http://www.thisislondon.co.uk/dynamic/news/business/top_direct.html'To join or not to join. That is the question,' says William Simpson, adding, 'but the question is not simply whether to join the euro, but whether joining the US dollar may be a better option.'

Simpson, like the economist he is, asks simple questions only to give complicated answers. His reply to the question he poses on whether Britain would be better off with the dollar seems to be a definite maybe.

He is, in a sense, a voice from Euroland, in that he is the chief economist of the British end of a French company, Euler, which claims to be the world's biggest credit insurer and owns Trade Indemnity here.

Simpson asks whether the dollar might be a better soulmate than the euro not in an obscure economics journal, but in Risky Business, a risk-management magazine Euler sends to 7000 customers and opinion formers. The advantages of a dollar link, he says, are that British firms might also have better access to Wall Street, and could be well shot of an alliance with countries that are either confused about, or - shades of Germany and Mannesmann - still hostile to cross-border investment.

Better still, he believes a dynamic dollar-pound bloc would accelerate structural reforms in Euroland.

On the debit side, he says: 'Potential offence to euro partners would be great.' Loss of sover-eignty would also be at least as great with Uncle Sam as with European Union president Romano Prodi, Simpson says, adding: 'The US Treasury and Federal Reserve would still set policy first, and have no plan to seduce the UK into a dollar link.'

Other questions Simpson poses include: 'Could we be expelled from the EU if we link with the dollar?' and 'Would expulsion matter, if the EU moves in a socialist direction unsuited to entrepreneurship?' He regards the last question as 'particularly difficult', given that too many British politicians have jobs in Brussels to risk expulsion.

While hedging his bets in true economist style, he says one good thing about a dollar link is that it might be a step towards a world currency backed by gold. 'Even citizens of badly-run, basket-case economies could have faith in purchasing power and trade could be freed for ever from exchange rate volatility,' he suggests.

He concedes, however, that a world currency is some way off. He sees Britain being forced to integrate more with EU bureaucracy by virtue of EU membership, adding: 'Handing over British sovereignty in economic affairs by adopting the euro would at least end the pretence that we are on an alternative path.'

The pro or anti-euro debate, he says, obscures a deeper set of issues about market accountability and market freedom in the EU.

'The desire to anchor the pound to the dollar or the euro reveals a diffidence (or worse, hostility) towards the improvements in economics that are delivering low inflation and lower unemployment in the UK.'
View Yesterday's Discussion.

http://www.bbc.co.uk/worldservice/worldbusinessreport/ The BBC World Service radio World Business Report program reported during its March 1st, 2000, 10h45 GMT program that after Koch-Weser's rejection, a (former) BIS bureaucrat may be considered for the IMF top job.
Could this put the IMF's' attitude vis-a-vis gold in line with BIS's?

www.murabitun.org/WITO/dinar.htmDear Elwood: I wonder if the Mideast Trading Center has anything to do with the new Islamic dinar which was introduced last spring. Wasn't the dinar bank supposed to be in Dubai? I haven't heard much about the dinar lately; has anyone else?

http: www.murabitun.org/WITO/dinar.htmlSorry, wrong link. Hope this works (I'm in the dark here and don't have access to a pen to copy it down). If not, the link can be found if you search under "Islamic dinar."

RE: ME Gold Trading CenterLet's speculate some more. If the LBMA and Comex close and "all paper burns", the physical metal will need to trade somewhere. Makes sense to me.

http://www.murabitun.org/programme/retgold.htmlThank you Leigh, That link didn't work either but I think this one will.

http://www.usagold.com/Order_Form.html3/1/00 Indications
�Current
�Change
Gold
293.80
+1.30
Silver
5.11
+.06
Gold Lease Rate
0.4662%
-0.0426
Gold Comex Stocks
1,373,896
-1,192


Market Report (3/1/00): Gold continued in the recovery mode this
morning adding $1.30 to the price in the early going. The market
recovery which began yesterday is being fueled by short covering,
continued physical buying in Asia and the announcement by the Dutch
central bank that it was curtailing its selling program until September
or later. In a strange twist to the growing energy problem worldwide
that might have a more pervasive effect down the road, the Zimbabwe
Chamber of Mines reports that mining operations in that country are "at
a critical point" and "subject to sudden stoppages" due to a shortage of
diesel fuel and hard currency. As we suggested yesterday, the spat
between Europe and the United States over the Caio Koch-Weser candidacy
for executive director of the International Monetary Fund has deeper
implications than Koch-Weser's credentials. "Yes, there are differences,
also with the United States," he said. "We'll have to fight it out. I
see crisis prevention, precautionary avoidance of financial turbulence,
as a very big task. Just crisis management during emergencies is not
enough." The Reuters article put acting IMF head Irving Fischer,
Koch-Weser and Japan's Eisuke Sakakibara as the leading candidates for
the top position.

That's it for today, my fellow goldmeisters. See you back 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 on link above and make the appropriate entries.

http://www.usagold.com/halldiscussion.htmlThe link is from TownCrier's assemblege of the various discussion that came on the heels of my ""perfect" monetary system for an imperfect world" commentary. I know that my comments are way too long, but I would encourage you to scan over it again in light of your recent line of questioning. I think you may find several avenues for seeing things differently.

You seem to perceive that there would be no fundamental change under the system that is being described. You wrote in response to the dollar continuing to be in service for wages, "How can the dollar maintain its place as a settlement of commerce if it no longer represents anything of value and is bankrupt? ... To me it's like going to my neighbor and saying, 'Here, take this piece of paper ... even though I have ... gold.' Why would he continue to take it? Because the feed distributer will accept it as payment for his feed as well as the farmer he buys the hay from. But isnt that what we have now?? Aren't we looking for a better way? ...What happens when Joe Public wakes up to what has happened to our dollar and the big boom has been really the big debt? Won't there be outrage and distrust? Won't my grocer not take my dollar for the groceries anymore demanding that he be paid in gold or silver or barter goods? And then will the banks have to cash my check in gold or silver? I don't understand how things can continue unchanged after the dollar tanks."

The whole purpose for my pages and pages and pages and pages was to lay a basic foundation toward answering many of the questions you've asked. Seeing your comment that you have in fact read my writing, I can only conclude that I failed in my effort, for which I am solely at fault. Perhaps it was too long. Back to the drawing board...

Here's my suggestion in the meanwhile. Print out the commentary using a nice, large comfortable typestyle, then make a nice big bowl of popcorn, pour yourself a glass of Coke, and work your way through it with a red ball point pen. Cross out everything you know to be false, and underline everything seems to go against your conventional wisdom or perception. Circle everything that you can immediately accept as fundamentally true or as common sense. As you continue to work your way through the text, you will see that I at various points tried to offer deeper explanations on the various statements I made that I assumed would not "sit right" with people's initial perceptions and convential wisdoms. (I was in tune with which points these would be because I am a longtime Gold advocate, and I had to overcome all of my own off-base perceptions and notions regarding Gold's role in the monetary system. So, using myself or friends as my litmus test, I knew what areas required the most attention.) As you read through my reasoning, if you find the answer to be acceptible, go back to the original statement that you underlined as vexing, and circle it if it has now gained entry into your "collective wisdom" or "conventional perception" of the world.

Here's an example. Early in the commentary I say that paper money isn't worthless. That is something you might be inclined to underline because we all like to say that it IS in fact worthless--it goes against the grain of our thought, and you allude to that in your comments above. Then, as you read further, you will encounter a block of text that includes these ideas: "...the value in any given currency-unit originates in the terms of the loan contract in which the borrower has promised to repay these units of currency to the lender. ...It's easy to convince yourself that people will provide goods or services in return for dollars--either because they themselves are in debt and in need of the currency to repay their outstanding debts, or else because they believe with near certainty that these same dollars will be useful to them as a medium of exchange when they encounter somebody else who is burdened with outstanding debts." So, as you ask what will happen when Joe Public wakes up to the fact that our big boom was a big debt, we can see what it is that will keep these dollars in circulation. EVERYBODY needs them to pay off their big debts. And those that crawl out of debt will seek the stability of Gold "currency" for their savings because their national currencies will ever be dwindling in value. All of history shows us that. In the text, I offer more on that account, and if you agree with the case presented, go back to the phrase you underlined and add it to those you agree with by circling it entirely.

To help you further, once you've read a block of text that makes the case for something you've circled either initially or subsequently changed from an underline, feel free to draw a big "X" through it so you never have to waste time on it again. Also, "X" though everything that strikes you as idle banter. I do this from time to time to make the text more "fun" to read (and write) by breaking up the endless string of more serious topics.

When you get to the end, you will have X'ed through most of the text, you will have circled the key points you initially or subsequently agreed with, and you may very well have some text that remains underlined and in doubt. Read through the text one last time, reading ONLY what has been circled, followed by a a review of what remains underlined. This is generally what I do myself when I sit down to digest a body of information that is unfamiliar to me. It really helps put the focus on the issues that are personally relevant to yourself, and essentially gives you an executive summary of points, with highlights for further inquiry.

Ultimately, you asked, "Why can't free gold back currencies?" As I attempted to present to the reader, although putting Gold in a role to "back" a currency does to a degree help the currency for awhile, it nonetheless KILLS Gold, and leaves you with no true safe haven for a savings plan except for such illiquid real things as your land, house, car, pot and pans, tools, lawnmower, etc. We need to have the very liquid, very real property known as Gold to be left free to serve in this capacity. That doesn't make it any less "money." To the contrary. It makes it moreso. Those with Gold bars and Gold coins would find themselves propelled to a higher financial position in a world that wants what they have.

Julia, I've enjoyed the chance to chat with you. I'm also glad to see you've derived some benefit from the description of my "personal Gold Standard" stragegy of wealth management. It has helped me live a fuller life, knowing that the world offers much more important things than those that can be found in a Wall Street Journal.

Gold. Get you some. A good life is sure to follow. ---Aristotle

A couple of good friends have told me I should read Rand. Judging from your comment I would probably find that her philosophy resonates with mine. It is always good to know that we are not alone in our view on the world. Personally, I never have been able to rationalize--as many people apparently have--that we could all somehow in perpetuity continue to expect to retire at an early age and be able to consume over the course of our remaining lives more than we ever produced. Where this can be done is where the production of others has been granted unto you either by hook or by crook, or plain old good luck--like being able to get out of a ponzi scheme before the meltdown, holding the winning number in a lottery, or by inheritance, for example. It is good to know that you don't think I am a crank for believing that a typical person such as myself is capable of producing an excess throughout a lifetime, the size of which (and ecpected lifespan and lifestyle) will dictate when retirement may occur. All that I ask is that I have a reliable means with which to represent and save my excess productivity--my wealth. For this reason, we need Gold to sever its attachments to inflatable paper. In the process, there is no need to demand the fall of the paper currency card houses...they will do that on their own and in their own timeframe. Of course, being free to choose and hold Gold, your wealth would be immune to the destruction. Who could ask for anything more?

Gold. Get you some. ---Aristotle

http://biz.yahoo.com/rf/000301/we.htmlYen could be helping today's uptick in gold.
Interesting read. Change of direction for Japan?

http://ap.tbo.com/ap/breaking/MGIVL6F7B5C.htmlWith all talk about increasing oil supply, why is the market still rising? April crude is now at $31.33, up $0.90. Go figure.

I said, "Personally, I never have been able to rationalize--as many people apparently have--that we could all somehow in perpetuity continue to expect to retire at an early age and be able to consume over the course of our remaining lives more than we ever produced."

I've got no problem with the idea of retiring early--more power to you if you can hang up your toolbelt at age thirty-three! My point being that the productivity of your active years seems like a fair measure of what you would rightfully have a claim to in the course of your life. And in the regard that those of us that were wise enough to choose Gold at historic lows before it reclaims the throne of monetary supremacy will be receiving windfall profits, well hey, I can live with it. It's all the better when the nation's financial elite know a thing or two about sound money, and rose to the top on that conviction, wouldn't you say? OK, enough fanciful talk for one day.

Gold. Get you some. ---Aristotle

$31.70

Gold back to the doldrums and seemingly back to its 2 $ max volatility!
Something's very foul in the state Denmark, though nobody seems to care and if someone cares he gets the cold (or is it nutty - haven't you yet learned gold is out ...forever) shoulder.
Another 6 months and every exploration co. will be either
internut or dead. Who's counting on that outcome? ...and who's responsible for this irresponsible manipulation, or is it collusion?
Is it currency war on the back of a few, manipulating and blackmailing gold producing countries and miners, as experienced by oil producers (Std. Oil) and OPEC before 1972. This collusion to stem the tide versus the fiat $ is
doomed to fail, as it failed in the 70's - and no high tech
weaponry will change this fundamental truth (see Russia vs Chechenia), or on the other hand see Austria, not budging in their democratic elected government, vs the rest of the world.
It reminds me of the same kind of blackmail, which would not have happened if the country would have had the relative importance of say France, Germany or even Italy. BTW, after all EU is now 90% plus socialist governed and the Portugese
Pesident happens not only to be EU's acting president, but also president of the international socialistic league. What
an incredible bungle - I wonder what really is behind it, keeping the CDU scandal in mind?
Go ahead gold bugs and fight the collusion and the colluders - and go for gold - the only true money!
Double venting - CB2

What's your take on the latest thoughts from TG/FOA regarding "legal tender laws" and changing international same? Thanks.

If memory serves me right, the government set a date years ago by which all Silver Certificates had to be returned for newer non-metal backed currency. After said deadline the old currency became by government proclamation - worthless paper. I'm sorry to tell you your paper is of no value but before you decide to throw it away let me send you a self-addressed stamped envelope.

I'm not current for some days - though in my mind 'legal tender' means the (il)legality to enforce the "means" of exchange for real product, or intermediary for barter.
If a government enforces paper FRN's as legal exchange for a commodity (product), so did Jesse James with (some silver) bullets in his colt.
Is that what law enforcement really means? :-) CB2

Interesting stuff!! no?

Legal Tender Cases

(1870, 1871), two cases decided by the U.S. Supreme Court regarding the power of Congress to authorize government notes not backed by specie as money that creditors had to accept in payment of debts.

To finance the Civil War, the federal government in 1862 passed the Legal Tender Act, authorizing the creation of paper money not redeemable in gold or silver. About $430 million worth of "greenbacks" were put in circulation, and this money by law had to be accepted for all taxes, debts, and other obligations--even those contracted prior to the passage of the act.

In Hepburn v. Griswold (Feb. 7, 1870), the Court ruled by a four-to-three majority that Congress lacked the power to make the notes legal tender. Chief Justice Salmon P. Chase, who as secretary of the Treasury during the Civil War had been involved in enacting the Legal Tender Act, wrote the majority opinion, declaring that the congressional authorization of greenbacks as legal tender violated Fifth Amendment guarantees against deprivation of property without due process of law.

On the day the decision was announced, a disapproving President Grant sent the nominations of two new justices to the Senate for confirmation. Justices Bradley and Strong were confirmed, and at the next session the court agreed to reconsider the greenback issue. In Knox v. Lee and Parker v. Davis (May 1, 1871), the Court reversed its Hepburn v. Griswold decision by a five-to-four majority, asserting that the Legal Tender Act of 1862 represented a justifiable use of federal power at a time of national emergency.

Strong, William

U.S. Supreme Court justice (1870-80), one of the most respected justices of the 19th-century
court.

Admitted to the bar in 1832, Strong practiced law in Reading, Pa., and served in the U.S. House of Representatives (1847-51). While sitting on the Pennsylvania Supreme Court (1857-68), Strong, a Democrat but a firm supporter of the Union, changed his political affiliation
and became a Republican.

-------- in Knox v. Lee and Parker v. Davis (1871), the newly formed court overturned the Hepburn decision by a vote of 5-4. Strong spoke for the majority, upholding the
government's power to enact legal-tender legislation and defending such power under the "necessary and proper" clause of the Constitution. The abrupt reversal of a major decision so soon after the enlargement of the bench renewed the charges against Grant. Despite this controversy, which overshadowed Strong's appointment to the high court and his first major decision, he served with distinction for 10 years, winning the respect of the legal community for
his ability and integrity.-------------------

Freedom requires justice; and, justice, vigilance.

Same apply to, "changing international law"? Is that your point? Tyou.

Here is some more very good food for thought. Please note the word use and how it could be so very "in context today". Especially these items:

--suspensions had occurred during periods of war or economic crisis-------------

----- "Hard money" advocates wanted to resume paying specie for this paper money, while "soft money" supporters feared the deflationary impact resumption would produce. -------

-----public favourably inclined to keep using the much more convenient paper money--------

============================================================

the redemption of U.S. paper money by banks or the Treasury in metallic (usually gold) coin.

Except for a few periods of suspension (1814-15, 1836-42, and 1857), Americans were able to redeem paper money for specie from the time of the ratification of the Constitution (1789) to the onset of the Civil War (1861). The suspensions had occurred during periods of war or economic crisis. With the outbreak of hostilities between the North and the South, the federal government again suspended specie payments late in 1861.

In 1862 the government began issuing paper money, called "greenbacks" and "shinplasters," and in 1863 it authorized federally chartered banks to issue national bank notes. By the end of the war in 1865, more than $430,000,000 worth of paper money (declared legal tender by Congress) was in circulation.

"Hard money" advocates wanted to resume paying specie for this paper money, while "soft money" supporters feared the deflationary impact resumption would produce. After the Supreme Court sanctioned the legitimacy of the paper money in the Legal Tender Cases (1870-71), congressional backers of a return to specie payments passed the Resumption Act of 1875.

In accord with the Resumption Act, specie payments were resumed on Jan. 1, 1879. But the knowledge that the government could indeed redeem each greenback or bank note at par in gold made the public favourably inclined to keep using the much more convenient paper money.

You are a good teacher. I harken back to my days spent at the pub (after the rugby match), er ahhhhhh University. Understanding a teacher's method helps the student progress.

You may have to put these posts in order, but it's worth a thought.
I know most all of you already know this stuff,,,,, but thought a short review would be good.
(smile)




Resumption Act of 1875

in U.S. history, culmination of the struggle between "soft money" forces, who advocated continued use of Civil War greenbacks, and their "hard money" opponents, who wished to
redeem the paper money and resume a specie currency.

By the end of the Civil War, more than $430 million in greenbacks were in circulation, made legal tender by congressional mandate. After the Supreme Court sanctioned the constitutionality of the greenbacks as legal tender, hard money advocates in Congress pushed for early resumption of specie payments and retirement of the paper money.

On Jan. 14, 1875, Congress passed the Resumption Act, which called for the secretary of the Treasury to redeem legal-tender notes in specie beginning Jan. 1, 1879. The bill also called for reducing the greenbacks in circulation to $300 million and for replacing the fractional paper
currency ("shinplasters") with silver coins as rapidly as possible.

Members of the new Greenback Party were bitterly opposed to the Resumption Act, and in 1878 they succeeded in raising the amount of paper money allowed in circulation. Specie
resumption proceeded on schedule, however, and Treasury Secretary John Sherman accumulated enough gold to meet the expected demand. When the public realized that the paper money was "good as gold," there was no rush to redeem, and greenbacks continued as the accepted currency.

Cavan Man,
Don't ever think that your old college teachers weren't learning too as they went along! We always learn from each other. All our lives!
In these articles, it's interesting just how easy people groups can change the rules. For better and worse. I'll send some more in a minute. Also am working on the next Trail walk. )smile)

Aristotle,
Isn't it interesting (and supporting our freegold cause) that the government can "legitimize" an "unbacked" "greenback" currency ,,,,,,, by just accepting debt satisfaction (payment) in said paper!

See: last sentence

It seems that during both yesterday and today, the publics perception of money in circulation is more identified by it's ability to "square the books". Whether it's gold or fiat!?!?


=================================================
Greenback movement

(c. 1868-88), in U.S. history, the campaign, largely by persons with agrarian interests, to maintain or increase the amount of paper money in circulation. Between 1862 and 1865, the U.S. government issued more than $450,000,000 in paper money not backed by gold (greenbacks) to help finance the Union cause in the American Civil War. After the war, fiscal
conservatives demanded that the government retire the greenbacks, but farmers and others who wished to maintain high prices opposed that move. In 1868 the Democrats gave partial support to the Greenback movement by endorsing a plan that called for the redemption of certain war bonds by the issuance of new greenbacks.

