and yet "smallifying"...allowing advantage at smaller sizes...perhaps the Euro is the first great test of the path...perhaps the new Dinar initiative in the Arab world is another.

Poor old Solomon

4Ducat

(02/21/2000; 21:47:51 MDT - Msg ID: 25798)

Philippine Ancient Gold

http://www.usagold.comFrom a Philippine source of information whom I trust to be reliable. During WWII the Japanese buried large gold hoards on the islands which was some of what they had gathered from their conquests of other islands in the South Pacific. The ruling families of most islands were of Spanish ancestry going back to the time before 1899. Before the American occupation, the Philippines was known for its gold mines and a treasure ship arrived every few years from Santiago, Chile to conduct trade and recieve royalties. Ruling families always had a cave to go to during severe typhoons. I know of a certain family whose grandparents lived underground in a large cave during the entire Japanese occupation. Candles or darkness.

I believe the treasures of the Incas, Aztecs, and Mayas were large yet were mined by primitive means. So I won't discount the possibility that the same mining activity could have occurred in the Philippines centuries before we arrived. Nor the possibility that these ruling tribal families may have each had small hordes of gold hidden when the Spanish arrived. Chinese had colonized before the Spanish.

Typhoons never occured with any great extent over the continent of S. America. When armies attacked it was a land battle. When armies attacked the Philippines it became a cave battle. If the Spanish had flushed out all that mined gold what makes you think they were so quick to send it all back to Spain? Spain lost grip of her colonies just like every other colonizing nation. Spain also could not easily send troops to subdue Spanish on the islands who may have rebuffed demands for gold. They say "Come and get it"......no, we will just send the ship from Santiago and you pay them and they will bring needed supplies. So I believe that because the Philippines is geographically far away from Spain that Spain had a diminished influence over the islands. The majority of the gold mined was never actually taken to Spain and was stolen by Spanish who arrived and found the islands riddled with caves that they never had to dig.
When the sons of the seven samauri land on your small island and prefer to use their swords rather than their guns, what would you do? Sure in my hands, take our gold...same thing the Egyptians did to the Jews before they left Egypt....take our gold and don't kill us all like our firstborn are dead. Japanese were the gold collecting agents for that whole hemisphere wrought by the terror of their occupation. So that is where the secret Japanese gold hordes come from. Some of it is still buried. So years pass, many years. From my source which is first hand, I'm told Marcos ran a campaign of terror to shake the gold out of every ruling family he could get his guerillas to chase. The Philippines became a archipelago of terrorizing warlords kept in equilibrium only by their ability to conrtol waters between islands with gunboats and by controlling politics on land with the death squad that may arrive in the night. On Mindanaou (southern regions) this all still goes on. So maybe if the gold ammount isn't a hoax, it could represent the volume of gold accumulated over centuries which included much trade with China plus Japanese hordes dug up by Marcos. Just a thought. And if the CIA intercepted Marcos' gold in transit who knows where they stashed it or who they are even loyal to? If the factions in the CIA still loyal to the US got the gold then it very well could be used to back the paper trade but we can seriously discount the tonnage figures I'm sure. Everybody just paying minimum tribute. It's a little bit for me.......it's a little bit for you.

USAGOLD

(02/21/2000; 22:16:52 MDT - Msg ID: 25799)

Solomon....

Many associate a national currency with sovereignty. If the British give up the pound, for example, they also give up the ability to gear monetary policy toward their own needs. Some might say that as you give up that right to self determination, you gain a say in a much larger political context, i.e., the European Union. Is that enough to induce a vote in favor of joining the EU? Britain will have to decide.

As the European Union is now structured, however, the voting is essentially cumulative (like a stockholder vote) with France and Germany holding a majority by combining their vote. Economic and monetary policy could be dictated to Britain from Paris and Berlin!! Imagine that! Astonishing if you even have a passing grasp of European history. Once the British pass their economic sovereignty to Continental Europe, each individual's sovereignty, in my view, passes with it. The national will is diluted, worse, it is surrendered. It is much easier to get your hands on the local MP than it is some bureaucrat in Brussels, Paris or Berlin. I think this is something each citizen in Britain will have to weigh in the balance. I would want to know the political institutions and the constitution under which I will be living once that sovereignty is passed along. Short of that, I would want the ability to pull out by a national vote with 30 days notice brought on by a simple majority vote in the Parliament. (I now ask my British friends to forgive my intrusion in their affairs.) I wouldn't attach any permanence to that joining until a constitution was signed and voted into law by the European peoples. I would add that I offer the same advice to the Germans, the French, the Dutch -- et al. It can't work any other way.

Dollar Bill

(02/21/2000; 22:24:52 MDT - Msg ID: 25800)

Ole Solomon

Hello Solomon,
I have other subjects to bring up on another day but
you asked if anyone wanted to question your comments
about the euro.

You said "oil backed euro".

I have seen that idea in other writings here and in the
greatest hits archives and elsewhere.

I don't however see writing on other related issues that
effect what the Arab princes actually do and so I bring
it up.

The clearest evidence of what they will do is the action
the Kuwaitis took to back the dollar by leaseing thier
horde. America is the military of Saudi Arabia and the
rest of of the gulf states that produce Europes
and Japans oil.
Conspiracy buffs here might want to know that the reason
saddam invaded Kuwait, (besides the fact that he wanted too)
was the fact that an American diplomat accidently(???)
gave saddam the idea that we were ok with that.
And some could say that Bush stopped at the border of
Iraq for many reasons including the benefit of having
the continued dependency on close ties to the American
military (reserve currency) power base.

Saudis have for a couple generations been schooled in
America and have seen France and Germany cave into
saddams squacking in the UN.
Germany and france (euro) are no help what so ever
militarily to the arabs.
What makes us think the arabs will ignore thier dangers
and want gold expensive when they can buy it cheap now.
Just because the euro guys say that gold "will" back
the euro some percent, it is just talk.
Lets see them do it and see how
fast it drains out of thier "honest" currency vaults.
I certainly believed the idea at the start, but after
a while.....you DID want a contrarian to respond right?

Dollar Bill

(02/21/2000; 22:37:20 MDT - Msg ID: 25801)

Ole Solomon 2

Hello Solomon,
America clearly can play hardball and has for years
in many ways. Some hate the US for it but tyranny
was threatening for decades and a dark tyranny it was.

I can't imagine the US govt not taking all the euro's
that it will get because of the trade we have with
europe and immediately turning them in to the CB's of
the euro and demanding gold.

Dollar Bill

(02/21/2000; 23:01:44 MDT - Msg ID: 25802)

Nickel62

I also thought as you did about the euro/bis but it
turns out that it is the european central banks that
are the main creditors of the soulth americans and
also, besides the Japanese, the main creditors of
asia.

Brazil is one of the countries that play the gold
derivitve game and as you know, the US only has PART
of the derivitive vulnerability. I know I was shocked
in august to read that the derivitive market was in the
trillions, and freaked at the threat that the sept
euro cb action posed, but I think the reason they all
marched in step at the last big 8 finance meeting is
that they know now if not then, that stablilty is
thier only friend. It is only natural for men of any
group to be at odds and power struggle, but like the
commitee chairmen of the senate, they have thier
closed meetings and they are not about to self destruct
on purpose.
After Greenspans recent talk, I think we will be seeing
derivitives in the hundreds of trillions.

Goldfly

(02/21/2000; 23:04:16 MDT - Msg ID: 25803)

MK, #25795, they can't keep Buchanan out.

If Perot is really behind him then he will probably make every ballot in the U.S. They will *have* to let him in. Mr. Buchanan should easily be able to muster the 10% in the polls that the debate committees require.

Now, how about Alan Keyes? Has it occurred to anyone that Mr. Keyes is not running for President, but is out for V.P.? (This is not incredible analysis here, but I've not seen it mentioned before.)

And then suppose, that having been rebuffed by the Republican establishment, Mr. Keyes opts to run as VP on the Reform ticket? OOOOOOooooooohhhhhh. Talk about an insurgent campaign!

The Dems would be squealing like stuck pigs and the Pubs would be squawking like wet hens. The press would be falling all over themselves. What a great country!

I bet we could get an accounting of Ft. Knox out of the deal. Maybe some real answers to GATA's questions too. Yeah, the whole idea is probably no better than a fantasy.....

But THINK of the possibilities!!

Solomon Weaver

(02/21/2000; 23:05:54 MDT - Msg ID: 25804)

Oil backed fiat

Dollar Bill - I certainly believed the idea at the start, but after a while.....you DID want a contrarian to respond right?
--
Certainly...don't just want yes men around us now do we?

First of all, gold backing does not mean redeemable. At least in the sense that if you show up at the door they will give you gold....perhaps in the sense that the lender of last resort has the option to settle in gold.
One great conspiracy topic is "does America still have 8000 tons of gold in the vault?" If so, then in high gold price environment, the USD will also be strong. In this regard what concerns me (and to address MK as well), will the 10,000 tons of gold distributed in European CBs act in the same interests as the 750-1500 tons controlled by Eurocorp.?

Now, let us discuss oil backing. Another and FOA have pointed out an interesting definition. When a country is able to import a barrel of oil for X and using technology, create a good which is worth a multiple of X, (and it is understood that this good can only be produced using oil energy/or raw material) then this currency can compete on the world markets for oil purchase. If you know anything about Europe, and I certainly believe you do, then you will know that the price of energy is much higher than in the USA. Given that the crude pricing is the same, this is a taxation issue...one could say that Euro governments are exploiting the need for energy...on the other hand, one could also point out that this type of tax has driven the market of energy efficient products. So, let us now assume that we are entering a time when the price of oil rises dramatically and stays high. In such an evironment, the ability of energy efficient European companies and householders to profit is enhanced over those of Americans. Since the rest of the world will want such efficient products, Europe also has a more attractive export business. Remember how the great coup of Japanese auto imports was accelerated by the 1975-78 gas crisis?

So in this analysis, we can say that the Euro is positively leveraged to higher oil prices compared to the dollar..thus following the definition of Another on creating economy out of oil, the Euro is "more backed by oil than the dollar".

America is also the military of Europe. as a matter of fact, even though Russia starts to shake the old fist again, we could say that the belief in the need to maintain a highly advanced standing army is a financial liability for Americans. West Germans lived for decades with nuclear weapons just kilometers away in East Germany...today for better or worse, they are one state. The threat of nuclear retaliation stopped Saddam from using chemical and biological weapons in the Gulf War...if he were to try to take Saudi Arabia the same threat would come again. My bet is that the Europeans understand that the world is demilitarizing, which is a risky transition, and they understand that the skills they have to negotiate are better suited to Americans.

I agree that Arabs like gold, and that they are getting it for a real nice price now...but it is simplistic to think that that is all they want....the very rich Arabs have their hands into many modern investments worldwide...and given their large gold holdings I can well imagine that they would enjoy a large upswing in the POG.

Nice to joust with you kind knight...probably morning by now.

Poor old Solomon

4Ducat

(02/21/2000; 23:58:54 MDT - Msg ID: 25805)

Marcos' Golden Mirage (correction)

http://www.usagold.comFlierDude is right. If that much Philippine gold is out there then the POG would know about it. Nothing but 100% USDA Prime propoganda. I wrote my little history sketch down below but no amount of conjecture can refute simple math.
Yes, it shows desperation. I think Greenspan is going to try to ween them off their derivatives as they come in to him crying for cash but he's going to have a tough job covering up the amounts he's passing out. That's going to be in gold's favor.

Black Blade

(02/22/2000; 00:45:37 MDT - Msg ID: 25806)

Philipines and stolen WWII gold.

There are gold mines in the Philippines with an active exploration and mining industry. Until recently, one of the largest commercial operations was PDG's Marcopper Mine. There are several shanty towns built around several gold deposits worked by artisanal miners. This of course could not account for such large hoards of gold as reported by ORO and others. There are also stories of Toshidas(?) Gold. General Toshida, the Japanese commander during WWII safeguarded the gold acquired by Japanese forces throughout Asia. The gold was stolen from the governments of conquered Asian countries and from religious shrines. During the latter part of the war General Toshida had his military engineers bury gold in several locations as the allies drew closer to the Philippines. Reportedly he had several POW's and Filipinos building the tunnels to bury the gold. He had them killed along with the engineers to keep the locations secret. He had also tried to ship out gold on freighters, however, most were sunk. Much of that gold was recovered by US Naval forces. Occasionally some of Toshida's gold is found by treasure hunters. As for Toshida, he was hanged as a war criminal after the war, and refused to disclose the whereabouts of the gold. Rumor has it that Marcos and some of his friends found some of this gold and that he came to power because of financing made possible from his share of Toshida's Gold. Anyway that is the story.View Yesterday's Discussion.

Black Blade

(02/22/2000; 01:31:18 MDT - Msg ID: 25807)

Gold demand may fall as Internet offers other forms of investment

Bridge news

Dubai--Feb 21--The gold mining industry relies too heavily on "strong but remote markets such as India and China," and risks losing them to other forms of investment as these countries "gain greater access to the Internet," according to Wayne Murdy, President of US company Newmont Mining. Speaking to delegates here at the London Bullion Market Association Precious Metals Conference, he said that without greater marketing of gold, these countries' reliance on gold may diminish as they encounter other forms of investment via the Internet. (Story .14687)

Black Blade

(02/22/2000; 01:41:15 MDT - Msg ID: 25808)

Palladium......classic short squeeze!

http://biz.yahoo.com/rf/000221/kt.htmlFrom yesterday's PGM action across the pond. Will tonight and tomorrow be a replay? Perhaps, the short squeeze is on, no more Pd to be found anywhere, SA production is shipped as fast as it is produced, Russians can not deliver what they don't have, etc. This story gets wilder as time goes on!

L.Harrison

(02/22/2000; 01:41:24 MDT - Msg ID: 25809)

Trail Guide

(very private bullion gold)

May I ask what criteria you have applied
in accumulating your AU hoard?
Do you favor high MS or low mintage?
Old or new gold?
Rare or easily marketable?
Proofs or Circulated?
Any favorite types?
How do you protect your hoard?
Do you hold pieces priced at many times there bullion value?
What pieces do you view will be desired by traders
in the future markets? Mintage from US, World, Euro?
Will internet facilitated trading be allowed by
governments in the future markets?
I do not mean to make my questions
multible choice.
If/when you sell what would be your rational?
Where do you obtain supply(please ignore if out of line)?
For that matter please ignore this post if out of line.
You have stressed physical as core and mentioned rare
gold coinage(numismatics)in your holdings several times.
I wondered?

Regarding gold stocks; the criteria you listed yesterday
limits investments to only two companies I know of and neither qualifies in all regards. Can you offer any
additional clues?
The HARMONY of GOLD: when will the gold bull(MAX) run?

BTW do you know if Another holds private bullion coinage?

gidsek

(02/22/2000; 02:19:33 MDT - Msg ID: 25810)

OT Solomon

"Remember how the great coup of Japanese auto imports was accelerated by the 1975-78 gas crisis?"

I saw an ad tonite for an itty bitty Japanese model called the "Echo". It showed the car maneuvering down crowded city alleys, slipping easily into tight parking spaces, the usual. Boy those Japanese are quick out of the blocks, only now are the SUVs beginning to pile up on dealers" lots.

In eastern Canada today large number of independent truckers blocked a major highway, they are protesting high prices for diesel as they are stuck with money losing contracts.

gidsek

gidsek

(02/22/2000; 02:27:33 MDT - Msg ID: 25811)

Canuck ... ECB doubling

I suppose this might only involve a movement of gold from member CBs to the ECB, not something "the herd" would view as an important, fundamental development. It would seem to be a significant development though, taking into account the view from where WE sit.

gidsek

Goldsun

(02/22/2000; 02:30:54 MDT - Msg ID: 25812)

Barrick Bits

While I support the campaign by GATA and friends to publicize Barrick's hedging and encourage investors to sell their shares, it seems overly optimistic to expect Barrick to change their ways. Remember that their board includes:
George Bush, Sr. former US president
Brian Mulroney former Canadian equivalent
Vernon Jordan chief fixer for current US president
An unusual amount of horsepower for a relatively small company. While Bush and Mulroney were in office, they collaborated on the creation of NAFTA. When Clinton took office, he quickly pushed through final approval of NAFTA - despite the screams of organized labor, one of his party's sources of power, and in sharp contrast to his vacillation and procrastination on most matters. NAFTA, like the WTO and EU, deprives member nations of their sovereignity. These three gentlemen are obviously only gofers, but the game they are playing is considerably larger than the price of Barrick shares. These are not nice people and they do not have our best interests in mind.
During his glory days, Adnan Khashoggi had a company in Hong Kong named Barrick Investments. I sometimes wonder if there is a connection with the infamous Barrick. (I know nothing about mining). BTW, Khashoggi and Bush Sr. are said to have long been associates.

fox

(02/22/2000; 02:46:59 MDT - Msg ID: 25813)

amplats

get used to this figures !

Breaking News Sport Technology Special Reports News Roundup

netAssets news
Amplats lifts earnings 82.7%
The world's largest platinum producer has reported an 82.7% rise in headline earnings to R2.580bn in the year ended December 31 1999 from R1.412bn

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

Anglo American Platinum Corporation (Amplats) -- the world's largest platinum producer -- has reported an 82.7% rise in headline earnings to R2.580bn in the year ended December 31 1999, from R1.412bn the year before. Amplats said this is the fourth consecutive reporting period that earnings growth has exceeded 70%.

Cash holdings increased from R1.530bn at the end of December 1998 to R2.215bn. Headline earnings per share rose to R11.97 from R6.58 and the dividend per share was up from 385 cents per share to 700 cents per share.

Amplats also reported a rise in platinum production to 2.02 million ounces for the year ended December 31 1999 from 1.86 million ounces the year before. Palladium output was up at 1.02 million ounces from 930,900 ounces.

Amplats said the sustained growth is indicative of the strength of the company and the continued positive fundamentals for platinum group metals.

Production highlights include refined ounces of platinum exceeding 2 million ounces and palladium exceeding 1 million ounces, Amplats said.

"By continuing with its strategy of developing the market and expanding its operations to take advantage of the increased demand, Amplats is ideally placed to continue to strengthen its position as the world's leading
platinum producer," it said.
I-Net Bridge

21-2-2000

� I-Net Bridge (Pty)Ltd
Disclaimer
Add to Favorites

SteveH

(02/22/2000; 03:03:37 MDT - Msg ID: 25814)

Euro

Anybody note that the Euro is rebounding against the dollar? Up 1.44 at 100.4.

April gold only up .3 at 307.60.

Oil down .41 at 29.10.

April platinum down under 500 at 482.

Bonds are all up sharply, yields down.

Hmm?

SteveH

(02/22/2000; 03:08:06 MDT - Msg ID: 25815)

doubt

Some of those figures were from last night. Suspect. Just noticed that!

Usul

(02/22/2000; 03:41:26 MDT - Msg ID: 25816)

$7-B MARCOS GOLD SCAMMER ARRESTED

http://www.newsflash.org/199712/hl/hl000366.htmManila, Dec. 25, 1997 - Manila's newspapers today prominently featured a story out of Melbourne that an Australian has been arrested for attempting to defraud a London bank using forged certificates allegedly representing $9 billion worth of Marcos gold deposits.

Quoting Melbourne police, the report said investigations began when Rothschilds Bank in London was offered by a group of Australians the fraudulent certificates as guarantee for a $7-billion credit line.

The suspect was nabbed in Melbourne after a combined operation by major fraud squad investigators in Melbourne and Scotland Yard. Investigations in Australia and Britain are continuing.

Speculations about the Marcos gold stash continue to baffle courts, banks and governments around the world 12 years after the Philippine strongman was ousted from power by a US- supported military uprising joined by the church and business groups.

President Marcos' widow Imelda, now a member of the House of Representatives, claims that the gold certificates representing thousands of tons of gold deposits around the world were stolen during their flight to the US in February 1986.

Reported by: Sol Jose Vanzi

tedw

(02/22/2000; 05:09:03 MDT - Msg ID: 25817)

The Future of Gold

http://www.usagold.com
If you havent read John Hathaways article at www.lemetropolecafe.com entitled Apocalypse No it is definetely a must read. John correctly called the recent run up in gold as well as the reasons. He makes more sense than anybody else I have read. I recommend it.

Henri

(02/22/2000; 05:51:58 MDT - Msg ID: 25818)

Secret Plunder

http://sightings.com/politics5/hiro.htmThis seems to flesh things out a bit. But it still has a long way to go

Black Blade

(02/22/2000; 06:52:04 MDT - Msg ID: 25819)

PGM's pull back, but supplies tight!

http://www.marketwatch.newsalert.com/bin/story?StoryId=Colix0b8ZtdiYmtm0mZKX&FQ=palladium&Title=Headlines%20for%3A%20palladium%0APGM's volatile, but no Pd to be found.

Dollar Bill

(02/22/2000; 08:06:36 MDT - Msg ID: 25820)

Ole Solomon

Good morning schoolchums and teachers.
Solomon, it will take me some time to digest what your
post said and any and all other responses made before and
any to come today. So I won't respond for a few days
probably.

I do love the forum here and Farfel might enjoy knowing
I have read him a lot.
There is plenty of action here without me needing to
raise my hand, but, squeaky wheel and all that.

ORO

(02/22/2000; 09:01:15 MDT - Msg ID: 25821)

Marcos Gold - true or not? - how true?

The estimates of the Yamashita pillage were of some 9,000 Tonnes of gold equivalent at the end of the war.

Hearings on the matter have been conducted in the US congress and in the Phillipines legislature. Some of the evidence presented by some witnesses is completely absurd, one claiming that 400,000 Tonnes of gold were taken by the Japanese.

The historic accounts that indicate official gold payments by the occupied peoples to the Japanese occupiers are on the order of 70-150 tonnes per city per levy - sometimes levied more often than once per year. In a 9 year occupation in China alone this would be easilly in the 5000 tonne area.

Once the opium monopoly and the gambling monopolies operated by the Japanese military are considered - which took payments in gold and silver only - are considered, there can be another 6,000 tonnes just from that source.

Point is, that estimates of ancient gold mining in Asia are not good because of a lack of records spanning back to those times, and because of a lack of useful information about the mines themselves. That leaves only estimates of gold used in trade and as wealth money. Since the Asians of the time before WWII - wealthy or poor - had no use for banks, there are no useful records openly available for the determination of the quantities of gold held in these parts.

I can't say a thing as to the authenticity of the documentation I have pointed you to. However, any calculation I have done to understand the quantitative aspects of the gold market in the period 1980-1992 comes up with a deficit of at least 12,000 tonnes. Meaning that at the very least, 12,000 tonnes came into the markets beyond the quantities reported by any WGC estimate, Veneroso's estimates, or any other widely accepted figure. The more likely figure I have calculated as the deficit for that period was on the order of 25-30,000 tonnes.

If any of the gold sales and deposit certificates posted on the net have any merit, then they provide an explanation of a source for the gold that filled the deficit.

For any disparaging the documentation I would just say that you are calling these people forgers. These people are disinterested in the particular amounts they show in the documents, they are not trying to claim these quantities for themselves. There is little to be had by forging these documents by those presenting the information.

The 1240 tonnes at the Zurich airport that were frozen pending court decisions on law suits should make it obvious to the doubters that at the very least, ten times that amount is still in the hands of the Marcos heirs and at the very least ten times that figure was sold in the past.

Still, verification of the circulation of rumors of the Marcos gold sales by people active in the London gold markets of the 1981-1987 period would be very helpful in determining an order of magnitude figure on the numbers this documentation indicates.

USAGOLD

(02/22/2000; 09:12:59 MDT - Msg ID: 25822)

Today's Gold Market Report: Quiet Open; Scant News

http://www.usagold.com/Order_Form.htmlMarket Report (2/22/00): Gold was down in quiet trading in New York at
the open. It was an equally quiet night overseas. All in all, its a
non-day so far with the market trading on scant news. We will update if
anything interesting develops. In lieu of that,we will see you here
tomorrow as usual. Have a good day, my fellow goldmeisters.

If you are looking for a pro-gold view of the various financial markets
as well as a summary of the events affecting the yellow metal, our
monthly newsletter might be of interest. News & Views -- Forecasts,
Commentary & Analysis on the Economy and Precious Metals has
been characterized as witty, urbane, intelligent and down-to-earth. Not
to mention it's Free of Charge If you want to keep up with gold, this
is the way a large segment of the gold owning public does it, and has
done it for over a decade.

Just click on the link above and make the appropriate entries.

TownCrier

(02/22/2000; 10:15:16 MDT - Msg ID: 25823)

Fed added $4.5 billion in temporary reserves to the banking system with 2-day RPs

http://biz.yahoo.com/rf/000222/wa.htmlOver $3 billion of the repurchase agreements used mortgage-backed securities as the collateral.

TownCrier

(02/22/2000; 10:37:25 MDT - Msg ID: 25824)

U.K. to Publish Euro Changeover Plan in Coming Weeks

http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=55843f05b53cbefb2d3f23d5f08bc80cA blueprint for exchanging the pound for the euro that will be updated each year until the final decision is made. Chancellor of the Exchequer Gordon Brown said the strategy is to "prepare and then decide"...the decision to join only to be made if economic conditions are right to do so.

TownCrier

(02/22/2000; 11:01:29 MDT - Msg ID: 25825)

Latest release of the European Central Bank balance sheet today...

Looks like the Dutch CB is nearing completion of its first-year program of gold sales under the Washington Agreement. It was revealed today that another 7 tonnes was moved last week, leaving them with only 5 tonnes to go of the original 100 scheduled to be sold through the BIS between December 1999 and September 2000.

How about that, folks. The world sopped up 95 tonnes through "unadvertised sales" in less than a three-month period and the market didn't even blink. (Not to mention another 50 tonnes provided through the BOE auction during this period, with their final 25 tonnes in this phase of auctions scheduled for March 21.) Does the world have a ravenous appetite for gold, or what? And will the Swiss sales be able to come smoothly on line now that the Dutch source has dried up, or will higher prices visit us soon?

Goldmak

(02/22/2000; 11:05:00 MDT - Msg ID: 25826)

@ ORO.... RE Marcos Gold

First I would like to say that I have read yours and a few other posters on the web with interest, but I feel some get all too caught up with "data". Having said that
the issue as to the existance of Marcos Gold is really
not in question, what is in question in my view is the
unrealistic tonage amounts and the timing of these announcements.

I recall back in the late 70's and early 80's these Marcos
tons of Gold stories circulating, of course then the amount
of tons of Gold then were much much lower.

The point being, even if large amounts of Gold existed,
the Gold market has absorbed any and all. You are correct in that figures from WGC on Gold production etc are NOT
accurate. One other example comes to mind.
In South Africa during the apartheid years, and sanctions,
the Goverment for many years, encouraged the covert production of Gold and other precious metals, some of it out of then existing legit Gold mines, without shareholder
knowledge, to sell for Oil and the like. The amount of
covert Gold mined during all those years was said to be very large.

But the major point being that these announcements
of a quizillion tons of Gold found like. Bre-X, and the
now famous Golden asteroid , which is soon to be mined
the quizillions of Gold to be extracted from sea water
etc, etc, etc, these are put out there for the sole purpose
of propaganda against Gold for mass public comsumption.
It is no coincidence that AOL is putting out these stories
AOL now in with Times Warner who "educate" the
public on Gold via their ownership of CNN et al.

Yes Gold seems to evoke mysterious and clandestine claims very few true, and very many tall tales, but
the point again is the timing and purpose of these tall tales.

Farfel

(02/22/2000; 12:23:57 MDT - Msg ID: 25827)

Another Dose of Reality re: GOLD vs. Internet.

Date: Tue Feb 22 2000 13:39
Radiumflipper (frank lee spokane What is the target sell price for Vengold & Savanna?) ID#409248:
Ven could easily paw at the $25.00 mark
-------

Vengold will probably go down in history as the best example of an internet mania at its most extreme point. The preceding poster seems to believe that this company should be worth US FIVE BILLION DOLLARS soon or CAN 6.5 billion?? At that price, the company would be worth MORE than the majority of industrial companies in Canada today.

Let us re-examine the facts.:

You have a long suffering gold company whose share price has been on a long trip to nowhere.

They decide to liquidate most assets, retain a piece of a gold mine in SE Asia, and use proceeds of some $70 million Canadian dollars for the purpose of "incubating" Canadian internet websites.

There are only around 33 million Canadians, less than the population of California, and in general much less affluent than the population of California.

As of today, the company is worth more than US 400 million dollars or CAN 520 million , solely on the basis of two announcements.

Announcement 1) -- the names of the major executives involved in the company.

Announcement 2) -- the first three internet (companies??) they INTEND to purchase AFTER due diligence is conducted... so as it stands, there is no guarantee any deals will even go through.

Moreover, as we all know, most internet "companies" consist of a handful of individuals, a business plan, little to no assets, and no profits.

In the years BC (BEFORE CLINTON), if anybody had read the preceding info, they certainly would not be pouring their life-savings into such a venture. Rather, they would be turning over the preceding info to the RCMP for further investigation into the company's activities in the securities markets.

It is truly astounding and for gold investors, it is a sad commentary that many who normally would never touch an internet blue sky venture are all too willing to abandon common sense and dive into this head first.

It is NOT a gold company fellas, and when the internet bubble truly bursts, it will be worth LESS than the average gold company.

Thanks

F*

ORO

(02/22/2000; 13:42:35 MDT - Msg ID: 25828)

Goldnak - reading the story as bullish

My take of the story is this - if true, it answers three great questions -
1. How was investment demand answered during the period 1981-1989. Particularly the large amounts needed by oil Royals.
2. Where did the petrodollars go.
3. Why did the dollar stabilize when it did.

It also answers one market observation; that of the near 20 year price range for gold. The deal details in the contract posted on the net would coincide perfectly with the maximum and minimum prices.

The other "secret" deals that we have understood to lie in the background behind the markets are much more likely to have been executed with the Marcos gold in the quantities stated than without it.

Though the Yamashita/Golden Lilly/Prince Chichibu/Marcos/Diaz/Santa Romana story sounds absurd, it would be the exact story one would expect to be kept hidden as much as possible. It would also make some post war "economic miracles" less miraculous and more reasonable.

Finally, it points out the existence of a 3000 to 4000 Tonne annual investment demand, which is the same value as the investment demand I "back calculated" from the "official" data I could find. What the data showed was that the gold needed for meeting this investment demand was not "there", however, the gold banking system would have been wiped out 15 years ago if the investment demand were not met with at least half that rate, 1500 Tonnes per annum more than produced, of physical gold.

Paper gold was not sufficiently developed to absorb this demand till the early 90s. Even with paper gold as well accepted as it is today, the gold markets still need some way to provide 20,000 Tonnes mostly over the next 5 years. Even half that amount is well outside the combined abilities of both the CBs and the gold producers.

The point I was making long ago - in mid to late 99, was that there was a gold deficit that was so large, that there was no way the mine production - even when combined with all known hedging and all known (and even imaginable) CB leasing and selling - would ever come close to meeting the deficit. I had assumed that there was a "hidden" seller of gold that sold at least 12,000 tonnes in the period 1981 through 1988 or up to 1992. This "hidden" seller could have easilly sold 30,000 and up to 60,000 Tonnes, managing to just keep gold prices stable within their range of the period.

So how bullish is it for gold? How bullish could be a market that demands 6000-8000 Tonnes per year but gets only 2500 Tonnes from production? How bullish is it if the major seller is running out of gold to sell? How bullish is it if the bankers that are to mediate the last bit of the sale program have already sold the stuff - possibly twice over?

The Yamashita gold story is the most bullish story for gold one could ever imagine. That there are published documents for 94,000 Tonnes sold ALREADY, is more than just bullish- it gives the gold deficit story kevlar cladding- it is bulletproof. There is no more "Yamashita overhang" left to pelt the markets with.

Hipplebeck

(02/22/2000; 15:37:47 MDT - Msg ID: 25829)

How much gold?

My opinion is that no one will ever know how much gold is out there. The best indication at any time is the price.
Gold has been used for wealth and power for as long as there has been man.
Add art, religion, and the myriad scientific, industrial, and practical uses that are unique to gold, and you have something that is as basic to mankind as fire.
How many tons are out there that have been dug up and then reburied only to be lost?
How many private vaults?
How many little stashes of jewelry in every home?
How can anybody know how much there is?
I now carry a gold maple leaf, a gold eagle, and an eagle silver dollar all the time. I show everyone I come into contact with the coins and tell them about gold, silver, banks, derivitaves, fed, mining forwards, Washington agreement, etc. etc.
This is the only way we can change reality, by educating those around us to what we know to be true.
What I have learned here from you posters I am teaaching to others who do not yet visit this forum, but when I come into contact with anyone who knows how to use the internet, and forums, I give them the website addresses of this forum and 2 others. This one is my firtst choice.
Michael

Leigh

(02/22/2000; 15:48:46 MDT - Msg ID: 25830)

Hipplebeck

What a prince you are! I'm so impressed! What do people say to you when they see your coins and hear what you have to say? Do they believe you?

Hipplebeck

(02/22/2000; 15:57:50 MDT - Msg ID: 25831)

Hi Leigh

oooh, its heavy
Is this worth fifty dollars?
Is this gold?
Are these old?
Some people know a little, There aren't that many of us I guess, who get interested in trying to ferret out the truth of what money and integrity mean.
The virtual world is so strong these days.

CoBra(too)

(02/22/2000; 16:05:28 MDT - Msg ID: 25832)

Marcos' or Yamashita's Gold

ORO-The story is bullish in any case - if true or not - though I'm just asking if the numbers youre crunching may just fit too smugly? - It may be farfetched, but in today's
manipulated markets these kind of stories tend to provoke reverse conclusions.
As your qu's are also valid, I also try to answer with more questions:
1. Investment demand (81-89) a/o Oil Royals:
*New mine supply < 1800tpa but scrap overhang large
due to dishoarding globally after spiking 850/oz
*Oil Royals - after regaining surplus of 70's - hard
pressed to finance their ambitous restructuring back
home.
2. As above - needed for domestic infrastructure and general social benefit.
3. $ stabilized 1984/85 coming out of recession before any
other country - US since then complained of the burden to be the #1 eco engine.
Again, pls regard above as a possible explanation only, though I would like to stress that there is no physical gold overhang, whatsoever, with or without Yamashita's gold.

Regards CB2

RossL

(02/22/2000; 16:07:54 MDT - Msg ID: 25833)

ORO - Phillipine gold

Interesting theory. But a few questions remain in my mind. Who bought the gold? Has it been dispersed into the market? Are those big numbers of gold traded daily at the LBMA real gold or paper? Has the decline of gold in the last few years been because of paper only, or will more gold bars come out of hiding to supply the demand in the next rally over $400...

Goldmak

(02/22/2000; 16:28:54 MDT - Msg ID: 25834)

@ ORO

It appears to me that you are attempting to "fill in" some
of the missing pieces for your book? with Marco's
tall Gold tale of 130,000 TONS of Gold.

With respect, I don't know if you have been to or
ever seen Gold mined and in particular the HUGE amounts
of rocks needed to extract that much Gold, and where are are these MASSIVE tailings???/you can do math if you like at an average grade of say .20oz/ton (generous)since
even if the alleged mines were high grade .35 oz/ton
they would have never been able to extract it all , the
technology was simply non existant.

Even the South African mines were not able to extract
all the Gold from the rocks mined, so much so that more recent technology is/has been used to extract
the remainder of the Gold from the Old Tailings.
I ask again where are all these Massive Gold Tailings
for the 130,000 TONS of Gold?

As far as you three questions, I can only say that you
may be assuming some numbers as "facts" as well
as other unproven "rumors" or theories.

As far as where additional Gold came from, I would suggest
"scrap" Gold accounted some years for as much as
400-600 Tons, the South African illegal Gold I posted
also accounted for 200-350 Tons of Gold, and probably much more, we do/will not/ever? know about.

But the FACT remains all that Gold has been absorbed
by the market and today there is a LARGE (5-10,000) Tons
deficit of PHYSICAL Gold as well as an upcoming yearly
deficit between supply/demand of 150-200 Tons.
BUT then again those are just official? "estimates", and
I suppose that is just one of the many reasons why Gold is such an intriguing Precious Metal.

Hope you keep up the research, there is an old saying,
"It is the voyage that is important, and not necessarily the destination."

canamami

(02/22/2000; 16:29:20 MDT - Msg ID: 25835)

Big Supply Hitting the Market?

The stagnant POG at a time it probably should be rising, coupled with dirt-cheap lease rates, suggests that supply from somewhere (and I mean big supply) is hitting the market, IMHO.

What person or institution is willing and able to supply such quantities, at this time?

CoBra(too)

(02/22/2000; 16:34:38 MDT - Msg ID: 25836)

Hello Farfel - on a Vengold deal Placer Dome-

was castigated to sell its shares at a huge loss a week before they could have - mined the internet story of VEN!
PDG's response was that they ARE a mining co.after all!- and after learning that they've built up their hedge book from 4,5 moz to about 10moz - after the Washington agreement- I was debating the fact, notwithstanding their recent cease and desist hedging assurance.
Tell me, F*, how can you trust these guys-and we're talking about the 5th. largest global gold producer- ever -
ever again?
As an afterthought, I used to think highly about John Willson (btw-still do, since he really turned the co around) and his successor Jay Taylor - thoughts?
Confused CB2

RossL

(02/22/2000; 16:39:33 MDT - Msg ID: 25837)

The Privateer

Do you have any insights as to why foreign Central Bank holdings of US Treasury debt have suddenly skyrocketed in the past two weeks?

Hipplebeck

(02/22/2000; 17:04:01 MDT - Msg ID: 25838)

Goldmak

In the oldest and most populous civilization, the tailings could be grassy mounds by now.

Goldmak

(02/22/2000; 17:43:53 MDT - Msg ID: 25839)

@ Hipplebeck

And where may I ask are the MASSIVE DEEP mine PITS?
You know the MASSIVE amounts of rock needed to
be taken out of the earth to mine 130,000 TONS of Gold tend to leave quite a few truly BIG holes in the ground.

Farfel

(02/22/2000; 17:52:01 MDT - Msg ID: 25840)

@Cobra: Placer Dome

I think Placer Dome is thinking rationally today, and that is a big handicap in an amazingly irrational world.

What do they know about the internet business? Probably next to nothing. So why should they hold millions of shares of an internet stock? In a more rational world, people usually stick to the business (es) they know.

Most recently, PDG went public to announce the end of hedging. They took a lead role in renouncing a gold producer strategy that has done nothing but hurt the entire industry. The company lit a fire to the price of gold.

Do not attack this company for returning to rationality. I mean, isn't rationality the most important attribute of good business management?

If anything, you should be infuriated at the irrationality that swirls all around PDG.

When the VENGF bubble bursts and the stock drops 90% in value (what's to say it can't happen tomorrow?) ...with the distinct possibility that gold will be soaring at the same time... then do you really want to own a PDG whose coffers aret filled to the brim with millions of shares of VENGF? In such a scenario, you probably would be the one complaining loudest that PDG should never have had a thing to do with internet investment, right?

Although VENGF may still hold a piece of LIHIR, it is undeniably an internet stock now.

So you must decide...which is a better investment today? Internets riding at the top of the wave, or golds sunk at the bottom?

Thanks

F*

Farfel

(02/22/2000; 18:05:08 MDT - Msg ID: 25841)

@Cobra: One more thing.

Do not be too quick to blame Placer for the expansion of its hedgebook, post Washington Agreement.

It appears most producers increased hedging positions POST-Washington Agreement as a result of the incredible pressure from bullion banks. When a gun is held to your head and a credit rating downgrade is threatened along with all kinds of "SELL" recommendations by various investment brokers, then it is difficult to resist the pressure.

However, it appears that PDG reached an epiphanic moment where it simply determined, "ENOUGH IS ENOUGH!"

At least PDG mines real gold and can cover most of its hedges. What about the bullion banks that wrote naked gold calls? Where do they get the gold to cover their positions?
When they were pressuring PDG to help cap the price of gold, how many took actions for their own account to protect their short positions? How many ever realized there would be a rebellion of gold producers against the bullion banks concerted efforts to destroy them?

The Final Act is soon to unfold. You may yet be singing the praises of Mr. Willson.

Thanks

F*

Bonedaddy

(02/22/2000; 18:29:53 MDT - Msg ID: 25842)

ORO - the Marcos Gold?

First, thank you for posting this theory. One of the things that makes this forum truly enjoyable is the variety of the information posted here. I understand from your last post why this amount would answer many supply and demand questions that have arisen over the years. Your ability to document these amounts proves your veracity as a source in such matters. I still see the story as a probable counterfeit, not because of my knowledge of markets, but on the basis of my experience with men. There are several "great lies of history" that I won't go into here, but thay are all based on the same premise. 1)Include enough proven truth to conceal the lie. 2)Plant the story where it will be inadvertantly discovered by a reputable source.
3) Fabricate the lie in a manner that answers a few "unanswerable" questions. For example: UFO's must be higher life forms from another planet, because nobody here could have built the pyramids. Yeah, I suppose that's one explaination. But, getting back to the Marcos gold, the main reason I doubt the story's veracity is that there is precious little truth in the world, especially where money is concerned. I look at who stands to gain by the story and who stands to lose. At the end of the day, its much like oil. All of the gold that really matters is the gold that can be brought to the market on demand. (Ashanti understands this now) Proven oil reserves don't make truck tires go round and round. (Truckers understand this now) And tales of great fortunes are only valuable as propaganda. I enjoy your posts very much. When you get your book written I hope you'll autograph a copy for me.

Cavan Man

(02/22/2000; 19:18:39 MDT - Msg ID: 25843)

Aristotle

Believe it or not, I just today, made the time to read your "Building the perfect......". I know you have been sweating it out as of late not hearing from me and receiving my hearty approbation ( :) ). Well, you have it! You have an amazing ability to make the complex readily understandable for simpleminded types like me. I would hope that a copy of the entire document was placed into the palms of some strong hands.

So, now we wait for the advent of a "Freegold" market. Some sort of "lightning in the night" would most probably be the catalyst as you suggested. When this event occurs, the US would likely be knocked off her feet, at least temporarily. How do you feel about Confiscation II.

Thank you for your time and for your consideration of the monetary realities of good old terra firma. Kind regards..

Leigh

(02/22/2000; 19:24:37 MDT - Msg ID: 25844)

Confiscation II

Sounds like a new horror flick.

Chris Powell

(02/22/2000; 19:34:31 MDT - Msg ID: 25845)

Midas commentary for Feb. 22

http://www.egroups.com/group/gata/394.html?Latest from GATA Chairman Bill "Midas" Murphy.

Leigh

(02/22/2000; 19:36:03 MDT - Msg ID: 25846)

Off-Topic

My eight year old son has turned into quite a silver bug! He has already earned a number of silver Eagles. His grandfather recently gave him some old silver dollars and bicentennial quarters. He has a birthday coming up soon, and he's agitating for some double-date Silver Maples. (I've already ordered them, but he doesn't know it.) This, along with his state quarter collection, has become a really fun hobby for him. Hopefully it will be a profitable one, too, but he's not thinking about that aspect yet.

They're coming to your home -- they can't be stopped -- they're driving a bulldozer through your backyard -- it's Confiscation II! (Sorry, Cavan Man!)

Cavan Man

(02/22/2000; 19:40:19 MDT - Msg ID: 25847)

Leigh

It would be a horror wouldn't it? Could history repeat itself? I think there's at least a chance. I think MK has the right take.

schippi

(02/22/2000; 20:48:06 MDT - Msg ID: 25848)

XAU and FSAGX Chart

http://www.SelectSectors.com/xautoday.gifApproaching a critical junction?

Solomon Weaver

(02/22/2000; 21:31:36 MDT - Msg ID: 25849)

Canamami - where is the supply from?

canamami (02/22/00; 16:29:20MDT - Msg ID:25835)
Big Supply Hitting the Market?
The stagnant POG at a time it probably should be rising, coupled with dirt-cheap lease rates, suggests that supply from somewhere (and I mean big supply) is hitting the market, IMHO.

What person or institution is willing and able to supply such quantities, at this time?
--------
Canamami -

We all should understand that the POG as we know it today is determined by gold paper pricing...thus the "supply" you speak of may be to a large extent paper...which are promises.

Secondly, since "I" have never tried to lease gold myself, this is just conjecture, but given the amount of stress that gold leasing has put on the market, and the massive danger to all who deal in gold paper (and anyone whos claim on gold is still contracted - like many CBs), we should consider that the "published lease price" is just window dressing...if you show up and really want to lease gold in this environment, if they think you have enough credit, they will tell you what the real rates are.

-----

Regarding the Marcos gold story....We all know that China has been civilized for over 5000 years. We can also assume that "trailings" from ancient mine operations were dumped into rivers etc. Or left as roads to and from the mine. I agree with ORO and CB2 that when one thinks it over, if true, it is bullish because it means that "investment" interest is not anywhere near the piddly couple hundred tons per year which is published...big powers in this world still love gold. It also means that gold trade is still very secret..

As I see it, there is plenty enough gold in this world to bail out the 10,000 ton short position created in NY and London....If some big bullion banks fall because they can't get physical to cover the shorts...then their demise is planned and agreed upon.

Poor old Solomon

ORO

(02/22/2000; 22:08:28 MDT - Msg ID: 25850)

Farfel - VENGF and Fear of Falling = Fear of Flying

Farfel, VENGF can't fall 90% in one day (particularly tomorrow) because I'm not done selling my position yet.

When they announced their plan in Dec. I was going to bail, but then I thought the internuts still have some steam and the stock is selling only slightly above book value. So I decided to hang on to it till it pops. It popped and now that momentum is slowing some, I started selling. 1/3 down and we continue selling as it appreciates. At the current price it is undervalued compared to the proven CMGI and SOFTBANK based on book (triple to go), and very competitively priced relative to tangible book (ten fold to go). But it is a new deal on the internet horizon and seems to have some new institutional support at 25% ownership (15 mil shares purchase in last quarter) so I ain't dumping it all at once. Yet.

I will let the technicals show the way.

Farfel

(02/22/2000; 22:28:47 MDT - Msg ID: 25851)

@ORO Re: Famous Last Words??

You say:

At the current price it (VENGF)
is undervalued compared to the proven CMGI

------

Oro, CMGI is now valued at something like 25 billion dollars. It is the bubble on top of a bubble on top of a bubble. Most of the companies under its umbrella have no profits and may never have profits. That is because nobody in their right mind spends money on the internet if he can get the stuff for free. For example, in my two years of active internet involvement, I have yet to spend a dollar purchasing anything. If it's not free, I don't buy it. I know at least ten other individuals with similar philosophy. By extrapolation, there must be hundreds of thousands (millions maybe?) of like-minded individuals who are net-connected but only on the basis of FREE surfing.

For you to draw a comparison to CMGI and in doing so claim that VENGF is a fair value is analogous to my declaring (back in 1989) that the real estate owned by the Sushi shop in downtown Tokyo and appraised at one billion dollars is a fair value in comparison to the Sake store down the road appraised at two billion.

But as I said earlier, the hysterical thing about Vengf is the fact that it still has not formally inked any deals with any companies, but already is valued at over US $400 million. Preposterous lunacy beyond any conceivable logic. You talk about a company blowing air upon a foundation of complete air.

Just because a period of lunacy has lasted for over a year or so does not mean there cannot be a return to sanity overnight. The trigger event will come from left field but it will come and those who are participants will not be provided any exits.

Thanks

F*

Farfel

(02/22/2000; 23:28:50 MDT - Msg ID: 25852)

The Ashanti Defense re: GOLD FUTURES

With much reduced open interest in gold trading, one theory posited is that the gold shorts are more fearful to bet against a rising gold price.

That may be true.

By the same token, it may also signal that there are fewer investors willing to continue taking long positions in gold, given the blatant corruption and absence of fair play within the market demonstrated over the past several years.

The Ashanti case is most notable. The concept that Ashanti's counterparties can "forgive" Ashanti's margin calls, thereby precluding the need for Ashanti to enter the market and buy gold, is the most egregious example of market rigging to ever visit a national marketplace.

The gold market is littered with "dead bodies" of corporations and individuals who had the plug pulled on their long positions in the gold market by their respective demanding insistent counterparties.

But Ashanti escapes without any damage? And notorious gold shorter Goldman Sachs allows Ashanti to walk free, in all likelihood to protect gold short positions in its own accounts?

Yes, the gold market is truly America's GREAT SHAME! Never again do I want to suffer hearing another hypocritical American politician get up in front of the world stage, wag a finger at some foreign diplomat, and scold them for either market rigging or cronyism.

I think the time has come where investors in the gold market should utilize "THE ASHANTI DEFENSE."

The next time you take a long gold position, first, I suggest you only set up an account with Goldman Sach's bullion bank, J. Aron. Then if that long gold position turns into a losing situation, you should threaten legal action against J. Aron if it attempts to deduct those losses from your account.

You should demand a standstill agreement similar to those provided Ashanti and demand it be enacted immediately, thereby precluding J. Aron from taking your investment monies away from you. You should offer "The Ashanti Defense" in support of your position.

After all, why should Ashanti be excused from its realized liabilities and legal obligations while average individual gold investors are required to pay up for their losses, either past, present or future? Why should we always act as the only saints in the marketplace whilst most other players operate in the slimiest manner?

And if any bullion bank deserves to have individual investors walk away from their losses, well you know Goldman's the one.

Be Mad as Hell and Take Action!

There is nothing so pathetic as professional masochists who offer their rear ends to the world over and over again, saying, "GO AHEAD AND KICK US IN THE ASS!"

Thanks

F*

ORO

(02/22/2000; 23:39:42 MDT - Msg ID: 25853)

Farfel - VENal corp.

I am in complete agreement with you. However, the markets have yet to come to their senses.

The CMGI bubble is indeed built over the internet bubble which is built on top of the tech and telecom bubble. But on the bubble surface - way out in imaginary expand but not burst land, we are in a 2D world like flat-land (if you remember the book)- the people live in a set of rules that is totally diferent. As long as the hot air from the economy (money liquidity) expands not too quickly and not too slowly - the bubble will not burst. The bubblonians are thinking in the rosey tint dialect of "imagine the future speak" appropriate to the myriad colors reflected off a bubble, the more is left open to imagination, so will the valuation grow relative to the size of the contemplated item.

The seed is valued more than the tree - buy the rumor sell the fact - the promise of an imaginary company is more compelling per dollar current revenue/book value/income than the same company when it has arrived. Remember the commercial for the Williams company? The guy imagining the braised duck coming through the internet? Another lady executive thinks that she will get telepathy services and read the client's mind? It is the spirit of the day.

If you are a capable technical trader you will be able to get out if you track this particular floater in the sea of sewage - oops - stocks. I am a reasonably OK trader, which is why I take out large chunks of the speculation at the first signs of slow down in momentum.

I would not recommend to anyone to buy into this piece, but recognize what makes it float, and see that it is still floating as more sewage flows and raises the sea level...

Farfel

(02/22/2000; 23:57:18 MDT - Msg ID: 25854)

@ORO, I completely disagree re: technical trading & Vengf

First, just because liquidity pours into a market does not compel that liquidity to be invested by market participants.

Second, show me a single technical trader that accurately predicted the gold buy hysteria triggered by the Washington Agreement or the most recent gold buy panic triggered by the Placer Dome anti-hedging announcement. I follow a lot of technical analyses (solely from academic interest) and cannot think of a single one who foresaw those events.

When the trigger event occurs to pop the internet bubble, it will be as left field and as unpredictable as anything that has occurred in the gold market. Moreover, given the size of the equities market, nothing guarantees that the next time, either the government or The Street will be able to stabilize the market and maintain its bullish mode.

Thanks

F*

Farfel

(02/23/2000; 00:15:37 MDT - Msg ID: 25855)

@ORO...One Other Point on BUY THE RUMOR, SELL THE FACT

Although the stock market is supposed to be a future indicator when it is operating properly, you cannot possibly describe internet valuations as a case of "BUY THE RUMOR, SELL THE FACT."

A better description today is, "FABRICATE THE MOST FALSE RUMOR, FABRICATE AN ARTIFICIALLY LOW SHARE FLOAT, LAUNCH THE STOCK, THEN SELL BEFORE ANY FACTS SET IN"

In internet land, nobody leaves anything to chance. The progenitors of bubble vehicles are not about to sit around waiting for rumors...instead they create them.

They get buzz going in IPO's before they are even put down on paper. They ensure that the available share floats are on the low side (averaging four to eight million shares per IPO), then price the IPO at an absurdly low price relative to expected demand.

For example, if you know that the market wants to buy at least hundred million shares of Scam.com, then naturally, it makes sense to only provide a tenth the number of those shares at the lowest possible price. Then when investors see those shares increase 500%-1000% on the IPO day, the frenzy begets more frenzy which begets more frenzy.

It is the overtly fraudulent nature of these internet IPO's that subverts your analysis. Because when a fraud falls apart, then the best technical theory in the world can never foresee the collapse.

Incidentally, as an aside, I highly recommend you see a new film entitled "BOILER ROOM," purportedly dealing with "chop shops" but in reality providing a metaphorical equivalent for the manner in which major mainstream Wall Street houses deal with the public today.

Ultimately, the markets are a function of mass perception and this one particular film may contribute a great deal in the creation of a mass psychological shift within the nation.

If this film does not make the average investor in this Bull Market very uneasy, then nothing will.

Thanks

F* View Yesterday's Discussion.

ORO

(02/23/2000; 00:43:19 MDT - Msg ID: 25856)

Farfel - the event from left field

I expect that would be the case. Which is why I never put much into anything correlated with the market. Never more than 30% in non-gold non-resource equities. Yes, the latter don't correlate very strongly with the stock market as a whole.

Furthermore, the pump and dump operations you speak of are exactly those that I had pointed to through long posts on some of the tools and mechanics of it.

Yes, the liquidity is not necessarilly going to be targeted towards the same ole' "asset" groups. Actually, I hope to see it flowing into gold.

The Technical indicator I use most is the weekly MACD delta(10, 20, 8) passing 0 and a daily MACD making a higher low - particularly when the equity or index made a lower low at the same time. I also use support lines and parallel trend bars as well as volatility and momentum adjusted bands (these for longer term studies cuase they take a while).

The Washington agreement was preceeded by a move to the + of the weekly MACD delta in mid Aug. and it was rising as the POG dropped. The weekly signal on the PDG announcement was rather weak, but was there, though not a full month earlier. The daily signals were there on both counts, in the last one I had my positive delta (coming from a preceeding negative value) as the MACD made a higher low on the 13-15th of Jan. A confirmation came at the first days of Feb..

I am a little less reliant on MACDs for exit points.

Strad Master

(02/23/2000; 00:44:01 MDT - Msg ID: 25857)

Piggyback to your recent posts

FarfelI think one thing that will come into play when the bubble bursts is a breakdown of the technology that makes all this fast-paced trading possible. A sudden overload of the system due to some inconsequential glitch which, however, makes it impossible for traders to access their online trading accounts might just cause a cascading panic and trash the stock market. How ironic it would be if the very technology that makes huge volume trading possible could trigger and exacerbate the market collapse you speak of.
Fond regards to you and Mrs. Farfel. Strad

Simply Me

(02/23/2000; 02:29:42 MDT - Msg ID: 25858)

Word from the Street

The Average Joe's out there are still selling gold, although not in as large numbers as in January. The curious part is that the small time PM dealers are having trouble selling to the bigger guys.

They're paying under spot for an ounce, while their sell prices are getting a little steep. I'm seeing premiums of $30 or more on an ounce of gold. And about $10 premium on a tenth-ounce.

"This means something."...Close Encounters of the Third Kind

simply me

Black Blade

(02/23/2000; 03:41:46 MDT - Msg ID: 25859)

Currently Pd up another $30.00!

Bridge newsTOCOM Precious Metals Review: Palladium rose in sluggish trading

Tokyo--Feb 23--Tokyo Commodity Exchange palladium contracts Wednesday rose to another daily maximum price limit in light volume following the overnight rally on NYMEX, while platinum sunk broadly on profit-taking, dealers said. Gold was depressed by the weaker value in the US dollar/yen pair amid a stable spot market, they said. (Story .2192)

Black Blade

(02/23/2000; 03:46:53 MDT - Msg ID: 25860)

Desperate Aussies attempt to KO gold again!

Bridge newsAsia Precious Metals Review: Gold stable despite Australian sales

Tokyo--Feb 23--Spot gold hovered at about overnight late US market levels with sluggish trade on Wednesday in Asia after selling from Australia depressed prices early in the morning, dealers said. Platinum trimmed some morning gains in the afternoon on profit-taking, while a large bid/offer spread prevented most dealers from trading palladium, they said. (Story .2200)

Hipplebeck

(02/23/2000; 06:00:04 MDT - Msg ID: 25861)

Goldmak

lakes?

Black Blade

(02/23/2000; 06:36:13 MDT - Msg ID: 25862)

Palladium lower, but $50 spread, will go higher!

Palladium stumbles from highs, gold quietly steadier
Reuters Story - February 23, 2000 07:17
(Reuters) - Palladium prices were firm, albeit off new highs in Europe on Wednesday, amid increased nervousness and uncertainty after Japan's TOCOM attempted to calm its market. Palladium's pull-back and unheard-of wide $50 buyer/seller spread unsettled platinum, which eased back to straddle $500. Gold, however, was calm and doing little in the middle of the current range. TOCOM MOVES TO REIN IN PRICE RISE The Tokyo Commodity Exchange (TOCOM) said earlier today it would allow palladium futures trading only at Wednesday's closing prices in an apparent bid to force traders to liquidate huge long positions and ease market tightness. This follows moves earlier this week, when it has twice cut the daily trading limits.

"We are taking these steps to prevent widespread disorder in palladium trading," TOCOM director Kazanuri Hayakawa said. The restriction does not apply to spot February, which expires on Thursday. If members do not follow the exchange's new measures, TOCOM will force them to square their positions, Hayakawa said. "What sort of signal does a $50 buyer/seller spread and a rule change send? They are penalising the longs in favour of the shorts," one analyst said. European palladium prices, which had been quoted at $800.00/$850.00 prior to the announcement, dipped to $760.00/$810.00. But there was hardly any business taking place, with liquidity drying up. Traders said palladium was overcooked but no-one was willing to stand in the way of speculators who have now jumped on the bandwagon. "Time-wise, not price wise, it is near the top...this market is out of control and we could easily see it gain another $200/300," one said.

The supply tightness emanates from Russia, the world's largest producer. It has failed to deliver palladium in the first six months of each year since 1997 through bureaucratic red tape. However, lease rates, although edging up at around 14 percent for one month, are not as high as to suggest that metal is unavailabley, analysts noted. "There is metal there - but the demand is just so strong," another trader said.

Platinum eased back to $495.00/$505.00 an ounce from the $516.30/$526.30 New York close. GOLD STUCK IN $301/309 RANGE Gold business was slow, with attention largely focused on the PGM sector, and there was little sign of the market breaking out of the present $301.00/$309.00 range. The range around midday was narrower at $302.00/$306.00, but there was very little metal changing hands, one gold trader said. Gold was fixed at $305.25/ounce, while spot settled at $305.00/$305.75 against the New York closing level of $304.75/$305.75.
Silver was hardly moving, and was quoted unchanged from closing New York levels of $5.25/$5.27

CoBra(too)

(02/23/2000; 07:13:31 MDT - Msg ID: 25863)

@ F* re-PDG-Critique

F* Thanks for your response. I appreciate my critical stance
re PDG may seem overblown, as I appreciate their huge build up of reserves by acquisition of 50% of Western Areas - expect a bid for the all of it - and Getchell at rock bottom prices for gold in the ground, though I have a recent personal feud. As PDG always stated to be fair in its dealings with juniors I've learned that "always" means only, as long as we can't put a gun to the head of the minoes -as soon as we can we will! Oherwise its a fine company, though
still hedged on the heavy side.
Anyway your right ther'e bigger (gold)fish (perpetrators) to fry.
Thanks CB2

CoBra(too)

(02/23/2000; 07:15:43 MDT - Msg ID: 25864)

And I meant to add...

that I may also become oversensitive as an Austrian citizen
lately. Thanks again CB2

USAGOLD

(02/23/2000; 08:31:17 MDT - Msg ID: 25865)

Today's Gold Report: Gold Meanders, Dutch Hit Bottom of Barrel

http://www.usagold.com/Order_Form.html2/23/00 Indications
�Current
�Change
Gold
303.00
-2.00
Silver
5.25
-.03
Gold Lease Rate
0.3788%
-0.0012
Gold Comex Stocks
1,372,002
nc

Market Report (2/23/00): Gold meandered for the second straight day as
the markets prepared for the remainder of Alan Greenspan's Congressional
Humphrey Hawkins testimony today. The stock and bond markets are down
sharply on interest rate fears and OPEC seemingly willing to hold the
line on production schedules. The Asian gold market was quiet as well
with some Australian selling into weakness. Europe was also quiet with
physical buying on the dips supporting the market and selling at the 10
day average ($305) capping the upside for the moment. The Dutch central
bank announced unloading another 7 tons last week which leaves them with
5 tons still to sell out of the original 100 ton allocation. The Dutch
sales explain the low gold lease rate. With the gold carry trade in
retrograde, loan demand is low and the Dutch liquidation are enough to
satisfy the market at present.

That's it for today, fellow goldmeisters. We'll update if anything of
interest surfaces. Have a good day.

If you are looking for a pro-gold view of the various financial markets
as well as a summary of the events affecting the yellow metal, our
monthly newsletter might be of interest. News & Views -- Forecasts,
Commentary & Analysis on the Economy and Precious Metals has
been characterized as witty, urbane, intelligent and down-to-earth. Not
to mention it's Free of Charge If you want to keep up with gold, this
is the way a large segment of the gold owning public does it, and has
done it for over a decade.

Just click on the link above and make the appropriate entries.

Dollar Bill

(02/23/2000; 10:44:57 MDT - Msg ID: 25866)

ORO

I was initially bouyed by your comments that enough
gold is there to cover the leaseing and that a bank would
go under only by decision.

However, there are rumours that the US has no where near
the Ft Knox gold that is claimed.
And, isn't it wishful thinking that the gold dervitive and
leaseing vulnerabilities can be handled well.
If news of this vulnerability gets out to Iran or Iraq or
even other irresponsible deep pocket guys, that the
result could be wreckage for not just some "hannible
whatevers" but the many millions that hope for
their families sake that stability reigns.

I read Tice ect. so I know there is plenty of irresponsible
behavior to point to.
Even with the news that gold traders are being released
by some of the hannibanks, which intially made me hopeful
that the threat was lessening, the still strong efforts
to control the market leads me to suspect that there is
still grave danger in a sharp free gold market.

Which causes me to think that since this is
probably (?) the case,
even if truth is truth, a severe vulnerability is not to
be shouted out to the world by responsible people.

Bill Murphy emailed me in oct when I wrote him about it
but his response was "better sooner than later"
which I can't accept as a good enough answer unless
the real threat to the system is known.
And by reading his Cafe writings, I can't see evidence that
he is inside enough to know the actual full situation.

As you can see by what I picked out of your post, I am
not comfortable assuming that this louder and louder
clamoring for gold now is not another big threat
along with (but not in the same way)
the credit bubble threat.
And I look for evidence that it is not.

Henri

(02/23/2000; 10:53:40 MDT - Msg ID: 25867)

Experimental

My new indicator of a "buy" is henceforth a downgrade of a goldmining stock by one of the investment houses. This is a de facto indication that they are rebelling against the house of cards and will soon recover from the strong arming they had been subject to while in "good graces".

Henri

(02/23/2000; 10:56:47 MDT - Msg ID: 25868)

BIS site

http://www.bis.org/Hmmm, the description of the wording on shares of BIS include the words 25% "paid up"...I wonder, FOA, have you paid up your other 75%?

Jon

(02/23/2000; 11:09:14 MDT - Msg ID: 25869)

Greenspan's comments on inflation during his testimony this am

Says "inflation" is being contained. He was obviously referring to price inflation. Does he really believe this? Would he willingly lie to Govt and to us? Do you think he is believed? The bond and stock markets don't act as tho he is believed.

schippi

(02/23/2000; 12:09:01 MDT - Msg ID: 25870)

Ugly Gold Chart

http://www.SelectSectors.com/agpm70.gif FSAGX and FDPMX Gold Sector hourly chart up to 1:00PM

Solomon Weaver

(02/23/2000; 13:45:13 MDT - Msg ID: 25871)

(No Subject)

http://cbs.marketwatch.com/news/current/kellner.htx?source=htx/http2_mwGive me liberty and give me debt
Our debt is piling up at an alarming rate
----
Interesting little article on debt. Did anyone out there realize that stocks are being bought on margin???

I wonder what would happen in the gold markets if long players decided they should stop using margin??

Poor old Solomon

Gandalf the White

(02/23/2000; 13:50:16 MDT - Msg ID: 25872)

Hail MK -- a favor please !