Is primarily a medium of exchange, backed by legal and truthful reality by government (- love me tender, love me true* :-)) and convertability into real goods at a fixed exchange rate to gold (until 1933/71).
Today, legal tender is still a medium of exchange, convertible at the perception of value of the power to be - until other powers may find some flaws in inherent value (perception) of the value.
Cauri Mussels have been a currency in some backwater country for ages. So where's te difference?
Yes, I know and appreciate the difference is in GDP growth, measured by productivity gains. That's a tough equation in todays world, where productivity is measured by
enhancing services in a predomantly service industry.
Even if RD is a part of this new paradigm - it may be vastly overstated. IT, High Tech and Biogenetics are predominantly leading American technology - but when it comes to production of microchips, computers, TV's, etc ... TM's tell us different.
Fine, as long international division of labor works! Does it? - As long as the US of A seems to reap most of the (il)legal tender benefits due to seignorage of the US$ - these days may seem counted.
IMO, free floating currencies seem to me to be the old adage of political means - ending in war -currency war as it befits the times.
The time for the only true arbitrator of value between trading partners, accepted by all participants -gold - is overdue to make its comeback! CB2 - venting again!

After reading below, one can see that silver came into the picture more so because it would allow "greenback" expansion. The whole context of involving silver into the money system came about from the changing of the "Legal Tender" laws earlier. The thrust of the argument was that
people wanted the ability to expand their fiat monetary base........ and the Legal Tender laws were the first way such a change came about.

be back later TG

============================================================

More on the "Greenback movement"


The Panic of 1873 and the subsequent depression polarized the nation on the issue of money, with farmers and others demanding the issuance of additional greenbacks or the unlimited coinage of silver. In 1874 champions of an expanded currency formed the Greenback-Labor Party, which drew most of its support from the Midwest; and after Congress, in 1875, passed the Resumption Act, which provided that greenbacks could be redeemed in gold beginning Jan.
1, 1879, the new party made repeal of that act its first objective. The 45th Congress (1877-79), which was almost evenly divided between friends and opponents of an expanded currency, agreed in 1878 to a compromise that included retention of the Resumption Act, the expansion of paper money redeemable in gold, and enactment of the Bland-Allison Act, which provided for a limited resumption of the coinage of silver dollars. In the midterm elections of 1878, the
Greenback-Labor Party elected 14 members of Congress and in 1880 its candidate for president polled more than 300,000 votes, but after 1878 most champions of an expanded currency judged that their best chance of success was the movement for the unlimited coinage of silver.

Well, the scales are only a medium for weight measurement ... and sometimes tipped! Good night CB2

Remember Matt Jacob, the investing wunderkind who turned the Internet Fund into America's best loved Internet mutual fund? It seems his new-and-improved Jacob Internet fund, launched last December, isn't faring nearly as well. The fund, launched with $150 million during a two-week subscription period, and now claiming about $270 million, is actually down on the year.

While competing funds like Munder NetNet and WWW Internet have pulled in returns of about 14 or 15 percent since the beginning of this year, Jacob's portfolio is down 2.5 percent. That performance has the rabble-rousers on the investing message boards taking aim at the once revered Gen-X money manager.

Black Blade: Now just think how the masses will react when the whole dot.com speculative bubble bursts! I don't think there will be a LTCM type bailout for the masses. If Jacobs is getting a little heat overa miniscule loss of 2% so far this year, well then look out below .... Hmmmm....

Source: Bridge newsNYMEX to hike palladium margins as of Wednesday close

New York--Mar 1--The New York Mercantile Exchange said that it will increase margins on its palladium futures contract as of the close of business Wednesday. Margins will rise to $37,500 from $22,500 for clearing members; to $41,250 from $24,750 for members; and to $50,625 form $30,375 for customers. (Story .15851)

http://www.SelectSectors.com/agpm70.gif FDPMX has been merged into FSAGX as of 2/29/2000

FSAGX Trying to form local bottom.

COMEX warehouse added another 1.8 million oz of silver today. That's roughly 20 million oz in the last few days! Also Crude oil rose to $31.70, but don't worry, it won't add to inflation, the experts at the gubbermint tell us so. Pd and Pt dropped today, in spite of the fact that there isn't any to be had. The SA and NA producers have their production committed, and the Russians simply don't have any. Meanwhile the TOCOM and COMEX people have added another layer of market manipulation on PGMs. Don't worry, none of this will show up as inflation!.....Unless the PPI and CPI numbers are manipulated too. Oh well, might as well have another beer aned just be happy! Hmmmmm........ We live in interesting times, yes?

I have read your many, many wise thoughts for a long time now my friend and I can tell you that it's not you, it's me who needs to go back to the drawing board. Your writing needs nothing else. I knew it would be a challenge for me to understand the first time around and I have been remiss in not telling you how much I appreciate your work.

I've enjoyed our chat as well. Thank you for your help. Sorry to be slow in catching on to all this.

Just know that I know you as a good and kind and patient teacher so don't think your work was in vain, far from it. I just don't get it yet. I'll stay in after school for these extra lessons any day you are willing to take on the challenge of teaching me what you know . The gift of your time and your thoughts are of great value to me. Where else could I get such a fine economics education than at my favorite "Knight Spot???" (Big Smile)

.....Headed back to the sofa with caffeine and red pen to re-read and ponder your thoughts.

Thank you, Aristotle
Julia

Hi...Does anyone have any comments about Sun River mining???

I have looked at this stock for months, with no trading activity...and then today it was up a cent with volume of 60,000....Just wondering if this little bugar has any potential.....

Thanks....Goldilocks guy

Black Blade (03/01/00; 19:37:09MDT - Msg ID:26269)
Don't worry, be happy!

Some folks have been watching the silver flowing into COMEX and interpreting it as a sign of "concern".

Consider the following facts:

550 million ounces silver total mine production 1998...total demand around 750 million ounces.

I would propose to you that this level of silver movement is not neccessarily uncommon at COMEX (especially in the season of the year Q1 when a lot of large users are contracting or taking delivery of material in the current years budget for operating expences.)

------

Now, that being said....unless Mr. Warren Buffet has "sold" silver (which I seriously doubt), he has title to 130 million ounces...we must assume that such a prudent investor as he is would only "lease" metal that he holds in a vault. It is a little hard to put hands on the real figure for vault reserves of silver...but the "official" numbers have shown a rapid deterioration from 1.8 billion ounces in 1990 to around 200 million ounces in 1998. During the last 6 consecutive years, the yearly deficit in silver supply has been averaging just under 200 million ounces. So, based on "official numbers", the 20 million additional ounces which you mention coming into COMEX could represent 10-20% of the remaining "official sector" silver supply. Thus, although not "historically relevant", that number could be highly relevant in "today's" very tight market.

Another very important aspect to consider....since the price of silver is very low now and has been for a while...WHAT INCENTIVE WOULD THERE BE TODAY for someone with millions of ounces of silver held somewhere outside of the "official inventory" to suddenly sell??? The only way a large holder could be attracted into this market would be for "certain parties" to arrange a "semi-official" deal....where a dramatic premium was paid "off market" for a transaction which occured "in market".

Here is a very important point:

From at least 1950 (the beginning of the graph I have) the "official silver bullion inventory" as reported by CPM Group 1999, remained at a MINIMUM of 850 million ounces and since 1966 a MINIMUM of 1 billion ounces. By 1990, the silver inventory had reached a mulitdecade high of over 1.8 billion ounces. Then, in the accelerating lease/forward sale decade of the 1990s, in the face of strong demand and marginal increase in mine production, the silver inventory starts a free fall. By 1996, the "official" inventory was at the "low" which it had seen in the very late 50s and early 60s. This should have been a warning sign...but NO...inventory has continued to fall dramatically.

Now, we enter a world where silver mining has been very unpopular and more than 1/2 of the worlds 6 billion people do not own electronics, use photos, etc.

Sorry for this elongating post, but I have to use an anology here that comes to mind....surfing...

Every real surfer has had this happen at least once...one is out on the water...watching the swell...waiting for the right wave...always looking towards the ocean...here comes the wave....one starts to paddle hard...looking back...and just as one makes the move to stand up...one looks forward...and there right in front of this beautiful 6' wave is....SAND.......crash...

Even if there is silver stocked up by the millions of ounces...the usual method to attract "real sellers" into the market is to bid a higher price. The fact that there may be as much a 1 billion ounces "short" means that in the very near future, everyone who is "now in the market" is going to be a "buyer". The only "real sellers" (and I mean real metal), will be "new" sellers who are bringing in all that "unofficial" silver we hear of.

The situation here is far more dramatic than in gold...although in gold much more dollars are at stake, for sure.

Lets compare the past with the future:

Almost 20 years ago, the Hunts took a leveraged position of about 100 million ounces of silver, when almost no "metal leasing industry" had existed (thus short contracts or buyback obligations were lower), and the official inventory was 1.0 billion ounces...the average yearly price spiked from $5 to $20...and a great meltdown of USA citizens silver occured as people dumped on the scrap market.

Today, Warren Buffet has an unleveraged position of 130 million ounces, there has been a massive "metal leasing activity" in silver which has produced hundreds of millions of ounces of "buyback obligations" and layers of paper shorts holding up the dike, and the official inventory is less than 200 million ounces (an average of 1 years deficit)..WB has a massive corner on this market and nobody cares!!!! And this time, when the USA citizen gets involved it is more likely to be as "buyer".

The only thing that could be more explosive would be if silver nitrate would be used in gunpowder!!!

Gandalf, as special little note to you...perhaps you should encourage the hobbits to make just a little room in the vaults at Bag End for a little silver, no?? Heard lately that the Chinese are intending to start an elite force of 100,000 "white berets" and they have chosen an alloy inspired by the famous elf made mail of Sir Bilbo.

Julia

To you and anybody else who is worried about a total implosion of the dollar...

Imagine yourself standing at the edge of a crevice...behind you is a tiger (who might decide to attack you) a few feet away is the other side where you could leap to safety...how wide a gap will you consider before you decide that a leap is certain death, where to stay with the tiger is probable death (while you consider other exit strategies).

In a world which measures GDP increases and inflation is 1,2,3,4 percent, even a "slow slide" of the dollar losing 5-10% of its worldwide purchasing power each year would create chaos...but eventually there would be some new equilibrium and it would stabilize...not to say that many fortunes could be lost along that way.

Regarding what you will be paid. I agree dollars. If we understand Alan Greenspan, there is a thriving "real economy" underlying all the "paper millionaires" fantacy economy. Once Americans understand that in a "multipolar" world, we cannot be king of the fiat hill, and adjust to the "new rules" we will recover and remain an important world economy...

Perhaps it is more important to consider not what you will be paid for your job...but will your job pay. No insult intended here....some of the most talented and qualified people will find themselves to be in a sector which we can do without for a while....

Poor old Solomon

For some reason, I'm feeling defensive - - - -

"My ideas are wide open to deliberation and
disagreement, but I won't seriously entertain
dissention based on such a premise as "Yeah, but Mises
said..." or "But Keynes said..." unless it is first
filtered through a fellow poster's own thoughts and
words. If we were content to let them (dead economists)
do our thinking for us we would all be doomed to living
with the flaws of the most distant past (that being the
first "formal" opinion offered), and we certainly
wouldn't have much need for a discussion forum."
-Aristotle (2/28/2000; 8:36:34MDT - Msg ID:26123)

I can't speak for others, but there are three main reasons I
like to quote sources:

FIRST, and most importantly, I quote people because I've
found that what they say in a particular instance is the
clearest presentation (in some cases the _only_
presentation) of an idea I've run across. Quite often, such
a quote is far clearer than I could achieve in a reasonable
time - - - if at all. That is, the work's already been done
by someone else - - why reinvent the wheel?

SECOND, all the fine posters here, particularly Aristotle
right now, probably know how hard it is to produce sentences
and paragraphs that communicate just what you intended. I
for one appreciate this difficulty and believe these efforts
should be rewarded, at least by the recognition of an
included acknowledgement of that effort. Especially when it
has increased my understanding.

THIRD, y'all don't know Journeyman from Alan Greenspan - - -
or the drunk three stools down the bar. Quotes from
"authoritative" or known sources let me off the hook and
lends me credibility even when I fall off my stool. "Don
argue wi me, heesh the one who sheed it."

Finally, at least when I post a sourced quote (can't speak
for others,) it has indeed passed through my mind and been
interpreted by that organ as relevant to some topic, or just
plain interesting. If I were to paraphrase rather than
quote, the results could be anything from obtuse to
plagiarism. Worse yet, the results might even be
inaccurate.

As for the "bare naked" Mises quote in Journeyman
(2/27/2000; 18:57:15MDT - Msg ID:26103), the essence of
which was:

... "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."

If it needs interpretation - - - First, Mises quote above
is stated in the context that "The Law of Supply and Demand"
applies to money. This explains, in part at least,
FOA/Trail Guide's difficulty in predicting the price in
dollars for gold after a dollar melt-down. Particularly,
the demand for gold as a medium of exchange after any major
dollar devaluation would be just about impossible to
predict. Thus so would the "price" of gold in dollars.

The people here speculating on gold giving them MORE than
parity buying power after such a devaluation are speculating
that there will be some "medium of exchange" demand for
gold. The bigger the "medium of exchange" demand, the more
added value to holding gold.

Finally, as the "medium of exchange" demand for gold
fluctuates, so will it's buying power. There is NO absolute
standard of value that doesn't fluctuate. Gold, on the
other hand, at least according to the historical record,
fluctuates LESS than any other medium of exchange,
particularly less than ANY fiat that's ever existed.

That's why Aristotle's right. Gold. Get you some!!

Regards,
Journeyman

Sir Weaver said: "Perhaps it is more important to consider not what you will be paid for your job...but will your job pay. No insult intended here....some of the most talented and qualified people will find themselves to be in a sector which we can do without for a while...."

Perhaps it is the season for a bit of wisdom passed along from folks who survived the depression. They said, "Have something to do (meaning a job) with your head, and something to do with your hands, and you won't starve."

Be ready to change gears, change jobs, change lifestyle. The flexible will not only survive, they'll get stronger in the coming changes. There's nothing like a good old fashioned dose of hardship to remind people of what's really important to them. Pride in your chosen field of endeavor?...or your family's food, warmth, and safety? Might wake up some of the twenty-somethings I've seen who only show up for work when they feel like it, because there's always another shop at the mall looking for help.

Please, excuse the ranting. But I actually think a little depression would be good for this country as a whole. The government can't support half the country on welfare. It would break the socialists backs, make self-reliance and entrepreneurial thinking not only popular but necessary, and it surely would bring home the importance of precious metals as a form of individual indestructable savings.

Preaching to the choir.
simply me

Well.......its a year to the date that I bought my first physical.......its at the same price (almost to the penny)a year later.........probably should have held off until sometime last summer to make my first purchase........Of course, hind sight is always 20/20........Oh well, I'm still hanging in for the long run.........Hmmmmmmmmmm........View Yesterday's Discussion.

TEX,
It's been about a year since I talked a friend of mine into buying some physical. A week or two ago, he said, "Gold hasn't gone up much has it?" The inflection in his voice meant he was trying to make a point. I asked him where he got the money to purchase the gold, "mutual fund" was his reply. I told him to look up the fund and see where it was.
Two days later he called and told me it was down 4.30 from the day he sold out.

I realize this might be defined as a special case, but I keep track of several portfolios, trusts , etc. All is not well in the world of equities. I'd like to hear more comments on this...I guess people don't like to talk about their losses.

And..no...I'm not talking about those high flying biotechs, comm, or internet stocks, I'm talking about Jo six blo, out there with a good diversified portfolio. Bond values are getting hit, blue chips stocks have been in correction mode, and looking for new long term investments has been downright nasty for quite awhile(T-Bills have been looking good).

His investment in physical amounted to 7% of his portfolio, a good hedge in this type of market environment. I myself have gone higher, but hell, I'm addicted.


Coinguy

Seems to be a significant amount of speculation that Friday will be a big day for gold. Can I ask why?

TIA.

Canuck.

My girlfriend got talked into an index fund (TSE300)early in the new year; did well for a month and recently has pulled back; she's up a percent or two for the year. I've been trying to talk her out of it.

I saw your post a day or two ago re: the wheeling and dealing of coin. Are you in the Vancouver area?

Canuck.

http://www.scmp.com/News/Markets/Article/fullText_asp_ArticleIDsee if this posts ?

http://www.scmp.com/News/Markets/Article/FullText_asp_ArticleIDoops.

http://www.scmp.com/News/Markets/Article/FullText_asp_ArticlelDlast try :) Hi peoples :)

http://www.siliconinvestor.com/stocktalk/subject.gsp?subjectid=22875This company was started by some former Golden Eagle (MYNG) employees, some with questionable bacgrounds, I believe. There is a thread on SI for SUNR (see link). Someone has been accumulating the stock. Maybe another .com in the works because they have a OTCBB listing? It is not a gold mine.

http://www.thecomingbattle.com/comingbattle_introduction.html

After the Bank of the United States was conceived by Hamilton and approved by Washington, there was a tremendous amount of speculation in the stock of the bank as it was heavily oversubscribed. "The speculation centered in bank scrip, that is, certificates for initial part-payments on bank stock, hence the terms that were bandied about at the time--"scrippomony", "scrippomania", "scrippophobia". Bank scrip was quoted at advances of from 100 to 300 per cent before there was a reaction." (This phenomena was compared to the famous South Sea Bubble in publications of the day.)

William Duer, an intimate of Hamilton and for a time the Assistant Secretary of the Treasury (as well as a fantastic financial "operator") eventually went to jail for various indiscretions relating to federal securities and specualtion therein. Writing in context to his son-in-law before Duer went to prison, Jefferson said:

"Here, the unmonied farmer (italics), as he is termed, his cattle and crops are no more thought of than if they did not feed us. Scrip and stock are food and raiment here. Duer, the king of the alley, is under a sort of check. The stocksellers say he will rise again. The stock-buyers count him out and the credit & fate of the nation seem to hang on the desperate throws and plunges of gambling scoundrels."

From Dumas Malone's Jefferson biography vol.II

OIL @ $32
AU down

Good news! Dow and NASDQ up!

http://www.usagold.com/Order_Form.html3/2/00 Indications
�Current
�Change
Gold
291.40
-.40
Silver
5.10
-.02
Gold Lease Rate
0.4362%
-0.0300
Gold Comex Stocks
1,373,896
nc


Market Report (3/2/00): Gold seesawed between a down night overseas
(down about $3) and a respectable opening in New York (down about 40�).
FWN reports pressure on gold overnight from "one large New York trade
house." In a thin market, that's all it takes. In the past any dip to
the $290 level has been met by strong physical buying we will see if
that's the case today.

Following yesterday's reports of an 8.8% overall European Union
unemployment rate, the European Central Bank judiciously leaves interest
rates where they are frustrating the pundits who predicted a rate
increase to help the euro. Now the euro is free to descend even further
against the dollar. Ecuador dollarizes its economy at the rate of 25,000
sucre per dollar. The first plank of the dollarization plan calls for
"Ecuador's Central Bank to swap sucres for dollars at a rate of 25,000
sucres for $1." The question becomes "Who's the lucky entity that ends
up with all those nifty, illiquid, useless sucres -- the U.S. Treasury?
Ecuador's central bank? Another question: Where does Ecuador get its
dollars? Do we just wire them the money or do we get something out of
this? As for your typical Ecuadoran, I would suggest that it would have
been in his or her best interest to have swapped sucres for oil early on
since the price has just gone from 125,000 per barrel a year ago to
750,000 per barrel now -- that rate of increase is about double what
Americans are paying.

Oil it would seem is much better currency than the sucre, the dollar or
gold for that matter. Ecuador runs the risk of a major depression with
this dollarization, and now under the fifth dollarization plank, they
can't print their way out of it. This is what happens when you give up
sovereignty. (Britain take note.) At the same, if you are thinking about
your own defensive plan against Ecuadorization of the American economy,
some gold discreetly stored nearby will likely be the ticket. Oil has
limitations as a portfolio item. It has a tendency to take up space and
difficult to transfer upon sale, making gold the logical alternative.
Ecuadorans would be well served to consider what happens to their
economy should the rampant dollar printing continue. Dollarization might
have worked before oil rose threefold. Now it could bring on a
devastating depression.

By the way, Europe decided that Caio Koch-Weser's credentials were
substantially better than the Clinton administration realized. He is now
on his way to Washington for a visit (interview?). Reuters says that the
wrangling over the Europe's Koch-Weser nomination to head the
International Monetary Fund is "setting the stage...for a bitter clash
between Europe and the United States." To my knowledge, this is the
first time Europe has truly flexed its muscle since the Washington
Agreement on gold sales and leases in opposition to U.S. policies.

That's it for today, my fellow goldmeisters. See you back 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 the link above and make the appropriate entries.

How do you read the current oil market? Reports today say leading OPEC members see the need for "stability" in pricing. The price level was not specified.

In my business, prices can be high or low but TERMS other than price are often equally important.

OIL pricing, Koch-Weser, Euro depreciation, Iraqi intransigence, US "bubblemania", continued dollar hegemony (to date), China & Russia sabre rattling, (what am I forgetting?); how does it knit together in your view?