Could you please see if you could contact Mr. Insider and as him if there was anyone we know dumping gold at the close of the COMEX today ? ONLY 200 shares in the last few minutes !
<;-)

Gandalf the White

(02/23/2000; 13:52:14 MDT - Msg ID: 25873)

corrections --

the KEY word is ASK and those were NOT SHARES but sale TICKS !!!
Dumb Wizard
<;-)

Usul

(02/23/2000; 14:08:17 MDT - Msg ID: 25874)

@Jon

I think what Greenspan should have said is that inflation
is "bottled up" in equities. Rather than increasing
wage rates, employees have been receiving share options and the number of people in the markets has reached
record levels. The containment of inflation is dependent
on keeping these assets "on paper".

Should the cork pop, there will be inflationary forces
"coming out of the wazoo"

Solomon Weaver

(02/23/2000; 14:19:55 MDT - Msg ID: 25875)

FARFEL - some thoughts on VENGOLD

FARFEL

VENGOLD is just a poster child of the level of investment insanity today.

If there is ONE THING which has become clear in the 1990s is that investors want companies to have very specific focus. I can understand when a VENTURE CAPITAL company decides that they will invest both in gold mine development and internet, but it absurd when a poorly managaed gold company simply "morphs" into an internet venture capital company.

The mining of gold is almost the opposite of an internet company...the mining company spends millions of dollars in exploration, needs large loans to finance heavy equipment, must move tons of earth, and employ sophisticated technologies to enrich gold from a few ppm to 99.9%. A mining company needs almost no advertisement to get public attention..their investors buy in because they believe that the mine is strong and the company has staying power.
---
I will however make one note which you should consider. A while back Jason Happy (if I am correct) was talking about setting up a e-site to sell gold...you are also aware of the recent popularity of e-gold.com (which is providing a very interesting options for gold believers)...IF THE MASSES BEGIN TO BELIEVE that gold is the place to be, you can bet that they will gravitate to online sites which claim to offer the best low commission (easy buy easy sell) way to "be a gold owner". Fraud like this happended in silver in the Hunt event, and you can bet that with all the e-business activity that this scandal will jump on top of gold when gold starts to run...we can even expect to see gold shorts fabricate articles about "beware where you BUY gold...never saying beware where you SELL gold". Don't be suprised if VENGOLD is actually able to capitalize briefly on this.

Poor old Solomon

CoBra(too)

(02/23/2000; 14:41:30 MDT - Msg ID: 25876)

Interesting ! new Board for Ashanti!!

SStockwatch US: ASL ASL I bet all the new board members are well experienced
in forward sales, hedging and option strategies,which may
simplify their task of turning a gold miner into another
hedge fund. After all, who needs mining engineers or even
geologists, who have already proven their capability to do the same.
This easy way out for Ashanti seems to be another scam
engineered by financial scum.
While gold bugs have cautiously started to celebrate the new floor at 300, they now realize that some of the boarding used was as rotten and corrupted as the whole system. While floors dont carry for now, carry trades won't either.
As the battle goes on the manipulation of (mis-) information - AG's testimony today- qoute: "...you can't
apply the same monetary strategy as 40 to 50 ys ago" unquote
- how about 70 - 80 y's ago Mr. AG? - the disproportionate
disequilibriums will eventually have to correct.
Will I live to see it? CB2

Skip

(02/23/2000; 14:53:28 MDT - Msg ID: 25877)

The cliff close

Can anyone explain why the POG fell off a cliff just before the close of COMEX today? ...and don't the manipulators realize that keeping the lid on the price of gold when so many factors are screaming for a significant rally only provides further evidence of their manipulation? I hope to God that GATA blows the lid sky-high off of this scam. Far too long have us little people been hurt so that a few insiders may profit by bleeding us.

As for VENGF, I wish I had waited two more weeks before selling...but there is no way I'll buy back in now.

--Skip

ORO

(02/23/2000; 14:58:46 MDT - Msg ID: 25878)

Farfel - VENGOLD

By the way, I sold 1/2 of the remaining position at the open today because it was showing weakness while the internuts were going gangbusters.

Still hanging on to 1/3 of the original position because it looks like there is still some support.

Elwood

(02/23/2000; 15:02:54 MDT - Msg ID: 25879)

Keep buyin'

Some days you eat the b'ar...
Some days the b'ar eats yeww...

Hipplebeck

(02/23/2000; 15:03:11 MDT - Msg ID: 25880)

Maybe some of the last opportunities here

I think I know what the term "buy the dips" means now.
That's what I did today.
I'm afraid I'm not a big league investor, but thank you USAGOLD for your services.

Cavan Man

(02/23/2000; 15:05:49 MDT - Msg ID: 25881)

Gandalf 25872

They're dumping paper right/wrong? How many ounces went out the door equals what was actually sold right/wrong? Please correct me if I am wrong.

All-I am beginning to think that without the Another/FOA endgame scenario, we might not see a rise without a real catastrophe.

Still goin' way long....CM

oldgold

(02/23/2000; 15:18:47 MDT - Msg ID: 25882)

Today's Gold Dump

What the precise reason for today's gold dump was I do not know. But I do know that this big drop should not have really have surprised anybody looking at objective facts instead of indulging in wishful thinking.

Fact 1

Lease rates still are very depressed. Despite all the attempts to rationalize this away, low lease rates generally are quite bearish for POG. Makes it very cheap and easy for the shorts to hit in a big way at the right time.

Fact 2:

The COT numbers are bearish. Again attempts have been made to rationalize this away. But when the commercials are significantly net short -- that generally is bearish for POG. And especially so after a sharp rise.

Fact 3:

The dollar has been strong of late. Again usually bearish.

Fact 4)

Gold stocks have not been acting particularly well versus bullion. Nothing like the action we saw before the 1993 gold bull.

Fact 5)

Gold stocks have been rallying on modest volume. In a genuine gold bull, the rally volume would be much heavier.

The bull case for gold of late has been TALK that producers would reduce hedging this year. And some very smart people like John Hathaway, Cedd Moses, and Don Hays are bullish on the yellow.

But hard numbers like low lease rates, negative COT, and mediocre gold stock action should take precedence over anybody's opinion re: where POG is headed. The dangers of investing in this sector simply are too great unless all or almost all of the key indicators are bullish. And that certainly has not been the case lately.

CoBra(too)

(02/23/2000; 15:35:24 MDT - Msg ID: 25883)

Bloomberg Headline:

Greenspan says rising U.S. interest rates will keep expansion ro"BUST"! - Is that what AG inflected? CB2?

Hipplebeck

(02/23/2000; 16:01:37 MDT - Msg ID: 25884)

big picture

I know it's kind of depressing when the price goes down, but we all know the big picture don't we?
I am dead serious when I say that there are a few things we can learn from other markets, and one of them is to buy the dips.
Personally, I believe that all consciencious citizens must, at this time, preserve our national wealth in the hands of that citizenry. The US has perfected the art of the financial bamboozle.
As the people become more educated due to the advances in information technology,like the internet and forums such as these, they will see the great experiment in financial sciences that brought us derivitaves for what it is. Selling something you don't even have.
It is only a matter of time before these imbalances that we have created will come back to haunt us.
I think it is our social duty to preserve some wealth in the hands of the citizenry now that we know that the integrity of our financial system has been compromised.
I know that there are some out there who want to play the gold market game just the same as if they were in the tech stocks or something, but I want you to know that I consider that game as corrupted as the other shill games going on on Wall Street.
There's more to the gold standard than just making money on it. The standard represents integrity.
There is a deep relationship between sound money and a persons personal integrity.

goldfan

(02/23/2000; 16:46:01 MDT - Msg ID: 25885)

Hipplebeck (2/23/2000; 16:01:37MDT - Msg ID:25884)

Thanks for your encouraging words. I totally agree that the essence of gold buying and holding is to work towards a way of trading that takes it out of the gambling and greedy hands of the banksters and recognizes that the integrity of our money and our way of handling it is the essential glue that binds us in a civil community.

Goldfan

Hipplebeck

(02/23/2000; 17:06:03 MDT - Msg ID: 25886)

Greenspan today

I only saw a small snippit of the Greenspan show today. could someone link to a transcript?
What I did see, was him saying something about the ship coming in to the dock when it should have made an extra turn.
I don't know how many of you sail out there, but when you come into the dock without making that extra turn on a sailboat, it means you are probably going to crash into the dock unless you do something radical at the last minute.

Hipplebeck

(02/23/2000; 17:17:05 MDT - Msg ID: 25887)

The miracle of the internet

This evening I am able to talk about global finances with people all over the world.
Today, The man who watches over my shop told me he finally prevailed in his arguement with his wife that tv wrestling is phony. Sadly, to his many protests, I informed him that his favorite show, Roller Jam, is phony too.
Sometimes life is the twilight zone.

lamprey_65

(02/23/2000; 17:26:37 MDT - Msg ID: 25888)

Out of Japan

From Bridge News:

TOCOM brokers asked to sell long palladium positions to clients
Tokyo--Feb 23--The Ministry of International Trade and Industry (MITI) Wednesday issued a new guideline on the trading of palladium on the Tokyo Commodity Exchange aimed at helping investors who have suffered losses close out
their positions amid the current market volatility, according to the TOCOM.
(Story .13196)
---

Here we go...longs can lose their you know whats in the markets, but big players who are short can have their political stooges change the rules for their benefit. Will this garbage ever end? During bull equity markets no one seems to care about manipulation, it's only when the whole ball of wax goes bust that people pay attention to the cess pool in the markets.

Lamprey

lamprey_65

(02/23/2000; 17:28:18 MDT - Msg ID: 25889)

oldgold

You sound very much like Kaplan...coincidence?

lamprey_65

(02/23/2000; 17:38:49 MDT - Msg ID: 25890)

Greenspan Today

So, he is raising rates to target the "wealth effect", the wealth effect is mainly caused by the extreme returns in the equity markets, but he is "not targeting the markets exclusively". So, what else is he targeting?...Raising rates to prop up the dollar? By his own admission, there is very little if any inflation! (Funny, no mention today of rising prices for real estate, energy, commodities, or even my cable rates!).

OK, I'm confused.

I'm also confused as to why the Federal Reserve by its own admission can no longer measure money supply with any confidence.

What a crock. He's throwing doublespeak at these hacks and most are more than willing to swallow it hook, line, and sinker.

Lamprey

oldgold

(02/23/2000; 17:43:53 MDT - Msg ID: 25891)

lamprey

Actually I have had some bitter disagreements with Kaplan over oil. But he is not always wrong.

Barring a totally unexpected left field event, I just cannot see gold mounting a SUSTAINED rally until such indicators as the COT, gold stock trading patterns, and especially lease rates turn bullish.

CoBra(too)

(02/23/2000; 18:06:43 MDT - Msg ID: 25892)

Lady Leigh - Just a thought on your Confiscation II

Gold/Silver was 'virtually confiscated' for years - and as
we now feel the new era of virtual financial explosion in monetary aggregates is exceedingly working towards its own
debasement - your wealth should be safe in the basement.
As your administration has negated any monetary use of the au-metal - any confiscation would be counterproductive. I'm having a single malt (k)nightcap - Cheers-CB2

Elwood

(02/23/2000; 18:08:11 MDT - Msg ID: 25893)

To Hipplebeck

Don't have a link to a transcript, but the Greenspan was asked to gauge the probability of there being a run-up in inflation to 5-6%. The questioner asked him to put his answer in the old one-to-ten scale with one being the lowest probability. The Greenspan asked if he could have an option that was less than one.

Then he (the Greenspan) got sandbagged about why he was raising interest rates if there was no chance of inflation. That's when he trotted out the wealth effect and the Forest Gump boat-into-the-dock analogy. Funny how the wealth effect gets blamed for the demand side, but no one seems to recognize the benefits on the supply side (increasing investment).

I'm getting to the point where my skin begins to crawl when I hear the sound of his voice. I can just hear it in a nightmare now.... "unless we monitor closely these wide-ranging imbalances between aggregate supply and aggregate demand, the effects on our prospective prosperity will be in serious jeopardy."

I just want to shout, "Well, Stanley, there's another fine mess you've got us into!"

TheStranger

(02/23/2000; 18:57:43 MDT - Msg ID: 25894)

Party On, Said He, And Party On They Did

"...hard numbers like low lease rates, negative COT, and mediocre gold stock action should take precedence over anybody's
opinion re: where POG is headed. The dangers of investing in this sector simply are too great unless all or almost all of the key
indicators are bullish. And that certainly has not been the case lately." - oldgold

Stranger's Response: Forgive me, oldgold, if I find your formula above a little glib. All of the gold market influences you detail are technical in nature. They can, and often do, change profoundly at a moment's notice. Not many in this room, I pray, have built their investments in gold upon such intellectual sand. Rather, what draws us here is a common concern for what is being done to the dollar.

As recently as last week (and perhaps again today, for I do not know yet) Greenspan revealed his Achilles heel by testifying that monetary growth is now too complex to control. Instead, he made clear, the Fed will attempt to maintain dollar integrity with continued periodic minor interest rate adjustments. Anyone who wishes to guage how seriously that threat will be taken need only look at today's Nasdaq party to get their answer.

Yet, the dollar's health will have to depend upon more of these nearly meaningless quarter point increases in the months to come. I wouldn't bet on the strategy succeeding if I were you. Meanwhile, such considerations as today's lease rates or the latest commitment of traders report hardly seem to me worth mentioning.

Cheers, my friend.

Henri

(02/23/2000; 18:58:14 MDT - Msg ID: 25895)

Hipplebeck Msg 886

You found a fellow sailor. FD USA 26
When sailing into dock a safe landing can be made when dropping the sail once sufficient momentum is attained and proper account is made of tidal draw/push but only in stable conditions. When trying to make dock in unstable conditions one rarely approaches dock at full sail but mostly reefed. It is desirable to douse the reefed sails at the last moment possible to make dock but at negligle forward momentum. When comng in at full sail one must prepare for a major collision and damage at dockside and be prepared to offload everything of water submersion perishable value (paper) quickly before sinking of vessel.
If the cargo is not water perishable (gold and the dock site is secure from pillage (no derivative exposure) the salvage of the teasure can be conducted at leisure.

Henri

(02/23/2000; 19:02:49 MDT - Msg ID: 25896)

Real Scenario

Markets are at sea in a violent storm and nowhere near safe harbor or dockage. They are staring at a lee shore bound in rocky cliffs at great depth and peril. Salvage of cargo not a concern at this point... rats left ship last week.

Henri

(02/23/2000; 19:07:41 MDT - Msg ID: 25897)

oldgold Msg25882

Hard to swim to shore carrying all that heavy bullion. it was let go to preserve flotation and their own lives...they think they can make it safely to shore now. The cliff is dead ahed and the twin jaws of Scyilla and Caribdis will grind them to a pulp

Harley Davidson

(02/23/2000; 19:39:55 MDT - Msg ID: 25898)

Henri your Msg ID:25897

Aye, Henri and thems that dies is the lucky ones. Arhhh!!!

Holding gold is analogous to being on dry land.

Here's a snippet from John Crudele...

"Let's say that someone has a house that rose in value from $250,000 to $350,000 in the past two years. The gain, of course, is primarily due to the fact that investors are putting their bubble money into real estate.

The guy suddenly has $150,000 in equity, including his $50,000 down payment. But he's convinced -- and rightfully so -- that the real estate market can't continue to rise at that pace.

He goes to the bank and takes out a $100,000 line of credit that he intends to invest in the stock market. And he buys stocks on margin. So not only is he indebted to the bank but also to the brokerage firm for those stock purchases.

This all works out quite well as long as the stock market is rising.

But let's say stock prices do what they have always done in the past -- they decline in value. Suddenly this guy's real estate isn't worth what it used to be, so he has borrowed equity that isn't there anymore. The brokerage firm is getting nervous, so it requires that more cash be put up against the stocks.

He's getting squeezed from all sides.

Could this happen? Could investor borrowing be even more crazy than the margin debt indicates?"

I don't think these people have a clue where true wind is coming from, what the depth is, or what the tides doing and when they run aground, its going to be too late.

I've read a lot from disappointed gold bugs today, and all I can wonder is... hasn't any one heard of buying on the dips???!!! Just imagine what the Wall Street machine would be saying if this happened to the NASDAQ.

Today's gold prices represent yet another opportunity to acquire gold at bargain basement prices.

oldgold

(02/23/2000; 19:49:03 MDT - Msg ID: 25899)

stranger

I certainly agree that the aftermath of this unprecedented bubble will include a huge bull market in gold at some point. But I still think that will be preceeded by great improvement in such indicators as lease rates and gold stock action. Until then the only people who will make any money in gold and gold shares will be very nimble traders. Investors will continue to be taken to the cleaners

Gold Trail Update

(02/23/2000; 19:49:23 MDT - Msg ID: 25900)

The Gold Trail Discussion has been Updated

The Gold Trail Discussion has been updated. Click on the link to read the latest updates.

oldgold

(02/23/2000; 19:49:26 MDT - Msg ID: 25901)

stranger

Solomon Weaver

(02/23/2000; 20:01:29 MDT - Msg ID: 25902)

Not yet a bull

What is a bull and what is a bear?

I sort of have these two images...The bull runs forward, smashing down barriers in his wake...his gait is strong and targeted...all are continually amazed at his strength and vigor...almost never pausing....the bear meanders in and starts to swat at things...for a while silent....and then suddenly another bout of destruction...all continue to think he may have calmed down...his attention to the side, they start to rebuild and he starts up again, randomly swinging forarms ripping apart any object...the bull does not do a lot of damage...the bear is a nightmare to all. The bull is focused and exciting...the bear is chaotic and terrifying.

In the gold markets, we have an unusual situation. With so many vested interests holding obligations for future delivery (shorts sellers), we see the unusual circumstance that a "bullish" move upward in price creates a lot more chaos. I think that the two recent upspikes in the Gold Paper markets (1. Post WA Agreement 2. Post Placer Dome announcement) should not be considered "bullish" even though they caused a dramatic surge in prices. Although there are certainly some paper longs playing against the shorts, these surges were caused by panic driven "short covering" which is actually the "psychology" of a "bear". There will perhaps come a time in the near future when large players who have remained on the sidelines begin to see that gold and gold stocks are "oversold" and are one of the sectors to move into for a while...when the number of new buyers begins to swell so much that anti-gold rhetoric only becomes the call to buy more gold, then we can talk about being in a gold bull.

I think FOA is right that $360 plus is the start of a bull...because any shorts who still hang on from there are very exposed.

Imagine this....an internet stock with 130 million shares issued, and an estimated 100 million shares held by insiders. The short interest has sold 10-15 million shares short. Thus, when short sellers are forced to buy back those shares, they will need to buy half of the available float. And yet, this company is trading at only $3.05 per share, close to its all time low of $2.52 per share...the days when it traded at $8.50 per share is so long ago that most charts don't even show the peak anymore. Nobody cares about the product of this company because they think it is old fashioned...what they forgot was that this is the only company in the world which has software which is completely protected from hacking and government intervention. Shouldn't this company be exciting to watch when the fund managers notice it???

Poor old Solomon

(02/23/2000; 20:14:52 MDT - Msg ID: 25903)

On The Trail

Hello FOA,
It's great to see you back. I look forward to the prospect of hearing yours and Another's thoughts on this new venue.

Thanks for the warm-up hike. I needed to break in the new boots.

See you soon on the Gold Trail.

GD

oldgold

(02/23/2000; 20:19:53 MDT - Msg ID: 25904)

Solomon Weaver

Well said!

I suspect that when the real gold bull begins, it will start for no apparent reason. No announcement to panic the shorts. Just lots of new money coming in on the long side.

Solomon Weaver

(02/23/2000; 20:38:42 MDT - Msg ID: 25905)

suggestion for MK at USAGold

To FOA and USAGold - I am very glad to see that the new Gold Trail site is up and that FOA and Another now have a beautiful golden forest which is out of the reaches of those occasional ugly trolls.....

I raise at this entry point, only a small technicality which needs to be addressed at the start. As FOA and hopefully Another contribute over time to the Gold Trail site, we should make sure that their words are organized in a fashion which is easy to follow and reference...

I would propose that the following html address be used for the doorway to the site:

http://www.usagold.com/goldTrail/default.html (this is what we have today).

Then, after the words of greeting as they stand today, each new "update" from either of the authors be added as a separate file...

For example, the first update file might have the address http://www.usagold.com/goldTrail/1.html

perhaps the kind authors would be willing to consider a title for each update...

Thus, when one enters the golden woods at Gold Trail, there would be a growing table of contents where perhaps date, author, title appear in a list...and the reader is allowed to choose a particular update.

The advantage of doing this is that regular visitors can quickly see from the color which portion of the path they have already read...it would also give posters on USAGold Forum the chance to link directly to portions of the path which are being discussed. Another advantage to this would be that the authors would be able to add hypertext links from some of the prior updates as they reference places they have been already.

Perhaps you have already considered all of this. But, if not, certainly at the beginning is the time to start...

Kind regards to you MK....Poor old Solomon

Solomon Weaver

(02/23/2000; 21:22:54 MDT - Msg ID: 25906)

A lot of changes needed to make the house ready for the bull

oldgold (2/23/2000; 20:19:53MDT - Msg ID:25904)
Solomon Weaver
Well said!
--
Thank you kind sir.

I also think that we will need to see a change in the type of "buying".

First of all, buyers are going to have to start asking "what am I really buying?". Obviously, most "buyers" will not want coins arriving in the mail...but they will also not want to buy "naked promises" from a "short selling" bullion bank who is already Kneedeep in bull/bearsh*t. There will have to be a number of reputable bullion banks who are trusted to really have the gold on stock and not to issue multiple titles. (Perhaps one service which GATA could do is to identify and promote these "honest" bullion banks.) You see, the problem that we have in the gold markets is that we have "paper liquidity" meaning it is easy to transfer gold derivatives between counterparties. But we do not have "real liquidity" meaning that there is not for example 10,000-20,000 tons of gold which experiences new ownership on a regular basis. If Warren Buffet would buy 10% of Microsoft, he could have the share coupons delivered immediately, if he tried to buy 1% of the world's gold (from the float, not using a sideline deal), demand for real delivery would terrorize the market.)

Secondly, "buyers" are going to have to start asking for delivery of their metal and sending it to these banks. Also, sellers may find that they can only "sell" when their metal is already held at such a bank. We need to have at least 10,000-20,000 tons (300-600 million ounces) of real gold, with high liquidity of ownership and high clarity and guarantee of title which is able to absorb the hundreds of billions of dollars of money which would "like to invest in gold". If not, there is always the risk of "too little or too much" gold entering the market and underwhelming/overwhelming it in a short period. There has to be room in the gold market for a very large insurance company or bank to take a $30 billion position as part of portfolio management. There has to be room in the gold market for "dozens" of such banks to take such large positions. There can be "off market" deals, but there has to be the real physical liquidity to have such deals be done right in the middle of the market.

Thirdly, "buyers" are going to have to reduce or preferably eliminate the use of margin...when the only buyers are paper buyers who have 10% down and borrow the rest, it is no wonder that they flee when the short traders take the day...what the paper market needs are players who take large non-margined long positions and just sit there with the shorts praying they don't take delivery. You see, when someone plays the "gold carry trade", they "sell" you some gold (paper) and they take all the cash and use it somewhere else...so "they the shorts" are fully vested, meaning they have a hugh "liability" to defend. A short who has $500million worth of gold out on loan will think nothing of throwing $5million into a trading day to defend the price. A long who puts $500million unmargined in can sit and wait for the day of reckoning.

------
So, given that this is not the current structure of the gold market, and that it is only likely to change when there is a massive problem in the status quo, it is actually very safe to say that the real bull cannot come until the paper market of today collapses. Until then, it is really only that bear in disguise that I mentioned a little earlier...

I think what Trail Guide is trying to tell us is that now is the time to get some gold for yourself, because when the destructive bear/bull enters to make way for the real bull, it will be much too late to get real gold at prices of today.

The vital signs like COT, POG, open interest, lease rates, COMEX reserves, futures and options prices...are parameters which tell how sick the patient is...like a band of physicians anxiously watching the vital signs of a head of state in the intensive care unit...we sometimes get more interested in the blood pressure and forget to remember that the real prognosis is that only a younger man/woman will return to the leadership chair.

Poor old Solomon

TheStranger

(02/23/2000; 21:24:56 MDT - Msg ID: 25907)

oldgold

Where have you been? Gold is up 20% since last summer, more than the large majority of stocks and virtually all bonds. I hope you understand I mean you no harm. It just amazes me how much pessimism there still is about gold. Maybe your expectations are too dramatic.

Bonedaddy

(02/23/2000; 21:25:35 MDT - Msg ID: 25908)

Stranger, yeah Party On Dude!

Hello, Stranger. Your most recent post had a line that caught my eye. You wrote "As recently as last week (and perhaps again today, for I do not know yet) Greenspan revealed his Achilles heel by testifying that monetary growth is now too complex to control." By making this revelation, is Greenspan admitting that the greater part of money creation is outside of Fed control? Do you think that he is referring to credit creation brought on by paper stockmarket and real estate gains? As I watched Wayne Angell and the talking heads on CNBC this morning I began to wonder If the quarter point gains are designed only to give the "impression" that the Fed is in control of inflation. (We live in a sociey where belief is more important than fact, no?) The conventional wisdom seems to say that there is no inflation and Greenspan is going to err on the side of credit contraction. In reality, if the bulk of credit is created out in the private sector with weakly collateralized loans and margin accounts, a quarter point raise by the Fed may not do any more than balance the credit being created elsewhere. What happens if the Fed begins to make half point increases and the credit creation still grows? I'd love to read your thoughts on this line of reasoning.

Topaz

(02/23/2000; 21:42:17 MDT - Msg ID: 25909)

Test

Solomon Weaver

(02/23/2000; 21:42:48 MDT - Msg ID: 25910)

How much has gold gained lately??

TheStranger (2/23/2000; 21:24:56MDT - Msg ID:25907)
oldgold
Where have you been? Gold is up 20% since last summer, more than the large majority of stocks and virtually all bonds. I hope you understand I mean you no harm. It just amazes me how much pessimism there still is about gold. Maybe your expectations are too dramatic.
-------------
Hey Stranger, I bought gold almost two years ago and it is just about today where it was then...I agree with you that after a long downward trend, we appear to have reached a "recovery" and the "much discussed" changes in leasing, producer hedging, etc. are solid structural changes, but if you are honest about it can you really believe that gold is once again a "mainstream market". You know what I mean, the kind of place where "allocation of assets" allows large numbers of people to hold that classic 10% of their invested assets???

What I think oldgold is pointing out is that there is a lot in the market which has not yet changed and that from the perspective of many of the players "it seems to be the same old market"....

Glad to see you back by the way....were you out for a while, or just quiet...

Poor old Solomon

Solomon Weaver

(02/23/2000; 21:45:48 MDT - Msg ID: 25911)

TOPAZ? A gem in a house of metals?

Topaz

Step in and introduce yourself....it is only us nightowls sitting around trying to decide how we define a goldbull.

Poor old Solomon

Solomon Weaver

(02/23/2000; 22:12:25 MDT - Msg ID: 25912)

Is it Kuhn who gave us paradigms?

Something on the back of my brain tells me that the phrase "paragigm shift" was coined by Thomas Kuhn in a book called "the Structure of Scientific Revolution". It keeps reoccuring to me that FOA is telling us about a "new" gold market, which will behave much differently than the "old". And many of us analyze the current market using today's perspective...

Is there anyone out there with a copy of this book who could summarize the "anatomy" of the paradigm cycle.. or has anyone seen a good summary which they can offer..

I remember things like...

New data is found which does not fit the current thinking.

A new theory which places the new data into a new context requires old data to be viewed in the new context.

Vested interests are not willing to see the new context and because the new data does not fit the existing context it is discredited.

Eventually, as more people begin to understand the new context, they find additional data which supports it.

Those who incorporate the new context begin to have enough better understanding that they become the "engine of change" in the field...and younger learners take up the new context without attachment to the old.

Eventually, often through some catharsis, the old is left behind and once all view the world from the new context, the weakness of the old context is clear.

The more radical the difference between old and new, the more chaotic and disruptive the changes are...often destroying the careers of the older members...

Poor old Solomon

Topaz

(02/23/2000; 22:16:40 MDT - Msg ID: 25913)

Hello fellow Bullionaires! / OZ DUMPS

It's interesting to note the corelation between $A (the Aust Dollar) and the POG.
Several times in the past 12 mths the $A has been sold down as a precursor to OZ (Producer) selling into the Spot Market.
This effectively provides an in-the-know Supplier with an approx. 5% premium on SPOT in OZZIE Dollar terms.
Once the Devilment is done, the $A is allowed to ramp back up to eqilibrium.
The proof of same will be to observe the $A in the coming days....
Collusion? ........NAH!

Solomon Weaver

(02/23/2000; 22:31:33 MDT - Msg ID: 25914)

$A and spot selling

Topaz

Are these producers who are delivering physical into the spot market and are using currency hedging to get a premium, or are these producer sales paper short sales...If they are paper, and they are getting 5% advantage in this way, and if this is done in tandem, this makes it REAL hard for long positions (10/90) to fight back...

Also, if the USD would start to fall, do you see the $A going right along with it?

Poor old Solomon

Solomon Weaver

(02/23/2000; 22:45:23 MDT - Msg ID: 25915)

the ponzi of metal leasing

http://www.gold-eagle.com/gold_digest_98/butler121798.htmlAn excerpt from an article by Ted Butler that is two years old but still hasn't lost it's bite....

Full article at link above...
-----
In fact, metal leasing resembles closely any typical Ponzi scheme - you know, the pyramid cons where early investors get paid back with proceeds from later contributors, which perpetuates itself until not enough new investors can be found, and the whole thing collapses and the fraud is exposed. Of course, while the con is on, participants are true believers and are thankful for their returns - naysayers and critics are treated as jealous, or worse. Kind of like right now in metal leasing.

At the heart of any Ponzi scheme is a defective economic premise. Invariably, the fault concerns an illogical termination assumption - as in, what happens when everyone who could possibly contribute, has contributed? Without exception, collapse is immediate when that point is reached, or when it becomes public that something is wrong, and existing holders attempt to withdraw. This is what's wrong with metal loans - at its very heart, it is based upon a defective economic premise. That premise is that gold or silver bars offer any economic lending benefit other than consumption or sale. And by consumption or sale, you have immediately destroyed the underlying collateral, rendering any and all metal loans into sham transactions. This is major fraud. Try selling that car you're leasing, or that apartment you're renting and pocket the proceeds. Do you think if you promised the leaseholder or landlord to pay them back some day that it would keep you out of jail? Look, it's either a lease or a sale - all the big name investment firms or mining companies in the world can't change the meaning of basic building block words. They can fool themselves if they want to into believing that sales are leases, but there is no reason the rest of the world has to go along with their stupidity or fraud. There is no reason for the rest of the world to have to continue to suffer the consequences of their own personal Ponzi scheme.

When the end comes in this metal-Ponzi scam, the collapse will look different than the implosion of the typical variety. That's because the 15 year stream of secret physical metal contributions from central banks under the guise of loans has structurally altered the supply/demand balance in gold and silver. To date, over 300 million ounces of gold and 1 billion ounces of silver have been dumped uneconomically on the market. Like a drug addict, the market has absorbed them and grown dependent upon more dumping to satisfy growing demand. No, when the collapse of the metal-Ponzi scheme arrives the only thing imploding will be the books of the dealers and the miners and the hedge funds involved in this fraud. To the rest of the world, it will look like an explosion - the biggest explosion ever seen in precious metal prices.

The defective economic premise in the metal-Ponzi scheme is the selling of ever-increasing quantities of gold and silver, in which the real owners (the central banks) don't receive the proceeds, and those that do (mining companies and hedge funds) issue the hollow promise of returning physical metal in the future. It doesn't matter how happy the central banks are to receive the "interest" in this scheme, nor how sincere the mining companies are in their promise of repayment, the whole scheme is absurd. The real physical market is in steep deficit - it just keeps chewing up the collateral and moving steeper into deficit. It's just a question of when the scam ends.

To those who would claim that I am just arguing semantics with the distinction between loan or sale, please keep this in mind - by claiming they are merely loaning the metal that belongs to the people of their countries, the central banks avoid all public disclosure of the divestiture of national assets. This is an integral aspect of the metal-Ponzi scheme. By saying you are loaning, not selling, nothing has to be disclosed. Additionally, the mining companies involved in this scheme have wide latitude in reporting their finances, because no one is really sure what they are up to. The bottom line, however, is clear. Metal loans can't be paid back because we have a shortage and there is no material available to pay them back with. That's what makes it fraud.

Topaz

(02/23/2000; 22:49:30 MDT - Msg ID: 25916)

Solomon

The $A represents approx 3% of (let's call it ) Global Capital and is firmly entrenched in the "Big Dollar" camp. I would expect it($A) to range in the mid-sixties U.S. come hell or highwater unless The Monster, under extreme duress, begins devouring it's Young.

We shall see!

TheStranger

(02/23/2000; 23:09:29 MDT - Msg ID: 25917)

Response to Bonedaddy

Bonedaddy - Remember the '70s? (Maybe you are too young). We had a decade of progressively higher interest rates accompanied by periodic bouts of rapid money expansion. Sound familiar? What we got from that experience was higher and higher inflation that didn't let up until Volcker came along and stopped the growth of lending cold. Likewise, in today's hot economy, no single digit fed funds rate is going to discourage either speculation or lending. What is required is truly tight money, money which is unavailable at any price.

Greenspan's remark about the difficulty of managing money supply may have something to do with the influences you mention. It may also have to do with the fact that dollars are used all around the world and they cross borders very easily. But any Fed which abandons money supply targeting in an envitronment like this one is asking for trouble IMO.

You say, "The conventional wisdom seems to say that there is no inflation and Greenspan is going to err on the side of credit contraction." Yes, Bonedaddy, a few economists and a lot of journalists are still propounding this claptrap. That is because the narrowly-configured PPI and CPI have been deliberately engineered to omit some of the most inflation-sensitive areas of the economy. They also fail to include consideration for the fact that a country which consumes more than it produces must outsource many of its needs to other countries in a manner which can only result in a depreciated currency.

Is the Fed scamming us or are they just making a mistake? You decide. But I think it is obvious they are just wrong.

TheStranger

(02/23/2000; 23:31:36 MDT - Msg ID: 25918)

Response to Solomon

"...if you are honest about it can you really believe that gold is once again a 'mainstream market'. You
know what I mean, the kind of place where "allocation of assets" allows large numbers of people to hold that classic 10% of their
invested assets???" - Poor Old Solomon

Solomon - you may have bought a little early. But buying two years ago made a lot of sense when you consider that was when the threat of deflation was at its greatest. Knowing that threat was temporary required some perception on your part. You can probably thank the manipulative scoundrels at the Bank of England for delaying your reward.

Is the gold bull market already sufficient to have achieved for gold the ready acceptance you ask about above? No. That should come at the top. The process by which gold reachieves that status will define the bull market as it progresses. That, of course, assumes we still have higher to go. I believe we do.

Thanks for asking about my absence. I just missed a few days is all. I hope I didn't miss anything earth-shaking.

SHIFTY

(02/24/2000; 00:17:46 MDT - Msg ID: 25919)

The Captain Greenspan boat ride!

If he is heading for the dock, sounds like the boat ride is just about over. One way or another.View Yesterday's Discussion.

Peter Asher

(02/24/2000; 01:17:51 MDT - Msg ID: 25920)

Philippine c.bank says seized $333 bln counterfeit

Talk about printing money!Well this bust will decrease the global money supply!

MANILA, Feb 24 (Reuters) - Philippines officials have seized
counterfeit banknotes and certificates with a face value of more
than $333.3 billion in the last three months, the central bank said
on Thursday.

The bank said in a statement the joint operation by police, central
bank agents, postal officials and secret service agents from
Manila and Washington resulted in the arrest of 15 suspected
members of local and international syndicates.

No further details on the syndicates were given. The arrests were
made between November and January.

Last month, authorities arrested three suspects and seized $61.8
billion worth of fake U.S. dollars, dollar-denominated gold/silver
certificates, liberty bonds, federal notes, treasury notes, Banco
Sentral de la Argentina notes, and bullion certificates.

Prior arrests involved 12 suspects. Officials found about $271.4
billion worth of fake Philippine peso and foreign currencies,
Japanese Liberty Bonds, and ammunition. Equipment used to make
counterfeit money and notes, such as films, ink, computers and a
scanner were also seized.

Black Blade

(02/24/2000; 01:26:37 MDT - Msg ID: 25921)

PM manipulation? What gives you that idea? Manipulation? NAH!

Source: Bridge newsSeveral news items in regards to PGM manipulation today. There is no Pd for sale, and other PGMs are scarce. The following items refer to PGMs, the question is "will the same occur with other PMs when the investor/speculator sentiment shifts?"

TOCOM brokers asked to sell long palladium positions to clients

Tokyo--Feb 23--The Ministry of International Trade and Industry (MITI) Wednesday issued a new guideline on the trading of palladium on the Tokyo Commodity Exchange aimed at helping investors who have suffered losses close out their positions amid the current market volatility, according to the TOCOM. (Story
.13196)

Black Blade: This smells of LTCM style "you scratch my back, I'll scratch yours" manipulation. The boys are in a bind and we must help out our buddies.

NYMEX to hike palladium futures margins as of Wednesday close

New York--Feb 23--The New York Mercantile Exchange said it will increase margins on its palladium futures contract as of the close of business today. Margins will be hiked to $15,000 from $6,500 f
or clearing members; to $16,500 from $7,150 for members; and to $20, 250 from $8,775 for customers. (Story .16043)

Black Blade: There isn't enough PGM out there, so the boys at the exchange will restrict other players from getting into this game.

US DLA offered no platinum for sale Wednesday

Washington--Feb 23--The US Defense Logistics Agency said it made no offers to sell platinum or any other metal via its Web site Wednesday. (Story .2354)

Black Blade: They know better. They know that there isn't any PGM left, so why unload what they have. Also last month these guys asked the US mint to return Pt that was loaned to them. Hmmmm��.

TOCOM Feb palladium falls 12.3% at expiry on market control

Tokyo--Feb 24--The Tokyo Commodity Exchange (TOCOM) Feb palladium contract Thursday expired at 2,600 yen per gram, down 290 yen or 12.3% from Wednesday following TOCOM's decision to allow transactions only at Wednesday's settlement prices for all the contract months except for Feb. (Story .26191)

Black Blade: Had to slam PGMs today or else payout a lotta yen!

Russia's Norilsk says delay to PGM quotas destabilizes market

Moscow--Feb 23--The Russian government's delay of the approval of the 2000 platinum group metals (PGM) export quotas destabilizes the world market and harms Russia's business reputation, said Anatoly Komrakov, spokesman of Russia's largest PGM producer Norilsk Nickel Wednesday. Komrakov said his company was interested in a stable market and urged the swift approval of the quotas. (Story .18863)

Black Blade: These guys don't have any either, but what the hell, "let's play along!"

NYMEX to consider allowing platinum, palladium sponge delivery

New York--Feb 23--In an advisory committee meeting this afternoon the New York Mercantile Exchange will discuss allowing delivery of sponge against its platinum and palladium futures contracts, said industry sources. Currently only ingot or plate is good delivery, but some industry players are urging NYMEX to
expand acceptable forms in order to boost liquidity of the 2 contracts. (Story .22390)

Black Blade: "What's this crap! - This isn't what we paid for!" Of course not, but there isn't any PGMs left!!!!!!

NY Precious Metals Review: Mar palladium down $96.80, 11.9%

New York--Feb 23--After jumping $115.55 Tuesday to an all-time NYMEX high of $835 per ounce, Mar palladium futures see-sawed lower Wednesday, settling down $96.80 or 11.9% at $720. It erased Tuesday's big gains on news that Tokyo Commodity Exchange (TOCOM) brokers have been instructed by Japan's Ministry of International Trade and Industry to sell long palladium positions to clients. (Story .2333)

Black Blade: Well now, dodged another bullet for one more day. We got through epiry. Gotta be careful now, someone might figure out that there is manipulation in these PM markets.

THX-1138

(02/24/2000; 01:47:30 MDT - Msg ID: 25922)

Re: Black Blade

I love it.

You need to do the commentary thing more often. It really spruces up a rather boring news report.

It also makes it easier to understand exactly what happened.

Thanks.

THX-1183

Topaz

(02/24/2000; 02:48:31 MDT - Msg ID: 25923)

Black Blade

http://www.kitcomm.com/comments/gold/2000q1/2000%5F01/1000124.013341.sdrereeee.htmHello BB

The SDRer link above IMHO sheds some light on recent PGM activity....

Kinda discounts the meaning of PRICE; SUPPLY/DEMAND; MARKET., Doesn't it?

nickel62

(02/24/2000; 03:21:10 MDT - Msg ID: 25924)

Austrailian's Sieze Opportunity to Build in more Hedges FROM FT for Feb 23

http://216.32.180.250/cgi-bin/linkrd?_lang=&lah=626b9f1458152017bd68de6ed8affd75⪫=951386862&hm___action=http%3a%2f%2fnews%2eft%2ecom%2fft%2fgx%2ecgi%2fftc%3fpagename%3dView%26c%3dArticle%26cid%3dFT4NV49IY4C%26live%3dtrue%26tagid%3dZZZU2IUKJ0CThis main line news article clearly will be dug up by some future market historian to explain the irony of why the gold market price explosion of the year 2000 was so unexpected and dynamic.

Hipplebeck

(02/24/2000; 05:07:20 MDT - Msg ID: 25925)

oil

Something that's been on my mind for a while.
Didn't the oil industry stock up in preparation for Y2K?
Here we are less than 2 months later, and inventories are empty.
Doesn't seem right to me.

Henri

(02/24/2000; 06:06:41 MDT - Msg ID: 25926)

Harley Davidson Msg 25898

Yaarr! Dem wats dies first IS de lucky ones. Unimaginable torture for dems wat lives!
Yo Ho Ho and a bottle of ...Tequila?
Ah but only the finest

TownCrier

(02/24/2000; 06:59:16 MDT - Msg ID: 25927)

For those who overlooked the Automated *ALERT* yesterday...

http://www.usagold.com/goldtrail/The new feature we've added as a means to satisfy both popular demand and some logistical issues is a running commentary/archive in which FOA will continue to present his unique views of the gold market as influenced by the "THOUGHTS!" of ANOTHER. This will give FOA an opportunity to lay out in a more straightforward manner the issues of past, present, and future that he feels will help you to better evaluate and position yourself for the "new gold market."

The site has been coded so that each time new commentary is submitted to the Gold Trail page, a brief message and a link will automatically appear here at the Round Table to alert you of the update. (Look at yesterday evening's discussion to see how this will appear.)

The USAGOLD HomePage has also been revised to include this permanent link. On another related note, you may be pleased to know that we've made great strides over the past few days on a graphic redesign for the entire USAGOLD website. Once again the candle burned through the night high up here in The Tower, and by the first rays of the morning sun those of us gathered around the workbench are marvelling at the fine results of the night's effort. (Adobe Photoshop is a fantastic tool...once you've mastered the art/theory!) A rebel yell is certainly warranted... YEEEEEeeeeeeeeeeHAA!! (You'll all see, too, soon enough.)

Leigh

(02/24/2000; 07:03:58 MDT - Msg ID: 25928)

Trail Guide/FOA

Dear Trail Guide: What would you like us to call you -- FOA or Trail Guide? Love your new site!

TownCrier

(02/24/2000; 07:14:10 MDT - Msg ID: 25929)

More housekeeping...

http://www.usagold.com/HallDiscussion.htmlFor those of you away from your computers over the President's Day holiday weekend, we have assembled the collection of posts that all contributed to the fantastic discussion over the past 2-1/2 weeks on gold's role within the monetary system...whether or not it should be unshackled from financial derivative attachments to become pure property, the most "monetary" and most liquid asset that a person might conceivably own. (Some of you may recall past discussions on what forms of property a person actually *owns* (is your house actually *owned* if failure to pay your land tax results in loss of the property??), including whether or not a person has ownership (or merely use of) the dollars in his wallet.)

A fascinating topic, and one that you absolutely must read and give thought to for yourself. This link puts it all conveniently at your fingertips...

Henri

(02/24/2000; 07:50:10 MDT - Msg ID: 25930)

Aaarrgghhh! Trail Guide

I see you have begun the hike up to my pleasant alpine meadow from which I view the traffic far below. I will be watching as you make your ascent. I expect you will be by directly...if not I hope you will not mind if I tag along when you take a turn I had neglected to notice on my way up here. If you come upon my current abode, you are all welcome to stop in for some good cheer, kick off your mukluks and dry them by the fire. Get a good nights rest,for in the morning, we will all be away again. I can't wait to see where the trail leads from here. Quite frankly, I thought this was the end...but I am usually wrong. One word of warning...from here on you will not need your laptops or modems as beyond this point there are no more places to "plug-in" to the pulse of the market...that is unless you have a portable sattellite connection to the "Web". Ah, but the baggage grows heavy in this rarified atmosphere. I expect you will find that you do not need it beyond this point. Feel free to leave your appurtenances at my place, if you decide to head back down the trail early, you can pick them up on your return to the fray. Since I expect to stay close behind the Trail Guide, I will not be there to host so please just leave the place as neat as you found it and replenish what you use in the way of firewood and the stored water. You will find the spring just behind the cabin.

Galearis

(02/24/2000; 07:55:00 MDT - Msg ID: 25931)

Kitco repost about silver

Date: Thu Feb 24 2000 06:33
rhody (COMEX SILVER STOCKPILES: The recent 5 million oz increase) ID#410367:
Copyright � 1999 rhody/Kitco Inc. All rights reserved
in COMEX stocks could be preparation for a major delivery.
All this silver is registered ( already listed in somebody's
bullion account ) . On the other hand, the CABAL may be
trying to display an increase in stocks that actually doesn't
exist, as a ploy to keep prices down.
Rumor has it that the silver actual supply/consumption deficit was
300 M oz last year, against a projected 144 M oz. If true, then the monthly deficit is 25 M oz, and that 28 M oz eligible stock in COMEX warehouses may be the last bit of remaining silver outside of China. It should last about a month.
The pattern in COMEX silver strikes me as very odd, with
lease rates moribund, and fixed in a pattern which reads
tight supply, but with a tendency for spreads to widen. This would indicate that speculative interests are avoiding the silver lease market, but that the lease overhang exists, and roll-overs are maintaining relatively high rates ( compared to gold ) What this means is that lease holders are trapped.
****************************

Spreads out of London are $5.21 and $5.34. Normal is $.02.

Can anyone say melt-up? Can anyone say imminent?

This post should address some statements of this week in regards to the silver market. I do not understand where some posters (sorry I forget the handle) would get the idea that the above described circumstance would lead to $25 per oz. silver when a less severe situation during the Hunt Bros. forway resulted in $50/oz. Factor in inflation/declining US dollar and one is looking at $100+/oz at the peak.

Furthermore, I see the real problem in the coming melt-up for both gold (to be on topic) and silver as one of deciding how much of the gains are reflecting currency collapse and how much are bull market traits!
G.

elevator guy

(02/24/2000; 08:19:31 MDT - Msg ID: 25932)

@Topaz

Sir Topaz, would you be kind enough to bang your stein on the table, to alert poor elevator guy from his slumber, when you see the $A do its little dirty manuever?

Cavan Man

(02/24/2000; 08:40:25 MDT - Msg ID: 25933)

EU & China

http://www.bloomberg.comSEE: "European Union Talks With China End Without Agreement On Entry Into WTO"

agbull

(02/24/2000; 08:46:50 MDT - Msg ID: 25934)

More about Silver

No problem quoting from "Money" -- just be sure to cite it as you do other
sources. The cite is protection for both of us.

The info on page 140 is part of what motivated Mr. Warren Buffett to do
what he did about two years ago: He (reportedly) bought (title to) about
20% of the world's above-ground reserves of silver. He doesn't screw
around when it comes to investing. He researches the subject carefully,
also scrutinizes every possible investment, and invests only when the
fundamentals look solidly promising. His investment in so much silver was
paralleled by Bernard Baruch's identical investment -- about a year before
the stock market crash of 1929.

Tnx for the warm thoughts and kind words, and for your support for honest
weights and measures.

Best wishes,
Jim Ewart
(zns@interserv.com or principiapub@ibm.net)

USAGOLD

(02/24/2000; 08:56:49 MDT - Msg ID: 25935)

Today's Gold Report: Greenspan Nonchalance Should Serve as Warning

http://www.usagold.com/Order_Form.html2/24/00 Indications
�Current
�Change
Gold
300.00
-.50
Silver
5.23
-.02
Gold Lease Rate
0.3775%
-0.0013
Gold Comex Stocks
1,372,002
nc

Market Report (2/24/00): Gold tested the $300 support level once again
both overseas last night and in early New York trading. FWN reports this
reaction from one European trader -- a viewpoint which seems to
encompass a growing consensus: "Gold's performance overnight)has calmed
nerves somewhat and has paved the way for further trading in the
$298-308 range that has held the market over the past week or so."
Reuters reports solid physical demand from "the Middle East, as well as
other areas" without specifics.

Alan Greenspan's apparent confusion over what constitutes inflation
along with his nonchalance over money supply growth and the stock market
bubble should encourage cause for concern among investors -- and perhaps
it has among the more astute and that's why we are seeing gold demand
crop up "in the Middle East as well as other areas." On the whole
though, Wall Street speculators read Greenspan's detachment as another
friendly invitation to blow the bubble a little larger. The glassy-eyed
herd thunders behind their fearless institutional counterparts.
Greenspan sighs, shrugs his shoulders, gathers up his papers and heads
back to the marbled confines of the Federal Reserve.

Meanwhile, the speculative mania he has railed against for so many years
continues unabated. If a stock market bubble can only be determined in
retrospect, one would have to say that the stock market crash which
usually follows a speculative frenzy like this can only be determined in
retrospect as well. In which case, why do we need a Fed chairman, or a
Federal Reserve for that matter? Is this an admission that nothing can
be done about the greatest speculative mania in history? Is a crash
considered by the Fed chairman an inevitability as stoppable as say an
afternoon thunderstorm -- and in his eyes just as threatening?

It wouldn't be so bad if we could say that the stock market mania is a
victim of laissez faire economics. Perhaps we free-market-types could
live with that. But it isn't. It is the child of easy money -- easy
money now parked in the stock market. As the father of this perhaps
illegimate child of Fed monetary policies, perhaps Mr. Greenspan should
be concerned and utilizing Fed policy to rein it in, but he isn't. It
seems he would rather deny paternity with a new-found and vague
nonchalance.

That should serve as warning.

That's it for today, my fellow goldmeisters. Have a good day and see you
here tomorrow.

If you are looking for a pro-gold view of the various financial markets
as well as a summary of the events affecting the yellow metal, our
monthly newsletter might be of interest. News & Views -- Forecasts,
Commentary & Analysis on the Economy and Precious Metals has
been characterized as witty, urbane, intelligent and down-to-earth. Not
to mention it's Free of Charge If you want to keep up with gold, this
is the way a large segment of the gold owning public does it, and has
done it for over a decade.

Just click above and make the appropriate entries.

JCTex

(02/24/2000; 09:35:20 MDT - Msg ID: 25936)

USAGOLD: ...As the father of this perhaps illegitimate child...

MK,
We are quick to praise folks like FOA, ORO, and others [and rightfully so]; IMHO our host is just a weeee-bit astute, himself.

Great post.

SteveH

(02/24/2000; 09:51:12 MDT - Msg ID: 25937)

Patterr

Gold down.
Bond yield down.
Oil up.

Gold up.
Bond yield up.
Oil down.

Anybody else notice that?

schippi

(02/24/2000; 09:57:47 MDT - Msg ID: 25938)

Ugly Gold Chart

http://www.SelectSectors.com/agpm70.gif FSAGX & FDPMX Gold Sectors Chart

SteveH

(02/24/2000; 10:33:15 MDT - Msg ID: 25939)

repost

www.kitco.comrepost:

Date: Thu Feb 24 2000 11:36
permabear (gold can move now) ID#170184:
Copyright � 1999 permabear/Kitco Inc. All rights reserved
We are starting to get real critism of how Greenspan is trying to
do his job. Polititians went at Greenspan Wednesday and Seadman
on CNBC this morning is criticizing Greenies push for higher
interest rates. THIS IS WHAT GOLD NEEDS. When the market ( worldwide )
picks up that the FED is cornered by political considerations
and is losing control--investors world wide will ABSOLUTELY STORM
THE GOLD MARKET. At that point I would guess the paper gold market
would collapse because news will spread among many different classes
of investors that the gold physical and paper markets are completely
different animals.

fox

(02/24/2000; 10:39:38 MDT - Msg ID: 25940)

hannibal cannibal and the unknown others

strenght, strong , stronger , strongest.I admire all of you and your knowledge and your "force de frappe " but we are fighting against a power that is to strong, in my vieuw a real Titanic, that is resistent against all what happens. If there is a God, he is on their side. They can really do what they want; see today's price of gold. In mij humble opinion they are getting some goldbugs very nervous and depressed. Please "tira mi su "

CoinGuy

(02/24/2000; 12:02:19 MDT - Msg ID: 25941)

Fox, the market, and all

Fox,
I see what gold is doing today. Spot is trending upward 1.20(.40%). The Dow has lost 195(1.9%). I'm not ready to commit Harikari as of yet. The gold market seems to be basing at this new $300.00 level. Can it hold, I don't know, but I'm glad I'm not in the Dow, or the Nasdaq. If I wanted to gamble, I can fly out to Vegas for a vacation.

Lets reiterate the last six months:

1) The Washington Agreement
2) Armstrong comes out of the closet(literally)
3) Ashantis hedge book
4) Producers cutting back on hedge books(Placer Dome et al)
5) Gold goes up about 50 bucks an ounce
6) Major shorts rumoured
7) Wall Street, media turn positive on the yellow metal(well
a few of them at least)

buy physical,

CoinGuy

nickel62

(02/24/2000; 12:24:39 MDT - Msg ID: 25942)

Dow breaks 10,000 !!!! Hurray!

I wonder if they have party hats for the occassion as they did last time on the Greenspan fantasy ride.

nickel62

(02/24/2000; 12:29:56 MDT - Msg ID: 25943)

Fox don't let Goldman Sachs get you down they have been giving their clients the shaft

from long before they got involved in the mining business. Let them put gold anywhere they want to scare the sheep, not everyone is believing them anymore and besides how can you hate someone who in an attempt to mislead is selling off the only lifeboats at lower prices.

Screw them and and go buy some more gold!
They are having a discount sale again today.

Dollar Bill

(02/24/2000; 13:07:05 MDT - Msg ID: 25944)

Aristotle

I wanted to limit my posting to every few days at most
but if you will allow me...

Aristotle, Town Crier did a great job with the new link
to the new hall of fame page.

In it, you said something that would make my year if you
could maybe elaborate on it. Or just confirm that
can be done.

The exerpt from one of your hall of fame posts...
"...As for the difficulty of abolishing these gold-based
derivitives? Just imagine washington agreement round 2.
It's that simple. Done in the blink of the eye...."

That should be in the gold derivitive instruction manual
if that's the case, for fearful types like me who live
next to the holland dikes and see holes and see water
spitting out and hear cracking sounds and see guys hammering at the dang thing.

I'm willing to believe, just elaborate if you will.

rsjacksr

(02/24/2000; 13:14:07 MDT - Msg ID: 25945)

Fundamental and Technical Market Analysis By Steven J. Williams

http://www.geocities.com/WallStreet/Exchange/9807/Charts/SP500/Outlook.htmSPEAKING OF G.S. .....MUST READ
Excellent multi-level article on Wave crash theory and also how the PPT ( he calls them CPT) and Gold Sachs and other execute a "stop run". I.e. low risk , hi profit right to steal sanctioned by your Gov't'

goldfan

(02/24/2000; 13:29:49 MDT - Msg ID: 25946)

canaries in the mine

http://www.prophetfinance.com/charts/pc.asp?symbol=FNMWhat does it mean that Fannie Mae is in free falllll
ll
ll
??
Goldfan

TownCrier

(02/24/2000; 14:12:22 MDT - Msg ID: 25947)

Banking system is flying by the seat of its pants...

http://biz.yahoo.com/rf/000224/x6.htmlDuring the last day of the banking system's two-week reserve-maintenance period yesterday, the Fed temporarily drained $1.75 billion through matched sale-purchase agreements, but then right away today the Fed participated in a rather large injection of temporary reserves...$7.5 billion through overnight repurchase agreements.

Does the banking system even know whether it's coming or going these days?

Cavan Man

(02/24/2000; 14:27:42 MDT - Msg ID: 25948)

Town Crier

Excepting the buildup to Y2K, isn't this business as usual? What was the action like in the first and/or second quarter of 1999? Are these amounts historically extreme?

Thanks in advance for shedding light.

Cavan Man

(02/24/2000; 15:12:22 MDT - Msg ID: 25949)

US Urges Lower Oil Price; Kuwait Cautious

http://news.excite.com/news/r/000224/17/news-energy-kuwaitDoesn't sound like a slam dunk for the Mr. Richardson.

Cavan Man

(02/24/2000; 16:01:29 MDT - Msg ID: 25950)

Cavan Man 25949

Go to that same link and now the headline says, "Richardson Making Progress....."

The big one is Friday in SA. What's goin' on down there TG?

TownCrier

(02/24/2000; 16:37:15 MDT - Msg ID: 25951)

Sir Cavan Man

I have yet to discover where this historical data may be compiled for the comparison you desire, so my memory is the best I have to offer. As last year progressed, the daily adds tended to grow, with the typical level in mid-Summer near $2-$3 billion. It wasn't until early September that daily add needs consistently approached the level we've seen today. Clearly, the longer term repos now coming off in this period might cause some headaches and the need for short-term adds to even things out, but basically this is telling us that the funds created in those long-terms aren't coming back to the banks very readily. As a consequence, the banking system continues to "sell" various collateral to the Fed for temporary cash as a patch to meet reserve requirements.

On another note, I enjoyed seeing some of the Fed Chairman's presentation to the Senate yesterday. Rather than appearing confused, my opinion was to the contrary. Mr. Greenspan clearly knows the right answers and the true nature of money...thereby making it harder for him to give acceptable answers that the Senators could understand. Can you imagine Mr. Greenspan saying this?

"The financial commodity to which you refer, money, does not readily lend itself to our efforts at management in the traditional sense; that is, through direct measurement and control. When you refer to the dollar, you are making the common mistake that presumes the national currency IS the money supply--a continuing presumption that, to be sure, remains vital to the current economic prosperity of this era. In truth, the well-known monetary aggregates such as M1 or M3 attempt to track financial parameters that are not money per se, but are actually forms of the base unit of financial derivatives on future productivity. These are popularly called dollars...the funds either in circulation or on deposit at financial institutions, for example. As these dollars are in essence contract derivatives, they are no more uniquely the "money" of your narrow financial understanding than are any of the other financial derivatives that exist in vast quantities in all sectors of financial endeavors. Who is to say which of these sectors may give rise to the "wealth effect"? That is to say, we can not say with any certainty which levels of which accounts might lead to a perception of financial security and abundance--leading, in turn, to demands on production of real goods beyond the ability of real economy to deliver. Due to the nature of the economy's derivative base-unit, the dollar, this resulting imbalance between demand and supply of real goods has a dictinctly troubling effect of eroding the foundation of our economic structure...an effect for which we are nearly without means to provide meaningful mitigation. So as you can see, Senator, we find ourselves to be striking a very tenuous balance between acknowledging the real side of the economy (that being the demand and supply for goods and services) and the illusory side (that being any typical portfolio of "accounting wealth"). Given the inexplicable popularity of the illusory side of economic gains by the Western world, and given the fundamental inseparability of the various derivatives and accounts on this side, the Fed has landed in a de facto role as an overarching custodian of general sentiment in regard to consumer demand. Should a significant "wealth effect" arise (from ANY sector of the illusory side of the economy) that manifests itself in the real economy rather than recirculating within the illusory side as it currently has, the extent of the illusion will swiftly known by all participants. It is this, Senator, that we at the Fed now see as our primary charge in this new era. You see, there IS NO definable money to be managed as you would perceive it to be, unless, of course, you would be referring to gold. But that seems doubtful, as I'm sure gold remains off of your radar screen; and further, an international effort continues apace to remove gold's remaining ties to this illusory side and any prospects for management. As one who has long been nostalgic for economic merits of a gold-based economy, I welcome this movement as we must all have somewhere firm to stand when the derivative illusions suddenly lose their substance."

Farfel

(02/24/2000; 16:45:28 MDT - Msg ID: 25952)

@TED BUTLER...Looks Like Your Silver Article is Working

Ted, your most recent article about silver seems to have them scared. Look at all that silver pouring into the warehouse in the last few days.

Interesting coincidence that all this silver is appearing suddenly so quickly after publication of your article noting the absurd level of the silver short position in the market.

More anti-silver propaganda from COMEX?

With luck, investors will step forward and take physical possession and test whether all that metal is really there or not.

-------

Date: Thu Feb 24 2000 16:09
FOX-MAN (COMEX SILVER WAREHOUSE TOTALS (alot more silver added to Registered)) ID#330280:
Reg +3,197,407 to 57,974,506
Elig 28,192,605
Ttl 86,167,111
*************************************************************************
As you can see, another 3 million+ ounces were added to Registered totals at Republic National Depository....
No change in Comex Gold Warehouse totals...

Cavan Man

(02/24/2000; 17:25:04 MDT - Msg ID: 25953)

TC 25951

Sir Town Crier,

That's too good. Thanks.

elevator guy

(02/24/2000; 17:43:25 MDT - Msg ID: 25954)

Elevator guy is a little "down" today! (Pun intended)

Heres how it looks to me-

Oil is high.

Trade imbalance is high.

PMs are up.

Interest rates are on the rise.

Dow is tanking.

All this should bode well for gold.

But still gold just sits there, languishing.

The paper price of gold is not an indicator of anything real, but rather is just a well directed play, showing the dollar strong. What a farce!

My guess is that the POG wont move until TPTB lose control of the public's and the world's perception of the USD, if ever. And this may not happen until there is a really massive derivative blowup, or something else to upset the status quo. But even then, a convenient war could tip the scales back towards the USD. We are not dealing with just GS here, but in fact, the very foundations of the West.

Until that time, the PPT will keep the lid on, and all technical analysis is just a dream. Dont trade the patterns, because this market is in the pocket of the benefactors of Mt Vernon, Bush, Cliton, GS, Chase, Barrick, et al.

But if you bet on physical gold, you've "backed the right horse".

Beowulf

(02/24/2000; 18:01:40 MDT - Msg ID: 25955)

Galearis on Silver, Leigh on confiscation

If that Kitco post is correct and we may see $100/oz. silver I know what I'll be doing with my silver eagles. I'll be taking three at a time and converting them to gold eagles. :)

Leigh-
You mentioned confiscation of gold a while back. The way I see it if gold were to be confiscated again and give me dollars in return, then the only other hard asset of wealth preservation would be silver. Their ain't no way they want people selling their gold and then converting the paper to silver instead. We'd have a really HUGE shortage in silver on the market then as everyone selling their gold starts running to the bullion dealers to convert their paper to silver eagles or maple leafs. The next thing they would have to do is confiscate silver and U.S. citizens wouldn't stand for that.

Cavan Man

(02/24/2000; 18:10:06 MDT - Msg ID: 25956)

Bundesbank Warns of Crash

http://cbs.marketwatch.com/news/current/erdman.htx?source=htx/http2_mw"Second on their list of dangers for the United States is the Dollar."

Cavan Man

(02/24/2000; 18:15:31 MDT - Msg ID: 25957)

Cavan Man 25956

You know, the Bundesbank ain't chopped liver.

OK, so now the DOW stocks and I suppose the NYSE composite stocks are in disfavor. Everyone wants into the "new economy". The plot thickens and multiples go higher. Now, you might say, you can't think in terms of multiples. OK, I'll grant you that with this caveat; you can't think in terms of multiples if you are an investor in the classic sense, not a speculator or gambler.

Thanks...CM

Cavan Man

(02/24/2000; 18:16:24 MDT - Msg ID: 25958)

last post

I was referring to the NASDQ

Leigh

(02/24/2000; 18:19:12 MDT - Msg ID: 25959)

Beowulf

I wonder if that's why Warren Buffet bought silver.

Solomon Weaver

(02/24/2000; 18:25:03 MDT - Msg ID: 25960)

How many hit points does a silver eagle have?

A few months ago I got a holographic Machamp (a second stage Pokemon which evolves from Machoke) and I put it on our bulletin board in the kitchen....a few days ago, I put a nice shiny new 1998 Silver Eagle in a small plastic envelope up next to the Machamp.

Tonight, my son (11 years old) informed me that the Machamp was worth $15 (because it is a first edition!!!) and I told him that the Eagle is worth about $9 right now...so his opinion is that the Pokemon card is worth more....guess I have some things to teach him about life, no?

Poor old Solomon

Al Fulchino

(02/24/2000; 19:46:02 MDT - Msg ID: 25961)

Geberal point on Confiscation for your consideration.

We rightfully are concerned with possible confiscation, yet we collectively watch 2-5% get taken away each and every year, with barely a wimper. It gets hard to fight so many battles.