I see that TOCOM ( Tokyo) has capped palladium prices in order to "save the shorts". So the only liquid market for palladium appears to be the LBMA (London) where they use a twice daily price fixing mechanism that could be just to provide window dressing for the real deals which are going on behind the scenes at who knows what price. I guess this still does not save the shorts at TOCOM, just makes it unnecessary for them to attempt to buy right now. This makes it possible to hide from public view, the real trading price of physical palladium. I'm no expert, but this is what I surmise.

Now, Ted Butler (published on Gold-Eagle) has been in an exchange with COMEX (Chicago) about the data they publish that shows there are 4 traders short an enormous amount of silver, approaching a years output for the largest supplier of silver, Mexico. He says there is no way these naked shorts can ever cover. Certainly not with COMEX stocks. And he says, they are effectively capping the price of silver by shorting whatever amount they want, when the price rises. COMEX has responded to Mr Butler by saying that they rely on the 4 traders to have the necessary silver in their own warehouses, to meet the demand if they are ever forced to pay back their borrowings. COMEX is saying that it's ok by them if a few traders corner the short market. This means, as I see it, that COMEX is willing to allow the silver price to be capped by these shorters, until the physical demand gets so great their inability to cover becomes public knowledge. In which case, COMEX will simply change the rules so they are no longer responsible. And COMEX as a price discovery location for silver, will simply disappear, the way the TOCOM has for Palladium.

Am I right about this?? How long will it take for this to happen?? When it does, what will the effect on gold traders at COMEX be? Isn't all this real evidence that the COMEX paper market in the PM's is already effectively dead, as FOA and Another have predicted? And the data, for whatever it is worth, on LBMA sales volumes says they are going out of business too.

Why can't we have an open honest physical market in the PM's in this country? Why wouldn't the producers get together to form one, if no one else will? Farmers have been unable to save themselves this way, because of cheap imports, but what's stopping the PM producers?

Goldfan

Up 5.6% from last year.

Cavan Man (on the street): February is ALWAYS a poor month for retail; ANY kind of retail.

When I watch this latest price action I "see" lots of paper being dumped on the market. Besides the big flurry of supply (J.P.Morgan exit?) there seems to me to be some question of credibility of this paper. With APR options expiring March 10, is this a move to the exit? If a jolt hits the gold market TOCOM style would futures contract holders want to put up the extra FRN's to meet margin? Perhaps an increase in FRN margin is more a measure of FRN weakness than it would be weakness in paper gold even with its possible quality question (Can this future delivery contract actually be delivered?)

I've said it before and I'll say it again. As the noose slips tighter the known good delivery forward contracts have already been snatched up at a premium (Last 2 weeks?). What are the balance of these contracts worth? Judging by the price they are commanding? Apparently...not as much.

When I say this is what I "see" it is more in the vein of a mystic. Any basis in what currently passes for reality? Only time will tell. Reality as society perceives it is often far different than what it is. My definition of reality is the here and now...constant change and a tendency to seek harmony with its surroundings. When those surroundings are chaotic. The changes will be volatile and of unanticipated direction. Expect the unexpected...prepare for the worst. As the night is always darkest before the dawn, so the day seems the brightest just before the sun "winks out". :-)

http://cbs.marketwatch.com/archive/20000302/news/current/stwatch.htx?source=blq/yhoo&distHope this URL works!
From news release:

Chris Thompson, a 52 year old Canadian who took over the leadership of Gold Feilds(GOLD) 18 months ago, says Gold will get its day in the sun."Some sort of collapse in the equity market is what is going to be the catalyst for Gold, we have had a secular trend,paper assets going up and hard assets going down, and that can't continue."


Those in the Know.....Buy Gold.....beesting.

Good post, I agree 100% with your post.
I think the paper markets are operating the same as the fractional reserve banking system--Only a small percentage of participants want ownership of product at the same time.A run on product,which seems to be happening right now in Palladium,may be fatal for the paper market, if buyers realize what is happening.

I suspect what may eventually happen is this;
Automobile manufactures who are required to use Palladium, Platinum in new automobiles, and large users of Silver and all other raw products,including Gold,will bypass paper markets and purchase directly from producers.
This can be done very easily using cyberspace communications.Producers listing,product on hand, and prices.
With overseas products,guarantees of "good delivery" would be a little more complex.
In the U.S., and all of North America, with trucking providing door to door pick up and delivery of products.....WHO NEEDS MORE MIDDLEMEN???

Have to run now.....beesting.

Steve Kaplan is bullish on gold and he is a categorical idiot, with 9 out of 10 predictions always wrong.

Or....

Steve Kaplan says he is bullish on gold but recommended notorious gold shorter slimebag company BARRICK GOLD, thus proving that he is really bearish on gold but speaks with forked tongue.

Take your pick.

Thanks

F*

From Reg Howe to myself, many of us remained very cynical when chronic gold short BARRICK GOLD announced it had purchased multi-millions worth of gold calls with strike prices at 320 and 330 or thereabouts.

After all, who would write such a large amount of calls except some bullion bank/hedge fund sleeping in the same bed as chronic gold short Barrick Gold.

These Wall Street funds and bullion banks are used to vertical stock markets, cronyism, moral hazard, and uneven playing fields. They will sell their mother to a whorehouse before they ever "allow" the stock market to lose them a significant dime.

When I saw Barrick purchase the call position (WITHOUT taking any measures to pump up the price of gold at the same time), I pretty well knew the fix was in AGAIN.

As I posted earlier, the only scenario I could envision where some extremely wealthy third party/bullion bank/hedge fund would write such a huge gold call position for Barrick is one in which they desperately needed to raise cash via the call premiums.

However, such is not the case.

Now who knows how low the slimesters will take gold this time?

Anybody ready for 200?

Thanks

F*

From the Wall Street Journal's coverage this morning of the NAPM report:

March 2, 2000
Manufacturing, Construction
Show Continued Expansion

By YOCHI J. DREAZEN
Staff Reporter of THE WALL STREET JOURNAL

WASHINGTON -- The manufacturing and construction sectors continue
to expand in the new year, defying predictions of a slowdown. Rising
prices for industrial commodities, meanwhile, added to worries about
renewed inflation.

The first economic data to be
released for February, the National
Association of Purchasing
Management's monthly index of
manufacturing activity, rose to 56.9
from 56.3 in January. The gain,
driven by increases in exports, new
orders and production, more than
offset a slight decrease in January.

February marks the 13th month the
index has been above 50, signaling
that the sector continues to grow.
Many economists fear that such growth could stretch the economy to its
limits. Indeed, the report showed continued increases in prices for oil, steel
and other industrial supplies. The index's closely watched "prices paid"
component increased to 74.1 -- a five-year high -- from 72.6 a month
earlier...

The NAPM numbers are likely to be noted at the U.S. Federal Reserve,
where officials remain on the lookout for any signs of inflation. Rising
energy costs contributed to the overall increase in input prices, but prices
for commodities such as steel, aluminum and chemicals also rose. Whether
those increases will be passed on to consumers, though, remains unclear:
The report found that many respondents fear they may not be able to raise
their prices in the face of strong competition. But the momentum for
broader price increases is clearly building, NAPM officials said.

"At this level of input prices, the potential for inflation has traditionally been
fairly strong," said Norbert Ore, chairman of the NAPM's business-survey
committee and director of purchasing for Chesapeake Display Packaging
Co. "We're in the type of environment where the next step would be for
intermediate prices to go up."

Stranger's Note: We still keep hearing about how hesitant business is to pass these higher costs along. Boy, if you live long enough, you see everything. I well remember when many businesses refused to believe inflation had been subdued in the early 1980s. Such businesses lost market share by continuing to push for price increases in a disinflating environment. Now we have the other kind of inertia where a body at rest tends to stay that way. But narrowing margins will force many companies to face reality and begin pushing up prices soon.

http://hv.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=002gaTY2K Homework #2, RonWortham@aol.com wrote:

WASHINGTON (CNN) -- The United States Air Force said Tuesday that it had grounded nearly 200 C-135 transport planes and KC-135 in-flight refueling tanker planes to inspect the aircraft for potential problems in a stabilizer part in the tail section.
>
> "Failure of the gear could result in a jammed stabilizer. As a result, the stabilizer could be stuck in a position that hinders the airplane from going up or down," the Air Force said in a statement.
>
> The Air Force said 198 of the Boeing manufactured aircraft are being inspected "as a precautionary measure due to a manufacturing problem discovered during an assessment" of the stabilizer trim actuator replacement procedure.
>
> The Air Force has 545 of the planes, which are a military variant of the Boeing 707 jetliner. The C-135 Stratolifter and the KC-135 Stratotanker are the only airplanes affected by the inspection. The Air Force also has more than 500 KC-10 Extender in-flight refueling planes.
>
> Air Force: 'No precipitating incident' led to grounding.
>
> The Air Force statement says that "there was no precipitating incident, accident, or system failure" that led to the decision to ground the aircraft for inspection.
>
> While some flights will have to be postponed or canceled for the time being, all high priority flight missions will be accommodated "by carefully managing the available fleet," the Air Force said.
>
> An Air Force official told CNN that the problem appears to be with a part that has installed in some of the airplanes since September of 1999. Those suspect parts will be replaced.
>
> The Air Force statement also says that the grounding and inspection are in no way connected with the recent crash of the Alaska Airlines MD-80" near the coast of California, in which all 88 aboard were killed. That plane's crew reported problems with the aircraft's horizontal stabilizer, and were
trying to correct them when the plane crashed. No official cause of the crash
has been determined.
>
> As a result of the Alaskan Airlines crash, the Federal Aviation Administration ordered inspections of the jackscrew assembly on all domestic MD-80 series airliner aircraft.
>
> The MD-80 was made by McDonnell-Douglas Corporation.
>
> --------------
> [COMMENTARY BY POSTER] (@greenspun.com)
>
> My take on this:
Last year they realized that the embedded chips in the trim actuator
system were not compliant, so they replaced them in September 1999. Now they have discovered that the chips in the new actuators are also not compliant, because the 2000 leap year was not written into the programming code.
>
> When they say there was no precipitating "incident" they probably mean nothing that occurred while in flight. My guess is that yesterday morning, Feb. 29th, several planes were started up to go out on their schedule flights. When they went through the pre-flight check, they discovered
that the stabilizer trim actuator was non-operational.
>
> After being sent the instructional signals from the flight deck computer referencing the date of Feb. 29 for its timing calculations, the chips simply could not accept that date, and just shut down. I doubt that they would otherwise weaken our national security by grounding all 200 planes at
once unless they had no choice. In other words, there is no way that these
planes could fly even if they wanted them to.
>
> -- Hawk (flyin@high.again), March 01, 2000

If you would like to be added to the Y2K_Homework mailing list'simply send an "Add me" statement to: RonWortham@aol.com<

- Puts out-number calls on NASDAQ, etc. stocks by 7 to 1.
Bernie Shaeffer, Schaeffer's Investment Research, author "Options Adviser," -CNBC, 00/03/02, 10:44:34 AM

Regards, J.

then recommending Barrick is an oxymoron - to say te least!
I agree with you (and won't start my PDG slamming again-after all they had a bad year in terms of earnings even equating their super-low "cash" costs -156$/oz- or such
a fair(y tale) figure, though they tremendously built up their reserves at lowest prices ever - W. Areas at $ 7.5/oz!!! and Getchell against lots of paper!), so does it matter if anyone turns bullish or bearish on "paper" gold.
I guess, and I'm sad to state I'm bullish on the physical
bullion fundamentals and sure hope some of the less hedged and juniors will still see their day in the sun - which they deserve, and not get right now. - And I can't and ever will accept this kind of blatant manipulation, where the manipulated are being held hostage instead of the powers to be - Clever? ... Only as long this clever scam can be held together, a scam already fraying at the seams - so is AG's
ploy to go to these kind of extremes - Tulipmania may have been about bulbs - they at least reproduce- while DOT-COM'S and BIO GEN'S only c l o n e!!! ... And they only clone, when fed by the adrenaline of money supply exaggerations.
Every day brings us closer to the final reckoning - when
Joe Doe (or Sixpack)- finds out it's not only champagne that bubbles - no, he'll be foaming (no Bud) about the loss
of all his "virtual savings" and will not revert to the solace of his bubble gum, without trying to 'Wrigley' out of
a scam implanted by 'big brother'. No way, I've been to the Paradise - I don't and won't accept your foul tomatoes from here on! WOULD YOU - CB2

- "3Com," maker of the Palm Pilot, just spun off "Palm Computing" today as a much anticipated IPO. The CEO of "Palm," Carl Yankowski, was wearing a brown suit, the material of which was interwoven with 24 carat gold. When asked if the gold in the suit was for real, he responded it certainly was and was in keeping with the belief of his company in its golden future. -CNBC, 00/03/02

Regards, J.

What he said!

conservative news service:
" Palm more than doubles in first-day trading after IPO;
3Com (the parent) declines 21% ....
Santa Clara, Cal., today, shares of Palm Inc., the hand-held organizer unit, a spin off of 3Com, is a bet on
pocket-sized PC's, providing wireless Internet and cell phone connections. Goldman Sachs arranged to sell a 4.1% stake (the smallest percentage ever issued to the public), though the market value at 1st. trading close doubles its parent and at 53 billion $, just barely beating Ford Motor Co's mkt value!
Nice Go! Now consider this IPO - Palm Dot Gold (you can't palm it), though GS is considering an IPO for 4,1% of its
gold (paper shorts) virtual bullion. Since this may be seen as the other side of the coin - it may be a thousand times undersubscribed ... and GS still makes a profit!?!
What's wrong with that equation? Or with me? Or with the rest of the world? OR WITH REALITY & TRUTH?! CB2

Slow type(r) - Anyway fed up with GS in all (back) alleys.

Journeyman (03/02/00; 13:40:41MDT - Msg ID:26298)
Bubble alert: does ANYONE bet this ISN'T a bubble??

- Puts out-number calls on NASDAQ, etc. stocks by 7 to 1.
Bernie Shaeffer, Schaeffer's Investment Research, author "Options Adviser," -CNBC, 00/03/02, 10:44:34 AM

----
It is very much a bubble upon a bubble.

But it is a much more sophisticated bubble today than in past.

Today's more savvy, CNBC-educated, Nasdaq investor rarely buys tech stocks anymore without either writing calls or purchasing puts, JUST IN CASE.

The loss of any expired puts premium is far outweighed by the gain in purchased stock value.

Today we have thousands upon thousands of very bullish investors who buy puts right and left solely as "insurance," hoping or expecting that they will expire worthless against the soaring stocks they own.

In other words, the put/call ratio in this market is complete meaningless today.

Yet another historical ratio that serves no purpose in a vertical market. When the stock bulls finally figure that out, well....ooops.

But you'll never hear about that from Louis Ruykeser and his ilk.

All part of that New Paradigm, you know

Thanks

F*

I believe one of the country's primary exports is oil. Likewise, I believe South America does have some interesting exploration projects developing. Of course, Canada has lots of Natural Gas.

Chalk up another win for the dollar.

I don't know if the CABEL crowd are believing the party line or not about inflation (the one about there being none), but if one were to conservatively assume an inflation rate in dollar purchasing power amounting to 5% less than a year ago then wouldn't that really put the NY close at a few bucks over gold's all time low ($254). Factoring in inflation on the $287.50 close would then be make this $258 in 1999 dollars.

Am I wrong about this, or if correct - wouldn't someone with very deep pockets and a golden appetite consider this a nice buying opportunity? Of course if I'm wrong and the shorting and foreward sales push spot much lower, we may be entering uncharted territory again.....

In other words (and assuming I am right) the bottom should be in right about now! Right. Right?

Galearis

Your 5% inflation calculation and "buying opportunity" are based on the mindset of someone who would buy gold without margin, taking delivery (at least to a semi-private vault).

What you should remember that the POG as we see it is primarily determined by paper traders with highly leveraged positions and short time horizons...and the paper volume is the volume that moves the POG today.

Since you mentioned that you are looking for a safe way to park a million dollars...you should personally consider taking delivery...then on that day...YOU just might really make a small difference as your 3,000 ounces leave the COMEX vault. (smile)

Poor old Solomon

http://www.usagold.comHey Waldo! Maybe that's why this airplane has been so hard to fly. We've been telling the passengers that it was a lot of "air turbulance" when actually we've been flying around for two months with no rear stabilizers! Look don't tell anybody that the computers are dysfunctional just find a worn bolt and say some threads are bare. Good idea the planes will be grounded for one month until we change the worn bolt in the stabilizer. That's a long time to change a bolt isn't it. No, that's the rare $750 bolt, ASTM stress tested, there aren't many of them left. I'm sure glad we don't have to learn about computers. Me too. We're pilots. I got my job.
..........................................................

If you have to fly, go Greyhound!

..........................................................

I see the paper gold and silver futures contracts settled in cash as like off-track betting. They only effect the POG when actual delivery is taken. Only the movements of physical PGMs actually effect the supply and demand equation. Failure of the writers of the options who promise to settle in cash, should in time make such investment vehicles too high risk. In a derivative market shakeout their would be a mass exodus of options holders who would be settling in cash. Or they would sell them at a discount as junk bonds do. They'd want physical delivery when the value of storing the metal surpasses the risk involved with holding gold paper, the would be "junk paper gold". Until we have a few "shorter's bankrupcies" then the present derivatives casino could keep going on. We need to hear something like "gold paper was downgraded today after major banks #1 #2 and #3 are said to be insolvent". One announcement to bail out failing major banks would send a tremor of an earthquake through the markets. The Fed is just going to "print up" a few trillion to save the present system? Catch 22. That would be exactly the same as devaluing the currency. Like 25% inflation one time with the stroke of a pen.

Necessity is the mother of invention. When that happens you'll see businessmen wanting to offer a "gold service" for the rich who want to physically own gold but don't want to hire an army to guard it at their house. Owning gold through a trusted company would become popular. Certain trusted companies will see the profitability potential of real gold banking. They would make loans on gold held as collateral. The complex US "BS" banking system should evolve into a more trustworthy system as the need becomes so real. Runs on banks would lead to such a system as "private gold banking". Weak systems naturally become replaced by stronger systems. As weak cultures become "driven out" by stronger cultures. Like the fish called a bowfin will drive out the bass in a lake. So bowfin are hated fish because they are too fierce and competitive and too worthless to eat so they can't be "fished out". A bowfin is a prehistoric type fish in freshwater but has teeth like a bluefish. He's your original goldbug of a fish, A real survivor. Gold is the king of investments but the king is in exile, dethroned by the paper pushers. The emergence of real gold banking should come about as a natural process as the paper pushers of fiat currency become dethroned from a failure of trust in them.
So this is my treatise for down market days. The derivatives casino is the Titanic and the consumer credit crisis is the "I SEE berg". They are going too fast and the ship will hit the Iceberg. In the midst of a party they will see the water around their ankles. Then your papermoney can't save you anymore than it can save me........You may have some gold...but is it enough?

I suspect what may eventually happen is this;
Automobile manufactures who are required to use Palladium, Platinum in new automobiles, and large users of Silver and all other raw products,including Gold,will bypass paper markets and purchase directly from producers.
This can be done very easily using cyberspace communications.Producers listing,product on hand, and prices.
---
Beesting The miners and the users will want to both feel the price is fair...and this will require an open market...which no matter how physical, will soon contain some amount of paper....

I think what will have to happen is a new paper market which has "rules designed to serve parties interested in purchasing for use". There will have to be a lot more transparency and a lot less financial risk takers...who don't have money and gold (other metals) backing them up.

Poor old Solomon

RE: goldfan (03/02/00; 10:08:20MDT - Msg ID:26289)
Silver and Palladium, is the paper dead?

Goldfan, you hit the nail on the head with this one. This is the very thing we have all been waiting for, as per the Another/FOA forcasts.

True, the collapse hit Palladium first, but it's there. A limit on what you can sell your paper for? Doesn't that sound a aweful lot like the collapse of paper in the 1933 US scenerio... "you must redeem your gold now for paper at the set price" or risk becoming a felon... Soon thereafter, gold jumped from $20/oz to $35/oz, but it was still illegal to own it. And this revaluation was still too little, otherwise confiscation would not have been necessary to pay off forign holders of dollars!!!

So, does this mean that real prices of palladium should almost double, or more than double soon??? When will similar rule changes hit the COMEX... spelling the doom of these fraudulent paper markets. Soon, it seems.