Solomon Weaver

(02/24/2000; 20:31:49 MDT - Msg ID: 25962)

The Bear Market, Why now??

http://www.tocqueville.com/brainstorms/brainstorm0058.shtmlhttp://www.tocqueville.com/brainstorms/brainstorm0058.shtml

This article says nothing about gold, but it has some interesting thoughts about the very difficult time which American companies will now have in increasing profits...

If the authors scenario is right....a modest recession in the USA, during world wide economic expansion/recovery, a much more dramatic drop in stock values (and by ripple many other American assets), then this could be a very good climate for gold.

Poor old Solomon

Solomon Weaver

(02/24/2000; 20:56:54 MDT - Msg ID: 25963)

Many pots have two handles

Leigh (2/24/2000; 7:03:58MDT - Msg ID:25928)
Trail Guide/FOA
Dear Trail Guide: What would you like us to call you -- FOA or Trail Guide? Love your new site!
-----
Leigh....I think they are both going to be with us...

FOA is obviously that part of the man who has seen the vision which Another is teaching...and wants to teach on his behalf...tailoring his words with the flavors left by his discussions with Another...he dwells in his mind in a world which is coming.

Trail Guide is the man in the world who enjoys a debate and feels like he is still learning a lot from us. Trail Guide can be more spontaneous...just himself. And in his private moments, and his dreams, he continues to feel the name of FOA.

Dollar Bill

(02/24/2000; 21:37:01 MDT - Msg ID: 25964)

Town Crier

Your Greenspan is a terrific piece of work.
A hall of famer.
I wonder how the market will react when he kicks off.
He looks like he has 5 minutes left.

Solomon Weaver

(02/24/2000; 21:43:42 MDT - Msg ID: 25965)

The Stranger....our patience will reward us...a bull will visit.

http://www.gold-eagle.com/research/butlerndx.htmlTheStranger: Solomon - you may have bought a little early. But buying two years ago made a lot of sense when you consider that was when the threat of deflation was at its greatest. Knowing that threat was temporary required some perception on your part. You can probably thank the manipulative scoundrels at the Bank of England for delaying your reward.
-------
Solomon: Yes, when I got in to physical, I knew much less about the metals markets than I do today...There is a very odd thing that has been a big factor in this...my timing was driven by worries that y2k expectations could burst the big bubble.com....and to show that I was viewing it correctly, the FED launched the most massive liquidity expansion in history of USA. So all that funny money has extended the day of reckoning. One thing which is also imporant, never plan how you are going to spend your profits.

The Stranger: Is the gold bull market already sufficient to have achieved for gold the ready acceptance you ask about above? No. That should come at the top. The process by which gold reachieves that status will define the bull market as it progresses. That, of course, assumes we still have higher to go. I believe we do.

Solomon: I agree that we have a lot higher to go. My ideas yesterday in response to oldgolds apparently "pessimistic" view go along with the concept that until major structural changes in the paper gold markets occur, we cannot really have a true gold bull....

With all the massive amount of "short" in gold, and the lackluster interest by traditional longs (who consider gold ownership important to a diversified portfolio), we actually have a situation where a price increase (considered by definition to be "bullish") causes the types of value destruction that is normally classified as a bear market. Also, unlike a normal bear, which generally hits the "masses" hard, this inverted gold bear (meltup) hits mainly at a very small group of very powerful financial entities first....as price rises and these folks are destabilized it will not be a roaring bull but much more like a chaotic bear.

I have been spending time lately rereading the postings of Ted Butler....on one level, he seems to be a bit fanatical...but I have to say...already 2 years ago he hit the nail on the head about what the real problems are in the gold and silver markets....

looking at todays discussion about 5 million new silver ounces coming into COMEX....Butler did indicate just a few days ago that industrial users who have typically avoided using futures have started using the COMEX. I think that one of the big factors in the next few months in silver is going to be "what is Warren Buffet doing?". A guy like Buffet who is proud to not need margin must just laugh at those who get in trouble will foolish leverage. I have a very sneaking suspicion that this popular icon will be once again in the mainstream press related to silver.

Poor old Solomon

Aristotle

(02/24/2000; 22:11:30 MDT - Msg ID: 25966)

The Bill and Al Show

Al Fulchino,
you have a fine grasp on the hidden "confiscation" of currency inflation. A similar "confiscation" happens when the Gold supply is artificially inflated by the forward selling of tomorrow's Gold production in today's marketplace, or by the general (that's "geberal" to you, Al) acceptance of paper gold derivatives as portfolio substitutes. So while the pre-1933 European Gold coins that I've become so fond of (especially the Gold German marks and British Sovereigns) make for reasonable insurance against a government's standard-issue attempt at physical confiscation, (on artistic/cultural immunity,) my recent comments calling for a detachment of Gold from modern-style banking/financial contracts was the necessary means (in my view) to avoid this more subtle form of "confiscation" that you've touched on so well.

By the way, I've got an endless supply of n's on my keyboard if you need any. No need to use b's in their stead--unless its an emergency, you know.

Dollar Bill,
you said it would make your year if I could elaborate or confirm that a "Washington Agreement: Round Two" could be done as I suggested, in the blink of an eye, which would unleash Gold's property-asset value from the debilitating effects of a false market based on inflated paper-gold supplies.

First, I'm glad to see you chime in with apparently a small chord of support for the veracity of this line of thought. Gold's free value as pure property will soar because it would become the most liquid, universal asset for storing your excess productivity--the ideal means with which to flee ever-depreciating national currencies.

And finally,in reply for your desire of some confirmation that such a thing could be done, I need try no harder than to point to "Washington Agreement: Round One" as the ultimate "proof" of the potential. Who on Earth a year ago (except insiders) would have ever imagined that a consortium of Central BANKS would do something as seemingly "preposterous" as constructing a formal agreement to tie their own hands in regard to the level of financial operations that they may undertake with the world's purest money??? How crazy is that??! And yet, they DID it. And so it all begins--the right trend for all the right reasons.

Gold. Get you some. ---Aristotle

Black Blade

(02/24/2000; 23:07:00 MDT - Msg ID: 25967)

Topaz and THX-1138, belated response

I've been in a blizzard last night and lost power. I finally had a chance to read todays' posts. My y2k chili, corn bread, and beer came in handy (an explosive combination indeed!). It's also nice to have a wood burning stove and dutch ovens.

Topaz: welcome to the forum! An interesting article thanks.

THX-1138: Thankyou. The rapid-fire sequence of events in the PGM markets did show how desperate measures come about from desperate people. I'm afraid that this is a lesson as to what we can expect in regards to the gold market. The market makers did not have the ability or desire to "honor" their commitments, so they implemented a rapid succession of rule changes, and even went as far as to deliver an inferior product at a higher price. Makes one wonder about the Japanese market-makers definition of "honor".

Chrusos

(02/25/2000; 01:58:04 MDT - Msg ID: 25968)

Real metals exchange to replace Comex?

http://www.gold-eagle.com:3128/cgi-bin/gn/get/forum.htmlWho would believe what has been happening? Dow down, NASDAQ new high, gold shares pulverized � I thought FOA might be talking through his hat (too much high mountain air) when he said the gold paper market may go out through the bottom � that might even happen if a competitive real exchange was set up � see the post below from Goldeagle

Feb 25, 00:2

Elwood To uponroof re: your Feb 24 22:51
You said:
"Richard640-I was speaking to my good friend George Soros last night. He had called to see how things were going with the new precious metals exchange being set up by some seriously big players. (hint:oil) Yes, COMEX is the subject of a hostile takeover of sorts. There will soon be a new PM exchange available for those who want to actually engage in "free trade". George is just waiting for the go ahead. I'll keep you posted."

I reply:
Extremely fascinating statement. Can you be more specific? I assume the exchange will be based somewhere in the Middle East or South Africa using Euros to price the gold. When? Weeks? Months?

It's also a no-brainer as to what this will do to the dollar. Please give us more if you can (link?). Thanks.

Elwood
View Yesterday's Discussion.

Chrusos

(02/25/2000; 02:08:12 MDT - Msg ID: 25969)

Alternative exchange - was a joke sorry!!

When I read the original post I see it was signed "just dreaming" - my apologies - maybe his dream will be prescient. Going a bit crazy with events!
Back to lurking after my false scoop.
Chrusos

Simply Me

(02/25/2000; 03:07:35 MDT - Msg ID: 25970)

Off Topic

Just heard on the news that Paul McCartney just made the cover of "Modern Maturity" published by the AARP. Bummer.
I'm suddenly very tired.
Thanks for all the great posts today.
'Nite All,
simply me

Topaz

(02/25/2000; 05:15:51 MDT - Msg ID: 25971)

Elevator Guy- Black Blade

Sir Guy:

If time allows, over the w/end, I'll try to overlay some Currency charts USD/$A:$CDN:SARand and POG. Maybe something will show up to FLAG future price drops.

You sound a little disenchanted in your recent posts- these times aren't for the faint hearted are they?

Solid advise though -- Buy and Hold some then Buy and Hold some more!

Black Blade:FYI

Might I suggest a visit to KITCO- enter "SDRer near Platinum" in the search engine and read the several posts, you'll find it interesting, perhaps even rewarding.

On another note, my local coin dealers (Sydney) won't buy platinum coins at anywhere near SPOT. (The same applies to Au when it's volatile) and they tell me truckloads of Coins come to Market on the spikes (only to be turned away at the door through lack of a buyer). So the overwhelming sentiment throughout the Market here is STILL negative.

Hipplebeck

(02/25/2000; 05:49:23 MDT - Msg ID: 25972)

inflation

The recent prices of gold and silver and what Greenspan had to say the other day reconfirm to me the direct relationship between the price of gold and fear of inflation. As long as they can fool people into believing there is no inflation the price will remain down.

Hipplebeck

(02/25/2000; 06:44:09 MDT - Msg ID: 25973)

inflation and other official numbers

You probably already know this, but a banker friend of mine told me that one of the best tricks the government uses is to put out the numbers, and then go back and quietly revise them later.

Galearis

(02/25/2000; 07:40:50 MDT - Msg ID: 25974)

silver spreads... and gold movements

My apologies to the forum for an error posted yesterday on silver spreads. The data was an error entry from Kitco.

But while I am here...We can expect a major fall in the POG today. Lease rate hikes across the board in gold indicate a masssive loading up of shorting ammunition. Hopefully this will not result in more than a $5 fall, but I think we may even see $285 again - however briefly.

Silver right now is a major buying opportunity - a narrow window of opportunity.

Have a fine day all. Watch the DOW today!

ORO

(02/25/2000; 07:43:04 MDT - Msg ID: 25975)

Town Crier - Greenspan Senate testimony

Greenspan has a remarkably deep understanding of economics and monetary systems, as any of us who have read his earlier work could observe. He also has remarkable facillity with language that makes him wonderfully opaque to those who treat the "illusory economy" as real. Anyone dropping the illusions of the faux assets will read through his two way mirror and see the real economy behind the reflection.

In last night's testimony I heard it so clearly as none have ever managed to express it. Yet Greenspan manages to lead the viewers at his mirror to still see their own reflection. Amazing.

How about using "His opaqueness'" words in addition to my Matrix post in the HOF?

He tells us clearly that gold is being separated from the "illusory economy" of financial markets. This is precisely what Trail Guide/FOA and ANOTHER say and Aristotle sees as the compromise that would balance the conflicting interest of the powers that rule our financial world.

I will repeat the essence of my previous comment to Aristotle on Gresham's law:
* A currency will trade at parity to specie until all specie is gone from the markets as it is displaced by increasing amounts of currency.
* If currency quantities increase further, but parity is maintained, the purchasing power of the currency will drop as will that of specie. (1)
* Once there is no one left accepting the currency at parity a quick and self reinforcing process commences by which currency is devalued - ultimately brought below its proportion to specie. (2)

Notes:
(1) Maintenance of acceptance at parity can be achieved beyond the point of specie displacement by two methods:
(1a) the use of credible substitutes for specie (gold derivatives).
(1b) the establishment of parity with a commodity other than the monetary metals. This allows the currency to trade at the marginal utility of the underlying commodities. It requires full control over the supply of the commodities.
These substitutes allow further currency expansion beyond specie replacement, until expansion exceeds the credible supply of the gold derivatives and the commodities for which parities were established.

(2) The devaluation of currency is always such that its value falls below its probable value had parity been reestablished with existing reserves.

Galearis

(02/25/2000; 07:49:29 MDT - Msg ID: 25976)

@Hipplebeck

"A favourite trick for governments is to quietly revise inflation numbers."

On CBC (Canada) it was announced last night that inflation was DOWN this month over last.

Sometimes it is not so quietly revised.

ORO

(02/25/2000; 07:52:53 MDT - Msg ID: 25977)

Addendum to last post

If it is not clear to any who read the prior post, the point is that upon the separation of gold from the dollar and fiat world, the whole structure will collapse.

This will be because of the break of parity.

Parity is the prerequisite of the second part of Gresham's law.

Otherwise we have only the first part - Good money will drive out the bad.

TheStranger

(02/25/2000; 08:33:11 MDT - Msg ID: 25978)

PCE Deflator And The Bear Market

-Inflation Statistics-

The PCE deflator for 4th quarter 1999 is 2.5%. All of 1999 was 1.6%. 1998 was .8%.

-Bear Market Statistics-

The "average stock" Value Line Index is now down 22% from its all-time high on April 24,1998. The NYSE advance/decline line reached a new low yesterday since the peak in March 1995. 90% of the 1994-1998 bull market has now been reversed.

Tech stocks are, of course, a prominant exception to the numbers cited here. Those who trade this sector no longer care about value. They want to make money, and lots of it, right now. We saw this kind of behavior once before in the 1970s. Then it was penny stocks which often had no earnings but were wildly popular. Needless to say, that frenzy didn't end very well.

I wouldn't look for a new bull market to develop for most stocks until this excessive behavior in techs has been punished. It is a dangerous game trying to predict when a bubble will burst, but, in the last 9 months, American stocks have scored only one week of positive breadth. Those who own gold have far outperformed most stocks during this period.

Cavan Man

(02/25/2000; 08:35:01 MDT - Msg ID: 25979)

ORO

Can you elaborate on what you heard that gave you the concrete impression you just conveyed here? Thank you.

USAGOLD

(02/25/2000; 08:43:46 MDT - Msg ID: 25980)

Today's Gold Report: Beginning to Look Alot Like the 1970s

http://www.usagold.com/Order_Form.html2/25/00 Indications
�Current
�Change
Gold
295.00
-4.40
Silver
5.13
-.03
Gold Lease Rate
0.5262%
+0.1487
Gold Comex Stocks
1,372,002
nc

Market Report (2/25/00): Gold fell below the pschologically important
$300 level in early New York trade. We have COMEX option expiry today.
Traders are looking for support at $295 where bargain hunting and short
covering could turn the tide. This is not the first time gold has
plummetted ahead of options expiration. If the past is an indicator, we
could have a rebound as early as late today or early next week. The
strong dollar is also affecting today's trading. The European currencies
including the euro are getting hammered. The Commerce revised 4th
quarter 1999 GDP this morning to a hot +6.9%. The initial report had 4th
quarter GDP at a 5.8% gain. It is not often that I find myself agreeing
with Bill Clinton but I have to say I agree with his assessment that
Alan Greenspan's recent remarks before Congress did not constitute much
of a change in Fed policy. When you look at GDP numbers, money supply
numbers, employment, etc. and the fact that the Fed adds liquidity to
the system almost daily, I don't think a another one quarter percent
interest rate increase is going to have much effect. My take is that we
are in an inflationary economy at present and there's not much that the
Fed cares to do about it -- or perhaps can do about it. This is
beginning to look alot like the 1970s.

That's it for today, my fellow goldmeisters. Have a good day and see you
here tomorrow.

If you are looking for a pro-gold view of the various financial markets
as well as a summary of the events affecting the yellow metal, our
monthly newsletter might be of interest. News & Views -- Forecasts,
Commentary & Analysis on the Economy and Precious Metals has
been characterized as witty, urbane, intelligent and down-to-earth. Not
to mention it's Free of Charge If you want to keep up with gold, this
is the way a large segment of the gold owning public does it, and has
done it for over a decade.

Just click above and make the appropriate entries.

TheStranger

(02/25/2000; 08:47:16 MDT - Msg ID: 25981)

Commodities Milestone

This week, the bull market in commodities reached its one year anniversary. Depending upon which index one uses, commoditities have risen 20% or so. Gold has achieved roughly the same gain in a little over half the time.

Phos

(02/25/2000; 09:06:00 MDT - Msg ID: 25982)

PEI newletter re Oil

Received a newsletter from J.Smith of Princeton Economics yesterday and they are predicting a 'panic' week in crude next week. Princeton is looked upon with opprobrium by many now because of Martin Armstong's troubles but I have heard that their economic model is very good. By panic, they mean it could go up or down but more likely up. It looks as if it has started that move already. The note says $35/bbl. would not be out of the question by the end of next week. They think the US may lean on OPEC to start delivering more before the meeting and that rumour is, additional supplies are already on their way.

Skip

(02/25/2000; 10:09:40 MDT - Msg ID: 25983)

@Galearis (silver spreads... and gold movements)

Your prediction about a drop in the POG today was right on, in fact more accurate than I had wished. We can only hope that GATA helps reveal the truth for the whole world to see, so that the manipulation comes to a screeching halt. I for one am getting very tired of this. Although I wish to God that I had never purchased gold or gold stocks until recently, now is NOT the time to sell. If anything, I believe that now is the time to buy and buy like crazy. In spite of the manipulation, there seems to be less downside risk in PM and PM stocks than anything else out there.

--Skip

TownCrier

(02/25/2000; 10:13:48 MDT - Msg ID: 25984)

Fed adds reserves to span the banking system's current two-week reserve maintenance period

http://biz.yahoo.com/rf/000225/rb.htmlFollowing yesterday's $7.5 billion overnight system repo addition to banking reserves, today the Fed added $3.505 billion using 13-day fixed system repurchase agreements.

TownCrier

(02/25/2000; 10:26:29 MDT - Msg ID: 25985)

Additional Fed note...

According to Reuters, an analyst at Stone & McCarthy Research Associates estimated that the Fed has an add need of $9.6 billion per day throughout this reserve-maintenance period.

BTD

(02/25/2000; 10:29:33 MDT - Msg ID: 25986)

TownCrier re: Fed adding reserves

You inform us regularly when the Fed adds to banking system reserves, but I have a question for you. Are these actually cumulative additions, or are they merely replacing reserves who's term has expired? For example, you tell us that today the Fed added $3.505 billion using 13-day fixed system repurchase agreements. So, 13 days from now, these expire, right? If the Fed then adds another $3.505 billion, doesn't it just replace what just expired? I don't know how these things work - I'm hoping you can clear it up for me. The important thing, I should think, would be whether total reserves are increasing or staying the same. If Fed additions to reserves are merely replacing reserves that expire that's different than adding to the cumulative total reserves outstanding. Is there any way to note in your report of Fed reserve additions whether these are actual additions or just replacements to maintain the current level?

Galearis

(02/25/2000; 10:46:04 MDT - Msg ID: 25987)

@ skip:buy gold yes! but.....

they have hammered silver down to $5.08 - and the supply deficits in this pm are very extreme! This may (and excuse the presumption that I can actually predict this market) be one of the last buying opportunities with silver tanked all the way back to $5.08!! Again I am presumptious in predicting that the wheels will come off some time in April or before.

Needless to say I have been right as much as wrong. The problem is that the pm markets do not run on fundamental forces as much as manipulation forces. One should now always assume the market will be hammmered down if it shows a little life. But one day (soon) they won't be able to find the hammer, and that day is not far off....

Solomon Weaver

(02/25/2000; 11:06:26 MDT - Msg ID: 25988)

ORO - Parity between "two ecomomies"

ORO (02/25/00; 07:43:04MDT - Msg ID:25975)
Town Crier - Greenspan Senate testimony
Greenspan has a remarkably deep understanding of economics and monetary systems, as any of us who have read his earlier work could observe. He also has remarkable facillity with language that makes him wonderfully opaque to those who treat the "illusory economy" as real. Anyone dropping the illusions of the faux assets will read through his two way mirror and see the real economy behind the reflection.
---------------
ORO - I think that this comment by Greenspan has a great example in the gold paper vs. gold delivered comparison.
Just like you discuss parity in Gresham's law..these "two economies" are linked by a "parity"...during times of good liquidity and robust economy one is able to move back and forth between the two. As a matter of fact, many of us step back and forth between these two worlds very much every day...and base much of our livlihood on the interplay between both. I think where we all get in trouble is when excess money flows into the "illusory side" where "value creation" is a paper market cap value with corresponding paper profits. This type of "wealth" is extremely easy to destroy because each downtick in price destroys value across all units (shares). People sometime ask "where does all the money (value) go to when the market collapses??? The answer is obvious: back to where it came from (nowhere).
The moment when the illusion is exposed is when it is no longer possible to step back into the "real" economy with the "illusory" assets.

I also had the feeling that Greenspan was trying to tell the Senator that what most people consider money (the currency which the FED can control) is far removed from that which is out there "functioning as money".

It was also a bit unclear to me in Town Crier's post...were the last words about "unless you mean GOLD..." really what Greenspan said??? Or was that TC having some fun?

Poor old Solomon

SteveH

(02/25/2000; 12:19:20 MDT - Msg ID: 25989)

thought

gold down beaucoup
dow down beacoup
euro down beacoup
oil up beaucoup (pressure point)
NASDAQ down un tout petit tout

Something big is going on and we're clueless as usual.

schippi

(02/25/2000; 12:24:36 MDT - Msg ID: 25990)

One year XAU Chart

The past 10 days on the XAU chart are just plain UGLY.
But if you look at the one year chart, it shows we are
approaching or at one of the best BUY points of the
past year.

CoBra(too)

(02/25/2000; 13:09:28 MDT - Msg ID: 25991)

XAU -chart @Schippi

Schippi - give it a chance to correct some of its ingredients - Munk(ey)s and Ashanti Nuts - It'll straighten
out in time IMHO ...

TownCrier

(02/25/2000; 13:58:38 MDT - Msg ID: 25992)

Sir BTD, thanks for the question...and the opportunity for a brief break from The Tower's art department

http://www.usagold.com/halloffame.html#anchor213884Your question: "Are these actually cumulative additions, or are they merely replacing reserves who's term has expired? ... If Fed additions to reserves are merely replacing reserves that expire that's different than adding to the cumulative total reserves outstanding. Is there any way to note in your report of Fed reserve additions whether these are actual additions or just replacements to maintain the current level?"

We touched on this a bit in yesterday's response to Sir Cavan Man's question about the level of the daily adds...whether it was extraordinarily high with Y2K now behind us. My response to that was:
"...It wasn't until early September that daily add needs consistently approached the level we've seen today. Clearly, the longer term repos now coming off in this period might cause some headaches and the need for short-term adds to even things out, but basically this is telling us that the funds created in those long-terms aren't coming back to the banks very readily. As a consequence, the banking system continues to "sell" various collateral to the Fed for temporary cash as a patch to meet reserve requirements."

You can see a longer commentary on these operations at the link I provided above, but basically, you seem to have captured the proper understanding. A point of clarity, however, is that the "reserves" don't expire but rather, it is the short-term loan (the repurchase agreement contract) that comes due. As you are aware, many of these are VERY short term...one day (the overnight RPs). The reason for the short-term nature of these "loans" from the Fed is that the reserve requirements of the banking system is not fixed. It fluctuates depending on the activity of account-holders. On the level of an individual institution, a large perentage of the deposits on account have been lent to others, or used to purchase U.S. Treasuries or other interest-bearing government securities in order to earn a return--a small portion of which is shared with the depositor. Of the total deposits, only a small (percentage) cash reserve is required by banking regulation to be kept on hand by the bank.

If a depositor spends his own account down to zero by writing a check, or withdraws a significant portion of cash, the bank meets this need by drawing down its cash reserves, putting them out-of-balance with the mandatory reserve requirements.

It is like this:
The bank holds our deposits, $100 from you and $100 from me. Of this $200 total, the bank keeps $20 in cash reserves, and is free to commit the remaining $180 in order to earn a return through loans or bonds, for example.

Imagine that you cash a check for $20. The bank now has $180 in total deposits (my $100 plus your remaining $80) but has zero cash reserves left after honoring your check. Until various loan repayments come in at their various schedules, the bank has a reserve shortage. It needs $18 (whereas yesterday it needed, and had, $20). The bank participates in these short-term loans with the Fed whereby it puts up certain approved forms of collateral (US Treasuries, agencies, and mortgage-backed securities). In essence, the Fed buys this collateral, with the bank's pledge to repurchase it at the end of the term (overnight, 13-days later, or whatever...) using funds that it expects to have received by that point.

Rarely do fortunes change entirely overnight. Perhaps only a small fraction of the needed funds arrive, in which case a new overnight repo is arranged the following day for whatever amount is needed...it could be less...it might be more. When looked at from the level of an individual bank, there is no "money from thin air." The bank lives or dies on its ability to write performing loans and maintain deposits. It is when we expand our perspective to one of the Banking System as a whole that we begin to get the true essence of money created out of thin air...where the loan that is written temporarily expands the money supply, only to be contracted again as it is repaid (with the bank keeping the interest.)

I may not have been as clear on that distinction in past efforts to represent the banking system as a whole with an analogy of a single bank. Where the analogy is in place, as described previously, money is created by the bank on lending and destroyed by the bank on payback...as it is with the collective banking system. However, when we speak of an individual bank, not as a symbol of the collective banking system, money is not created or destroyed. When a loan is repaid, the bank can use this money to replace its cash reserves as needed.

I hope this has satisfied your inquiry.

Skip

(02/25/2000; 14:20:22 MDT - Msg ID: 25993)

How long???

According to a posting on Kitco, COMEX has over 3,000 ounces of registered gold and 5 million ounces of silver added today. Are the manipulators truly on their last gasping breath to keep the lid from blowing on PM's, or will they keep pulling out more and more stops to stop each rally? The action of PM's and PM stocks lately has been beyond discouraging...to the point of making me red-faced mad.

How long can they keep doing this before the long-overdue sustained PM rally?

--Skip

TownCrier

(02/25/2000; 14:46:09 MDT - Msg ID: 25994)

Sir Skip and COMEX gold inventory

Seeing an addition of 3,086 ounces to registered inventory is nothing to bat an eye over. Today marked the termination of trading on the February COMEX gold contract, and there were another 17 contracts held up for delivery... enough to account for 1,700 ounces of today's arrival. Further, open interest as of the end of yesterday's trade stood at 29 contracts...of those that weren't called on for delivery today, how many will be on Monday, last notice day? This could alone provide the new home for 2,900 of those ounces that arrived at Republic's Registered inventory today. But at the end of it all, these numbers are peanuts. Tuesday marks the deadline for delivery, and thus far on the February contract there have been 6,146 contracts tapped with delivery intentions. That's 614,600 ounces scheduled to change hands, my friend. With barely double that number on hand in the COMEX vaults, either a lot of title swapping will be taking place, or else a lot more that 3,086 ounces will have to be passing through there in the next two days.

Cavan Man

(02/25/2000; 15:08:04 MDT - Msg ID: 25995)

SteveH 25989

I think, not sure that what you meant to say (en francais) about the NASDQ was,.....une petite peu (a little bit)?

TownCrier

(02/25/2000; 15:21:02 MDT - Msg ID: 25996)

Sirs ORO and Solomon Weaver

The key sentence in that post to Sir Cavan Man regarding the Fed Chairman's testimony was "Can you imagine Mr. Greenspan saying this?"

The inspiration was based on comments to two congressmen. One whiner (sorry, but I calls 'em like I sees 'em)Senator from Kentucky gave the Chairman a rather harsh rebuke for what he perceived as the Chairman's attempt to take the punchbowl away from the national party, saying it wasn't his job to interfere in that arena of revelry...that he should mind his own business. Unfortunately, few people were sharp enough to realize that throughout, Mr. Greenspan gave him the mental/verbal equivalent of a depantsing. That was one element of my commentary. The other inspiration came from comments offered to a congressman that were acually discussed by some others here at the forum...where the Fed Chairman was elaborating on why the Fed has lately put less emphasis on their previous efforts at targeting money supply. The reasons were expressed in my post yesterday. How can you tell these Senators what they don't want to hear and can't easily understand without at the same time shattering the illusion that propels the current essence of "prosperity"? Mr. Greenspan subtly handled the congressman, but opened himself up to unwarranted ridicule by those not seeing the big picture when he confessed to the effect that "It is impossible to manage what you can't define." He was tactfully and responsibly saying in front of the world that our money was not quite what the masses tend to think it is....or rather that our simple concept and use of the dollar is not sufficient to serve as a governor of the illusory economy to contain its adverse effects on the real economy.

ORO's summary is spot on with respect to that old jazz man and avowed gold-heart, the Fed Chairman: "Greenspan has a remarkably deep understanding of economics and monetary systems, as any of us who have read his earlier work could observe. He also has remarkable facillity with language that makes him wonderfully opaque to those who treat the "illusory economy" as real. Anyone dropping the illusions of the faux assets will read through his two way mirror and see the real economy behind the reflection.... Yet Greenspan manages to lead the viewers at his mirror to still see their own reflection. Amazing."

CoBra(too)

(02/25/2000; 15:43:05 MDT - Msg ID: 25997)

The FED (up fire) brigade?

I would hate to break the rules - but as SEC, FTC and the rest of the gang doesn't seem to mind the "10K" (and 10Q, by coincidence)did finally succumb to scrutiny, or lack of such, it seems some of the standing regulations of the PPT have either been corrupted or worse abandonded, due to forced (not begnign) neglect.
After all, you can't put out all the fires at once, youv'e started over years. Not even the capt'n, pleading ignorance in fuelling this historical blaze want's to admit his accomplicity, though he's reluctant to answer the simple question as to what fuel started the blaze! Let's get a new fire brigade, before we exchange the chief!
Or, even better, let's abandon the heat instead of the incindiary - before it consumes the rest of (US) consumers!
Or even better, let's get real CB2

Cavan Man

(02/25/2000; 15:57:26 MDT - Msg ID: 25998)

Hello Trail Guide

Just in case we'll be taking a hike this weekend, I pulled my walking boots a a good stick out from the closet. Also, I'll bring my thinking cap along as well.

TownCrier

(02/25/2000; 16:15:12 MDT - Msg ID: 25999)

Building perspective...

If you are unleveraged, and own your gold outright (as is our recommended course of action) do not be overly concerned about the performance of the gold price over the latter half of the week. There are signs that this is not a gold-based phenomenon, but rather is a dollar-based event. Meaning, gold is not falling in a vacuum. If you view it as an independent financial asset that floats (albeit with some attachments to strangling kelp, sea debris, and whatnot) against other currencies, you will see that over this same period, the dollar has been on a rampage. Since Wednesday, against the dollar the euro has lost nearly 4% just as gold has. Here's a thought...imagine being in euroland, holding stock in an American company. Even if your stock fell by 4% during this time you could still cash out, convert to euros, and be near where you started from. On the other hand, if the dollar's value established a reliable falling trend, your American stock would have to gain just you keep you even. Imagine the investors' decisions with regard to their stock postions if the dollar began to turn down in addition to the stock market heading lower...you would be racking up losses on top of losses. My, how fast it could all come tumbling down...

And as an American, where do you turn when the stock market is being sold off, and your own dollar currency is being sold lower by those who are cashing out of their American dollar-denominated investments, bidding for their own currencies on the FOREX? I submit to you the flight will be to real assets....with gold as the most preferred and liquid of them all.

Jason Happy

(02/25/2000; 16:28:04 MDT - Msg ID: 26000)

Solomon Weaver: "How many hit points does a silver eagle have?"

http://www.nethack.de/Tell your son that silver is what "shields of reflection" are made from in the game of Nethack.

You need it to ward off magical attacks such as lightening bolts, dragon's breath attacks, magic missles, bolts of cold, disintigration rays, the charge from a wand of death, and the medusa's gaze, which turns you to stone.

It's a very useful item to have as armor, and it doesn't really matter what your hit points are if you have it, because many attacks will completely bounce off, inflicting zero damage.

It's interesting how many parallels you can make from all of that to real life... Silver Money can't be inflated away, or at least, not for long!

I wonder if the generation who grew up playing video games (my generation), where the goal of the game is to gather up as much gold as possible, will, eventually, collectively, as they mature and gravatate towards making obsene internet wealth, see that this has applicable lessons for real life, too?

Warning: Do not follow the link to nethack. Do not download the game. Do not play the free game, developed over 15 years in the usenet community through the "open source" method. It is a seemingly simple game, only about 1.5 megs in size, yet is probably the most complex & difficult game ever designed (you can die from well over 100 different random ways), containing no graphics, and will suck away your life if you ever become addicted. Goal of the game? To gather as much gold as you can from the dungeon, and escape alive.