I have tried to think of things that would raise the price of gold. (1) EU buying to increase their gold reserves to 30%. This would strengthen the euro if that is what they really want to do. (2) Swiss reduction of their projected gold sales. The Swiss seem to want devaluation of the S-franc so their manufacturers could better compete. However, insurance/financial markets bring in a lot of money
One of the selling points of Swiss annuities is the increase
in the payback in US$ from the changover from a stronger Sf.
So the Swiss may be hurting themselves by selling gold backing their currency. I hope some Swiss citizens will read
this change their minds.

http://www2.marketwatch.com/intchart/default.asp?source=htx%2Fhttp2_mw&symb=swc&menus=&mnuTimeFrame=open&mnuCompareTo=closed&mnuIndicators=closed&mnuChartStyle=closed&time=5&freq=1∁symb=∁idx=aaaaa%3A0∁ind=aaaaa%3A0&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=2&size=1Poor Old Solomon, Goldfan, Jason,

Interesting post on the silver market, Sir Solomon. - Msg ID:26272 - It seems to me that the paper palladium market is detaching itself from the physical market. If it is doing so, then I theorize that we can watch the current palladium events as a roadmap for what is to come when the paper silver and paper gold markets come apart at the seams. Limit up days, followed by changing the rules in favor of the shorts, followed by declining paper prices with no physical available. What's next?

Also, notice that Stillwater (SWC) stock peaked with the paper market in palladium. Gold and silver stocks may not be a fun place to be when the paper gold and paper silver markets start to fail.

http://www.yardeni.com/public/shspr_c.pdf
This is a bit of enlightenment. Particularly page 9.

The relative strength of industry groups within the SP500 relative to the SP as a whole.

The driver has been Tech.

Since 1993-4 all of the real economy stocks have been underperforming with these exceptions:

Telecom was up 1997-1999 and has faltered since mid 1999.

Health care took off in 1993 and hit a peak in Apr 1998. Presumably, this was part of the reason for the rest of the economy to go down during this period relative to the rest.

Financial stocks peaked in relative performance in Apr 1998.

Technology stocks have been on a sharp parabolic rise that continues accelerating in nominal terms - and relative to the SP.

There is some indication of why this is hapenning in the following URL:
http://www.yardeni.com/public/fofchrt.pdf

On page 2 we see that the government's share of borrowing has fallen consistently since 1992 - the one good Clinton policy. Driven, no doubt, by the decline in military spending and by the government income from the equity boom.

On page 3 corporate Capital spending is compared to cash flows. Companies make money when investment is below capital requirements. That has not been the case for the period 1994-onwards and particularly since 1997. Currently, the capital expenditure is outpacing cash flow by 12% and over $100 Bil.

Since 1994, corporations have been borrowing and buying back stock. The IPO fever of the past few years has done nothing to reverse these trends, just enough to stop their further growth. (Page 3 - bottom chart)

Pages 4-6 show how strong borrowing by financial corporations has been, and how disconnected that borrowing has been from the non-financial corporations. The 1994 date follows the change in spreads between Japanese and US rates that spawned the Yen carry trade. The carry trade operates through financial corporations. They borrow in dollars from Japanese banks that buy their bonds. The Japanese banks pay 0.5% today, and it costs them 1% to process a bond purchase or to make a loan. The rest of the interest rate differential with US rates is profitable as long as the Yen does not appreciate considerably vs the $.

This can be remedied - (Yen appreciation) - by the increase of $ interest rates. However, the financial flows this interest rate differential causes will necessarilly cause a growth in outstanding $ debt borrowed in Yen. The period 1993 through Apr 1998 was characterized by the growth of this debt as Japan constantly lowered interest rates - now to near 0. The resultant debt produces an interest payment stream that joins with the Japanese trade surplus to make the flow of investment funds from Japan ever greater. Raising the $ interest rates produces a higher interest payment stream in $. At some point, there will be no interest rate at which a sufficient amount of new Yen/dollar trades can be generated to cover both the trade deficit and the interest payments and the dollar will tumble as the Yen appreciates and then stabilizes.

The Non-Financial corporations to whom the banks participating in the carry trade lend, have been using funds to buy back shares at a rate nearly equal to that of the financial corporation's borrowing and their own borrowing, at about $270 billion equity purchases, $240 bond issuance (to pay for the stock) and $300 billion borrowed by financial corporations to lend to Non-financials or their customers. Pages 5-6

On page 8 of the flow of funds chart book, the household sector is seen selling stocks and buying bonds. - The exact reverse of corporate actions. Though Yardeni attributes this to M&A, this is actually what it seems - though the flow is dominated by corporate ESOPs which have reached a level of some significance in the economy at some $300 billion annual redemption. Some of the estimates bring this up to $440 billion for 1999.

Looking at the page 8, the mutual fund flows indicate a peak reached in 1996-1998 at a rate of $175 billion. When added back into the household sector - this comes out to a net withdrawal of $350 bil. in 1998 and a net withdrawal of $275 bil. in 1999. I dare say that these amounts correspond to the options redemptions. Though the options redemptions would be expected to show a rise with tech companies (the greatest users/abusers, second only to financial corporations) rising as steeply as they have in the past 2 years, the total market has been on a decline since April 1998, to show a 20% decline through 1999.

The budget deficit (net of interest on the national debt - page 14) turned into surplus in 1994 and continued a trend of decline that started in 1992 - exactly when the household sector started selling their equities. Thes sales are by corporate stock option holders. The buys are on the corporate side, buying back the stock they issued. This accounts for the whole of the Federal and state budget improvements since then. Though the Fed and Congress' CBO will not say so outright, this is the source of the US governments balanced books. The source for this is US corporate borrowing, and the source of funds for the borrowing is foreign funds, predominantly created through the carry trade with Japan, and some from Europe.

On page 9 we see that there is a massive escape of capital from the US ($300 billion - breaking out of the $200 +/- 10% range of 1993-1998 and continuing a trend from 1992-3) that is balanced by net foreign investment in US equities ($50-60 billion - up sharply from Apr 1999 - bottom page 12) and as a whole by foreign direct investment rising from the uptrend of 1992-1997 that led to $100 billion, and from there rising steeply to $340 billion in 1999.

Government insured securities ("agencies") and mortgages shown on page 15 are up to $630 bil (sum of both) in new debt issued. That is up from the $140 bil of the 1980s and early 1990s and $240 of 1994-1998. The debt splurge is on with a vengeance. The consumer is joined by municipalities and state govs that have resumed high borrowing levels not seen since their 1985 peak borrowing (pg 16).

Added to the spending boom of the boomers on housing - funded by the sale of stock from ESOP programs - they are drawing on their treasury holdings to pay for their mutual fund purchases (page 17). The similarity of the sums is not
a coincidence.

Some of the reasons for this can be seen in the outstanding consumer debt levels relative to "disposable income" which is stable at 24%. What this says is that people have been maxed out since 1995 - which also marks the end of corporate profit growth acceleration and the start of the steady growth phase, which has ceased in 1997 and turned negative in 1999.

To summarise:

The source of the US bubble is:

1 US demand due to boomers in their peak spending and earning years.

2 Debt pushers in Japan (2/3) and Europe (1/3) recently joined by the NICs (Korea Singapore Hong Kong, Thailand, Malaysia, Indonesia, etc. and China) who now support 1/4 of new US debt.

3. The US insistence on the dollar reserve system, which dates back to 1942. (3a) The support of that system by the governments of Europe, Japan, and the oil countries. (3b) Outside of coordinating interest rate policies with Europe and Japan, the US has left the dollar reserve system to the Europeans and the Japanese to determine as their needs dictate.

4. The cheap funds from Japan (mostly) and from Europe, have induced massive borrowing by the corporate sector and an insensitivity to local US interest rates. The Fed has little control over them because the Fed is not the world's low cost loan originator.

5. The cheap debt is used by corporations to run ESOP plans that give the company's earnings and assets to executives and high value techies. The ESOPs produce a supply of shares that the corporations buy back by issuing debt.

6. The ESOP shares are sold and the proceeds are invested abroad and spent at home as well. The Federal government surplus is funded by income taxes on these ESOP funds.

7. The US imports products and exports dollars in the form of product payments, capital, and interest payments. These total to a $700 billion net annual supply of dollars to the world. The world is using only 2/3 of that sum to buy US securities and to invest in US facillities. The balance is swalowed by the international debt markets and used to extinguish dollar debt.

8. The dollar supply is also used to form Euro debt from dollar debt, and is responsible for much of the dollar's appreciation since late 1998. The Euro debt has taken 50% or more of the international debt markets, squeezing the world for dollars. (Dollars are created as a result of new debt creation and the demand for dollars comes from interest and principal payments due on old debt). This has forced the Fed to allow incredible monetary and debt expansion in the US, and they raised interest rates to attract foreign dollars from leaving the US and flooding the world.

Dollar debt outside the US was at $21 trillion in 1999's onset. By the end of 1999, it was only $22 trillion. Raised by only $740 billion of new debt. The Euro debt raised in the same year - $550 billion or so at then current exchange rates - displaced that number of dollars from creation. The $21 trillion would have necessitated at least $1.6-1.7 trillion growth in dollar debt outside the US just in order to pay interest. This had the result of raising the dollar's value throughout the year in other currencies, most notably in Euro. Furthermore, it produced a $1 trillion deficit in foreign dollar debt markets. This deficit is being filled by US borrowing - which has proceeded at a record rate of $1.1 tril.. The US moved some $700 Billion out of the US to supply the dollar demand - of which sum only 2/3 came back into investment and securities - meaning that some $250 billion were used to cover foreign dollar debt. Expect the US oil expenditure to continue in contributing to this disaster of global dollar debt repudiation and the resultant coverage of the foreign dollar debt with dollars created within the US - where they will create price inflation.

Note on the Asian crissis:
The Asian Tigers had been borrowing in Yen and in dollars for the period 1990 to 1996 at $15 billion a year. This was invested in capital equipment. Interest rates contracted were in the 14%-18% range vs. 7% in the US, 4% in Europe, and 2% in Japan. Other developing nations did the same at an average rate of $50 bil. annually. By 1997, both groups were in a bad deficit and the pulling of credit by Japan in response to the BIS tightening of capital standards for banks pushed the NICs and then the other developing nations into financial chaos as no dollars could be had to roll over their loans due to the exit of Japanese banks from these markets.

The resulting shock sent NIC monetary flows into reverse, and they have now a $140 to $150 billion annual surplus which will eliminate their dollar debt soon. Other developing countries have brought their borrowing to near 0.

This stream of dollars will now be targeted for oil purchases at a new higher price. Eventually, after a possible retraction and stabilization, oil should trade at $45 per barrel. The US trade deficit and investment outflow will come to a $450 tril. BOP deficit for 2000 - a time when exports will improve greatly, if the tear with the EU is healed. If it is not repaired, the EU will pull the rug from under the US dollar and let the global dollar debt default. A default rate of 8% per year will eliminate the debt completely in a few years. 1999 saw only a 1.5-2% default rate (by Russia and Brazillian provincial governments and by corporations in developing nations and NICs, remember Daewoo?). I don't believe Japanese banks will be able to come close to picking up the slack if the EU withdraws dollar support as a result of a currency war.

The case of cooperation will allow a steady decline in the real value of dollar debt outside the US, and thus allow the Euro to take over the US dollar's role through a partial conversion of this debt into Euro debt. This will allow the EU to run a trade deficit during the old age of its boomers without the creation of EU debt deficits. When the stabilization of the new system occurs - in 2005 or so, the world will be a different place but still functioning much like it is today. Gold will appreciate as it is the cornerstone of EU monetary policy to retain gold reserves and to manipulate gold prices upwards to allow printing of cash Euro not backed by debt.

The case of monetary warfare of the US with the EU will result in there not being ANY currency remaining in wide use for financial settlements. There will be a devestation of all currency denominated assets everywhere, only gold would then be used for international commerce, and its value will outstrip anything we have ever discussed on this forum. There may be a success of sorts in maintaining use of the dollar for petty purchases and daily spending in the US, but is would not retain any significant role for savings and denomination of debts. It will be skirted for any long term or large denomination transactions.

In any case, once significant price inflation is noticed by the participants in the new internet business exchange sites, they will start maintaining inventories of the useful items that bear the lowest cost of storage but have the best price stability, perhaps Boeing will hold an inventory of 64 MB DRAMs to park its funds between purchases of necessary parts till they notice that their prices are unstable and trend down relative to other items. This will eventually lead to the same place to which it has led in the past - to the use of gold and silvewr - perhaps with other rare metals to store purchasing power over time. Eventually, government control of the definition and the character of money will completely fade. All attempts by government to control this will be circumvented. The lack of legal protection for contracts denominated in gold or any other commodity is not going to prevent its use for debt denomination, it would simply sever the connection between the government's legal system and the real world. Unofficial arbiters will come to the fore to replace government arbiters. Government guarantees will be recognized for the worthless promises they have always been. Furthermore, any reluctance by some countries to enforce contracts that interest the markets will simply be another small element to push people and business to the countries that will enforce them.

The old "industrial" limitations are no more. The Bahamas and Mexico can provide just as good a business and living base as any industrial nation. Quite frankly, the emerging nations offer better productivity (when figures are restored to account for purchasing power parities), smaller government tolls on business and personal income of high value workers, and far greater potential for growth. And, by the by, the internet is programmed and maintained in India and Tel-Aviv, it is only managed from Silicon Valley.

The internet will not be the salvation of the US, it will be its undoing. Pressure on the dollar or higher taxes will stop the global brain drain into the US and cause it to reverse. The favorable treatment of tech company taxation through the ESOP trick is just a symptom of the decline in government power to effect unbalanced taxation - had the ESOPs been taxed in the usual manner, the top workers and the core businesses would have been in Jamaica by now.

http://biz.yahoo.com/apf/000302/mob_on_wal_1.htmlPlease read the above URL and then decide Who are the good guys and who are the bad guys???
......beesting.

The Gold Trail Discussion has been updated. Click on the link to read the latest updates.

TZADEAK* @ Realities
Copyright, All Rights Reserved 3/2000

@ Behind the Frontlines of the Currenciy WARS......

The Battle of Kaputt (Khol) has now spread to France,
however Francois Mitterand the co-architect of the "EURO" is dead so "they" have picked out his closest
friend/advisor "Duma" for "criminal" prosecution.......
Germany is making "noises", it's standing by it's
appointment to the IMF" Mr. Ciao" who today won an
"informal" vote as the IMF Chief, he favors more European
"say" in world affairs including "help" for developing countires.....Also Germany's Defence minister in Moscow
said today that Russia was "justified" in it's war with
terrorists "Chechians"....I don't believe the Yanks are
amused at all....
In the Euro "interest war zone" the ECB did not raise
interest rates today, ECB Pres.WARNING however that the
"fall" of the Euro was a growing "concern" since it could
impact on the concept of Euro Union vis a vis England's
participation, in addition to being a "psychological"
downer or words to that effect.....'they" have also been using the YEN to help attack the "Euro".....On the other hand the low Euro has helped Germany especially, the worlds BIGGEST exporter raise it's exports almost 10% last
quarter......BUT the EURO must get back well above US$
parity.....
Predictions.... ECB to "talk up" the Euro.....AND if
"they" don't co-operate I predict a 75% chance
of 2nd European "surprise" ( a la washington agreement??)
to drive Gold higher thus lowering US$.....

OH so much to write about so little time.....@ Oil....

My Prediction last month re OPEC increasing production
by about 1 Bill Barrels/day is about done,,,,you can just
about stick a fork in it,,,,, This will mean very little ,especially
US$ price of gas in particular since it takes about 3-6
month to process same....look for US$ 2 Gas by summer...
the POO will come down to about 25-27 US$ BUT
will NOT stay there as world economies pick up steam
and As I predicted last month look for Saddam"s
Sept/October "surprise" Oil cut off.....Add also the
fact that this is an election year in Mejico and the
Venezuelanos workers are NOT happy campers....
Saudis will likely make up most of OPEC Oil increases....

@ Souf Afrikka.....Nature's devastating "floods" will
not only kill many innocent/poor but the water are
"seaping" into the DEEP Mines of SA so far a few
mine shafts "flooded" including 2 at Durban Deep.....
But this may be a temporary? problem, the BIGGER
problem is "PUNZILE" the SA Mines Minister who
proclaimed this week that the 21st Century will
belong to "Black" MINERS, announcing a series of
proposals that would see "permits" for mineral rights
handed out much more to "blacks".../NO wonder
all those SA miners are leaving for Canada/Australia et al....
BTW she also "floated" a "tax" on mining dividends....

@ China/Taiwan.....

NEW YORK (CNNfn) - With interest rates rising, an oil-price boom and the market at scary highs, cautious investors who remember the '70s might find their minds wandering to safe, reassuring gold. Forgotten what it is? Who could blame you? The only safe and reassuring thing about gold recently was that investing in it would lose you money. Old-timers might keep 2 percent of their wealth in bullion but the rest of the world steered clear. And it was a wise move. "As long as people are comfortable with financial assets and they've done well, they ignored gold," said Jean-Marie Eveillard, portfolio manager of the First Eagle SoGen Gold Fund. "And they've been right to ignore gold for quite a while." But if inflation picks up, governments back themselves into a corner and economic chaos breaks lose, gold will be an asset to remember. Eveillard has often considered closing his fund. He decided to keep it open after the Long-Term Capital Management debacle. "Maybe the world was more fragile than it appeared to be," he recalled thinking. If a financial crisis like that ever gets further out of control, "maybe it [his fund] is a cheap insurance fund."

An out-of-favor asset gets a boost

Central banks around the world, which collectively hold around 30,000 tons of gold, have depressed its price by selling consistently in recent years. Gold had also been depressed because gold mining companies have tended to hedge by selling gold "forward," ahead of its production. The strategy makes sense if they fear the price will fall -- and who could blame them, having lived through two decades of precedent. But they sold at a discount by hedging. Finally, the mines started to realize their hedging and apparent lack of confidence was contributing to gold's decline. Gold has recently received a double boost. Last September, the European central banks announced they would restrict their gold sales to 2,000 tons over the next five years. That removed uncertainty about how much gold could flood the market. And governments are showing they still have a place in their vaults for it, to back their currencies. Then, earlier this year, major gold producers such as Placer Dome, Anglogold, Gold Fields and Barrick Gold announced that they were scrapping or scaling down their hedging activity. Those two effects have helped boost the price of gold. There's now a third driver - when another commodity such as oil starts skyrocketing, other commodities often rise in sympathy. Gold hit a four-month high in February.

Handling gold for inflation insurance

What's the best time and way to use gold as an investment? Gold is famous as a hedge against rising interest rates and, more specifically, inflation. But after a run in it in the '70s, it's still not much of an asset to get excited about. Bill Martin, portfolio manager of the American Century Global Gold Fund, agrees with Eveillard that gold is best used as "insurance," particularly against inflation. But even when interest rates are rising, gold doesn't always benefit. Gold proves its mettle when the nominal interest rate set by the
Federal Reserve is very close or even below the rate of inflation. Even though the nominal rate of inflation is rising now, inflation is very low, around 2 percent, so that's not the case now. The best time for gold is when "real" interest rates, interest rates minus inflation, are around zero. Only if Alan Greenspan lets the economy escape his grasp will that happen. "It really should be a very small holding," Martin said, comprising perhaps 3 percent to 5 percent of assets for people who are trying to maintain their wealth. Perhaps its best use is for older people who are more worried about preventing their assets from depreciating rather than trying to grow them.

Bullion is for the birds

Financial planners and other experts are not so sure it belongs in a portfolio at all. "If somebody is super-wealthy and wants to be super-safe, owning some gold is fine for them," said Don Boegel, a certified financial planner in the Minneapolis suburb of Plymouth, Minn. But for normal people, he doesn't see the use. Even for the super-cautious, "I personally don't think they'll see a significant rate of return on it," he said. The last time he recommended owning gold was in the mid-'80s, after high inflation and poor stock-market returns spooked investors in the '70s. "I'd always have a piece of it there," usually less than 5 percent and never more than 10 percent of a portfolio, Boegel said. Boegel suspects the inflation of the mid-'70s may never happen again. "It's been years since I encouraged people to own gold," he said. He now tells his clients to look for other kinds of assets that tend to perform well under inflation, such as real estate. Real estate investment trusts, which pay hefty dividends, make a lot more sense than gold, he said. For people who are leery of real estate but worried about inflation, looking for hard assets as a result, other commodities may prove the answer. "If we were in a super-inflationary period, like some suggest [we're in], it would be better to have a tanker of oil in your backyard, or a bushel of wheat," said Robert Stein, president and senior economist of Stockbrokers.com. Unlike wheat or oil, almost every ounce of gold produced remains in supply, he pointed out. A composite commodity mutual fund may be the best answer for people looking for an inflation hedge, since it minimizes exposure to one particular commodity. Gold makes the headlines every now, as it did with its highs in February and in October. But because gold has basically been on hard times for so long, a short-term peak "is really a meaningless statistic for me," Stein said. "It's really coming from such a basement price."