Hipplebeck

(02/25/2000; 16:55:04 MDT - Msg ID: 26001)

(No Subject)

currency war

ORO

(02/25/2000; 17:03:53 MDT - Msg ID: 26002)

Cavan Man - repost of TC quote from G man

http://www.yardeni.com/public/shgold_c.pdfTake a look at above link. particularly pg 18.

Excerpts:

"an international effort continues apace to remove gold's remaining ties to this illusory side and any prospects for management"
" as we must all have somewhere firm to stand when the derivative illusions suddenly lose their substance."
- This is FOA and ANOTHER's story of the removal of gold pricing from the paper universe.

"when the derivative illusions suddenly lose their substance."
- when "All paper will burn" - not IF. As per ANOTHER

"When you refer to the dollar, you are making the common mistake that presumes the national currency IS the money supply-"
"these dollars are in essence contract derivatives, they are no more uniquely the "money" .... than are any of the other financial derivatives that exist in vast quantities in all sectors of financial endeavors." [probable insult deleted]
- The dollars are derivatives of debt and equity contracts.
- Both the supply and the demand of the currency are derived from the volume of new contracts relative to the demand to repay old contracts.

"Given the inexplicable popularity of the illusory side of economic gains by the Western world"
" recirculating within the illusory side as it currently has"
- What is inexplicable is why anyone would hold a piece of nothing payable in nothing and denominated in nothing. Referring to the dollar's nature as a derivative of debt (Greenspan's implied meaning). Debt being a non-collectible obligation of people to provide an unspecified amount of labor. Debt relates the value of future labor to the real assets securing the debt.
- What he can't reveal is that the dollar has been fixed to gold and oil - and thus he can't provide the necessary facts to explain the continuing function of the illusion, because the facts are secret.
- He is also hinting that the economy is accelerating while there are only fumes in the tank.
- ANOTHER "your wealth is not what you think it is"

"[dollar price inflation's destabilizing effect on the economy] an effect for which we are nearly without means to provide meaningful mitigation."
- Re ANOTHER: "all paper will burn"
- He means that the gold needed for the stabilization of the dollar is gone, and so the gold derivatives lost credibility. Therefore, gone is the willingness of oil producers to hold dollars and gone is the oil and gold backing of the dollar.

The Fed "find ourselves to be striking a very tenuous balance between acknowledging the real side of the economy (that being the demand and supply for goods and services) and the illusory side (that being any typical portfolio of "accounting wealth")."
And:
If a " "wealth effect" arise (from ANY sector of the illusory side of the economy) that manifests itself in the real economy rather than recirculating within the illusory side as it currently has, the extent of the illusion will [be] swiftly known by all participants."
- Meaning any attempt to redeem the papers with goods and services will reveal the paper's value - i.e. NADA.
- The job of the Fed is to manage "general sentiment in regard to consumer demand" - not real consumer demand, but what investors think it is. (Hence the general lisence in allowing corporations to report anything as profits and the all out effort to hide inflation from the public by cooking the CPI and PPI numbers as much or beyond the cooking of corporate books - we are living in the United States of Cendant, governed by president Ponzi).
- The goal is to prevent investor funds escaping through the looking glass - from paper land to reality land.
- To do this, the Fed must try to close in the financial flows by "herding" investors (i.e. cats) away from the real economy and gold (i.e. here is a picture of milk, isn't it tasty?). It is a game of confidence.

Financial land ---> Borrowing of consumers and business ----> Buy durable goods and capital equipment - and some personal or business inventory.
Financial land ---> Equity financing of business ----> Buy capital equipment, inventory, business services (particularly advertising)
Business sales less wage payments less capital investment less taxes less inventory building = net profit less new debt flow into Financial land.
Wages less taxes less spending less personal tax = flow of investment less consumer borrowing into Financial land
Government espenditure less tax collections = flow of funds into Financial land (when in surplus - or flow from Financial land when in deficit)

Government is pushing money into Fianacial land by running a current accounts surplus, payed 144 $B more in interest than it borrowed.
Business is giving off profits as dividends and share buy backs in an amount equal to business borrowing and this amount is greater than the amount generated by equity issuance (IPOs and secondaries). - Hence - less shares more money in equity land. and net flow of funds from the real economy to Financial land.
Consumers/investors are cashing out of savings accounts, CDs and equities and using the funds for housing improvement and buying goods. However, they are paying more interest on consumer and housing loans than they are getting from new borrowing (consumer loans 80 $B net drain)
Overall, there was a net drain of 180 $B from debtors into Financial land.
There was a net outflow of some $350 B from Equity sales - Foreign inflows were negative in 99, but strongly positive since Jan, headed by CBs.
Overall there was some 200-250 $B leakage out of Financial land, that increased nominal GDP by about $530 B. the other $300 B in GDP came from imports and went outside the US - to pay interest on Eurodollars.

-------------------------------------
TownCrier (02/24/00; 16:37:15MDT - Msg ID:25951)
Sir Cavan Man
I have yet to discover where this historical data may be compiled for the comparison you desire, so my memory is the best I have to offer. As last year progressed, the daily adds tended to grow, with the typical level in mid-Summer near $2-$3 billion. It wasn't until early September that daily add needs consistently approached the level we've seen today. Clearly, the longer term repos now coming off in this period might cause some headaches and the need for short-term adds to even things out, but basically this is telling us that the funds created in those long-terms aren't coming back to the banks very readily. As a consequence, the banking system continues to "sell" various collateral to the Fed for temporary cash as a patch to meet reserve requirements.

On another note, I enjoyed seeing some of the Fed Chairman's presentation to the Senate yesterday. Rather than appearing confused, my opinion was to the contrary. Mr. Greenspan clearly knows the right answers and the true nature of money...thereby making it harder for him to give acceptable answers that the Senators could understand. Can you imagine Mr. Greenspan saying this?

"The financial commodity to which you refer, money, does not readily lend itself to our efforts at management in the traditional sense; that is, through direct measurement and control. When you refer to the dollar, you are making the common mistake that presumes the national currency IS the money supply--a continuing presumption that, to be sure, remains vital to the current economic prosperity of this era. In truth, the well-known monetary aggregates such as M1 or M3 attempt to track financial parameters that are not money per se, but are actually forms of the base unit of financial derivatives on future productivity. These are popularly called dollars...the funds either in circulation or on deposit at financial institutions, for example. As these dollars are in essence contract derivatives, they are no more uniquely the "money" of your narrow financial understanding than are any of the other financial derivatives that exist in vast quantities in all sectors of financial endeavors. Who is to say which of these sectors may give rise to the "wealth effect"? That is to say, we can not say with any certainty which levels of which accounts might lead to a perception of financial security and abundance--leading, in turn, to demands on production of real goods beyond the ability of real economy to deliver. Due to the nature of the economy's derivative base-unit, the dollar, this resulting imbalance between demand and supply of real goods has a distinctly troubling effect of eroding the foundation of our economic structure...an effect for which we are nearly without means to provide meaningful mitigation. So as you can see, Senator, we find ourselves to be striking a very tenuous balance between acknowledging the real side of the economy (that being the demand and supply for goods and services) and the illusory side (that being any typical portfolio of "accounting wealth"). Given the inexplicable popularity of the illusory side of economic gains by the Western world, and given the fundamental inseparability of the various derivatives and accounts on this side, the Fed has landed in a de facto role as an overarching custodian of general sentiment in regard to consumer demand. Should a significant "wealth effect" arise (from ANY sector of the illusory side of the economy) that manifests itself in the real economy rather than recirculating within the illusory side as it currently has, the extent of the illusion will swiftly known by all participants. It is this, Senator, that we at the Fed now see as our primary charge in this new era. You see, there IS NO definable money to be managed as you would perceive it to be, unless, of course, you would be referring to gold. But that seems doubtful, as I'm sure gold remains off of your radar screen; and further, an international effort continues apace to remove gold's remaining ties to this illusory side and any prospects for management. As one who has long been nostalgic for economic merits of a gold-based economy, I welcome this movement as we must all have somewhere firm to stand when the derivative illusions suddenly lose their substance."
----------------------------------

- Further implications of dollars as derivatives of debt include the meaning of interest rates as (1) "desired rate of return + expected rate of currency depreciation + expected rate of default" on the cash lender side - investor - (setting minimum), (2) "expected rate of return + expected rate of currency depreciation" or "expected nominal return" on the business borrowing side (setting a maximum), (3) "expected rate of nominal asset appreciation" for the leveraged investor (sets maximum), and finally (4) "expected rate of consumer goods and housing appreciation + expected rate of nominal income growth" for the borrowing consumer (sets maximum).
- Note: so long as (1) is smaller than the highest of (2,3,4) the market can set an interest rate.

Cavan Man

(02/25/2000; 17:07:56 MDT - Msg ID: 26003)

At happy hours all over America this guy is probably getting a bumb rap for the action in the markets. Why, it's Greenspan's fault (I've heard this myself personally)! Even the host of the largest syndicated talk radio program in the US is an advocate of continued easy money (the fool). The bad news is he has a platform from which to influence 20MM people. BTW, I am anything but a Democrat.

Mr. G, pull up a chair. You're among friends here.

Cavan Man

(02/25/2000; 17:10:33 MDT - Msg ID: 26004)

Sir ORO

Thanks for making the time to do that! I have a couple of young kids on my hands at the moment but will come back later. How's the book comin'?

TownCrier

(02/25/2000; 17:46:13 MDT - Msg ID: 26005)

Whoa! Gotta try harder to nip this one in the bud...

ORO, in your reply to Cavan Man, (Subject line: "repost of TC quote from G man"), I must encourage you to take a fresh look at TownCrier (02/25/00; 15:21:02MDT - Msg ID:25996)
(Subject line: "Sirs ORO and Solomon Weaver"). The operative word in that key sentence was "IMAGINE". You no doubt were busy with your post as I made that clarification that some may have missed in their scanning of the information. As explained, I was giving the hypothetical near-Greenspanesque delivery of the Fed Chairman saying what he could not possibly say in such clear terms. Yes, he clouds it further still. But nevertheless, the that is the gist of it when you see through the looking glass. Hypothetical quote, to be sure, but very little of what could be called "wishful thinking". More like reading between the lines...easily done if you are not mesmerized by the "performance" of the illusory economy as the Senator from Kentucky aparently is.

From this I have learned the lesson that when you are known to deliver the news, the whole news, and nothing but the news, it is all the more important to stress when the line has been crossed to editorial. My lead-in should have used caps in the word IMAGINE. But again, the essence of the message remains the same as the tale he has been telling, so your analysis requires very little substative modification. Given that,...perhaps the Fed Chairman will clip it to save time in his next testimony?
;-)

Zenidea

(02/25/2000; 17:46:21 MDT - Msg ID: 26006)

email from Platinumguild

TOCOM Freezes Trading Prices On Palladium Futures Indefinately (NOt including spot transactions) at wedensday's closing prices....

CoBra(too)

(02/25/2000; 18:24:22 MDT - Msg ID: 26007)

TC-ORO et al - re Al G'(od)span.

As far as I'm concerned AG admitted to Ron Paul - it becomes increasingly difficult to define what money is, and quote: "It is impossible to manage something you can't define"!!!
AG, Sir, thank you for your admission of the final truth!
Still, you pretend to manage the undefined, or is it unrefined- ultimate outcome or effects of your strategy of testing uncharted waters, blue skies and bubble lies...

Why? Why ever did you accept another term? That is the
only question disturbing my complacency.... Thoughts? CB2

Cavan Man

(02/25/2000; 19:03:17 MDT - Msg ID: 26008)

CoBra

That's his job.

CoBra(too)

(02/25/2000; 19:15:40 MDT - Msg ID: 26009)

To be - or not to be...

...responsible for the final outcome of this monetary experience ... will eventually be judged by history - AG may have (had) deserved better remembrance, had he only kept his own belief in real money ... CB2

CoBra(too)

(02/25/2000; 19:22:48 MDT - Msg ID: 26010)

CM - too bad

Sorry - "blow job" comes to my mind - no pun intended -sounds- bubblemaniac- bal-looney!

Hill Billy Mitchell

(02/25/2000; 19:48:28 MDT - Msg ID: 26011)

No clue?

SteveH says:

SteveH (02/25/00; 12:19:20MDT - Msg ID:25989)
thought
gold down beaucoup
dow down beacoup
euro down beacoup
oil up beaucoup (pressure point)
NASDAQ down un tout petit tout

Something big is going on and we're clueless as usual.

My small and insignificant observation:

All the smart money is on the sidelines (cash) waiting to see which way to go. The poor IRA, 401k, pension, suckers are the one's with the mutual fund money dumps at risk to keep the ship afloat a little longer. Poor suckers!

HBM

Cavan Man

(02/25/2000; 19:50:56 MDT - Msg ID: 26012)

CB2

Agree of course; also, love those Phillies (not Philadelphia).

Let's see, spinning Kuwait on Thursday; silence in Riyadh on Friday. What's next Mr. POTUS?

Elwood

(02/25/2000; 19:56:55 MDT - Msg ID: 26013)

Wherefore will our Dollar go?

We could be in the final blowoff of the dollar now. This rise seems to be signaling increasing liquidity problems in the credit markets. If so then lookout below. That's just an opinion from looking at the info on my end.

This weekend might be a good opportunity for people to familiarize themselves with what happens during a modern-day devaluation. It's quick and it's sharp. And it ain't pretty for those folks who use the devalued currency. A five-year chart of any of the following currencies will give you an idea: Brazilian Real (only need a one-year for this one), Malaysian Ringitt, Thai Baht, et al.

The dollar now is no different than a dot com. No real earnings, no prospect for real earnings in the future, yet sky-high values are the rule of the day. FOA likes to quote Dirty Harry. Here's one for him: "Well, it's a high price to pay for being stylish."

Elwood

Canuck

(02/25/2000; 19:58:28 MDT - Msg ID: 26014)

@ Cavan Man

I agree with you; if A.G. had more say (power) on the course
of the Titanic it would have a chance of missing the 'berg'.

By the way, I think A.G. 'looks' like a goldbug. He looks nice, friendly and he doesn't have that crooked, manipulative deceiving 'fiat' look.

Canuck

Leigh

(02/25/2000; 20:17:37 MDT - Msg ID: 26015)

Canuck

I agree about AG. He'd probably be a lot of fun to have along on the Forum.

Canuck

(02/25/2000; 20:44:05 MDT - Msg ID: 26016)

POG

I'm away for the week-end so just wanted to throw out a tidbit before exiting.

The POG has taken a good hit in the last day or two but it doesn't faze on me one bit. The POG number we see as of late
IMHO, is the number 'discovered' by a nervous, speculative,
short, and a bunch of old cronies sitting in London. These
bunch of 'fiat' stricken, worried sick, paper saddled fools
probably couldn't identify an onze of gold even if it struck them on the side of the head.

The US markets are beginning to fail, as most clear headed
analysts said they would. "Ides of March" , some have said.
Of course they are dragging gold with it.

The 'real' price of gold, not the POG, is nice and steady, perhaps firming. The basis of my theory you ask. One-third
of gold stock fell a little today, one third was flat and one-third rose. Gold miners have access to physical, albeit some are a little confused how to make money, they own and have access to the 'real' McCoy.

Comex is a betting arena. Ask yourself, is it easier to 'drop' the price of gold by selling and shipping the stuff all over the planet or by betting it short. So when there really is a 'short' supply of 'real' metal and the 'real McCoy' starts to rapidly increase in value where does this leave the paper betters; up the proverbial sh*t creek without a paddle.

P.S. : The shorts are shorting because they have to. Gold will not find it's 'discovery' price because it's not allowed to. When gold (not POG) rises and crosses the magic line where shorts panic gold will shoot to the moon. What is the magic number? Ask John Hathaway !!

"Apocalyptic expectations are unnecessary to project a dollar gold price that includes 4 digits. It will only require the INEVITABLE unwinding of bearish producer and dealer hedge structures amidst a change of market perceptions on the desirability of financial assets"

Have a golden week-end.

Canuck

(02/25/2000; 20:52:46 MDT - Msg ID: 26017)

@ Leigh

Would't it amusing if we saw soon totally bizarre 'left field' thing like A.G. quitting and announcing to the planet that it's all a crooked hoax.

Fairy tale ending I suppose, I feel sorry for the guy.

I recall as a kid, my grandfather looked like A.G.

I'm going to bed; I'm getting wishy-washy.

P.S: What's the magic number? I say $349.

Black Blade

(02/25/2000; 23:17:07 MDT - Msg ID: 26018)

PGM Manipulation.....Hey lets all have fun!

Source: Bridge newsRussian aide says government deliberately delaying PGM quotas

Moscow--Feb 25--The Russian government will not finalize export quotas for the platinum group metals until it is satisfied it can use the metals as collateral for loans from western banks, a finance ministry official said Friday. (Story .18332)

Black Blade: Another magic trick! Short PGMs? Squeeze em� for a few more FRNs. Why not? They made the IMF FRNs vaporize and disappear!

Russia says PGM quotas to be signed within 2-3 weeks

Moscow--Feb 24--Russia's First Deputy Prime Minister and Finance Minister Mikhail Kasyanov said Thursday the government would approve the export quotas for platinum group metals (PGM) "within 2, maximum 3 weeks" and Russia will resume exports in "its usual amounts." (Story .15402)

Black Blade: Didn't they say this a couple of weeks ago? By the way, can you guys at IMF spare a few billion?

S African union NUM set to strike at Amplats over wages

Johannesburg--Feb 25--The world's largest platinum producer, Amplats, said Friday that the National Union of Mineworkers (NUM) has served a 48-hour notice to strike at its Rustenburg Precious Metals Refiners (PMR) shafts starting Monday. About 156 employees are expected to join the strike after wage negotiations between the NUM and management deadlocked this week. (Story .17031)

Black Blade: The PGM market is already tight. A strike now while prices are still a bit higher than normal might be a smart move. Not so smart at a gold mine while prices are in the toilet. The upside of course is that tighter supplies just may result in higher prices (usually works in a free market, maybe in this one too?)

Metals Commitments Analysis: Palladium commercial longs +23%

New York--Feb 25--The Commodity Futures Trading Commission commitment of traders report for palladium futures showed commercial longs up 539 contracts, or 23%, to 2,018 contracts in the week ending Feb 22. This could prove a problem at delivery time given that the commercial longs total 201,800 ounces of palladium, which is 8 times more than the 25,400 ounces in the NYMEX warehouse. (Story .2099)

Black Blade: Of course, PGM market is tight, Russia will not deliver in spite of what they claim. It will show up eventually��.on the black market. Russia is a cesspool of corruption and will remain that way. As far as the above is concerned, Ted Butler said something similar about silver recently. Manipulation, collusion, criminal? Nah, just business as usual.

Asia Precious Metals Review: Gold recovers from early morning slip

Tokyo--Feb 25--Spot gold Friday in Asia was supported at US $295 per ounce on buying from physical dealers, after stop-loss selling depressed prices following the weaker overnight US market, dealers said. Profit-taking continued to depress platinum and palladium despite some bargain hunting, they said. (Story .2200)

Black Blade: profit taking? OK, why not, cap the price, change the rules, left holding the bag! Sure why not get out of that position. What other excuses can they come up with? Oh, but wait! Read this next one!

TOCOM suspends platinum afternoon trade on computer trouble

Tokyo--Feb 25--Tokyo Commodity Exchange decided Friday to suspend platinum trade after the trading computer system malfunctioned. Friday's closing prices would be set at the last transaction prices before trading was suspended at 130 JT, it said. (Story .11051)

Black Blade: Of course, a computer problem, why not? How about "The dog ate my trade order!" You would think that their attitude would be: "Got our backs to the wall! Well then Bonzai!", but no! we suddenly got a computer problem.

TOCOM Precious Metals Review: Platinum sinks on profit-taking

Tokyo--Feb 25--Tokyo Commodity Exchange platinum contracts fell broadly except Apr 2000 on profit-taking on Friday, dealers said. They said liquidation in the palladium market has been prompted following the market control plans issued in the past few days. No one traded new Feb 2001 contract Friday as private speculators were prohibited to deal the contract until the next notice. (Story .2192)

Black Blade: So there you have it! Now even the little guy can't trade, because the big boys get first dibs! Manipulation��yup! I think maybe FOA and Another got this right - "paper will burn"

Quixotic1

(02/25/2000; 23:23:46 MDT - Msg ID: 26019)

Virtual Ph.D. in Economics.

Leigh,
Would you be so kind as to indicated where FOA/Trail Guide's URL might be. I've quickly scanned the past couple of days, and didn't see any mention. TIA

ALL,
I've been a long time lurker of this site, and others, on our passionate golden subject. I'd thought I share a moment of introspection with everyone since lurking this site qualifies as attending my mandatory AA meetings (AU Anonymous). Upon reading several post about the TOCOM/NYMEX announcements regarding the effective closing of the paper markets for platinum and palladium, I started to experience impure thoughts about my staying power in precious metals. Could the cabal have that much control as to transcend the borders of nations and manipulate markets without regard for domestic or international laws? ah yup� I fired off a dozen emails of outrage to my elected officials, as well as called anyone who'd listen to my new found weak knees. I started to tally up the dollar value of my modest holdings and develop an exit strategy. That's when it hit me. There are no other safe heavens for the storage of true wealth. I had no other alternatives except to take a number on the Wall Street train. For a "brief" moment, I experienced the insecurity of stepping off my golden foundation.
I have since recovered from that episode and will spend the weekend converting dollars into gold coins. Thanks to all for the Virtual Ph.D. in economics.

Get physical�

Gold for the good guys�Gary

Elwood

(02/25/2000; 23:41:54 MDT - Msg ID: 26020)

To Quixotic1

Wall Street may be a train, but your physical will be a ROCKET!

If you read carefully your commodity broker agreement you'll see that the exchanges can change the rules at any time for reasons that they determine. It's a paper game that you can't win; to play their game is insanity. Your physical is the right game with your rules.

Elwood

TownCrier

(02/26/2000; 00:39:23 MDT - Msg ID: 26021)

Sir Quixotic1

http://www.usagold.com/goldtrail/This is the link you are looking for. At any given time, you will always find it on the home page...the source for all USAGOLD links.

In regard to your other point...

PROPERTY.

That's the name of the game. And I'm not refering to real estate. When it comes to crunch time, the person with portable, liquid property that is tradable for all things under the sun in all nations...that is the person who has lived his life well and made good decisions. Gold fits the bill.View Yesterday's Discussion.

tedw

(02/26/2000; 06:34:58 MDT - Msg ID: 26022)

Musings

http://www.usagold.com
Does anybody out there understand this Gold market?

When I look at it objectively, I have to conclude the market is insane. Central Bank announcements shoot the price of Gold up,yet it loses most of its gains. Mining company announcements do the same thing. All the news is bullish but here we are at $292 an ounce($50 less than the average price over the last 18 years)

This does NOT make sense. Fairly astute observers, (i.e.: the stranger) make observations like $300 is the floor not the ceiling, and Gold seemingly defies common sense and plummets.

By any rational basis, Gold is terribly undervalued yet seems unable to rise to the levels most indicators say it should be (AVERAGE PRICE, GOLD/SILVER RATIO,ANALYSIS BY EXPERTS).

Manipulation and price control by powerful economic interests? Maybe, but neither GATA or anybody else has really been able to prove it,or go into a court of law and stop it.

The Gold Kruggerands I bought last year for $260 have not changed at all. Yet one day there worth $260 and another day they are worth $350. NOw that is odd since the demand for Gold hasnt changed much and not much more is being mined.

As I write this maybe I begin to understand. Most human beings are insane and mad (youve noticed that havent you?-well, Im sure youve noticed it about everyone but yourself).
So, in a way, it makes sense that insane people would have an insane market.

The real value of Gold? Its hard to say. If enough crazy people get together and decide it should be $100, then I suppose it would be a $100. If enough get together and decide it should be $800, then I suppose it would be $800.

Objectively, we seem to be at the lower end of the crazy peoples range. So if I buy goldstock, or options now, then all I have to do is wait until the crazy people decide its worth $400, or $500 or $800. Then I can sell it.With the cash I can buy something Real: gold or real estate or whatever.

Then when the crazy people decide that gold is worth $255 i can buy it all back and do it again.

I didnt make this crazy system, but I dont see anything wrong with taking advantage of it.

Do you think someday these nuts will come to their senses?

Its probably too much to hope for.

canamami

(02/26/2000; 07:58:08 MDT - Msg ID: 26023)

POG Decline

The Globe and Mail reports the POG declined due to the perception that gold mining companies would start to hedge again. Why? Because the fall in price would force them to hedge before the POG fell further. Perverse, circuitous logic if you ask me.

DAYOOPER

(02/26/2000; 08:15:54 MDT - Msg ID: 26024)

TEDW

Tedw...this is what's going on. The price of gold is driven up with these concocted comments which, I'm sure, all the good old boys are made aware of prior to. It is driven as high as they believe they can take it and then the long contracts in the market take their profits and start shorting the market and drive it down.

If gold doesn't move, THEY cannot make money. It has nothing to do with supply and demand and probably won't for 1-2 years when all the options that were sold prior to the first run-up expire. If you notice when gold is going up everyone says "this is it", gold is going to the moon. Yeh, right, if everyone thinks that you can be sure it will not. When it does make it's move to a price of about $450, a minimum price in my opinion, little guys like you and I will be so frustrated with the situation that we will miss (the paper move). The only way not to miss this move is to have the real thing in hand at these very good prices. Unfortunately, guys like me cannot afford to buy 100 ounces of gold and hold on...That is why I have to take my chances with call options and keep buying them until the move. Let's face it, we are all trying to increse our level of poverty except for those that already have enough FRN's and are shootng for a more stable world by having gold back up these fiat dollars we now have. There is a probem with buying these option, however, as they change the rules for liquidating these options at times. In October they did this and will probably do it again if a major move takes place. It's all a money game... nothing more. When you can't believe it can go any lower, it will. It you can't believe it will go higher, it will. That's the only way I can look at the past 20 years in gold.

DAYOOPER

canamami

(02/26/2000; 08:18:11 MDT - Msg ID: 26025)

Oro - Dollar Destruction

Oro,

I apologize in advance if you have already dealt with the point I will make, as I have trouble keeping up with all the posts and work at the same time.

Some time ago, we exchanged posts concerning dollar destruction. You opined that a dollar is destroyed whenever Euros are borrowed to pay-off dollar-denominated debt. Upon some reflection, I have to disagree with your position.

To have dollar destruction, I submit one needs a bankruptcy or a writing down or writing off of debt. This is the only way to destroy a dollar. Now, the repayment of dollar debt may set up dollar destruction, in that a dollar lender who wishes to stay in that business probably must agree to loan such dollars to higher risks (or on less favourable terms, though less favourable terms does not necessarily lead to dollar destruction). If these higher risks default, then there is dollar destruction.

Of course, the loaning of dollars could die out, and such dollars must then be used or held as a form of static savings. If used, they can lead to inflation, which skewers the market's signals, leads to bad choices, and causes further dollar destruction due to defaults.

If the scenario you describe is correct (the shift from dollars to Euros), the dollar's loss of station would result in its retreat to areas where it enjoys the status of legal tender - i.e., the US and the dollarized countries like Argentina and Hong Kong. The influx of dollars should cause inflation in these areas, if the scenario of Euro displacing dollar is accurate. Quarae if dollar devaluation through inflation could be conceptualized as dollar destruction, or merely devaluation?

Thanx for your enlightening posts, which contribute to the store of knowledge, and force independent thought.

TheStranger

(02/26/2000; 09:31:12 MDT - Msg ID: 26026)

"What Monetary Policy?"

There is an article by Gene Epstein in this morning's Barron's which reflects on Greenspan's admission that the Fed has essentially abandoned monetary control. Please purchase Barron's to get the whole thing, but here are some excerpts:

...By fixing a price on overnight credit through targeting the fed-funds rate, the
central bank powerfully influences...real forces. But when it comes to the
actual process of money creation, the Fed's role is completely passive:
Whatever amount of money the system needs, it gets...

...Take one typical way a new demand deposit, otherwise known as a checking
account, comes into being. A firm goes to its bank seeking to borrow $1
million. So the bank opens up a line of credit for that amount in the form of a
checking account and voila, $1 million worth of new money has been created...

Unlimited Supply

Now, of course, by raising the fedfunds rate, the Federal Reserve can make it
more costly for the bank to borrow that sum. So the bank might charge a
higher rate of interest on the $1 million loan -- and the firm that wanted to
borrow the money might decide to back off. In that sense, then, the Fed does
directly influence the "price" of money. But at any given prices, the supply is
unlimited...

...And the point is, if some credit transactions do increase the money supply,
while others don't, and if the mix between the two keeps changing, then the
pursuit of a "monetary policy" is a fool's game.

Stranger's Note:

Epstein argues that the Fed has little choice. But aren't the implications for the dollar negative either way? Or can these quarter point increases really succeed in slowing a speeding locomotive?

Now is a good time to remember you are not just long gold. You are also short paper money. I am no lifelong goldbug. To everything there is a season. But, right now, being short the dollar sounds pretty smart to me.

The U.S.'s over-appetite for goods is being met by foreign producers to the tune of $25 billion a month. How long can this go on without driving the dollar down?

SteveH

(02/26/2000; 09:51:07 MDT - Msg ID: 26027)

Beesting

Thanks. Still reading.

Citicorp says they closed an account owing to the company's business of selling or buying guns.

California getting ready to do away with Ceramic knives.

Illinois stating they want all civilian public officials to not carry arms.

UPS inpsecting packages at clerk's discretion (with you present and in line at counter).

Rule changes on commodity exchanges upon rise in prices (a shorters paradise).

CNN moneyline talking heads stating the correction will go to 20% on the DOW before turning back.

NASDAQ disregarding laws of gravity.

New economy paradigm now spelled pair of dimes.

There is no inflation because those who report or measure it take it out of their measurements or choose the definition that suits them best.

Greenspan admits he doesn't know how to measure the economy crazy.

Banking stocks down 30%

Dow new lows to new highs at 6:1 or higher.

Fleckenstein on Moneyline says Tech Sector has no basis in profits. Says he is shorting stocks with structural problems, gave IBM as example.

Gold manipulated downwards.

Gas at the pump (regular) now steady over $1.56 per gallon.

Crescendo and convergence getting worse. Stay tuned to economy crazy near you.

Enough already!

Gold Trail Update

(02/26/2000; 11:13:57 MDT - Msg ID: 26028)

The Gold Trail Discussion has been Updated

The Gold Trail Discussion has been updated. Click on the link to read the latest updates.

jaydeevee

(02/26/2000; 11:42:14 MDT - Msg ID: 26029)

. . .the continued ability of the powers that be to cap the gold market persists"

http://www.usagold.comPosted on another site by
Observer 2/25/2000 (on Kaplan)

"was right again about the unsustainablity of the recent rally.

He will undoubtedly miss the boat when the new paradigm of a sustained gold bull finally arrives.

But he will continue to do well as long as the old paradigm of a trading range and the continued ability of the powers that be to cap the gold market persists"

To those who know of Kaplan's history of gold market opinions, is Observer's opinion (above) a fair assessment of Kaplan?

ORO

(02/26/2000; 11:51:39 MDT - Msg ID: 26030)

Town Crier - Greenspan imagined quote

I assumed your "quote" was an assemblage of statements the G said outright or implied more than once. So I treated it as such - because it was so well put in such a condensed space.
So overall, he pretty much said everything in the "quote" but the statement about disconnecting gold from the financial "illusory economy", and the "inexplicable" attachment of Westerners to paper assets. He does not regard the investment world's dealings as inexplicable - though he does tend to point out some of the more absurd behaviors.
G must know of the key difference between the Western and Eastern views. Fukuyama's book, "Trust" points out that in the West there is a cultural inclination to take contracts seriously. The contracts may not be quite honestly entered into by some, but there is a sense of fair play and a tendency to abuse contracts minimally. One of the keys is the thought that contracts are entered into for mutual benefit. If the circumstances turned out to be other than those considered by the parties to the contract, the contract is invalid. Thus an oath has conditions. A word does not make a bond.
One of the halmarks of the Eastern cultures is the personal loyalty and the oath to the organization and/or its leaders. These are remnants of feudal relationships and though romantically attractive, are not economically/practically useful and bely an underlying general lack of trust that is not appropriate to business for mutual benefit. Among the problems this engenders is a cultural difficulty in dealing with bankruptcy.

The financial world has one major exception to this rule in that government has become so deeply entangled in the structure of money, that contracts are preserved only so far as the fiduciary duties of financial corporations to their clients - no matter how those are filled - even if that is at the expense of third parties (taxpayers) that do not know they are parties to the contracts. All the standardized OTC and exchange contracts come with a limited liability. When a sufficient number of counterparties are hurt - particularly those to whom the exchange has fiduciary duty (no, these are not the small investor/speculator) - they will change the terms of contract as in Bunker Hunt and now on TOCOM (so it seems). These are self serving and self regulating bodies that have traded some profitability for the release from the legal obligation of contracts through government regulation. The CFTC is not there to make the big guys honor their contracts, it is there so that they can renege on the contract without the counterparty being allowed legal recourse. It is a deal for sharing of sovereign immunity.

Same goes for worker's compensation - which essentially saves the companies from the costs of legal recourse by employees by blocking thier right to legal action, to sue. Same with the EPA, workplace regulation and the FDA, once approval of compliance is given, the likelyhood of successful law suits falls or even disappears, and liability is reduced by orders of magnitude. As many point out, the results are necessarilly bad for all sides involved since the regulator has no interest in the welfare of the parties involved but only in amassing further discretionary power. Thus free contract is not possible and both sides suffer the regulator's uneconomic decision making.

Back to G man. While he stopped short of calling the financial world "illusory". He has often come close to calling it that - even before the irrational exuberance speech of 1996. He has essentially limited his descriptions of the interaction of the financial economy and the real economy to saying that we don't know what part of the financial economy is the one from which there would be leakage - a net flow of funds from financial assets to real stuff. He does say that when conditions are such that prices are rising it is an indication that the interest component in the terms of contracts - which is what he sets, are not high enough.

G man's fearful references to the "big float" and the dangers of the enormous BOP deficit are much more significant in his eyes than most economists would even think possible. Same goes for the enormous volume of derivatives outstanding. The latter have been a focus of much attention by the BIS and the Fed since the 1990-1 recession and led to a flurry of reporting rules in 1992-3 and the collection and publication of data since then. The data have been put to good use by both agencies for the disaster simulations they had run. These include checking on what would happen had the largest bank failed separately in each of the countries. Of particular interest was the question of whether there would be a domino effect. Which they concluded (I believe erroneously and intentionally) would not happen. The simulations show a dampening effect on the progression and does not look at the common holdings of the banks in the case of seizure in the debt markets.

Gotta go.

Maybe fill in a little later.

pdeep

(02/26/2000; 12:12:12 MDT - Msg ID: 26031)

Policy by Wishful Thinking

Steve, just to add to your list.

"We have a surplus" but

CURRENT
MONTH AMOUNT

02/23/2000 $5,744,135,736,409.24 of debt
09/30/1999 $5,656,270,901,615.43 of debt
($87,864,834,793.81)

from:

http://www.publicdebt.treas.gov/opd/opdpenny.htm

"There is no inflation" but

Us Import Price Index has increased 6.7% over 12 months.

from:

http://stats.bls.gov/eag/eag.us.htm

"The economy is the best it's ever been; this is the longest expansion on record, yadda, yadda, yadda" but

go to this site to check on the level of public and private debt. For more gnuks, compare it to the GDP.

http://www.bondmarkets.com/Research/osdebt.shtml

Total debt: $14,218.0 billions

Current dollar GDP: $9,501.6 billion

from:

http://www.bea.doc.gov/bea/newsrel/gdp499p.htm

Ratio of Total Debt to GDP on a cash-basis: 1.5

from:

http://www.bea.doc.gov/bea/newsrel/gdp499p.htm

On an accrual basis, the ratio is probably closer to 4.0

Which is why I do not worry about short term fluctuations in the price of gold. Because I still believe that in the end, all debts must be paid. And part of "the payment" will likely consist of a massive dollar devaluation, which is in essence a tax on anyone unfortunate enough to be holding dollars and paper denominated in dollars. Maybe it occurs this year, maybe in ten years. But it's going to happen.

pdeep

(02/26/2000; 12:23:20 MDT - Msg ID: 26032)

The "High" Oil Price

http://www.westegg.com/inflation/The administration is foaming at the mouth over high oil prices. Well, let's see, I pay $1.77 per gallon for diesel, and regular gas prices are in the $1.55 range. Looking at the inflation adjusted price of regular gas, how much would I have been paying in 1960?

$0.28 / gallon.

So this wonder of all economies cannot afford to pay what seems to be a historically low price for the stuff.

which of course makes you wonder how wonderful the economy really is.

dragonfly

(02/26/2000; 13:43:21 MDT - Msg ID: 26033)

Thanks FOA

The hike is cleaning out the cobwebs for this old radical. The debate on the best and brightest monetary system is like trying to follow a world-class ping-pong game.

Solomon Weaver

(02/26/2000; 14:30:29 MDT - Msg ID: 26034)

KEEP CALM IN A DOWN MARKET

No MANS GREED CAN TRIUMPH OVER THE COOL SWEET PATIENCE OF GOLD.

tedw

(02/26/2000; 14:39:04 MDT - Msg ID: 26035)

In search of the Truth about Gold

http://www.usagold.comDayooper:

I dont believe your theory that the price of Gold is being driven up by concocted Press releases to benefit certain individuals will stand up.

The Central Banks have, I believe, the ability to print money almost without restriction. Are you seriously maintaining they make such announcements to drive up the price of gold after they have driven it down by leasing so they can make money with futures and options?

Although the Central Bankers may be motivated by greed, I suspect the people in the positions of authority to make such decisions already have all the money they could ever possibly need.

Who are these people anyhow? Can someone name names. It wasnt "Central Banks" that made the Washington agreement. It was really probably a handful of individuals from whom the decision came. Who are they?

It seems more likely to me that the motivation behind the Washington agreement had more to do with a power struggle of the Euro vs. The Dollar.

Comments anyone?

Truth- get you some!!

Solomon Weaver

(02/26/2000; 14:41:30 MDT - Msg ID: 26036)

CAN WE USE HTML TO INSERT?

No MANS GREED CAN TRIUMPH OVER THE COOL SWEET PATIENCE OF GOLD.
Solomon Weaver
(2/26/2000; 14:30:29MDT - Msg ID:26034)

KEEP CALM IN A DOWN MARKET

No MANS GREED CAN TRIUMPH OVER THE COOL SWEET PATIENCE OF GOLD.

Solomon Weaver

(02/26/2000; 14:44:19 MDT - Msg ID: 26037)

SORRY I GUESS NOT...

Harley Davidson

(02/26/2000; 15:08:33 MDT - Msg ID: 26038)

@Solomon

I don't know if I caught your thread in its entirety. Are you trying to do something with HTML?

Camel

(02/26/2000; 15:20:04 MDT - Msg ID: 26039)

Market manipulation

I have to agree with Daooper.I don't really know anything about trading gold futures, "paper gold" etc but it seems to me that the basic scam would work just as well with gold mining stocks.

If someone had enough "paper gold" to sell and drive down the price of gold then they might also be in a position to simultaneously short the gold mining stocks.They could then gradually buy back their paper gold, cause the price of gold to rise,drawing everyone back into the gold mining stocks and repeat the process giving all the sheep a haircut over and over again.

Seems like this was pretty much the same thing the big currency speculators did with the Hong Kong dollar a couple of years ago. They would simultaneously sell the currency and short the Hong Kong stock market. The Hong Kong Monitary Authority finally put a stop to it, buying stock and "punishing" the speculators whenever they tried to short the market.

Leigh

(02/26/2000; 15:21:20 MDT - Msg ID: 26040)

FOA

Dear FOA: It's a cold, rainy day here where I live, and it was fun to go hiking in the sunshine with you and the Forum gang. Your message answered a lot of questions I've had. Freeze-dried chicken a la king for dinner around the campfire, anyone? (Y2K leftovers.)

Phos

(02/26/2000; 15:44:36 MDT - Msg ID: 26041)

jaydeevee (2/26/2000; 11:42:14MDT - Msg ID:26029 - Kaplan

I have followed Mr Kaplan for about one and a half years now and his call on the gold market has been pretty accurate. But his calls on other commodities and the stock market have been miles off-base. He recommended cotton futures (I think) at one time and they tanked. I think there was another commodity call that was also wrong, but not quite so badly. He has recommended shorting EBAY for about a year now and that was a little premature to say the least. So like most 'experts', he has been right and he has been wrong.

It should be interesting to see, if and when gold does finally start its move up, he calls that correctly. I think he just might.

CoBra(too)

(02/26/2000; 16:36:35 MDT - Msg ID: 26042)

Learning to be humble ...

It's after midnight and I've just returned from a dinner with friend - including an elderly uncle.
After discussing Austria's favorite pastime - Joerg Haider - and you know where I stand in this ridicule - I've learned that the US$ is and will be the only save haven forever. It has been the only accpted currency in post WWII Europe for so long and still is such in formerly eastern block countries, as I've whitnessed in St. Petersburg (Leningrad) recently.
The great US Buck is in itself a legend - a legend of historical proportions' but never-the-less history.
I do find it amazing that intelllectual people either don't want or can't envision the sea change of value(s-ation) just around the next bend on the trail.
This is pobably why this drama will have to play out as all similar drama's did plaay out!

Best CB2

Cavan Man

(02/26/2000; 16:37:03 MDT - Msg ID: 26043)

To Leigh

Same here although I plan to keep e-supplies (not electronic) around here permanently; rotate just like grocery store. If I wasted more than $25 total I'd be surprised. Good Day!

CoBra(too)

(02/26/2000; 16:54:29 MDT - Msg ID: 26044)

Hello FOA/TrailGuide

Should have read your latest before shooting my mouth off - anyway similar conclusions ? Keep the good work coming and thank you - CB2

Primus

(02/26/2000; 16:58:49 MDT - Msg ID: 26045)

Silver

Could members of this esteemed table offer an opinion on the pros and cons of purchasing Silver Eagles vs silver rounds. As a new student to this table, I need all the help I can get. Thanks to all.

Trail Guide

(02/26/2000; 17:20:26 MDT - Msg ID: 26046)

(No Subject)

dragonfly, Cavan Man, CoBra(too), Leigh, Solomon Weaver ,,,,,, everyone!

Thanks for hiking the trail with me. I'm sorry I am not replying / talking here very much right now. My intent is to discuss mostly here as soon as we started. However, have had to wrap up several projects. With those behind me, I'll be writing quite a bit on both venues in a day or so. I already see something that needs further clarification and will correct soon. Also, I see a lot of openings for Trail Guide to jump in here and debate the issues! Hopefully, we will throw snow balls at each other,,,, I'm all out of rocks! (grin)
TownCrier,,,, that is some art job with the trees and all! (smile)

Thanks all,,,,,, Trail Guide

Zenidea

(02/26/2000; 17:44:49 MDT - Msg ID: 26047)

The Australian Gold Council

http://www.australiangold.org.au/~austgold/h/members.htmlJust curious why the members are seemingly the mining companies and associate members are seemingly banks....
like The chase Manhattan Bank, except for WMC which is seemingly both.

beesting

(02/26/2000; 18:00:09 MDT - Msg ID: 26048)

To ORO Ref: The Big Deal 02/21/00 msg.#25765.

Sir ORO's message #25765 suggests the possibility of huge amounts of Gold being sold worldwide since 1983.(ex-President Marcos' Philippine Gold hoard)

From ORO:<>

Well here's some more food for thought along this time line concerning Gold.
According to my coin books, most if not all, Gold producing countries, along with countries that held large amounts of Gold, decided at approximately the same time(1982-1983) to follow South Africa's lead(1971? with the K-Rand)and start minting and selling new issue Gold coins in return for paper money.This is now not a small amount of Gold annually.(U.S. alone sold 61 tonnes of U.S. Gold coins, in 1999) I have no idea of current world Gold coin sales.(400 to 500 tonnes???)
According to the World Gold Council Central Banks have also ADDED to their over all total Gold levels over the past 20 years.

Question- Why would any large producer or holder of Gold metal(countries) exchange it for paper money,knowing the history of paper money(always loses purchasing power over time)???

Possible answer- A large amount of unreported metal Gold was available from 1982-1983 to present times.[Sir ORO's hypothesis](excuse me for the American expression-HOT MONEY). Is the Gold being dispersed in the form of Gold coin to avoid detection worldwide??? I can think of no reasonable explanation for Governments selling Gold to the public for paper money, when they have the ability to create paper money out of thin air!
Please remember this is speculation.....beesting.

Peter Asher

(02/26/2000; 18:37:47 MDT - Msg ID: 26049)

tedw (2/26/2000; 14:39:04MDT - Msg ID:26035)

You said:
>>> It seems more likely to me that the motivation behind the Washington agreement had more to do with a power struggle of the Euro vs. The Dollar.

Comments anyone? <<<

Ted: I culled out these portions of Post #2166-12/26, from the last contest.

1) Gold New Year Begins With Advent of New EMU Euro!

It was forecast that the combining of several nations currency into one monetary unit would increase the economic buying power of the participating nations. However, the laws of geometry prevailed and the whole was only equal to the sum of it's parts. Despite the fact of its being redeemable by the combined economy of all its members, the Euro failed to attract a following as a Global Reserve Currency and the Dollar maintained it's supremacy. It was thought by many that the 15% gold backing would create an upward movement on the price of gold but this did not occur. The event was also significant in the end, by the fact of it's failed expectation.

The hoarding and dis-hoarding of national gold reserves is the largest quantitative factor in the distribution of above ground inventories. Therefor the advent of the Gold backed Euro and the Washington agreement are changes in the most basic fundamentals of the gold marketplace. For whatever reasons exist to be contemplated and discovered, these two events are surly part of a piece.

The US trade deficit is only maintainable by the fact of the dollar being the reserve currency of the world. The entity whose economy is backed by the reserve currency of the world, can consume more than it produces. The deficit is offset by the float! Euroland has been on the short end of this stick to date. It would behoove them to attempt to replace the dollar with the Euro. As even their composite economy does not have the magnitude of ours, how better to sway the World's traders than to back the currency, increasingly, with gold? If the marketplace can be controlled sufficiently for all borrowed gold to be returned to the CB vaults, then the lower price of gold will have created a net buying opportunity. Low prices will only have created losses on the quantities sold into the open market. It does not hurt a Central Bank to loose value on its hoard for a few years, if it still has it when the price recovers. Look not at what they sell, but at what they keep!

We may have only seen the first part of an ongoing strategy of the Central Banks increasing their gold reserves. This is not the only possible theory of the hidden reasons behind the manipulation the POG, but the events of this year do fit it well. It is still early in the Game!

Cavan Man

(02/26/2000; 19:09:28 MDT - Msg ID: 26050)

peterasher 26035

Hello Peter! I am very glad to see your post! Was that reference to something you wrote?

Cavan Man

(02/26/2000; 19:13:25 MDT - Msg ID: 26051)

Primus

I think Mike Kosares of CPM can answer that question better than I but, for me, bullion is bullion; particularly when it come to silver. The exception for rounds would be; choose a reputable mint. My opinion is that the very best possible delivery will be available from the most reputable source. See, that is why you should call MK @ the 800 number given.

All: Please correct me if I am wrong.

Leigh

(02/26/2000; 19:13:43 MDT - Msg ID: 26052)

FOA

Dear FOA: If the long-expected market crash occurs soon, how long do you think it will take for hyper-inflation to set in? Should we be stocking up on things now and preparing for panic in the stores, or will the inflation happen gradually? Thanks!

Cavan Man

(02/26/2000; 19:17:08 MDT - Msg ID: 26053)

Sir Trail Guide

I am running a bit ahead of the pack although I promise I will not ask you anymore questions with regards to "timing" as I (now) fully understand your strategy (I think anyway).

However, having said that, I must confess to be very interested in current events. Thanks.......CM

pdeep

(02/26/2000; 19:29:18 MDT - Msg ID: 26054)

Best Deconstruction of Greenspan's Spam

http://www.simplex.co.il/guests/warning.htm"Questions for economists about "productivity": If the US enjoys higher "productivity" why has the trade deficit doubled during the last two years? In an economy that is mostly based on "services", how can higher "productivity" generate the funds that will be needed to repay the debts, which financed a trade deficit that consists mostly of "goods"? Will 10 million Japanese and 20 million Chinese come every year to tour the US? How can competitiveness rise as the result of higher "productivity" if at the same time the trade deficit doubles? What competitiveness? Of burger flippers and Internet service providers? "

gnuk gnuk.

Cavan Man

(02/26/2000; 19:35:03 MDT - Msg ID: 26055)

Leigh

Don't bet on a crash of the markets. I think the decline of the USD is much more likely and perhaps, a worse fate.

Buy and holds should be "qualified" gold stocks IMHO. Otherwise, trade in and out or, inother words, place your bets.

Cavan Man

(02/26/2000; 19:37:49 MDT - Msg ID: 26056)

Leigh

What I mean is that the fate of the US equities market and the FOA/Another scenario are two, mutually exclusive (possible) events.

RossL

(02/26/2000; 19:40:44 MDT - Msg ID: 26057)

beesting

beesting said:
"I can think of no reasonable explanation for Governments selling Gold to the public for paper money, when they have the ability to create paper money out of thin air!"

I suppose the governments must keep the illusion that paper money is worth something tangible.

Leigh

(02/26/2000; 19:57:44 MDT - Msg ID: 26058)

Cavan Man

I could be wrong, but it seems that during the Asian crisis, the market crash and currency devaluation happened at around the same time. People were in a panic to buy whatever they could before their money was devalued. Will that happen here, and should we prepare by stocking up on consumer goods?

Cavan Man

(02/26/2000; 20:02:23 MDT - Msg ID: 26059)

Leigh

I understand your question. First of all, I am the wrong person to ask. I am always wrong.

Maybe this will help--I keep very little cash. If I need cash I go to the bank depository. My real estate is denominated in USD. Oh well, it's a long term hold anyway.

Solomon Weaver

(02/26/2000; 20:03:19 MDT - Msg ID: 26060)

it is the bullion banks who get the cash from gold coin sales. - Beesting

Beesting, you said.

"I can think of no reasonable explanation for Governments selling Gold to the public for paper money, when they have the ability to create paper money out of thin air!"
---
First of all, the amount of coin sales are probably related more to "demand" of world citizens who want to buy them.

Secondly, it is not the "Governments" who have sold gold coins to the public. It is the "borrowers" of CB gold, who in order to enter carry trades have "sold" the borrowed CB gold into the market, where it is available to mints.

You are right, no government in its right mind would sell citizens gold in exchange for a paper currency they could print themselves.

What I find most facinating about OROs story with the Marcos hoard is that if true, it implies a very large "hidden investment demand".

I don't know the history of gold mining, but I assume that with the dramatic price rises in the 70s that a lot more gold mining capacity was developed, and that the popularity of gold coins sales was also a way to increase demand to keep from having a golden glut.

Poor old Solomon

USAGOLD

(02/26/2000; 20:15:21 MDT - Msg ID: 26061)

Leigh....The Weimar Republic as a Teaching Text....

Was scrolling through the interesting discussion tonight when I came across your question. In working on the next News & Views, I came across this interesting little ditty from our good friend, James Turk. He brought up the Weimar comparison months ago in private conversation, but he's also published it in his newsletter as much as a year ago. He thinks that the rise in the Dow is directly a manifestation of money creation, and has been one of the few gold advocates saying that the Dow will rise as an inflationary component. I do not know what he is thinking right today, since this correction became more than a temporary blip.

Here's what he said in his January 31st letter:

"The answer to the next major move of the stock market is not so much about the economy or earnings or the impact of the Internet as it is about money. Tell me what the Dollar is going to do, and I'll tell you what the outcome of the stock market will be. And as I see it, there are only two alternatives. I've discussed these before, and labeled them the Nikkei alternative and the Weimar Germany alternative.
In Japan, stocks crashed hard in the early 1990's ending that country's stock market bubble, but the Yen survived as currency. In Germany in the early 1920's, stocks went to infinity because the purchasing power of the Reichsmark fell to zero. In other words, the German currency was destroyed, so stocks were priceless in terms of that currency. Which will it be for the US stock market and the Dollar? Long-term readers of these letters know that I have been leaning toward the Weimar scenario. In other words, there will be a serious flight out of the Dollar, so stocks will continue higher in Dollar terms (but not in terms of purchasing power).
As a result, I think the stock market will head higher in due course, as measured in nominal Dollar terms. But in the short-term, this latest sell-off looks like it could get nasty."

In the Weimar Republic inflation -- also known as the Nightmare German Inflation -- goods of any kind did well. If you had a warehouse full of wienerschnitzel, it was better than the paper money. It got so bad that the working man would go to work in the morning, get paid twice a day, and his wife would come to the factory gate to collect the pay check in order to spend it before the currency devalued further. In such a situation, gold ownership of course is crucial. A few German 20 mark gold coins at the beginning of the Weimar debacle would purchase approximately the same goods at any point during the nightmare. On the other side of the ledger, a family's life savings would not purchase a cup of coffee.

Do I think it could happen here? I'll just say obliquely that this is why the discussion about the euro is so important.

Solomon Weaver

(02/26/2000; 20:15:29 MDT - Msg ID: 26062)

Peter Asher - a follow on to your repost

Low prices will only have created losses on the quantities sold into the open market. It does not hurt a Central Bank to loose value on its hoard for a few years, if it still has it when the price recovers. Look not at what they sell, but at what they keep!
--------------
If gold were to return to a free market value, it is likely that a lot of that CB would not be returned as the parties who borrowed are in default. "Officially, CBs have not sold...they have leased...but when the "renters sell the material" it is a sale nontheless. Ask not what they have kept!

Poor old Solomon

Leigh

(02/26/2000; 20:20:40 MDT - Msg ID: 26063)

Thank you, MK. That's what I was suspecting.

Solomon Weaver

(02/26/2000; 20:39:39 MDT - Msg ID: 26064)

Primus - Go for the Eagles

Cavan Man (2/26/2000; 19:13:25MDT - Msg ID:26051)
Primus
I think Mike Kosares of CPM can answer that question better than I but, for me, bullion is bullion; particularly when it come to silver. The exception for rounds would be; choose a reputable mint. My opinion is that the very best possible delivery will be available from the most reputable source. See, that is why you should call MK @ the 800 number given.

All: Please correct me if I am wrong.
----
If you are considering buying rounds why not consider buying bullion bars? If you don't like the "premium" which you would pay for Eagles (about $3-4/oz) but want coins because you would trade or barter, consider junk silver.

Remember that one reason people buy coins is because they are beautiful. Let us say, just hypothetically that you would buy a unit of 500 new Silver Eagles...setting you back about $4000-5000. You would get all coins in the same year. But, you can now take some of these coins to shows and start to trade them with people for other coins you like....If the price of silver were to rise sharply compared to gold, you could for example trade a number of them for a nice gold coin. If you go to a coin show with just dollars in your pocket, you are only a customer. If you have a nicely packaged "handful" of Eagles you never know when you can find a dealer who is willing to cut you a sweet deal.

Another thing to remember about an Eagle....they make great gifts. Most people have never seen one. If you invited an old friend out to have a breakfast it would run you $10 easy. So, when your friend invites you to breakfast and won't let you pay...you reach into your pocket and say "well listen....let me give you this beautiful coin here...it is pure silver...good luck and all". If you stay in a hotel room for a week on vacation why not leave an Eagle as part of the tip to room service...what the hell, when you go out to a nice dinner...subtract $10 bucks from the $25 tip and leave $15 cash and a Silver Eagle. When you shop at a small owner-managed shop, consider slipping out a silver Eagle and asking if they would take this instead of $10 bucks...

Can you have this much fun with rounds or bars???

Poor old Solomon

Solomon Weaver

(02/26/2000; 21:09:44 MDT - Msg ID: 26065)

MK - I don't think it will be Weimar

MK

In your comparison to the Weimar inflation, something occurs to me as an important comparison:

As I understand it, the German Government was printing a lot of money and using it to buy goods...thus, as money increased and good were consumed the price of goods rose. If the government was putting this cash out in the market without even borrowing it (bonds), the level of official debt was not rising, and I doubt that "die Bevolkerung" had much private debt. Thus, the only place for money to go is into fixed assets...like companies. In the end, whoever owned the shares owned the shares and the poor guy was the one who just sold the last share for a wheelbarrow full of paper.

On the other hand, the inflationary creation of the dollar over the last 20 years has always been such that new dollars mean new debt...and that debt is distributed all around...private, corporate, gov't and international. Thus, if the world were to start to push dollars out of "reserves" and back into circulation, we must assume that one of the natural uses for these circulating dollars would be to pay back USD debts. Obviously, the debt issuers will be unhappy because they are getting paid back in dollars which are worth less but in the event that they too have debts, they can pass them on. Just as the creation of debt was part of the growth of the dollar, the reduction of debt can be part of its (slow collapse).

Poor old Solomon

Primus

(02/26/2000; 21:39:43 MDT - Msg ID: 26066)

Thank You...

Solomon Weaver

Thank you very much for your thoughts. I did call the "company" listed above. Being a NEW customer, I was handed over to a person, that after he was finished, I was more confused then when I started. I was not impressed, and will not request further information. We all started out 'somewhere� in life, and to gain knowledge we must learn from those who have walked before us. This I have learned, when a person talks more about his commission, then answering my questions, it's time I head for the door. I live in a small town. Here, I have two sources, visited both today ready to lay down hard cash. I still have the cash, the stores still have the silver. Not to mention the total drive exceeded 60 miles. Again, thanks for your help. Monday, I will be on the phone to New York.

Primus

Primus

(02/26/2000; 21:47:03 MDT - Msg ID: 26067)

@ Cavan Man

Cavan Man

Sorry I missed thanking you also. It's late, I'm brain dead and short on Silver.

Primus

beesting

(02/26/2000; 21:53:08 MDT - Msg ID: 26068)

Hi Sir Solomon Weaver--response on msg.#26060

http://www.usmint.gov/facts/facts.cfmMr. Weaver, you said: <>

Sir, I must respectfully disagree with that statement. Here in the U.S. the Mint,the agency that has the authority to issue official U.S. coins, IS part of the U.S. Government, by an act of Congress,no involve-ment of Bullion Banks, please see above URL.
I recently traveled to a small independent foreign country, and was told all Gold coin sales were done at the local Central Bank. Upon further investigation I discovered their Country's official Government coins issued by their Government, were minted at the Singapore Mint and sold directly to buyers at an office at the Central Bank only. Again, no involve-ment of Bullion Banks.
I have a World Coins catalog 26th edition which tells where coins are minted, and for which country, surprise-ingly much minting is done away from the Country that issues the coins.

It is my opinion Bullion Banks are a go between, between Gold mining companies,and COMEX,LBMA...paper Gold markets... and have some kind of cozy arrangement with Central Banks.
Thank You for all your posts.....time for me to get some shut eye......beesting.

Gandalf the White

(02/26/2000; 22:01:05 MDT - Msg ID: 26069)

Primus' Question !

Please Primus, tell us your question !!
The answers are here at the TableRound and this must be a very interesting question that so many people that you ask can not answer it. Remember, that there is not such a thing as a dumb question, only dumb answers.
<;-)

Solomon Weaver

(02/26/2000; 22:23:18 MDT - Msg ID: 26070)

beesting - more on who sells the gold

Beesting

Let me point out to you what I was thinking here...

Last year, I believe there were well over 1 million ounces of Gold Eagles minted by the US Mint. So that is about 100 tons of gold....

Did the United States Central Bank (which is not owned by the US Government) "sell" this gold to the mint who sold it to "us" as coins????

Perhaps it was borrowed first by Bullion Banks who then "sold" it to the mints who then "sold" it to "us".

My point was simply that the Bank that both owns gold and can print money would not sell gold. But, by loaning it to a Bullion Bank, they "keep" title to the gold which was sold to you....if this has been going on for 15 years, it is no wonder that there are several thousand tons of CB gold that is "owed".

I can well imagine that in Singapore (which is a model nation and by no means a normal nation) that the CB might be actually "selling" the gold directly.

Poor old Solomon

Gandalf the White

(02/26/2000; 22:29:13 MDT - Msg ID: 26071)

The Hobbits wild guess at Primus' Question !

Hail Primus -- I have searched back and found this question and am guessing that this is what you wished to get an answer on. IF the Hobbit's are wrong, please skip the following answers.
<;-)
----
Primus (2/26/2000; 16:58:49MDT - Msg ID:26045)
Silver
Could members of this esteemed table offer an opinion on the pros and cons of purchasing Silver Eagles vs silver rounds. As a new student to this table, I need all the help I can get. Thanks to all.
====
The way that the Hobbits see silver is far different than they look at gold, but here is their discussions on the matter of Silver Eagles and silver rounds. -- First they are both 0.999 silver and therefore have no difference in purity, BUT, one has the mark of the UNITED STATES OF AMERICA upon it and therefore a more "rated" maker than the other rounds. There are most likely tens of thousands types of silver rounds and most do not carry the date of production and are slanted toward collectors rather than bullion savers, and do not have a premium value that can be gained by the US coin. The varieties of silver rounds are endless and some have very artistic art work and others are rather plain. There are drastic differences in prices between rounds because of the "desirability" of the round, but most are pegged near to the Price of Silver (spot). A few silver mining companies engaged in production of rounds for a period of time, but could not maintain the effort as it was not profitable. Also the Silver Eagles have a established wholesale and retail market and therefore have a hefty premium for a coin. Junk silver coins also have a hefty premium on them too and have been out of circulation for a long time. The Hobbits await your additional questions, but be warned they do not engage in this market and are not up to date on the prices related to these items.
Good Luck!!!
<;-)

Solomon Weaver

(02/26/2000; 22:37:29 MDT - Msg ID: 26072)

Primus - don't be discouraged

Primus

If I understand you right, you called Centennial Precious Metals and did not get the service you want as a NEW CUSTOMER!!!!! Given that they are the folks who set up this site, and have many happy customers, I would encourage you to ask for Michael Kosares personally.

Go to the top of this homepage and email the sitemaster...there you will get attention.

Also, you probably feel desparate to make a purchase...but I think you can relax a little bit...the reason you are buying silver today (or gold) is not to get it for $0.25 per ounce less than next week....it is because you believe that silver and gold will weather the storm of fiat wars...those wars are only starting....you have plenty of time to get some coins.

http://www.monex.com/prices.html
The link above is for a company which sells a lot and the prices you see are for purchases of the unit sizes which a coin dealer may buy...you can't just buy a couple ounces....but this site should give you a good sense for the price on a given day.

Stay around here...learn how we think and discuss...and keep asking questions about how to become a PM investor.

Poor old Solomon

Solomon Weaver

(02/26/2000; 22:44:25 MDT - Msg ID: 26073)

Gandalf - a small correction on junk silver

Gandalf said to Primus: Junk silver coins also have a hefty premium on them too and have been out of circulation for a long time.
---
Silver spot close Friday was $5.05. Silver Junk coins sold for $5.08 ....those hefty pre y2k premiums have vanished my dear wizard.

Gandalf the White

(02/26/2000; 22:45:51 MDT - Msg ID: 26074)

Poor "Poor old Solomon"

time to go to bed Sol !
<;-)

You said
"Last year, I believe there were well over 1 million ounces of Gold Eagles minted by the US Mint. So that is about 100 tons of gold....""
NOT !!
one million ounces is NOT 100 Tonnes of gold !!

MO
"Did the United States Central Bank (which is not owned by the US Government) "sell" this gold to the mint who sold it to "us" as coins????"
NOT !!
the FED (USA CB) does not own the gold owned by the US Government. IT is owned by the Tresury Department which is of course a part of the Government. The gold used to make the gold eagles must be American gold and is obtained by the mint from known sources. MOST BB's do not know or care from where their bullion comes.

I have no comments on the rest of your effort, other than to say if one errors greatly at the start of a discussion, the remainder sometimes is not read in as much detail as it should be given. AND so it is off to bed for the Hobbits.
<;-)

Marius

(02/26/2000; 22:46:26 MDT - Msg ID: 26075)

Leigh & Town Crier: Weimar Amerika

The example of Weimar Germany in the 1920's is indeed the nightmarish extreme of inflation. One of the most compelling accounts of it is included in Leonard Peikoff's The Ominous Parallels: The End Of Freedom In America. I got my copy from Laissez Faire Books in san Francisco. (800/326-0996; or on-line at http://laissezfaire.org)

Peikoff was the executor of Ayn Rand's estate, and a standard bearer for Objectivism--the "enfant terrible" of modern philosophy. His "Parallels" are the startling similarities between Weimar Germany and America (c. 1982). It will frighten & repulse you at the same time it fascinates, and you won't ever forget it. I reprise it often, particularly when my friends and family shake their heads at my cynical remarks regarding what our culture reveals about us. Not for the squeamish, but a great read.

Gandalf the White

(02/26/2000; 22:56:21 MDT - Msg ID: 26076)

Thanks Sol !