Raising the standard with gold stocks

Investing in gold stocks is less conservative, but that defeats the "insurance" value of investing directly in bullion. They see greater gains than the metal if gold increases in value thanks to their leverage. Think of it this way: A gold mine spends $300 to produce an ounce of gold. It sells it at $325 for a profit of $25. If the price of gold rises to $350, the mine's profit increases 100 percent to $50. But the price of gold has only increased 7.7 percent. Of course, the downside is equally severe when the gold price moves against manufacturers. Gold, which closed at $293 an ounce on Wednesday, has increased 11.5 percent since its 20-year low last summer. So gold experts would normally expect gold stocks to rise between 28 percent and 35 percent as a result. Instead they have declined around 6 percent since then. Martin explained that investors are worried that gold-mining companies have overhedged their positions, even though they have now scaled the program down. If they're overhedged, if gold increases significantly in value, they stand to lose more money through covering hedge positions they've sold than they stand to gain in the increase itself. Martin thinks the concern is overdone. "This seems like a safe entry point for gold shares," he said. When discretionary money flows into gold stocks, it tends to move only into the big-cap companies, where it is easy to get back out again. Gold producers Barrick Gold, Anglogold, Newmont Mining, Placer Dome and Freeport McMoran Copper & Gold, all have market caps of more than $2 billion, and are the biggest components of the Philadelphia Stock Exchange's Gold and Silver Index. Anglo American, which trades in
London and via American depositary receipts, is the biggest gold company in the world. But Martin thinks mid-cap gold stocks are particularly undervalued, because they have suffered from both the unpopularity of gold as an asset, and because of the market's penchant for large-cap names. Companies such as Agnico-Eagle Mines, Meridian Gold and Goldcorp, Estimates are all "undervalued with good growth potential," he said. They rise after their big-cap peers, and right now they're the cheapest and have the most leverage, Martin continued. But they will be less liquid and tougher to sell. Small-cap gold stocks are too risky and too tough to sell for individual investors, gold experts say. Gold stocks still need something to get them moving, though. Many asset classes and out-of-favor sectors have idled while a narrow slice of the market captures most investors' attention. "Things can be undervalued for a very long time, as we've seen," Martin said. "You need a catalyst. And that's hard to predict for gold."

Yes I do realize that the POG is a paper driven derivative creation, but the point of my discussion really is that physical gold, at least in smaller weights can be purchased at these prices. The depressed price is an indirect benefit of the shorting pressure that benefits the small gold bug investor. I don't know where you got the idea that I had a million dollars to invest in physical (unless you have psychic abilities and were wiffing a constant daydream of mine).

The other point is that for all the angst about what the gold market is or isn't doing (right), many seem to forget what the dollar is currently worth this day in comparison to what the gold and dollar was worth a year or more ago. For example, during the last gold bull when people commonly point to gold reaching $400 plus per ounce in 1980, they forget that the dollar is worth less than half what it is today. That $400 is equivilent to $800 today. So when one hears that Robert Mundale (sp?) is predicting an equilibrium price of only $600 is he setting this figure into the subconcious of the potential sellers of physical gold in the future at this price - or is he being straight with the public. At any rate inflation, estimated conservatively at 5%, should really be a factor right now in this comparison for gold spot lows of a year ago. One wonders if the buyers and sellers are factoring this in in their trades.

It will be interesting in a year or two (?) when the US dollar begins to fall to see how people juggle this additional variable.

I do hope the Euro will make a timely physical entrance into the actual currency environment so that I can rotate from gold sales into the Euro in lieu of the US or Canadian dollar. I also expect open financial war between the Euro and the US dollar camp when the Euro takes physical form. I think this infant Euro that is still currently travelling down the birth canal is still to fragile and entity to risk for the ECB to intervene in a more overtly positive way to help gold. I believe they sit back and let US market mania in the derivative trades do the work for them.

I do not trust digital Euros. I do, however, have much more confidence in a Euro that may in the end be much more supported by gold than many here would believe. We shall see what this support level will be once gold has settled into its true equilibrium.

RossL (03/02/00; 18:15:54MDT - Msg ID:26312)
and to all
-------
I spoke with the VP of Corporate Relations at a silver company today, who had just come back from the annual precious metals meeting sponsored by (I believe) the CPM.

A few things which were confirmed:

1. The silver world (producers and I assume also BBs) believes that Warren Buffet Still sits on 130 million ounces and that most or all of it is in his vaults.

2. The official Reserves have not grown since 1998 when they were only 200 million ounces....It is estimated that if one includes "non-official" sources of silver, by this I assume they mean small private ownership of bars and junk coin (not jewelry and flatware) that the total reserves available to the market are about 350 million ounces. My read on this is that MR. BUFFET MAY ALREADY HAVE A CORNER ON WELL OVER 50% OF THE "OFFICIAL" INVENTORY. By now, major silver users should be shaking in their shoes hoping that Mr. Buffet is kind to them...

3. About 70% of newly mined silver comes as by product from companies who are focused on other metals (gold, zinc, copper, lead). These companies have consistently forward sold silver (sometimes 5 years entire production forward) because they prefer a non-volatile income stream of that element of sales (silver), given that in their primary metal they need to stay in the more volatile "spot market". Solomon's opinion here is that this means that it will be VERY HARD TO INCREASE SILVER PRODUCTION worldwide unless significant demand for all commodity metals increases accordingly...particularly bullish would be economic slowdown, less steel and copper required, less silver produced as side product. At the same time, silver investment demand rising.

Well dear knights, I think the season for a great joust is upon us...history is in the making.

Poor old Solomon

In reference to Buffet's silver position, found a post on Kitco (I believe it was Kitco) a few days ago from a gent who claims the latest Berkshire Hathaway report details that Buffet is actually leasing out the silver. Although I have not verified this, it does make sense if you think about it. He's more than likely getting a rate much better than bonds, and if they default, he settles for cash. All this makes one wonder how much of his position is truly intact.

Would be worth getting our hands on the latest company quarterly or annual report...should be able to dig it up on FreeEdgar...will try to find the time this weekend if someone else doesn't beat me to it!


Lamprey

Source: Bridge newsNY Precious Metals Review: Platinum, palladium slide on Russia New York--Mar 2--NYMEX platinum and Palladium futures ended lower on news that acting president Vladimir Putin had signed 2000 export quotas. Apr platinum settled down $14.70 or 3.2% at $452.5 after a 1-month low of $445 per ounce, while Jun palladium settled down $24, 3.5%, after a 2-week low of $655. Gold and silver also fell throughout the session, ending in the red. (Story .2333)

Black Blade: We shall see.

US DLA offered no platinum for sale Thursday Washington--Mar 2--The US Defense Logistics Agency made no offers to sell platinum or any other metal Thursday via its Web site. (Story .2354)

Black Blade: Obviously, the US DLA aren't convinced either.

Also�.COMEX warehouse added another 2.7 million oz silver today.

Oro, brother Oro!!!

I read your post of yesterday in awe........the best I have read in quite some time.......your ability to express the Big Picture is amazing, as always.

I kneel and bow my head in your direction.

Many thanks,

THCView Yesterday's Discussion.

http://nypostonline.com/business/25545.htm
This must be the "season" of rising prices. So typical of our government nowadays. Wouldn't you say?



CPI Report Did Not Include Energy Costs

By John Crudele

http://nypostonline.com/business/25545.htm

DID Washington eliminate the rising price of oil from the last Consumer Price Index?

If you have a car, you know that the price of gasoline has beaten up the family budget in recent months. Homeowners who heat with oil haven't missed that point either. In fact, the fear is that every industry from airlines to the makers of widgets will try to pass on their energy-cost increases to consumers in the months ahead.

Yet Washington is showing very little official inflation. How can that be?

We may have found the answer.

In a tactic that's reminiscent of the old Soviet Union's method of stat-keeping, officials in Washington seem to have simply eliminated the nasty effect of energy prices from their figures.

I say "seems to have" because it is virtually impossible to understand what the ledger-keepers in Washington are doing, even after they've explained it.

But here's what I know.

The Bureau of Labor Statistics reported two weeks ago that the nation's Consumer Price Index rose just 0.2 percent for the month of January. That bit of good information for the markets came shortly after we found out that producer (wholesale) prices were unchanged for the month.

Let's concentrate on the CPI in this column.

Buried deep in a footnote in the CPI report, under a section about seasonal adjustments, is this statement:

"Effective with the calculation of the seasonal factors for 1990, the BLS has used an enhanced seasonal adjustment procedure called Intervention Analysis Seasonal Adjustment for the CPI series .... For the fuel oil and the motor fuels indexes, this procedure was used (in January) to offset the effects that extreme price volatility would otherwise have had on the estimates of seasonal adjusted data for those series."

If this footnote really means what it seems to say, this disclosure is astounding. Washington has been assuring us that that inflation is under control, but it has been reducing -- and maybe even eliminating -- the impact of the rising price of oil in its calculations.

That's like leaving the rain out of a weather report. Or the visitor's runs out of a box score.

If this is what BLS is doing, it would produce a meaningless number.

The financial markets actually pay attention to these CPI reports, even though -- as I've explained before -- the Federal Reserve has come to distrust them and now relies on inflation information gathered from private sources. Last week, in fact, Alan Greenspan publicly said that he'd no longer take the CPI into consideration.

But as far as I know, Greenspan doesn't know about this footnote.

John Williams, an economist who runs the Shadow Bureau of Government Statistics in Hawthorne, N.J., was the one who brought this matter to my attention. Williams did his best to estimate what inflation would have been had the government not used Intervention Analysis.

His guess? Instead of a 0.2 percent jump in the CPI, the number would have jumped a full percentage point for the month. And the producer price index would have been up 2.5 percent instead of zero.

Williams is particularly amazed by the rest of the footnote that states that "extreme values and/or sharp movements which might distort the seasonal pattern are estimated and removed from the data prior to calculation of seasonal factors."

"This is incredible. If only those people using heating oil had their bills handled by the Bureau of Labor Statistics, they'd have no trouble paying them."

It isn't that the statisticians are doing something sneaky. They are, after all, explaining everything right in the report. It's just that nobody knows this statement is there.

What they are doing is wrong and dangerous.

Gidday mates.
, Perhaps you may be able to help Black Blade ( anyone) ?. I chanced to find Garnet in Aussie
after some seasonal floods in a gully that had been washed . The main Vein as far as i could see is shattered but a clear green through to yellow 95/05 respectively and about six feet high and varies in width to a max of about six inches wide. It is surrounded by soft sort of clayish brown dirt. Around the vein are larger crystals that are dodecahedrons with the largest faceted orbs thereto the sise of golf balls. The closest spot that represents any
seemingly historical evidence of civilisation is a copper mine abandoned eons ago. So the question is : Since copper may contain gold etc . Is the discovery of this garnet of any significance ?. Oh and a jeweler scratch tested it at hardness 8 if that helps ?.
Regards Ray.

Crazy....maybe.....but now's the time to buy
the golds.....oh yeah!

From your description, it sounds as if you encountered a dike (igneous intrusion) into the country rock. However, garnets occur in a variety of geologic environments, commonly in metamorphic rocks such as schists and gneisses, some in igneous rock such as pegmatite dikes and rarely in granitic rock. Some even occur in ultrabasic rocks such as peridotites and kimberlites. So you see, garnets may not be a very good indicator mineral for prospecting gold. That said, certain types of garnets (such as pyrope) and other minerals (such as diopside for example) have been successfully used to trace galcial moraines in Canada where diamond bearing kimberlites have been found. A geologist named Charles Fripke(?) found diamond bearing kimberlites with that method. The result was the formation of Diamet Mining(?). If anything, depending on the quality of the garnets, you may at least have some semi-precious gemstones :-) Anyway, good luck!

Asia Metals Focus: Japan dealers bullish on Palladium/platinum

Tokyo--Mar 3--Japanese dealers Friday remained relatively bullish on prices of platinum and palladium in the near future, despite expectations of Russia resuming normal exports of the 2 metals soon. The dealers said Russia would resume normal exports of platinum and palladium only if they are able to confirm export shipments. Russia provides about two-thirds of the world's palladium supply and 20% of platinum supply. (Story .2016)

Black Blade: Even the Japanese are skeptical!

BTW, Looks like the UK plans to sell another 150 tons of Au beginning in May! Gotta hurry and sell before the price goes up, eh?

...goes out to the paper trading gang and those physical dealers who still think that the paper price is a fair valuation of physical transfer to us small little furry toed scavengers.

Buy below $600. I love the gold/oil ratio valuation from the old desert sage trader. Reminded me of the berber market in Marrakesh :-) Gold is a screaming buy under 11...let's see $289/$31 is...GOTTA GO there's a man on the corner in a panic that wants to unload something shiney and yellow. I think I may be able to help.

This is a "typical" newsbrief...I get a similar one or two each day by e-mail...subscription is free....directions at end.

The reason I post this one is that I believe it is relevant to the Another/FOA scenario because as Europe get's financially motivated (Euro introduction) it seems that There are very serious warmings-up going on between Russia and China...related primarily to oil and weapons...but calling for a "multipolar world" where the USA does not call all the shots.

Could be that Putin is pushing this forward "pre National Elections" to generate the feeling he is already really in charge.

--


STRATFOR.COM's Global Intelligence Update - 3 March 2000


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Faceoff in the Baltics: NATO Expands the West-Russia Confrontation
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STRATFOR.COM Global Intelligence Update
3 March 2000


In Beijing, The Signs of a New Strategic Partnership

Summary

In China on March 2, the state-run People's Daily ran several
articles touting the benefits of strategic partnership between
Russia and China. The publication appears to endorse little noticed
negotiations between Moscow and Beijing, which are exchanging top-
ranking officials in preparation for a summit. Details have been
closely guarded, but the talks involve oil and weapons. The timing
of the state press coverage suggests that there has now been a
breakthrough in the talks. And it appears that a more vigorous
strategic partnership between Russia and China - one that will
worry the West - is beginning to take shape.

Analysis

Until now, China's official press has remained relatively quiet
about a flurry of diplomatic activity between Beijing and Moscow,
leading up to a long-delayed summit between the two governments
this summer. But on March 2, the state-run People's Daily ran a
series of articles touting the benefits of strategic partnership
between Russia and China. The articles also called for a multi-
polar world, instead of one in which the United States is the
dominant power - calling for the "establishment of a just and
reasonable new world order." The timing does not appear to be
coincidental.

Right now, one high-level meeting between Russian and Chinese
officials is concluding in Moscow and another is beginning in
Beijing. They are part of a string of talks - eight exchanges in
recent weeks - in preparation for a summit between Chinese and
Russian leaders. The People's Daily articles appear to signal a
possible breakthrough, both in the talks and the leadership
strategies of both nations. It now seems that a more vigorous
strategic partnership is forming between Russia and China. Alone
each is too weak to challenge American power, but together the two
nations can coordinate strategy and ultimately create simultaneous
problems for the West on disparate parts of the globe.

China and Russia have claimed to be strategic partners since 1992.
But in reality, the two nations have made little real progress
other than to ineffectively challenge U.S. policy in the Persian
Gulf and the Balkans. The two governments have most recently been
preparing for a summit between acting President Vladimir Putin of
Russia and President Jiang Zemin of China. The summit has been
discussed, reported and tentatively scheduled. The repeated
postponement suggests that the summit is serious, a matter of
considerable advance negotiation, and not merely a photo
opportunity.

Most of the hesitation has come from Beijing, as Chinese officials
petitioned for international recognition and strength based on
economic growth, attempting to join the World Trade Organization
(WTO). With its economy in much worse condition, Russia appeared
less an asset to Beijing than a liability. Throughout the talks,
Beijing appears to have kept Moscow at a distance both to keep the
door open to the United States and to remain dominant in
negotiations with the Russians.
http://www.stratfor.com/services/giu/121099.asp

Quite suddenly, China has turned public attention toward its
relationship with Russia. Aside from mentioning future bilateral
visits, the articles emphasized the idea of fostering "global
strategic stability and regional security" through Chinese and
Russian cooperation. Clearly looking back at U.S. military action
in both the Persian Gulf and Kosovo in the last 14 months, the
articles also call for respect for territorial integrity of
sovereign states and opposition to "humanitarian intervention."
China and Russia are clearly considering this recent history as
they regard Taiwan and Chechnya.

This endorsement of the relationship appears timed to coincide with
intense, high-level diplomatic activity and suggests that some sort
of breakthrough has been achieved in the talks. In recent weeks,
Beijing and Moscow have had no fewer than eight exchanges of
officials to prepare for the summit, now tentatively set for June.
While the People's Daily was publishing its articles, Chinese
Foreign Minister Tang Jiaxuan was concluding his visit to Moscow
and Russian Deputy Prime Minister Ilya Klebanov arrived in Beijing
on March 1.

In addition, the two nations are studying a deal that furthers
their common goals by advancing their individual interests. A deal
may involve both Russian oil and advanced weapons systems bound for
China. A main topic of Klebanov's visit to Beijing is Russian arms
sales and energy for China. On the table is a renewed proposal for
an oil pipeline from the Russian Far East through Mongolia and into
China, nuclear fuel for a Chinese reactor and continued sales and
cooperation on advanced weapons systems. In turn, Russia would
receive some hard currency and the benefits of increased economic
activity within its energy and arms industries.

This evolving relationship suggests a series of important
developments. In China, it appears that the center of gravity
within leadership circles is shifting. Until now, China held Russia
at arm's length and elements for economic reform had the ear of
Jiang. But Jiang's ambitions and the deteriorating domestic
situation have fostered a resurgence of the old-guard - those who
want a strong China without needing to appeal to the United States
or the western world. On a global scale, both Russia and China are
increasingly squeezed by international pressure in areas they
consider to be within their respective spheres of influence - and
this is driving them closer together.

The strategic partnership now taking shape is not a formal military
alliance with either hostile intent or desire for global conquest.
Rather, it is based on a simple, common fact. Individually, China
and Russia are weak - economically, politically, and militarily -
in comparison to the United States and its allies in Europe and
Asia.

Together, however, they can present a formidable counter to the
United States and its allies. Today, China is unable to project
military power far beyond coastal waters - but increased energy and
military supplies will help mitigate this over the coming decade.
This plays into China's increasingly short timetable for the return
of Taiwan repatriation; in the space of only years China will be
able not only to threaten the island but U.S. forces if they
intervene. In return, by boosting the Russian defense industry,
Russia gains much-needed cash and a way to revitalize at least a
portion of its domestic economy.

Even in the very short term, China and Russia can - if they choose
- present the West with a very difficult proposition: simultaneous
crises in Taiwan and on the Russian periphery. In such an extreme
situation, the West would be hard-pressed to respond. The U.S.
military is now stretched thin by increasing global commitments and
static post-Cold War force levels. Over the next decade both Russia
and China will only attempt to expand their military capabilities.




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Galearis (03/02/00; 20:55:27MDT - Msg ID:26318)
@ Solomon Weaver
Yes I do realize that the POG is a paper driven derivative creation, but the point of my discussion really is that physical gold, at least in smaller weights can be purchased at these prices. The depressed price is an indirect benefit of the shorting pressure that benefits the small gold bug investor. I don't know where you got the idea that I had a million dollars to invest in physical (unless you have psychic abilities and were wiffing a constant daydream of mine).
---
Galearis...I was sort of a joke that you were going to drop an million into gold....yes we all have dreams.

The point was also that even to make a dent in physical trading you have to have such monies..and those who do usually prefer the "ease of paper".

I agree wholeheartedly with your commments of POG in an inflating fiat.....this is already occuring in Australia as their dollar weakens....also this has caused their shorts to more aggressively defend.

Poor old Solomon

http://www.usagold.com/Order_Form.html3/3/00 Indications
�Current
�Change
Gold
288.40
+.20
Silver
5.04
+.03
Gold Lease Rate
0.4362%
nc
Gold Comex Stocks
1,373,896
nc


Market Report (3/3/00): Those of you who read this report regularly
know that we don't buy the government statistics on inflation. More than
once, we have remarked that Alan Greenspan was not reacting to the
Inflation Phantom as some in the financial press have suggested, but to
the Real Thing -- that in fact he might be looking at another,
for-his-eyes-only set of statistical criteria on the economy not
available to the rest of us. If you happen to do the family grocery
shopping, or gone out to shop for an automobile in recent months, or
stopped at the gas station over the past few days, there might be some
question in your mind why the government keeps telling us that inflation
is gone forever in this Cinderella economy and the shrinking value of
the dollar is a figment of our collective imaginations.

Well, John Crudele of the New York Post, has done yeoman work in
uncovering the reality of the inflation that now grips the U.S. economy
and what he has uncovered is astonishing. It's not so much the
government has been lying to us that's so troubling (nothing new on that
score), its the incredible depth of the lie. Says Crudele in a column
published yesterday (Thanks, Elwood at the Forum. See Msg# 26323 for
details.) Crudele says that the situation at the Labor Department (which
has been given the responsibility of reporting on inflation) is
"reminiscent of the old Soviet Union's method of stat- keeping."

It seems that the Labor Department has found a way to get around
including the explosive and "nasty" effect of energy prices in the
Consumer Price Index. I'll let Crudele explain it in his words:

The Bureau of Labor Statistics reported two weeks ago that the nation's
Consumer Price Index rose just 0.2 percent for the month of January.
That bit of good information for the markets came shortly after we
found out that producer (wholesale) prices were unchanged for the
month.

Let's concentrate on the CPI in this column. Buried deep in a footnote
in the CPI report, under a section about seasonal adjustments, is this
statement:

"Effective with the calculation of the seasonal factors for 1990, the
BLS has used an enhanced seasonal adjustment procedure called
Intervention Analysis Seasonal Adjustment for the CPI series .... For
the fuel oil and the motor fuels indexes, this procedure was used (in
January) to offset the effects that extreme price volatility would
otherwise have had on the estimates of seasonal adjusted data for those
series."

If this footnote really means what it seems to say, this disclosure is
astounding. Washington has been assuring us that that inflation is
under control, but it has been reducing -- and maybe even eliminating
-- the impact of the rising price of oil in its calculations. End
Quote.

I would agree that this revelation is "astounding" leading one to
question why it is so important to the government to cover-up the level
of inflation in the United States. So much so that the chairman of the
Fed in Congressional testimony is forced to manufacture an imaginary
circumstance, i.e. fighting the "threat" of inflation, in order to gain
the political leverage (and excuse) for raising interest rates -- the
time tested approach to killing an inflation. Does it have to do with
the government Cost of Living Adjustments on Social Security, etc? Or
does it have to do with the fact that there's an inflation raging in the
country and those in power don't want the money creation that's fueling
traced back to them? Or does it have to do with the absolutely worst
circumstance one can think of -- "The inflation can't be stopped so
let's make it look like it's not there."

I defer once again to Mr. Crudele's take on the matter:

John Williams, an economist who runs the Shadow Bureau of Government
Statistics in Hawthorne, N.J., was the one who brought this matter to
my attention. Williams did his best to estimate what inflation would
have been had the government not used Intervention Analysis.

His guess? Instead of a 0.2 percent jump in the CPI, the number would
have jumped a full percentage point for the month. And the producer
price index would have been up 2.5 percent instead of zero.

Williams is particularly amazed by the rest of the footnote that states
that "extreme values and/or sharp movements which might distort the
seasonal pattern are estimated and removed from the data prior to
calculation of seasonal factors."

"This is incredible. If only those people using heating oil had their
bills handled by the Bureau of Labor Statistics, they'd have no trouble
paying them."

It isn't that the statisticians are doing something sneaky. They are,
after all, explaining everything right in the report. It's just that
nobody knows this statement is there.

What they are doing is wrong and dangerous.

The government has provided one of the best reasons, I can think of to
own gold: If the inflation picture is so bad, they are afraid to report
it, then citizens need to move toward protecting themselves against it
-- and not deliberately, quietly and judiciously, but in short order.
When the truth surfaces and the public at large discovers it, the run to
gold will begin in earnest and you won't want to be caught in the
stampede.

That's it for today, my fellow goldmeisters. See you back here Monday.
Have a nice weekend.

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
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Just click on above link and make the appropriate entries.

The Keyword is COLA

COLA to government salaries and to Social Security payments would increase government expenditures and eliminate the budget surplus in a jiffy. That was, in part, how the 70s worked, despite attempts to lower the headcount of government, the crowning achievement of the Ford and Carter administrations and, of course the Reagan team, the expenditures continued growing through the COLA adjustments. The "old folks" who fought WWII were not about to be cheated in their COLAs, so the data could not be massaged because of political considerations. The golden years lobby is now very weak, and they are standing silent as the terms of the Social Security contract are changed against them.

Paper PM Markets

Poor Old Solomon, Jason, Beesting, Henri
Sir RossL You said:
>>>>>>It seems to me that the paper palladium market is detaching itself from the physical market. If it is doing so, then I theorize that we can watch the current palladium events as a roadmap for what is to come when the paper silver and paper gold markets come apart at the seams. Limit up days, followed by changing the rules in favor of the shorts, followed by declining paper prices with no physical available. What's next?

Also, notice that Stillwater (SWC) stock peaked with the paper market in palladium. Gold and silver stocks may not be a fun place to be when the paper gold and paper silver markets start to fail.<<<<

My guess is that when the price of paper PM's starts to drop, detached from the physical, it'll drop down fast, and if it affects the stock prices of producers they'll rapidly act in concert to put out the true prices they are getting for their production. maybe even set up their own marketing via Internet as Beesting suggests...No??

Goldfan

The MAIN reason the government (and the FED) SHOULD want to cover up "inflation" is that once the "inflation" becomes commonly recognized, it will become a self-reinforcing process as more and more of the people holding "BIG FLOAT" rush to unload it faster and faster to minimize their expected loses as dollar trade value plummets.

Regards,
Journeyman

"Throwing away over 100 years of money supply statistics, carefully researched by people like the reknowned Milton Friedman, going all the way back to 1867, the FED recently told Congress in its Humphprey Hawkins report that it has "little confidence that money growth within any particular range selected for the year would be associated with the economic performance it expects or desires". And, according to a Dow Jones News report, Fed Governor Edward Gramlich recently said "some years ago many believed that stabilizing the growth of money supply would lead to stable prices, but this approach is now generally discredited".
In other words, money no longer matters!
ND goes on stating that money stillmatters very much. The only problem is that excess credit reation does not always show up at in everey cycle in the same places. For the past five years, credit and money creation has been far above Fed targets and when they throw out things like oil prices or the boom in luxury homes prices, they can't find "Core Inflation" anywhere.
In the 1970s, inflaion was found in hard assests, but over the last 5 y's -as well as in the 1920s, and the 1980s in Japan, there was little or no CPI-inflation, and the excess credit creation found its way into the stock market, creating speculative booms. In all these three low inflationary periods, the central banks felt the reckless money supply growth was not fuelling "core inflation", so they were very comfortable with excess credit creation. But in the prior two cases, things ended badly when CB's raised the discount to 6%, thus taking away the punch bowl."
My take: This kind of complacency is making me more than edgy and no amount of market interventions will stave off the ultimate results. And if a one month slowing employment data can add 2% on DJII in an hour one has to wonder about the potential downside if and when reality sets in as the consumer wakes up and feels the pinch in his pocketboook! No amount of wealt effect, which may be on a decline anyway looking at the poor leadership in the stock market.
Go for cover - go for gold - CB2

My guess is that when the price of paper PM's starts to drop, detached from the physical, it'll drop down fast, and if it affects the stock prices of producers they'll rapidly act in concert to put out the true prices they are getting for their production. maybe even set up their own marketing via Internet as Beesting suggests...No??

Goldfan
---------
Goldfan

Hi highly agree with you.....meaning that since mining companies sell physical material..they will have a very intimate understanding of what the product is really worth...


On the other hand, if the paper markets are in trouble it could cause a lot of large investment houses to keep free old both gold and gold stocks....this could prove particulary troublesome to jr. miners who don't have large cash flows.

I've seen a few exposures similar to what you describe in Ontario, Canada and they certainly have a mineralogical interest. And it certainly sounds like a dyke that you describe, but could also be a skarn zone. Are the garnets of a dark red in colour or lighter - grading into orange, for example. Garnet rich zones can also be the product of very local contact metamorphism (skarns) and the local mineralization may be even more interesting. Other goodies possible are rare earth minerals, zircons etc. It also sounds like the country rock is altered granitic (feldspar rich) material - that has chemically broken down into component clays. I presume the site is in the Australian warm belt as this phenominon is common in Brazil etc.

But the bottom line, as interesting for the mineralologist as this might be, it is probably not of particular interest as an indicator of metal mineralization. In Ontario (and elsewhere) garnet is a common mineral - often, as Black Blade infers - present in quantity (if not quality) in a variety of igneous and (especially) metamorphic rock types.

But the size of the crystals - and if they are sharp and shiney - would have considerable interest to the collector.
If they are quite dark in colour, they are likely almandite garnet, an iron-rick species - and the most common of the garnets. You do not mention clarity, so I presume this leaves out hope for gem material.

Hope this is helpful to you.

http://www.cnnfn.com/2000/03/02/investing/q_goldstandard/posted. The above link shows gold is getting interest and the hedge market is messing up the stock prices.

I would not hesitate for a nano second to drop a million into gold. My immediate problem is getting the million to drop. I have heard that this problem is a common one, so I feel better in having the company in misery.

I notice too that even on Friday silver is showing a little frisk. I have a little put away to put into the white, however. I just hope it doesn't explode on Monday - that would ruin my day. (I presume you noticed the Ag lease rates plummeting exhuberently today).This month or April is my (hopeful) prediction for silver to be on its way for the COMEX version of the TOCOM.

We will see a little paper exchanged then too.

lamprey_65 (03/02/00; 22:29:35MDT - Msg ID:26320)
Solomon In reference to Buffet's silver position, found a post on Kitco (I believe it was Kitco) a few days ago from a gent who claims the latest Berkshire Hathaway report details that Buffet is actually leasing out the silver. Although I have not verified this, it does make sense if you think about it. He's more than likely getting a rate much better than bonds, and if they default, he settles for cash. All this makes one wonder how much of his position is truly intact. Would be worth getting our hands on the latest company quarterly or annual report...should be able to dig it up on FreeEdgar...will try to find the time this weekend if someone else doesn't beat me to it! Lamprey
--
Understand what Mr. Buffet is doing is going to be a key to anticipating what the "flavor" of the silver crisis is going to look like....in the end however, the situation is such that we are running a deficit of about 200 million ounces per year and it appears that what is left in COMEX and LBMA vaults is about all the "commited silver" there is...meaning in order for more real physical sellers to line up the price will have to rise.

Parties who "leased" silver into the market were duped...since most likely they will get little or no silver back for quite a while....just cash. The remaining silver holders who do not see that it is in their interests to stay out of the market until significant price rises are not understanding the silver phyical situation.

Here is how I view the issue of Mr. Buffet leasing or not leasing.

1. Leasing implies physical transfer of metal to a party who will "sell" it in the market for cash. If Mr. Buffet were to "lease material" but keep in in his vault, he could do better to simply loan someone money....he has enough credit to be a bank if he wants....I just do not see Mr. Buffet having any real interest in what he gains by leasing vs. the risk of default. Perhaps he is "leasing enough" be able to "state publically" that he is...but he's a buy and hold guy and you know he sleeps best sitting on as much of the metal as he can for now, knowing that in due time his day will come.

2. When Mr. Buffet bought all that Silver it caused a short squeeze where the COMEX changed some of the rules to prevent large financial interests from being able to take such large physical deliveries. Mr. Buffet was literally forced into continuing some leasing in order not to appear as a bandit. And what he did is now impossible to repeat.

3. Mr. Buffet is a value hunter. The fundamentals of the silver market are stacked against the status quo...they have literally robbed the coffers and the only way to get supply/demand balance is for silver to go to $10 $15 $20 for at least five if not 10 years. (and in the meantime we could have 6-24 months of a story like the Hunt days and today's palladium).

4. Mr. Buffet knows that there are large financial interests who will be forced to settle in cash instead of silver. HE DOESN'T WANT TO BE ONE OF THEM UNLESS HE CAN DICTATE ALL THE TERMS. And if he has leased all his material, he has no better bargaining position than the other parties who are "OWED" hundreds of millions of ounces of silver.

5. Mr. Buffet has most of his net worth in Stocks and he is prudent enough to act in silver such that he is not blamed for stock market problems...he is also in the position to sell silver selectively to industrial companies where he is a shareholder...perhaps in exchange for large blocks of newly issued stock. Because he will sell it the way he wants, for all intents and purposes his material is "not really available to the markets, ever."

Poor old Solomon

http://biz.yahoo.com/rf/000302/9n.htmlIn the week of February 21st, according to figures released by the Fed:

M-1 rose $3.8 billion to $1,105.6 bllion
M-2 rose $4.7 billion to $4,691.8 billion
M-3 rose $14.6 billion to $6,546.7 billion (represents an 11.5% annual growth rate on the week.)

In regard to what you suggested in your item #5 that Mr. Buffet "is also in the position to sell silver selectively to industrial companies where he is a shareholder... Because he will sell it the way he wants, for all intents and purposes his material is 'not really available to the markets, ever.'"

Would it not be the case that an idustrial user, having their silver needs satisfied in such a manner, would not subseqeuntly bring their own demand pressure to bear on the marketplace? The result is a wash whether he sells it over the counter or in the back alley. Real demand for a physical good should not be clouded by the perceptions based on price movements, which--if anything like gold--are determined through unrelated contracts markets where supply and demand can be something entirely separate. Feel free to dismiss this as you wish, for silver is alien to me and I am surely speaking from a position of weakness here.

Aristotle, I hope you have time for a few more comments and questions. As a prelude I think it is only fair to state the basis of my questions so that you can more readily hone in on where my actual misunderstandings or deficiencies may lie as opposed to assuming a philosophical perspective that is not one I share. This saves time and enables us to get to the heart of the matter in a simpler way. Thanks in advance for your patience with my approach and thought process.

First I must express my reaction to your statement <<<" Interesting perspective you've offered. I ask this: What magical well of real-wealth creation are we currently drawing from if our future needs don't have to be fairly created and saved by our extra production today. Meaning, how is it that we can continue to expect something for nothing�dollar accounts that grow faster than we do, and miraculously continue to buy more, even accounting for inflation? We've been able to do this in America on the backs of the rest of the world playing along. Why should they continue?">>>

OUCH. I fail to see where the question elicited or warranted that response, but since I am somewhat new here let me give a little more information and hopefully select the correct words because I agree with Peter about exact meanings wherever possible. Some of us out here have never played the stock market game, refuse to participate in the something-for-nothing 401-K pre-tax investment scam, have no debt and paid mostly cash on the barrel for most of our possessions. A few of us even reject the "flex plan" benefit of paying for medical expenses with pre-tax dollars. We have no entitlements, no paid-up retirement plans from our companies or unions, and seek no handouts in any fashion. I understand quite well the notion of facing the future as a free man, unencumbered by the tentacles of modern socialism, and actually hope to be fortunate enough to work productively, creating needed goods until I die of old age. OUCH. I am very much in solidarity with those whose backs and indeed graves have formed the playing field of this nation's ambitions. The pride I have in remaining as defiant as I can be in the face of this imbecilic juggernaut does not blind me to the necessity of a proper saving and/or investment plan. That is why I asked the question in the first place. The part of my original question that was left out in your response should have clarified the context and provided additional meaning to the words previously written. I also said <"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 wouldn't 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?">

You see, I am questioning how that someone, most likely a person who is already suffering dollar system effects to a degree most among us would not like to consider for ourselves, is ever going to catch up. As the paper 'burns� there are many palms to consider and a lot of them are not yuppie dot-commies, for whom I suppose most of us posting here won't feel too sorry. Alot of those palms are attached to the poor folks you refer to in your response. Sure, a "perfect monetary system" would alleviate future injustices to a great degree, but what about the transition period and the plateau thereafter? If the wealthy and wise of the world bid up the price of gold, out of fear and righteousness, will the downtrodden be better off simply because there is a free market in gold in which they can now participate? I don't know.


Now, it would be misleading to propose that most of us who hold physical gold dear do not look forward to its securing a bit of our personal future, but would it be heresy to question the consequences of "windfall profits"? Is the prerequisite "wisdom" in any substantial way different than other less noble 'something-for-nothing� inclinations? While many would denigrate the lumpen welfare slob for accepting government largesse, others might point out that they are in all actuality getting almost 'nothing-for-something�, that 'something� being their obedience and votes and that almost 'nothing� being paper dollars and disposable possessions. On the other hand, those of us who have come upon our knowledge of fiat currencies and true wealth at such an auspicious time in history, are really trading almost 'nothing-for-something�. I don't suggest that we feel guilty. Not at all. But shouldn't we recognize that our individual successes in this realm may be intimately related to major negative effects for others, both here and abroad, who have no idea of what's going on and even less responsibility it. Thus far I haven't read much that addresses this part of the equation, or didn't recognize it in another form

Well I'll leave it there for now. I guess its not the 'perfect monetary system� I am as concerned with as the 'imperfect world� in which it will operate. If those who own the gold make the right rules then everything ought to be pretty good. But what evidence do we have that that has ever been the case in human history?
(Boy I'll bet that one is going to send me back to my stack of homework, (smile)).

To be continued as my study of your series progresses. Thanks again for a stimulating dialog. Hope I'm not too na�ve for this discussion.

RonWortham@aol.com wrote:

> If we don't succeed, we run the risk of failure." --Al Gore
>
> "Democrats understand the importance of bondage between a mother and child." -Vice President Al Gore
>
> "Welcome to President Clinton, Mrs. Clinton, and my fellow astronauts."--Vice President Al Gore
>
> "Mars is essentially in the same orbit... Mars is somewhat the same distance from the Sun, which is very important. We have seen pictures where there are canals, we believe, & water. If there is water, that means there is oxygen. If oxygen, that means we can breathe."
> --Vice President Al Gore, 8/11/94
>
> "The Holocaust was an obscene period in our nation's history. I mean in this century's history. But we all lived in this century. I didn't live in this century."
> -- Vice President Al Gore, 9/15/95
>
> "I believe we are on an irreversible trend toward more freedom and democracy - but that could change."
> --Vice President Al Gore, 5/22/98
>
> "One word sums up probably the responsibility of any vice president, & that one word is 'to be prepared'."
> --Vice President Al Gore, 12/6/93
>
> "Verbosity leads to unclear, inarticulate things." --Vice President Al Gore, 11/30/96
>
> "I have made good judgments in the past. I have made good judgments in the future." --Vice President Al Gore
>
> "The future will be better tomorrow." Vice President Al Gore
>
> "We're going to have the best-educated American people in the world."
> --Vice President Al Gore, 9/21/97
>
> "People that are really very weird can get into sensitive positions and have a tremendous impact on history."-- Vice President Al Gore
>
> "I stand by all the misstatements that I've made." --Vice President Al Gore to Sam Donaldson, 8/17/93
>
> "We have a firm commitment to NATO, we are a part of NATO. We have a firm commitment to Europe. We are a part of Europe."-- Vice President Al Gore
>
> "Public speaking is very easy." -Vice President Al Gore to reporters in 10/95
>
> "I am not part of the problem. I am a Democrat." --Vice President Al Gore
>
> "A low voter turnout is an indication of fewer people going to the polls."
> -- Vice President Al Gore
>
> "When I have been asked who caused the riots and the killing in L.A., my answer has been direct & simple: Who is to blame for the riots. The rioters are to blame. Who is to blame for the killings? The killers are to blame.
> --Al Gore
>
> "Illegitimacy is something we should talk about in terms of not having it."
> --Vice President Al Gore, 5/20/96
>
> "We are ready for any unforeseen event that may or may not occur."
-- Vice President Al Gore, 9/22/97
>
> "For NASA, space is still a high priority." --Vice President Al Gore, 9/5/93
>
> "Quite frankly, teachers are the only profession that teach our children." --Vice President Al Gore, 9/18/95
>
> "The American people would not want to know of any misquotes that Al Gore may or may not make." -Vice President Al Gore
>
> "We're all capable of mistakes, but I do not care to enlighten you on the mistakes we may or may not have made." --Vice President Al Gore
>
> "It isn't pollution that's harming the environment. It's the impurities in our air and water that are doing it." -- Vice President Al Gore
>
> "[It's] time for the human race to enter the solar system." -- Vice President Al Gore
>
> AND, OF COURSE, (TO ALL USERS OF THE INTERNET),
> THE ALL TIME FAVORITE QUOTATION OF MR. AL GORE:
>
> "As many of you know, I was very instrumental in the founding of the Internet"
> --AL Gore to Katie Couric 3/99

I think he has the same foot in mouth disease his father has.

Are these two the only things this great nation can raise as credible presidential candidates?

Who will save us?

http://www.usagold.comI think another spike up in the XAU would provide some boost to the POG, I hope it will. A few goldsticks are one or two days away from bouncing off their two-year lows as they were before the last spike. I don't even have to read the paper but to look at these levels. These are not going to stay at this beaten down situation for more than a week. I think these jimmies are going to bounce up soon. Maybe not the super spike like we hope for but like the bored surfers in August said, "Any wave now is a good wave". Seems the DOW is doing its infamous "suckers rally". Yes that is exactly what it is and if you are not unloading your, I mean "taking out the trash". Think about the children!!! Blue chips are what sailors play poker with. The big boys are using this rally to go short with all they've got. Pump and dump. Market meltdown is on its way. How do we know it's market meltdown...........What rallies last? Biotech. First was tech, then internut, then in the past month while the first two have been drifting down the last kid gets his shoes tied to run the race. Little boy biotech. OK he ran real nice. He made the team. But the season is OVER. No it isn't completely over. Small Cap was going "parabolic to the upside" but when a few hundred $3 stocks go to $9 within a month and a half. You are going to tell me you are a "value investor". Aye mate tis all subject toa fast break down. Show is almost over, better pawn your movie tickets quick. These laggard sectors are the last horses out the gate, Biotech and Small cap. The big money is flowing into bonds and short positions. A falling dollar will pull money out of bonds and into gold. Equities are no safe haven for capital.