Sol corrects the Wiz.
--
Silver spot close Friday was $5.05. Silver Junk coins sold for $5.08 ....those hefty pre y2k premiums have vanished my dear wizard.
===
See Sol -- this proves that I know not much about present silver values, and in fact have rid the vaults of such to prepare more room for the real wealth ! Thanks for the additional information to BOTH Primus and me.
NOW, off to bed.
<;-)

Solomon Weaver

(02/26/2000; 23:04:14 MDT - Msg ID: 26077)

good night Gandalf

Gandalf

I stand corrected...yes 1 million oz is more like 30 tons...and I am glad to know that those Eagles really do contain American gold...

On another day, when you are not ready for bed, you will have to educate me more about who really owns the gold. Given all the discussion about Central Banks selling gold, and having been told that the FED is a Central Bank, I made the conclusion....is it rather that the Treasury controls all metal and coinage and the FED has the control of paper currency and digital money??

Gandalf the White

(02/26/2000; 23:06:35 MDT - Msg ID: 26078)

Calculations of spot silver and coinage silver are needed.

IF the Wiz remembers correctly --- a face value of junk silver coins equals about 0.72 ounces of pure silver and therefore a face value at about spot silver would be a HEFTY premium to the Hobbits. Do you agree. Sol?
<;-)

Gandalf the White

(02/26/2000; 23:10:07 MDT - Msg ID: 26079)

Good night Sol

We shall continue the education together!
and NOW to bed.
<;-)

Solomon Weaver

(02/26/2000; 23:11:34 MDT - Msg ID: 26080)

Todo, I think we really are in Weimer

Marius (2/26/2000; 22:46:26MDT - Msg ID:26075)
Leigh & Town Crier: Weimar Amerika
---Vielliecht sind wir schon da.
------
I believe it was CB2 who said that all his European friends were buying high tech American stocks..

In some odd way, we are already getting the Weimar effect...with a large trade deficit leaving dollars overseas in the hands of foreigners who have no "personal dollar debt" to repay, and do not want "American imports", they send the "big float" back into our stock markets and bid up the price of our companies....is this not just a slow motion version of Weimar???

Marius....do you post from Europe???

Poor old Solomon

Solomon Weaver

(02/26/2000; 23:14:02 MDT - Msg ID: 26081)

still no premium

Gandalf

You are correct about the content of silver...but the prices are quoted based on the silver content.

Poor old Solomon

beesting

(02/26/2000; 23:32:16 MDT - Msg ID: 26082)

Hi again Solomon #26070

Several months ago we had a discussion here concerning where the U.S. Mint obtained the Gold for Gold Eagles, many thought it came from Fort Knox, it was determined that the U.S. Mint has in their regulations a statement that states(from memory only)-All Gold will be bought directly from U.S. mines only. Since the U.S. is the worlds second largest producer of Gold annually,and we(U.S.) export Gold also,it would seem enough Gold is produced in the U.S. to satisfy all domestic coin demand, and then some.

In My Humble Opinion much Gold is sold worldwide off market, such as India 800 + tonnes annually VIA Dubai(sp). Again in my opinion, LBMA-COMEX show large amounts of paper Gold traded and somehow set the "spot" price of Gold, but this doesn't represent Central Bank sales to each other or off market transactions.

Again, Bullion Banks finance Gold mines, the reason Ashanti was not allowed to default on loans to Bullion Banks, was because it may have caused a chain reaction on COMEX-LBMA forcing closure of paper Gold markets(no physical delivery on sold Gold contracts issued by Bullion Banks)it may still happen.

Sir Solomon, thanks again for the discussion all input is greatly appreciated...now to bed....beesting.

Solomon Weaver

(02/26/2000; 23:34:15 MDT - Msg ID: 26083)

Is is junk or is it memorex?

http://www.monex.com/prices.htmlGandalf

Just to get the junk silver story clear.

The standard unit of sale is $1000 face value..which generally contains about 720 ounces of silver.

The coins themselves are actually 90% by weight silver.

If you go to http://www.monex.com/prices.html you can compare the spot prices for various bullion coins. I have always understood the pricing quoted there for 90% and 40% silver coins to be tied to the actual amount of silver in the coin, not to the weight of the coin.

By the way, if you have cleaned out your vaults of silver to make room for the gold....well then...you must have got much more from old Smaug's stash than even the Hobbits suspect.

Finally a late good night.

Poor old Solomon

THX-1138

(02/26/2000; 23:39:35 MDT - Msg ID: 26084)

Solomon Weaver

I think you are correct. This is a slow motion Weimar Republic with regards to the stock market. I felt that way back in Jan 99 when the stock market continued to go up after the Euro was released. That's when I cashed out most of my bank account and purchased my first 10 Gold Eagles. Since then I have looked on all US "currency" with new eyes.

The new 50 state quarters to me are just a bunch of scrap metal as is the new Sacagewea "Phoney" dollars.

One of my friends yesterday was saying how a new georgia quarter with a peach minted upside down was worth $50.

If that's the case when a piece of scrap metal with $0.25 stamped on it has a value 200% more than what is written on it, then my gold coins are worth 200 times what I paid for them ($300). They would be worth $60,000.

beesting

(02/26/2000; 23:49:17 MDT - Msg ID: 26085)

About 61 Tonnes!!!

The correct amount of Gold used in U.S.Mint Gold coins issued in 1999 is approx. 61 tonnes.
Thank You.....beesting.

Peter Asher

(02/27/2000; 02:18:55 MDT - Msg ID: 26086)

Solomon Weaver (2/26/2000; 20:15:29MDT - Msg ID:26062)

Ciu Bono, or who is the "Big Dog"?
You said >>>>If gold were to return to a free market value, it is likely that a lot of that CB would not be returned as the parties who borrowed are in default. "Officially, CBs have not sold...they have
leased...but when the "renters sell the material" it is a sale nonetheless. Ask not what they have kept!
<<<<

IF, gold were to break out and be driven to substantially higher price levels, that could happen. BUT, as is so lamented on this site, every rally burns out and gives back most or all of its gains. The December low was within a dime of the Friday close before the Washington Agreement.

I have never accepted that the CB's were fools who don't know what there doing with these leases. For that matter, awhile back there was a lot of discussion as to whether the gold ever left the vaults as opposed to paper title being issued to new owners, and therefore still held as collateral. As I recall this question was never really settled.

We may just see gold stay in the $290 - $330 band until all that gold IS returned. The CB's have the motive and they and their cohorts have the power!!

Perhaps all this quandary as to why gold behaves as it does is this simple. --- Maybe the slogan should be "Whoever has the gold, breaks the rules!"

View Yesterday's Discussion.

Peter Asher

(02/27/2000; 03:00:56 MDT - Msg ID: 26087)

Cavan Man (2/26/2000; 19:09:28MDT - Msg ID:26050)

Yes, that was an excerpt from my contest post #21666 on 12/26.

As I was saying below, I see the game "Behind the Curtain" as being a currency and wealth storage power play, run by the people who are really in charge. What AG said or felt re gold standard or Randian principles in his younger days is irrelevant. He answers to his current masters now!

IMO, when these guys have the gold they want to have, they will let it run. Whatever game the "Rulers" are using to accumulate wealth will be what persists. The high interest rates of the 70's were to the benefit of money lenders, the high inflation was to the benefit of property speculators. When the public joins in and starts to reap profits, then the game changes.

To be continued tomorrow, hopefully.

Hipplebeck

(02/27/2000; 06:27:01 MDT - Msg ID: 26088)

governments and gold coin sales

I believe they buy the gold, mint the coins and make a little profit on the deal.

On another subject, I listen to the sound money comedy show on PBS on Saturdays, and yesterday the talking heads reversed their advice and started sounding more like the reality is starting to seep in. It's amazing how these whores can contradict what they said just last week with such authority. Anyway, it's a very good sign. When the big crowd gets a whiff of inflation and the herd all turns at once, look out. You better have already bought your gold, because it will go way up,way fast.

SteveH

(02/27/2000; 08:04:30 MDT - Msg ID: 26089)

Just watched 3.5 hours (off and on)

... of a C-Span senatorial hearing on home heating oil.

Here are my conclusions:

-- refineries in US at all time low. Due to environmental laws and the expense of complying to them.
-- Lots of oil in Alaska.
-- Oil price is of grave to concern to the committee.
-- All agreed that it was an economic and national security issue.
-- Some believed that a crisis will occur that will then be dealt with.
-- Others believe that action must be taken now.
-- Seemed to be concensus that it was too late to get domestic production higher.
-- Reason for crisis thought to be because oil was let to go to $10/bbl virtually destroying domestic production.
-- Production was down 14% and demand in US was up 13%.
-- US is 55% dependent on foreign oil.
-- Stratigic reserves only good for 55 days.
-- Most were opposed to using strategic reserves.
-- Some felt higher oil price was necessary to make US production profitable.
-- Alternate forms of energy was discussed.
-- Seemed to be a reluctance to move into solar as a mainstream solution
-- Didn't mention 34 year remaining supply of world reserve oil.
-- Didn't mention, nor show a clue, about motivation behind Saudi and ME OPEC resolve to keep prices higher. Did say that in 2010 80% of oil would come from SA (although not clear on that). Did say that they were reluctant to open spiggots as a return to $10/bbl oil needed to be avoided.
-- Most saw oil returning lower from $30/bb.

They had no clue or if they did they didn't mention oil for gold deals nor systemic problems with gold and oil contracts or derivatives.

The people who testified would not have had it in their best interest to mention this anyway (Lehman Bros.'s Mr. Sallinger?, and US Dept of Energy person, and one other).

Conclusion: expect higher gas and oil prices starting in April and expect a crisis to be the motivation to resolve long term US energy plan.

DAYOOPER

(02/27/2000; 08:36:41 MDT - Msg ID: 26090)

tedw "msg 26035"

Tedw,

My senario of what's going on with the price of gold may be way off base but I do believe the game is all about wealth (money-gold or whatever wealth may be at the time) and the power it brings. Do you truly believe the guys pulling the strings have all the wealth they want? I don't believe that for a minute.
Remember, "the guy with the most toys when they die wins".

DAYOOPER

Simply Me

(02/27/2000; 08:36:55 MDT - Msg ID: 26091)

@THX-1138 Re: State Quarters/Sac. Dollars

Quite right, THX-1138. The State Quarters and Sacagawea dollars are no investment of solid value. They are the new Beanie Babies and Pokemon Cards. And the price of BU State Quarters is likely to go still higher! Just as certain Beanie Babies commanded huge prices till the craze faded...State Quarters, and to a lesser extent Sac. Dollars, will also climb. For how long? Who knows. The only thing safe to say is that when the dealers are done selling their supplies(maps/folders/cards, etc)with the BU State Quarters included...the finished collections will be worth little more than sentimental value.
The Mint mistakes, however, such as the upside-down Georgia Peach will hold value among certain collectors who buy nothing but Mint mistakes. The value it holds will depend on how many upside-down Peaches make it out of the Mint...and if it is real...two headed quarters are made, packaged and sold as a joke. The same process makes a very convincing upside-down quarter. Another point to consider in the value of the Mi(nt)stake is that the mint is changing the design and pumping out the quarters so fast, there are bound to be LOTS of mistakes.

Cavan Man

(02/27/2000; 08:38:44 MDT - Msg ID: 26092)

peterasher 26087

Share your view. Good to see you posting. Hope all is well with your family.

Clint H

(02/27/2000; 09:46:48 MDT - Msg ID: 26093)

Both at the same time?

MK, Cavan Man, Leigh, Soloman Weaver, All

USAGOLD (2/26/2000; 20:15:21MDT - Msg ID:26061)
....The Weimar Republic as a Teaching Text...

<<< In Germany in the early 1920's, stocks went to infinity because the purchasing power of the Reichsmark fell to zero. In other words, the German currency was destroyed, so stocks were priceless in terms of that currency. Which will it be for the US stock market and the Dollar? Long-term readers of these letters know that I have been leaning toward the Weimar scenario.>>>

<<situation, gold ownership of course is crucial. A few German 20 mark gold coins at the beginning of the Weimar debacle would purchase approximately the same goods at any point during the nightmare. On the other side of the ledger, a family's life savings would not purchase a cup of coffee.>>>

<<< In the end, whoever owned the shares owned the shares and the poor guy was the one who just sold the last share for a wheelbarrow full of paper.>>>(Solomon Weaver)

Thanks for the above. The thought had not occurred to me that we could have both a hyper inflated currency and stock market at the same time,

What faster way is there to get rid of unwanted US dollars than to instantly invest them in blue chip stocks?

tedw

(02/27/2000; 11:04:11 MDT - Msg ID: 26094)

Bank of England auction

http://www.usagold.com
When is the next Bank of England Auction?

Is there schedule posted on the net?

Who makes decisions regarding these B of E sales whether they go forward or not? A committe? A man? Who owns the
Bank of England?

Truth- get you some ( and some Gold too, and a .45 auto)

Julia

(02/27/2000; 12:02:03 MDT - Msg ID: 26095)

Freegold, Trail Guide and Oro

Situation:
A certain # of years from now, I want to buy groceries and then the next day I want to buy a house.

Assets:
I have a good job and am paid well.
I have enough gold to pay for the house (since I was wise and purchased it back when gold was so inexpensive in the late 90's) and still have a sizable sum left over to hold as part of my investments.

Senario:
US has either a money system like Trail Guide's, or one more like Oro's .

Questions for Trail Guide and Oro:
Under your particular system that you advocate:

1. In what form will I be paid for my job? Am I being paid with something of value or at least an IOU backed by something of value? If not then how will it work for me to feel I am being paid something for the work I do?

2. Could my gold be used as collateral for a loan to purchase my house?

3. What are my investment options for my gold? Is there an avenue for me to loan my physical gold for interest or will it be strictly hold for growth return.

4. Will I even be allowed to keep my gold and have the freedom to buy more?

I've read most all of your posts and forgive me if I'm asking you to simplify a complicated subject but how do you see it all work "at the counter" and not especially behind the scenes. I realize longevity is ideal but at my age I've come to the place where I expect to make adjustments along the way. No system will be perfect.

Thank you.
Julia

Gandalf the White

(02/27/2000; 13:40:20 MDT - Msg ID: 26096)

An item of discussion from Julia's post !

Julia says in post (2/27/2000; 12:02:03MDT - Msg ID:26095)
Situation:
A certain # of years from now, I want to buy groceries and then the next day I want to buy a house.
Assets:
I have enough gold to pay for the house (since I was wise and purchased it back when gold was so inexpensive in the late 90's) and still have a sizable sum left over to hold as part of my investments.
Questions for Trail Guide and Oro:
Under your particular system that you advocate:

2. Could my gold be used as collateral for a loan to purchase my house?
====
****And the Hobbits ask: "Where presently is available to obtain a loan on bullion gold coins, and what are the conditions ?"
---
The Hobbits would be interested in what others have knowledge of in this area. They then will define the lessons that they have learned about the matter.
<;-)

dragonfly

(02/27/2000; 13:51:43 MDT - Msg ID: 26097)

Aristotle - a few questions

I am finally able to delve into your five-part series and I am finding it to be very interesting. While I haven't previously thought through many of the points presented, most of them on first reading seem valid and well-reasoned. I do have some questions that you may be able to address whenever you have a moment. Thanks in advance.

The first relates to your statement: <"... gives rise to my own dissatisfaction -- that Gold is not at all points in time held near to its honest physical-based monetary valuation as it should be.">

Do you see that valuation to be some percentage above cost of production? The reason I ask is that if cost of production today is between $250 - $350 per ounce (or whatever the correct figures are) is that what it ought to be worth in future? Given that the apparent value of the $$'s spent today is really a fiction, enabled by historical circumstances, where is the reference point for the future valuation? Is the personal wealth protection you envision one whereby the buying power of $300 worth of labor saved in the form of gold will return the same amount of labor and goods, whatever the nominal paper equivalent in future?

I ask this because if this were the case and I were able to purchase an ounce of gold with three days income, then looking towards gold as my savings for retirement would be dicey at best. For every year that I figured I'd live beyond my working days I would need a substantial amount of gold to trade for the labor and goods of others. It seems to me that the only way for it to work, especially if the whole world was playing the same game, would be for the value of gold to increase as demand increased and in that sense one would get more than one gave. But this would'nt work for very long would it? One would be able to purchase more labor and goods relative to what the gold cost when one traded labor for it. Doesn't that put someone into a tough situation if productivity and wage increases don't match gold value increases? How could most people ever save enough gold to plan for their elder years?

My other question relates to your statement: <"The truth is, inflation hurts those with money (it erodes their purchasing power), and helps those with debts (it makes loan repayments easier.)">

How would you apply this line of reasoning to the countries who have contracted debt and have been unable to get out of debt leading to IMF conditionalities? Is it unreasonable to assume that those with money have been able to profit from this situation even in an inflationary environment? I mean in the sense that loan sharks can gain advantage in many ways beyond the repayment itself.

Also your statement (quoting David Ricardo): <"He said further that the farmer "more than any other class of the community is benefited by the depreciation of money, and injured by the increase of its value."">

With all due respect I think you would be surprised to hear the opinions of not only a few hundred-thousand ex-farmers but also that of the indentured mega-farmer 'survivers' of the last 30 years of ag policy disasters and agri-business manipulation. Again, I think this is a perspective that works on paper and may reflect reality in certain times but is not a universal truth by any means. Please elaborate if I have misinterpreted or am in an uninformed position on this portion of your treatise.

All in all it looks like it will take a few more readings to really understand the big picture you are painting and I really do appreciate the effort you have expended to share this vision of the future. You are obviously a gentleman with a good heart and sharp mind. Thanks again for such a thoughtful and elaborated series.

Leigh

(02/27/2000; 14:04:51 MDT - Msg ID: 26098)

Marius

I am intrigued by the book you recommended, "The Ominous Parallels." Does the author think we're headed for severe hyper-inflation, and that it will bring an end to our country?

P.S. MK/Jeff -- I'd love to be able to visit the Trail Hike section from time to time. Would it be possible to put a direct link to Trail Hike at the top of the Forum page?

Leigh

(02/27/2000; 14:13:27 MDT - Msg ID: 26099)

Bill Murphy

Bill Murphy (head of GATA) had his car stolen last night. Random theft or something more sinister?

Harley Davidson

(02/27/2000; 14:39:27 MDT - Msg ID: 26100)

@Leigh

I was thinking about requesting a link to the Trails page also. In the mean time, I saved the URL as a "Favorites" to enable easy access to this valuable information. You can get there by entering the following URL in your browser and, once there, save it in your browsers list of "Favorites".

http://www.usagold.com/goldTrail/default.html

Hope this helps.

nugget101

(02/27/2000; 16:31:22 MDT - Msg ID: 26101)

Dollar destruction

Canamami said:

One thing I found fascinating after y2k had passed was a reporter who said that now that y2k was over, the 60B of extra currency was now to be destroyed. She said this with a sort of pride. As if they were a type of weapon that now obsolete could be dispensed with. A currency ICBM. She didn't think to ask how this money was created and how it could be so easily destroyed. It was fascinating to see first-hand the thought processes of the public in regards to fiat money.
I have no idea if the destruction took place.

D.

Ray Patten

(02/27/2000; 18:17:30 MDT - Msg ID: 26102)

Oil & Y2K...some statistics & some predictions.

http://pub3.ezboard.com/fdownstreamventurespetroleummarkets.html
I have been analyzing and trading commodities for several decades. My analysis of the current statistics from the American Petroleum Institute is as follows:

December 1999 crude oil runs were 14.6 million barrels, down 2.6% from the previous year. January 2000 runs were 13.9 million barrels per day, down 4.3% from a year ago. So far in February, they are 13.8, down 4.5%. After reading the above site since its inception 3 months ago, I have pieced together a possible senario of what is going on. Firstly, the middle management people who work in the industry and publish on the site say that their friends in the company who are usually open about talking about problems in the refinery, are unusually tight-lipped. The feeling is that they keep losing the automatic nature of these refineries because of the embedded chip problem and have to switch to manual controls. This causes a reduction in efficiencies and consecquently the low crude oil runs.

The next item of interest is that March and April are the months when the oil companies normally close down their refineries for maintenance. They have no choice but to replace these embedded chips that think it is 19100. So there is a potential for even lower crude runs the next 2 months.

Gasoline demand is holding up fine. December was up 2.7%, January was unchanged and Febuary is up 4.0% from a year ago so far. If demand were to stay the same as a year ago for the next 2 months and crude runs stay about the same as they have been so far this year, gasoline stocks could drop about 40 or 50 million barrels by the end of April. We currently have the lowest level of stocks in 10 years, so another sharp drop would be like pouring gasoline on a fire (pun intended).

If you have been following my logic so far, you will realize that the coming rally in gasoline has nothing to do with the supply of crude. So OPEC or anybody else can't stop this rally. If the industry doesn't get its refineries running efficiently soon, nobody will be going anywhere this summer.

My prediction is that by the end of April, we will be paying $3.00 per gallon of gas.

Journeyman

(02/27/2000; 18:57:15 MDT - Msg ID: 26103)

Value of gold @ Aristotle, dragonfly, beesting, Soloman Weaver, ALL

http://www.mises.org/humanaction.asp
Anyone interested in how the price of a "medium of exchange" (gold, etc.) is determined may find the following relevant. It is from "Human Action" by Ludwig von Mises, Chapter XVII, INDIRECT EXCHANGE, Sect. 4., The Determination of the Purchasing Power of Money. It's excerpted from the on-line version of Human Action, available from the URL Link above.

XVII. INDIRECT EXCHANGE
4. The Determination of the Purchasing Power of Money
------------------------------------------------------------------------
As soon as an economic good is demanded not only by those who want to
use it for consumption or production, but also by people who want to keep
it as a medium of exchange an to give it away at need in a later act of
exchange, the demand for it increases. A new employment for this good has
emerged and creates an additional demand for it. As with every other
economic good, such an additional demand brings about a rise in its value
in exchange, i.e., in the quantity of other goods which are offered for its
acquisition. The amount of other goods which can be obtained in giving away
a medium of exchange, its "price" as expressed in terms of various goods
and services, is in part determined by the demand of those who want to
acquire it as a medium of exchange. If people stop using the good in
question as a medium of exchange, this additional specific demand
disappears and the "price" drops concomitantly.

Thus the demand for a medium of exchange is the composite of two partial
demands: the demand displayed by the intention to use it in consumption and
production and that displayed by the intention to use it as a medium of
exchange.[7] With regard to modern metallic money one speaks of the
industrial demand and of the monetary demand. The value in exchange
(purchasing power) of a medium of exchange is the resultant of the
cumulative effect of both partial demands.

Now the extent of that part of the demand for a medium of exchange which
is displayed on account of its service as a medium of exchange depends on
its value in exchange.

Regards,
Journeyman

Solomon Weaver

(02/27/2000; 19:07:57 MDT - Msg ID: 26104)

note to dragonfly and Aristotle

Dragonfly - I pulled this Aristotle quote out of your earlier post:

Also your statement (quoting David Ricardo): <"He said further that the farmer "more than any other class of the community is benefited by the depreciation of money, and injured by the increase of its value."">
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Depreciation of money is generally in most cases tied to inflation (or overall price increase). I assumed the quote was related to the type of farming which was done in the 1930's where most farmers owned land and were paying mortgage on land or barn improvements...what so devastated the farmers back then was the deflation (appreciation of money) and also the dramatic drop in monetary velocity.
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Aristotle - let me also say how much I appreciated your ideas.....I wish a few more people on the forum would undertake an effort to present a topic such...obviously we have the GoldenTrail evolving with FOA, but certainly there are others who can present some interesting things.
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It is amazing how the internet lets folks like us share and learn...I am also impressed by how the internet is returning many people back to the written word.

Poor old Solomon

R Powell

(02/27/2000; 20:00:10 MDT - Msg ID: 26105)

Ray Patton Re Refineries

Mr. Patten, a question please. In your (Msg ID 26102) it was stated that the refineries routinely shut down for maintenance in April and May. Can their embedded chip problem be fixed at the same time or will this chip problem cause further delays? I have read of such problems over the last few months but can't remember any links to offer. The government is going to have a hard time convincing Mary and Joe Public that there is no inflation when gasoline costs skyrocket. I believe inflation is alive and well but it's existence isn't being acknowledged, especially in the dollar price of gold.

Ray Patten

(02/27/2000; 20:51:08 MDT - Msg ID: 26106)

Reply to R Powell.

I'm sure they can replace the chips that think it's the year 19100. But that's the whole point of my prediction. If they don't shut the refineries down now, they will limp through the whole year at 85% capacity instead of the 98-99% they are used to. Sort of like me when I don't take my vitamines!

Al Fulchino

(02/27/2000; 20:52:22 MDT - Msg ID: 26107)

Ray Patten, Foa/Another

My cost, for unleaded regular , has risen from a low of approximately 43 cents/gallon in March 1999 to a current price per gallon of just over 95 cents /gallon. Even this is not high when compared to what it would be if we adjust for inflation over the last 27 years.

Foa/Another, I am following the price of oil. But, if I understand the two of you correctly, we haven't accounted for the price of what oil should be from the inflation registered since the late eighties in dollar terms. So I would have to see still higher oil prices and at some point a coinciding rise in gold or a higher price that trails oils dollar rise per barrel.

4Ducat

(02/27/2000; 21:22:52 MDT - Msg ID: 26108)

Primus: Silver, to be or not to be What is the Question.

http://www.usagold.comRounds or Eagles? Neither, you want Engelhard 1 ounce bars with serial numbers are best, ultimately in my opinion. Johnson Mathey bars are fine too. Why? Because when silver is low as it is now this difference is not perceived nor understood, "It's all silver to me". Yet when silver becomes $35 - $50 an ounce you are now in a sellers market and dealers who have to pay you the $35 an ounce suddenly get picky. You want to be able to get a premium over spot that you paid in the first place. The only way to get that premium when you sell is to get your silver in the form the buyers want when silver soars. I have dealt with 100 ounce Engelhard bars and they are easy to buy and sell at these low silver prices. When silver soars and you walk into the coin store with five 100 ounce bars the dealer is going to say "Wow, I'm faced with a problem here because I have to turn this stuff over quickly and I get 50 guys a day in here wanting single ounces in rounds or Eagles but not every guy has $3500 for a 100 ounce silver bar at $35 silver price." I'm in no way implying that you can't sell them, you just can't take them to a normal dealer in quantity. Single silver bars at $35 ounce silver can be bought by the average scared Joe wanting some silver. So the wise silver investor buys single bars en masse and when it is time to sell he can go to any dealer and sell 5000 single bars for cash or trade because that dealer knows he can sell them off to other dealers on any weekend. Dealers fear a price collapse after a spike up. So you need to understand what their needs become when silver jumps to $35+ an ounce and they have people who are clueless wanting to buy silver. Coin silver is crap. Smelter discounted when the price spikes up. Rounds are great but could be confiscated in another Federal PGM roundup like in 1933. Eagles are the best because would the government confiscate the same coins they produce? That question we all ask? Some think Eagles would be called "collector" silver coins but I doubt it would hold, they'd be confiscated too. So in the ever so distant future in your son's-son's lifetime and he is "going underground with his silver/gold hoard" in the year 2525 get him what John Doe Richy Rich wants to buy, BARS with serial numbers on them. Not that the serial numbers mean anything, police aren't going to return your once illegally held now stolen bars because they matched a serial number, the numbers just look so cool in the bars. You can get a premium above spot for name brand bars with serial numbers when the price goes to the moon because Rich guys just like to know there are numbers on the bars. Your car has a number,your dog, your gun, your artwork,TV........and your silver bars. No name brand??? No number??? What are these things, get the acid let's see how it fizzes...... Well I guess they are silver, I can pay you such a percentage under spot, I've got pounds of this %#@!. Now if they were Eagles or name brand bars??

My personal choice is the 10 ounce serial numbered bars from any major brand. You can still sell them to anyone and you can get them a little cheaper than the singles on a per ounce basis. Didn't mean to write a book here. Maybe my best investment yet is the speed reading tapes so I can keep up with other's great posts.

To you who have may more be given and to you who have little even the little that you have may you be careful that it isn't taken away.

............................................................

CB2 a question for you?

What does the Austrian two headed eagle represent? And the emblems around it? It's my favorite coin the 4 ducat because it's 24K .999 and it's thin for my "survival gold" ethic like the Oriental rectangular sheet gold they would cut small strips off with scissors. Terrible thought but nevertheless like "They have a saying in China.......He who doesn't prepare for storm returns and cannot find house".

schippi

(02/27/2000; 21:39:28 MDT - Msg ID: 26109)

XAU 15 year Chart

http://www.SelectSectors.com/xau15yr.gifMy read of this XAU chart, is that we are approaching
once again, one of the best buy points of the past 15 Years.
Unlike the current Equity market, Gold has already suffered
through it's Bear market. Also when one factors in inflation
and reflects upon "Tobin's Q-Ratio" which is a roadmap for
switching between the Equity Market and Hard assets, you are
again led to the conclusion that the time for Gold is Now!

Marius

(02/27/2000; 21:49:40 MDT - Msg ID: 26110)

Solomon Weaver/Leigh

Sorry to take this long to reply, but I try to spend more time with the Mrs. than with the computer on weekends!

Solomon,

I post from the Finger Lakes region of NYS. It does have that kind of genteel Euro-socialist flavor now and then--the taxes & regulation do sort of remind one of Europe, as well. I own about 23 acres of woods and fields in a nominally rural area north of Ithaca. I've lived here for about 35 of my 45 years, and was born & lived my first 10 years in and around Newark, NJ.

Leigh,

Peikoff discusses the German inflation of the '20's more in the context of a symptom of moral & cultural sickness, rather than making specific economic predictions. He's operating from a philosophic premise, rather than a purely economic one. Don't expect a map for a specific set of economic events. While not devoid of economic discussion, it's more about how a nation's moral and cultural bankruptcy led to dictatorship and mass murder, and how it could happen here if we let it. It is chilling to recognize how far down the road we've come in the 18 years since it was published, and how little we understand the reason Hitler became as powerful as he was.

Here's a little taste, a little chill, in which Peikoff quotes Hitler (I had this on my office door several years back so my corporate overlord and his liberal lackeys would see it whenever they came to see me...):

"The people about us are unaware of what is really happening to them. They gaze fascinated at one or two familiar superficialities, such as possessions and income and rank and other outworn conceptions. As long as these are kept intact, they are quite satisfied. But in the meantime they have entered a new relation; a powerful social force has caught them up. They themselves are changed. What are ownership and income to that? Why need we trouble to socialize banks and factories? We socialize human beings."

Sleep tight!

M

Solomon Weaver

(02/27/2000; 22:20:27 MDT - Msg ID: 26111)

Neighbors

Marius,

I post from the Finger Lakes region of NYS. I love the genteel Euro flavor which reminds me of both Toscana region of Italy and the glacial Voralpen feeling of Schwartzwald, Bodensee, und Interlaken/Lucern. I own about 48 acres of woods, fields and grapes in a mennonite-rural area north west of Ithaca on Keuka Lake. My Father was born and raised here (but left 50 years ago), but I came back only a year ago. I too lived near Newark (Ridgewood, Bergen County). Like gold, the realestate values out here have been depressed, but I believe that the still pristine nature of lake Keuka is a great "storage of wealth".

I had thought that the spelling used of Amerika in your post had implied German, and considered with a name like Marius that you may reside there... it seems we are closer neighbors than we thought. But alas, that is only a handle and who knows....

Poor old Solomon

Journeyman

(02/27/2000; 22:28:29 MDT - Msg ID: 26112)

Where Hitlers come from @Marius, Leigh, Solomon Weaver, ALL

It's not too big a stretch from Greenspan's quote below to see how a Hitler here in America coud grow out of a ruined currency:

"The question that we have to confront is, is it remotely conceivable that both of those buffers [imports and new workers] can continue on down to zero without pressures on the general price levels. I know of no way that that can happen unless we get into a centrally planned economy, price controls, or a variety of other things." -Alan Greenspan, Humphrey-Hawkins to House Banking Committee, Feb. 17, 2000

Regards,
Journeyman

Gandalf the White

(02/27/2000; 22:30:48 MDT - Msg ID: 26113)

4Ducat's silver thoughts!

WOWSERS 4Ducat, that discussion really nailed the "rounds or Eagles" question. Many thanks from the Hobbits.
<;-)

Journeyman

(02/27/2000; 22:50:25 MDT - Msg ID: 26114)

Where Hitlers: Correction

Oops!

Greenspan's quote in my previous post, "Where Hitler's come from," was from day 2 of Humphrey-Hawkins Feb. 23 (NOT Feb. 17) and to the Senate Banking Committee, NOT the House Banking Committee.

Regards, J.

Solomon Weaver

(02/27/2000; 23:14:04 MDT - Msg ID: 26115)