I'm bullish on gold because it's the only intelligent choice left. BECAUSE WHEN MARKET MELTDOWN HITS (quick slide down or the sudden panic sell) THE VALUE OF THE DOLLAR WILL FALL WITH IT. Perception becomes reality when we are dealing with mania and panic. No logic. No rational thought. No sentance structure either. Chinese are proactive politically. They attacked across the Yalu in Korea long before we got near it. Watch gold sales in Asia for clues to their attitudes towards holding dollars.
What can foreignors buy if not "sticks and binds". Foreign governments will hold dollars when they are a safe haven of value. The EURO's weakness also helps gold because any successful fiat currency is a lying competitor to gold. So they will not go to the Euro as it slides in value until the ECBs prop it up again. Asia and Europe want their hemispheres economically separated from the dollar. Asia wants to form an Asian-Alliance trade zone because they feel they are weak against a US American continent trade zone. Europe has its union trade zone. As the European union gets stronger the rich squabbling families that control Asian industry will be forced to come together. The main reason for their union will be for inter-asian trade. Less reliance upon US markets, that way the US will go along with their union ideas. Can't upset older brother.

STAGE ONE......get a common currency. Introduce it by selling bonds denominated in it. Once it's accepted then STAGE TWO........let the currency rise in value to compete with the dollar. The EURO is about to enter stage two once the ECB's feel it is accepted enough.

They can slowly deregulate their industries giving it more value as the currency would buy more when eurozone prices fall. They want the economic benefits of the USA without the social insanity caused by freedom without discipline.

If a straight talker like McCain gets elected we might gain some respect. But he is a fine loose cannon of a Scot and a bit too much for the shallow minded electorate. He'll get the Perot vote but McCain isn't quite Philly parade material like DC wants. So we might end up with a pandering guy from the twilight zone. Land-Grab Al. I thought I saw Bradley running the painting demo class at Lowes. Bush is starring in a new film "Platitudes II". It's a story about an insurance salesman who found out after joining a country club that he could retire early if he made enough rich friends.

...........................................................
Did anybody see the documentary on all the teen prisons in California? So the solution is always to build more prisons. Ladies and gentleman, it's called tyranny. "We think your teenager is an eyesore to the community and the illegal drugs they used aren't powerful sedatives like the ones we are going to put them on". With almost a case worker ratio of one to one it's only a question of money as to how to "create more social worker jobs". Hard labor is the solution. Not institutionalized isolation cells. Must be a hard life as a caseworker, only so many varieties of creamers to put in a day's coffee. Bring back the CCC. Civilian Conservation Corps. Eight months worth of planting trees in Alaska and we're on the road to redemption. Tough love not high taxes. Leave me with some money for gold, please.

Anything I write is open for criticism or comment. I'm mostly interested in perceiving of the macroeconomic trends developing because I feel the details will be confirmations or negations of forthcoming trends. All these things I write about should be held loosely if at all. A 20 minute speech by Greenspan can send us all back to the drawing board. That's what makes it fun. Have a great gold weekend.

I might sound like I want the dollar to collapse. Not so. I want to see gold at its real price in a free market situation. I live in the US yet I am taxed at the rate of Europeans and I receive no benefits from the government at all. I'm tired of seeing innocent people hurt by market manipulations, government and corporate propoganda (news), and the general attitude of all the cowardly scared people who are affraid to say what is right. Maybe you lurk so much because you have not the ability to speak the plain truth. I like McCain but I also know he is not electable. But I'll still vote for any independent. I believe in sound money gold, but I also accept that it is manipulated down. So I use their shorting to my advantage. I buy in after they beat it down. The last thing we need is a price rise to $600 and we are stuck with our uninvested paper. Your dollars only have value with a low POG.

Alan Keyes!!!

Aristotle, Journeyman,
SAVINGS' was the word that I felt Ari exactly defined.

So, within that context of savings being "Unspent earnings, created by real wealth actually produced " How is it possible have that credit to spend at some time in the future?

Gold, outside of those times that it is artificially depressed in purchasing power by manipulation, is going to keep your unspent value alive and well. -- BUT, when and how often are we going to be "Outside of those times"?? A perfect monetary system in an imperfect world may be mutually exclusive.

The alternatives: "Paper storage" in banks or bonds? Bad idea! We all concur on that. Erosion most probably and obliteration always a possibility.

Owning stock in real companies that produce real goods? Once upon a time that was a way to get dividend yield in return for capitalizing, or reimbursing the capitalizer, of a production facility.
Now though, the price multiples are discounted far into an uncertain future. The premium is too high and also technology evolves so rapidly that it is unknowable as to what endeavor will be replaced by new innovation and not be there for you when you need it. (Buggy whip company then Check printing outfit, soon),

So how else to stash that value that you truly created but wish to exchange later?

As Will Rogers said "Buy land, they're not making any more of it." Even there, land that Man develops has tenuous value subject to wise or destructive use and the manipulations of politics and finance.

However, farm and forest property does not ever become obsolete. If you keep yours clean and productive, it's value will never fall. And, it will rise in value to the degree that others trash or convert theirs, and also be more valuable as the population increases. Taxes can be paid by the product generated, and while it is not portable as PM's are, it is impossible to steal, as one has recorded title.

Hard assets stored real wealth long before Man found ways to get something for nothing by legal, though unethical trading, having no true value in its activity. Hard assets will continue to store value long after a future society that has learned that speculative profiteering is as counter-survival to the common good as rape, pillage and burn. All profiteering dilutes the amount of goods and services that are available to be exchanged for the labor of the true producers.

To paraphrase John Donne:

Ask not from whom that profit comes. It comes from thee.



No man is an island, entire of itself;
every man is a piece of the continent,
a part of the main.

If a clod be washed away by the sea,
Europe is the less, as well as if a
promontory were, as well as if a manor
of thy friend's or of thine own were:

any man's death diminishes me,
because I am involved in mankind,

and therefore

never send to know
for whom the bell tolls;
it tolls for thee.

John Donne (1572-1631)

Peter Asher,
The qoutes you attribute to Gore are virtually all
from Dan Quail.
The one from the internet was Gore's but even that one
might be not 100% accurate wording.
Tell your source to stop the fraud.
I dont blame you.

TownCrier (3/3/2000; 15:24:42MDT - Msg ID:26342)
Food for thought for Sir Solomon
Would it not be the case that an idustrial user, having their silver needs satisfied in such a manner, would not subseqeuntly bring their own demand pressure to bear on the marketplace? The result is a wash whether he sells it over the counter or in the back alley. Real demand for a physical good should not be clouded by the perceptions based on price movements, which--if anything like gold--are determined through unrelated contracts markets where supply and demand can be something entirely separate. Feel free to dismiss this as you wish, for silver is alien to me and I am surely speaking from a position of weakness here.---

Sir TC Perhaps you are alien to silver but you a brilliant goldmind so you are much more akin than you think.

I sometimes feel a little bad on a gold forum talking about silver but I think that they are 1. very similar beasts 2. both great investments. 3. Likely to perform in price together in general but in periods not (compare Pt Pd to Au lately).

I will agree with you completely that no matter how much silver Mr. B has, he cannot really effect demand much (unless he sits on it all, drives prices sky high and therefore curbs demand). Any that he sells is yes...a wash..in market or off market.

But let me clarify my thoughts....let us say that Mr.B. and BerkHath are major shareholders in a company like Kodak (for example, let us say they have $2 billion of Kodak stock). Let us further assume that Kodak consumes 25 million ounces of silver per year (completely out of the air could be more could be less). So, in today's market, Kodak would be spending $125 million on silver. Now let us say that silver surged to $20 and stayed there for at least a year such that the "average price" of silver for Kodak is now $20...without concerving this increases their out of pocket expences for silver to $500 million and eats into their profits. Given that P/E is a common way to price a stock, for every $1 of lower profits generated by rise in raw material prices, the "market cap" of the company could suffer $25-100, depending on how high tech and how growth driven they are.

So If Mr. B. has the option to cut a deal with any company where he owns shares (or wants shares) to "supply them silver" in exchange for newly issued shares...thus no cash expense for the company...the market will appreciate the shares when they see Buffett supporting the company, and the company does not loose competitive edge. And, other market participants who "see that they are not going to get Buffet's silver" are more prone to panic and move price higher..as well as long speculators swinging under Mr.Bs. coattails.

When such deals are done in gold, it is the quality of "gold as money" which is used...

I think what we have to keep on the back of our minds with Mr.B. is that he "loves stock" and he loves to buy when things are down....and he is sitting on as much as 50% of the remaining readily available worlds silver supply in a market with a large operating deficit and a mining industry that cannot ramp up output on short notice. The deeper we get into a silver crisis, the better Mr.Bs. cards are going to look.....and you can bet the popular press will have a lot to say about it...with Mr.Bs. Pic on covers of Mags..as the king of silver....Buffet knows he has TNT in his pocket and when the time comes he will use it.

This will raise the profile of silver and gold immensely.

By the way, did anyone hear that Michael Jordan just bought $13 million of gold and took delivery??? (just kidding, smile)

Poor old Solomon

Superb campaign piece! You have my vote. (PS if you have them do some reforest tree planting on my property, we can work something out!)

Dollar Bill

Thanks for the correction. I'll pass it on to the Y2K Homework guy from whence it came.

No more forwards from him, promise!

Peter,

Thanks for the lighter note re: Gore, even if the quotes ultimately are proved to be incorrectly attributed. On an otherwise tough day, they were good for a few chuckles.

Al(pha) Gore is cut from the same slimy, pathological lying mold as his predecessor: inventor of the InterNet, discoverer of Love Canal, subject of Love Story, always Pro-Choice, just to name four quick whoppers. That Bradley didn't eat his lunch lends credence to the theory that Bradley's candidacy was a ruse to keep Gore from falling completely off the media's radar screen during the primary season.

Oro,

Who will save us? We must save ourselves. As with FOA's scenario for the eventual separation of the paper and physical gold markets, and the collapse of the former, it is only when we separate ourselves from what we think government can or should do for us that their power over us will diminish. I know I'm preaching to the choir in your case, but this is something we all just have to keep hammering home to those we encounter on a day to day basis. I feel this way every four years, when I see the lame, cookie-cutter offerings from the Republicrats. Then I go vote Libertarian!

http://www.egroups.com/group/gata/399.html?Midas commentary for March 3, 2000:

http://www.egroups.com/group/gata/399.html?


CBS Market Watch features Gold Fields:

http://www.egroups.com/group/gata/400.html?


Fuel costs removed from inflation data:

http://www.egroups.com/group/gata/401.html?

Thankyou for your help :) , I have been surfing the net chasing these geological terms you have so discriptively mentioned with interest :). Gee and on my
Cyber travels sort of amazingly noticed in todays news through my bookmarked contacts that the Wawa
region in Ontario is experienceing abit of a Diamond Rush !
with alledgedly kimberlite truck sised bolders of kimberlite and G9 and G10 Garnets in the area (whatever G9 and G10 means ?. re: the rare earths , gee that sound tantalising. What a golden bunch of incredible people
we have here in USAGOLD. They are mostly dark green all are smooth and shiny and the edges are straight. Isnt nature just so incredibly amazing how such logical shapes can be formed !. Back to Gold :). I met a bloke who found a round rock like lump of quarts that looked like it had been
water worn smooth or something like a river stone . It measured about 8 inches in diameter and the gold in it which en-tranced me was a band about 10mm thick running through the centre of it. He claimed it came from the Marbel bar area in Northern West Australia. What i found interesting and I am no geologist by any means is the
quartz had a blue hue colour saturated through it . I have never seen that before. Just wondering if the blue in the
quartz is a good indicator for gold ?.
Oh my, I still have got Gold Fever :)
View Yesterday's Discussion.

I just re-read the post. I meant generally does the blue hue in the quartz signify better indications of likelyhood
of gold in an area ?. Maybe this discussion has transpired before ?. Has anyone ever stopped to wonder how the world would
function without an adequate supply of Platinum and Palladium for the wheels of industry. Given Russia's
supply problems in palladium alone to me it all seems rather daunting. regards Ray:).

Fund managers are being forced to drop value investing to the back burner and manage for price appreciation at an increasing rate:

- So-called "growth" mutual funds received a whopping $47 billion in-flow of investment dollars during January while there was a $26.5 billion out-flow from "value" funds during the same period. -CNBC, 00/03/03, 2:55:55 PM

Regards,
Journeyman

http://www.the-privateer.com/gold6.html#latestALL: Some good items on the web now. Especially MK's post of USAGOLD (3/3/2000;8:36:06MDT - Msg ID:26331)!

ALSO:

From the Privateer web site: see above

----Gold stocks are STOCKS, they are NOT Gold. This leads to a some further observations. -----


ALSO: some good reading at GATA!

====================================

http://www.egroups.com/group/gata/399.html?

---------------Apparently the foaming-at-mouth
media feel it's ok to have religious fervor if
discussing political freedom, religious freedom, and
press freedom, but not OK about monetary freedom. If
you ant a real 'free market in gold,' free of
government and central bank interference, you are a
fanatic. Yet the paper money in your pocket shrinks in
value every day and always does in a fiat (non-
convertible, dictated) money system, as the supply is
endless.------------------------

ALSO:

-------------"I submit to you that the gold market story that has
evolved a great deal over the past 12 months is going
to change radically in the next 12 months.---------------



I'll be back later for some discussion ,,,,,,,, TG

I can't swear to all of them but -- sorry Dollar -- most of Sir Peter's re-quotes [Peter Asher (3/3/2000; 15:58:11MDT - Msg ID:26344)] are indeed correctly attributed to Al Gore.

First, just looking at the context of a few of the quotes eliminates Dan Quail as source -- little Danny wouldn't be welcoming Mrs. & Mr. Clinton to a NASA shindig, for example. Nor would he be directly; "I am not part of the problem. I am a Democrat." referring to himself as a Democrat.

What's more, I recognize several of the quotes as Gore's, and if I had the time or inclination could dig them out of my archives.

No, scary as it may be, this guy has a fair chance of being the next president, with his finger on the still existent "button" and all.

Regards & good luck,
Journeyman

P.S. If a few came from Danny boy, well, he was close to the presidency too, remember. On the other hand, I can't imagine that either Gore or Danny Quail could be worse than Honest Bill Clinton - - - - OR George "Butcher of Bhagdad" Bush (Sr.) (responsible for the murder of at least 200,000 Iraqis, half of them women and children who disliked Saddam more than "we" did, killed by "collateral damage.") That's right, 200,000 Iraqis died as a result of the Gulf War alone. And yes, I will quote sources if asked.

P.P.S. Though in later actions against Iraq, terminals on Iraqi soil shipping "illegal" Iraqi oil were bombed by U.S. planes, right beside them terminals shipping petroleum under the UN "Food for Oil" program kept on loading un-bombed & unmolested. Want to guess where ALL the "Food for Oil" oil is shipped? That's right, directly to the U.S.!

ORO, TC, MK, Trail Guide, etc.

Several sources, most notably ex RTC chief and now CNBC "Chief Commentator" Bill Seidman, have suggested that the popping of the stock bubble might not effect the real economy much, since the bursting of the 1987 bubble didn't.

Kenichi Ohmae suggests that the bursting of such bubbles has the beneficial effect of reducing what he calls "super liquidity" that is, destroying excess buying power. I was just looking up his exact presentation -- forgot how good it was, and so I'm going to transcribe it, hang on for a moment . . . . . . .

*Challenge to the Traditional Understanding of Economics*

This new phenomenon [development of huge independent FX markets] suggests that several major
changes are taking place, which would challenge the
traditional understanding of economics.
(1) The traditional measure of inflation, the use
of consumer and wholesale price indices (CPI and WPI),
is obsolete. Until recently, overliquidity resulted in
inflation, as a result of excess money buying up
inventory in expectation of higher prices. Today, in an
era of worldwide oversupply, excess money is contained
in tradable buckets, and has not harmed the greater
public by increasing inflation. This is because higher
prices are certain to discourage demand. When supply is
tightened, there is always a high probability of
inflation. We are living with a zebra-like inflation
today, where CPI and WPI are stable, while real estate
and stock prices are sky high. In a way, the creation
and discovery of these liquidity buckets, and the
successful containment of excess money therein, have
been the key ingredients in curbing inflation.
Governments can take little of the credit for this
success. Their sugar-coated monetary policies would
have created unmanageable inflation across the board,
were it not for the invention of the globally
interlinked buckets and the occasional "leaky" buckets
which act as "black holes" (Figure 3.) -Kenichi Ohmae,
_The End Of The Nation State_, (New York: The Free
Press 1995), p. 155

What Ohmae means by "black holes" is that potential buying power is sucked in and completely disappears.

There is more here from Ohmae, but only if someone asks.

Comments?

Regards,
Journeyman

Thanks Oro for your post.
I have printed your commentary out along with the charts for in depth study.
Very useful.

It's a very cynical sort of position but there is probably a lot of truth to it.

After all is it really possible that everyone can live for ever after from stock speculation?
Of course not.
So somewhere along the line there has to be a separation between the strong and the weak players.
Clearly the stock market has become a net consumer of shareholder wealth.
When it all washes out in the end, I believe that we will have witnessed the greatest transfer of wealth in history.

All those who buy and hold stocks at their present silly prices will live to regret it. The winners will be those who sold near the top, especially if they were insiders who got their stock cheap as a result of option plans etc.

As long as the market remains at the present inflated prices you'd have to be crazy to buy, unless you are a gambler not an investor.

The overvalued USD (witness the Current Account Deficit ) means that when the market crashes the USD will crash too.

All other stock markets will crash at the same time as the US market.

What other rational options do Americans have, except gold and other PMs?
What else is better money than the USD?

WE WANT MORE

Is his book available in English? The text smacks of translation.

Thanks

Journeyman,

They are quotes from mostly the eighties and they are
indeed Dan Quail qoutes.
I recognised many of them.
The dates of the supposed Gore qoutes were all ficticious and would require proof before offering any of them up
as Gore's.
I dont support Gore but what is Dan's are Dan's.
They ARE a hoot.
Off topic of course.

Journeyman
The clinton and democrat comments are part of the fraud.
As well as the dates.
Not fair to say the least.

Well, ORO, here's some more from Ohmae. I suspect you're
ahead of him in several areas, but remember, the section
excerpted here was written quite awhile ago.

"The End of The Nation State" was written by Kenichi Ohmae,
at the time, I believe, the head of McKinsey & Company's
Tokyo consulting practice. Strangely, the following is all
taken from Appendix A, "What Moves Exchange Rates," and
isn't a direct part of the rest of the book. While the rest
of the book is interesting, even as a whole, it doesn't
approach the value of just this one appendix.

The numbers upon which the appendix is built, however, are
older than the book as a whole by nearly a decade --- dates
cited are as old as 1986, for example. This doesn't mean
they're invalid, but things have almost certainly evolved
greatly over the last 14 years.

"The End of the Nation State" is in English, and available
from amazon.com.

Here's what I've got so far - - - and, I'm sorry, but that's
all for today! This is a large appendix, and there's lots
more.

*The FX Market Begins to Have Its Own Raison d'Etre*

{there's more before this well worth excerpting}

...What has happened is that the FX market [which is 10
times larger than the volume of real transactions] has
started to have its own _raison d'etre_, and has
develop;ed unique behavioral patterns that must be
treated with care and interpreted with a new
perspective. For example, the FX market has been proven
to:
* _Dwarf government intervention_. [ corroborating
paragraph not transcribed yet]
* _Not reflect purchasing power._ As Figure 1
indicates, there is no major item which can justify the
current exchange rate of Y140 to the dollar. In fact, a
more reasonable conversion rate is certainly above
Y180, in order to equalize the prices of day-to-day
commodities.
There are several reasons for this seemingly
perplexing issur. One and the most obvious, is that the
Japanese distribution system is much more extended and
less efficient than that of the U.S. Thus, a Japanese-
made camera can be purchased at a much lower price at
the 47th Street Photo Shop in New York City than at
Yodobashi Camera, a Tokyo discount store. A typical
camera or color TV is priced at four times its
manufacturing cost. So, purchasing power, which was
believed to influnece the currency exchange rate in
equalizing prices, needs to be redefined using a
product's cost to the importing decision-maker. [more
not transcribed yet]
* _Yield much better performance than other
financial instruments available in the real world_. In
all but two months over the past nine years, the FX
market has fluctuated more than 1 percent per month, or
55 percent per year for a consistent winner in the FX
market. Quite often, opportunities appear to make more
than 6 percent per month. Similar high yield
opprotunities may exist in real estate, stocks, gold
and, in the case of Japan, golf club memberships.
However, such capital gains are usually taxed to
effectively halve the yield, while the FX market is
unlimited and unregulated in size, frequency of
exchange, gains/losses and taxes.
What this means is that the FX market has become
one of the largest investment instruments in itself,
and is interchangeable with other instruments. At the
root of this problem is the worldwide super-liquidity
problem. In Japan alone, some $1.1 billion is generated
daily from the private and corporate sectors to be
invested. Since there are not many opportunities to
substantively absorb such an amount of money in real
consumption, the excess money ends up in the available
instruments, or "buckets." For institutional investors,
it does not make any difference in which bucket the
money is put, so long as they are interchangeable and
tradable.
...tradability is the key prerequisite for
qualifying as a bucket for cash overflow. -Kenichi
Ohmae, _The End Of The Nation State_, (New York: The
Free Press 1995), p. 154.

*Challenge to the Traditional Understanding of
Economics*

This new phenomenon suggests that several major
changes are taking place, which would challenge the
traditional understanding of economics.
(1) The traditional measure of inflation, the use
of consumer and wholesale price indices (CPI and WPI),
is obsolete. Until recently, overliquidity resulted in
inflation, as a result of excess money buying up
inventory in expectation of higher prices. Today, in an
era of worldwide oversupply, excess money is contained
in tradable buckets, and has not harmed the greater
public by increasing inflation. This is because higher
prices are certain to discourage demand. When supply is
tightened, there is always a high probability of
inflation. We are living with a zebra-like inflation
today, where CPI and WPI are stable, while real estate
and stock prices are sky high. In a way, the creation
and discovery of these liquidity buckets, and the
successful containment of excess money therein, have
been the key ingredients in curbing inflation.
Governments can take little of the credit for this
success. Their sugar-coated monetary policies would
have created unmanageable inflation across the board,
were it not for the invention of the globally
interlinked buckets and the occasional "leaky" buckets
which act as "black holes" (Figure 3.) -Kenichi Ohmae,
_The End Of The Nation State_, (New York: The Free
Press 1995), p. 155
(2) The world's money supply has gone beyond the
control of any single government. Through interlinkage
and the active FX empire, money can now travel across
national borders electronically in milli seconds. Even
if the BOJ tightens the money supply, a Japanese banker
can borrow an impact loan instantaneously from abroad.
(3) Monetary interlinkage has created dollar-based
markets in Japan and yen-based markets elsewhere. In
fact, the U.S. has created an opportunity to invite a
$50 billion investment by the Japanese through its
trade deficit with Japan. The dollar-based trade
deficit is nothing but an accounts receivable for the
U.S., as greenbacks must eventually be used to buy
something American. They may make a detour via OPEC or
Brazil, but U.S. trade payments are bound to come back
to the U.S. In the long term, the trade balance must
equal the capital-account balance, unless the country
goes default or bankrupt.
(4) The notion of interest has become obsolete.
Such attractive profit-making opportunities as
speculative buckets lure financial institutions to stay
within the non-interest-bearing FX market, stocks and
real estate, rather than seeking investment
opportunities in the "real" world. [more] -Kenichi
Ohmae, _The End Of The Nation State_, (New York: The
Free Press 1995), p. 156

{Much more}

Regards,
Journeyman

Seen as a challenge to the traditional understanding of economics ... End of te Nation State -Kenichi Ohmae... Modern stock bubbles relatively harmless - Bill Seidman (CNBC)1987 crash is seen sound in reducing super liquidity ... or the worlds money supply has grown beyond the control of a single government!?
Only excerpts from your excerpts, though smacking of the kind of excuses used throughout history to defend/explain asset bubbles created by exponential money supply. Greenspan
and John Law still will meet or merit the same fate in the end. Please read Doug Nolan's Credit Bubble Bulletin at the Cafe today!
Regards CB2

PS: I would wonder why AG accepted a third term in full knowledge of the problems e helped to create - Is it the hope to correct at least some of the blunders - he still may know better?

HOW FAR DO YOU THING THAT GOLD IS GOING TO GO i HAVE A TARGET OF 282 ON THE APRIL GOLD, WHAT DO YOU THINK?

USAGOLD (3/3/2000; 8:36:06MDT - Msg ID:26331)

----Those of you who read this report regularly know that we don't buy the government statistics on inflation. -------

Michael,
Isn't that so very true! I completely agree. But in a more broad sense, doesn't that just delineate this era into something completely different from other recent (relatively mild) US inflations?

Here we are with a currency that's been in it's most recent extended inflation for 15+ years and almost no statistics show "major" price rises yet. Considering the overall world-wide expansion of dollar assets during this period, we would think 15% price increases would have already been the norm for several years. Along with seeing 15% interest rates. Clearly this is not the case as
somewhere, someone has been buying up our expanded dollar assets and holding them in support of the dollar system. This portion simply cannot be held as an investment, because one must eventually buy something here to gain from it.

I really love how everyone likes to say that all the foreign money is coming here to invest in this system,,,,, and that is why our markets and dollars were so strong most of this decade. Truly, if this was the case, our gross investment outflows minus the foreign investment inflows would have to have covered the huge trade deficit for the past 20 years! It never happened! Take out the expanded dollar reserve holdings of foreign CBs and their matching local currency creations from this and it would show a different picture. A colossal trade flow of dollar assets back into the US for conversion. Truly CB support was the dynamic that saved us from a crippling price inflation.

So, we have enjoyed a position of issuing a reserve currency and having mostly foreign governments support our asset values and lifestyles by absorbing all. This dollars support ,,,,,,, if they stop it's all over, yes? All the past dollar inflation will show up here in the only way that can balance ,,,, in the form of a major hyper price inflation. But not to worry, they have helped us for some time and will continue because the dollar is still the only reserve currency to support,,,, right?

But suddenly our USA official policy has changed from the recent past responses to up-ticks in price inflation. Our officials are doing their best to set the stage of not reporting any price effects at all. Covering the recent past, present and future reports by changing the rules. What gives? Why not do as in the past,,,,,, report rising prices,,,,, and raise rates to control it? We have the tools and support to do this, or do we?

In the past, "real figures" were reported because we "could" do something about them. Raise rates and tighten money! But we always thought (or were told) that these "tools" could be used by themselves. In reality, they never could. The dollar was "the" reserve currency and had to have the full support of other nations in order for this host country to reign in money growth and control prices. Doing so alone would leave us open to the risk of a complete economic crash in our economy. Of course the worlds system would also die because no other currency reserve existed then. So, the risk of "no support" was never there. Today, it is. I think my friends call this a strategic political risk unique for this era.

Yes, we could raise rates in a magnitude needed to control the situation, if the real price inflation figures were reported. But, if at the same time foreign nations decided not to support us and begin slowly converting dollar assets into another denomination??? We would have the very visual effect of a falling dollar with rate rises also appearing as an attempt to stop the currency from failing. Instead of just raising rates for the simple reason of slowing the economy. On top of this, if our present paper system that controls the gold market pricing action was to suddenly fracture,,,,,, the outflow of money into real gold would really make dollar inflation look ??????? Interesting situation, no?

I think today, the Euro has changed things and we are now entering a "final US inflation" because of it! It's not just the last few years we are talking about, rather the complete era. Our past ability to control rising prices without creating a major economic contraction is gone.
Gone,,,, not because the Euro is so great a competition for us,,,,,,, rather gone because "that" block of support has it's own major currency system to support. As a result, our US money printing through reserve expansion is now on a permanent one-way road. It will continue until it converts everyone into a hard money saver and paper sellers. Rate rises will be small and always be well behind the fact. One way or another, our currency value is going to adjust and it will impact every paper asset denominated in dollars.

No, our governments hiding of facts is indeed something more different than in the past. Currency war strategy has a way of doing this. We can expect more in the future. We know that more such under reporting is coming, because these are current signs of a monetary system living it's last days. Once the tools to correct a "regular inflation" were impaired, the final inflation process begins without end. If one is correctly prepared, it's going to be a real show to watch!

thanks TG

Scanning a variety of gold websites today, I've noticed a huge increase this weekend of anti-gold visitors. They are peppering goldbugs with more than usual negative commentary about their investments, the usual taunts such as "don't you wish you had bought CISCO two years ago?" and "even a stopped clock is right twice a day," etc., etc.

At the same time, the other day's Bank of England announcement of gold sales continuing beyond March is designed to demoralize gold investors and force capitulation. After all, it is demoralizing to see an institution fail to acknowledge the lunacy of its profit-MINIMIZING actions and continue down a road of insanity.

Gold is once again under 290, having been egregiously manipulated downward by all variety of market subversions, most notably the failure of gold market regulators to require Goldman Sachs to have its client Ashanti Gold cover its margin calls (as would be required of any other gold market participant receiving margin calls). Such margin covering would have sent the gold price soaring, thus presenting all variety of problems to Goldman Sachs itself. That, in a nutshell, is why it never happened.

Gold is under 290 at a time when most gold investors are extremely sick and tired of holding a non-performing, money losing asset...at a time when the NASDAQ is in a full vertical mania and it seems there cannot possibly be an end in sight...at a time when only the most powerful inner conviction can sustain a person against the almost daily taunts and jeers from the maniacal crowd who keep parading their huge profits in front of the "non-participants."

No doubt the swarms of anti-gold attacks are occurring again as it becomes more important to find liquidity anywhere anyhow to keep NASDAQ in full vertical mode. Trees cannot grow to the sky forever. So those bulls cognizant of this Law of Nature go on the attack, targeting any capital source (such as gold) that can be converted to join the mania. I would not be surprised to see another US hedge fund soon attempt to raid another international currency/economy in order to decimate it and force new foreign capital inflows into the American stock market.

A couple of years ago I stated that I believed a market crash was in sight. I was categorically wrong at that time as I had no concept of the degree of manipulations and interventions this government would utilize over the next few years to prevent the market from finding its natural lower equilibrium.

Now I believe that we are at a critical juncture and the usual historical manipulations and interventions appear insufficient to maintain market verticality. Moreover, I believe the Establishment itself is now increasingly worried that they have created a true Frankenstein. So bipolarization of Establishment interests appears to exist, with some Establishment factions convinced they can maintain this vertical mania ad infinitum while an opposing faction demands the bubble be halted for the sake of protecting America's future. Therein lies the Achilles heel of this bubble: the absence of unanimity in the virtue of the bubble, an internal internecine war between the collusional Establishment interests.

So either the gold market will be crushed this month or the stock market but I do sense something dramatic about to occur soon.

Meanwhile it is best that gold investors who continue to see the merits of their investments go forth and educate others in the same manner that anti-gold opponents infiltrate gold sites to discourage gold exponents and force capitulation.

Gold's value will not be recognized until a mass perceptual shift occurs in the markets and that shift will not occur if gold investors stay rooted inside their safe gold chat enclaves. They must continue to debate and challenge mainstream thought, not simply for the sake of their investments but for the sake of the American economy itself.
That is because, despite the outward appearance of prosperity, the economy is sick and growing sicker by virtue of rapidly escalating distortions developing between paper wealth and real wealth.

Thanks

F*

Have you fellows begun to notice that fewer and fewer of the economic indicators that we once viewed as crucial to any legitimate economic analysis just don't matter anymore. Deficits don't matter anymore, because we just owe the money to ourselves and a bunch of gullible Japanese and Arab financiers who are afraid to call us on it. Money supply doesn't matter because the money just runs around the globe in a never-ending transmission from terminal to terminal and never really gets into the economy. Bubble stock markets don't matter anymore because no cares whether or not corporations make profits anymore; all you have to make is good public relations and M&A possibilities and your stock rises. (The Time Man of the Year runs a company which sells books it buys for $20 at $15. He has never turned a profit, yet he is a modern hero.) Oil doesn't matter anymore because this is the energy non-reliant computer age not the high energy use industrial age.

Etc.(Anyone have any additions to the list?)

So what does matter?

Why not run a 100 trillion dollar deficit and insure the income of every man, woman and child in the world for the next decade and worry about the consequences later? Why not in the process run the money supply up to $100 trillion while we're at it and really give the forex players (and the equity markets of the world) something to toss back and forth? Why bother running a business to make a profit, let's all just create a bunch of companies and trade the stocks back and forth to each other until we all get rich? Why not shut down our oil imports, close down the oil industry in the United States, and all live off the warm glow of our computer screens (at least until the electricity goes out).

Why not?

None of that stuff matters anymore.

Does any of this inflation statistics nonsense really surprise anyone, in a world where most students learn economics based on Keynes' socialist stupidity?

http://www.usagold.com
These are just my own thoughts on the future of gold, and they may not mean too much.

Gold has surged upwards twice since October, only to drop
back down dramatically. It seemingly cannot sustain a rally, although the $280-$290 level is higher than the previous $255.

What must happen for gold to rise and stay there?

1) Runaway inflation. That would do it of course, but although indicators of inflation are on the rise one could not call it runaway at this time.

2) Stock market crash. A Stock market crash would cause the investment dollar to seek safer havens, but I do not think Gold would be the first choice. Bonds, real estate etc. would attract the investment dollar before Gold due to their
income producing ability.

3) Stock market crash couple with runaway inflation.These 2 factors working together at the same time would cause investor flight into gold.

4) Announcement of suspension of some or all Central Bank sales. I have no idea how likely this is, but one would think a combination of 1,2 might prompt Central Banks to consider suspending sales.

5) Widespread warfare in the world. I think this could do it too. The rumblings out of the Mideast, China, and Europe make this a distinct possiblity.Considering what human nature is, widespread warfare again seems like a distinct possiblity.

I dont see any of the above happening soon except a possible market crash, or warfare. Runaway inflation takes time and possibly we are seeing it beginning to develop.

Gold is a barometer of trouble. As the troubles increase expect to see the price of Gold rising.

In the short term, the next few months, I dont expect we will see much change.

Sir Tedw- professor (American School of Hard Knocks)

Your post was right on. We are being given one more opportunity to buy gold cheap and we should all take advantage of it. You can bet the Indians and Chinese are. It is always darkest before the dawn and I think I can see alittle light in the distant horizon. Maybe its just Goldman Sachs burning another client, but it might be the begining of balance returning.

Howdy Trail Guide, I have only one question, in your best educated guess how many years, before the show gets "real interesting to watch" Sorry to be blunt but i think alot of us are sick and tired of waiting. Please be honest in your answer, i see this dragging out for many years before we even see any sort of action. When i first started reading "Another" he gave the impression that a rise in the P.O.G was imminent and that was a year and a half ago!

In the last year i've seen my company's shares more than double and guys at work make 2.5 times their investment in 8-10 months on shares they bought for 10cents!
Tell me why i should hold on when "another" doesn't even bother to post anymore. He was the reason why i bought Gold to begin with along with your earlier postings in the bad old days?

Is it possible we've all jumped the gun here a little? I,am beginning to see this as a 5-10 year mission of the Euro vs the U.S. In terms of a day trader thats an eternity, and no i,am not one! I only have been holding Gold coins since i started reading another and yourself.

Thanks in advance but some idea as to when this "timeline" is about to end"In terms of GOLD rising" would be i think justified by now? Thankyou very much and look forward to hearing from you. P.S thanks for all the "Hope" you've given us, but i need something a little more concrete, Sorry!

G.T

Hello Solomon,
You write:

Solomon Weaver (2/23/2000; 22:12:25MDT - Msg ID:25912)
Is it Kuhn who gave us paradigms?

-----Something on the back of my brain tells me that the phrase "paradigm shift" was coined by Thomas Kuhn in a book called "the Structure of Scientific Revolution". It keeps reoccurring to me that FOA is telling us about a "new" gold market, which will behave much differently than the "old".
And many of us analyse the current market using today's perspective...----------

-----------------------------------------
TG:
Yes, I think this is a major problem and one that will backfire on many investors. Let's face it, no matter where the average investor resides in this world most all of them operate with a perception that the dollar will remain the worlds "supported" reserve currency. Few of them fully appreciate the impact a deviation from that norm would create.

They buy into gold derivatives with a dogged determination that the dollar price of these securities will always reflect the physical trading price on an equal or greater basis. It won't. It can't!

We can trace almost all of this perception from the views of the "gold trader". A perception that the entire "Western gold market" is built upon. He's primarily a paper trader of gold stocks, gold stock options, gold futures, etc.. Their whole strategy rests on the argument that the "price of physical traded gold" will wait for them to convert their paper profits into gold if the run really gets started.
The very leverage they play for is the same leverage that will gun the physical price faster than they can ever move.

As I just noted to MK, the publics real price inflation grasp is going to be from real events. Not from the past official policy of telling us how it really is. In this atmosphere the sponsors of our paper gold market are going to have a free hand to sell (create) contract gold without end. The more the Fed guns the reserves, the more the cash liquidity will be available to sell gold. Because so few of the paper traders wish to exercise these contracts, price discovery is totally in the hands of the market sponsors.

Because of this, at first dollar hyper inflation will not be reflected in a rising price of gold on the current dollar paper gold market. It will be reflected in a corresponding lack of real gold relative to outstanding contracts! A physical gold shortage will happen "first", as the contract price system slowly defaults in an ever lower price. Next the paper markets will totally fail from non availability. That means a super low (discounted) bid price for contract gold. That's the same price the stock market players currently value your gold shares with.

Once the dollar gold contract system fails (and this will be happening during a full blown "hidden" price inflation), a physical gold market will develop,,,, weather officially (Euroland) or black market style.

The point is that during this dollar inflation, physical gold will be in almost no supply and it's price will be 10X the paper price. No body, and I mean NO BODY is going to be cashing out of gold shares or any form of paper gold and doing an even swap! Every gold mine that operates using the
dollar gold market to sell into,,,, does it's financing with and is hedged leveraged with dollar based Bullion Banks ,,,,,, is going to see their stock ride the paper gold market to it's end.

A few of them will be allowed to tie themselves into ECB/BIS physical sales, very few! Many will try, but only if they can escape their financing ties with banks, that themselves are locked into the current paper bullion market. It's that simple.

I've mention this dynamic before. It's the main reason why I own only a very small slect few gold shares. If they fall,,,,, it will not impact me at all. Of my hard money "metal" investment portion of wealth,,,, 99% of it is in "non-USA Legal Tender Bullion". But not completely for the reasons our site provider does it (a good portion is in K-rands and bars, the rest in early and rare bullion). I'll
discuss this a later time.

We are always watching for the political dynamics to change, but I think only two things could make this happen.

First,,,, The US Fed would have to suddenly decide to break the current inflation on it's own and shut down all liquidity operations. Strangely enough, this would have the absolutely opposite effect many think. In today's changing times, such a deflationary move would completely fracture the contract creating ability of the Bullion Banks. The paper gold market would soar first, then lock from failure. Obviously, mines and their shares would do very well in such a situation. "If" investors could understand the positive effects such a dollar deflation would have on gold.

Second,,,,, our current process will change if Euroland decides to bid and trade openly with physical gold outside the LBMA marketplace,,,, and do so at ever higher dollar prices as they dispose of their mountain of dollar reserves. This is a very real possibility during this developing
currency war.

Otherwise, they have decided to let the "Western gold traders" live in their "paper market" and die in their own stew as the contract prices fall to ??. All the while letting the paper market have it's way with us,,,,, as they withdraw from supporting the dollar while the Fed tries pump liquidity as a real price inflation breaks out.

Solomon,
It's some interesting drama unfolding, no? Your advise in this next post is "right on"!

Solomon Weaver (2/23/2000; 21:22:54MDT - Msg ID:25906)

-----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.------------


Thanks,,,,,,,,,,,, TG

I have to read / study some contracts for a while. USAGOLD back and respond a little later (smile).

Hi CB(too)!

I don't believe in Santa Claus either. In the long run, even if Ohmae has a valid model, the "financial" economy MUST cause imbalances. To the extent people BELIEVE they can get more EXPECTED return from gambling on price appreciation, whether in equities, real estate, or Tokyo golf course memberships, the harder it will be to get assets for other things like roadways, automobiles, etc. - - - and at some point, the prices of these things MUST rise - - - - OR they will disappear because they won't be manufactured anymore.

However, there's another effect helping the FED and fiat. Peter Drucker (and others) make a strong argument that by this year only 18% of the population of "developed countries" will be making or moving "stuff":

"By the year 2000 there will be no developed country where
traditional workers making and moving goods account for more
than one sixth or one eighth of the work force."
-Post-Capitalist Society by Peter F. Drucker, pg. 5.

We know that automation is having big effects. For example,
farming in the U.s. employs less than 2% of the population,
though food is still the biggest export. And this
percentage is down from about 45% around 1900. These kinds
of effects can be seen in all sorts of other manufacturing
as well. These developments mean falling prices. We can
expect automation to continue to reduce needs for employment
in the manufacturing sector below even that 18%, and reduce
prices. This suggests it will take less and less work to
buy these "made and moved" goods.

At the same time, this will enable the "real economy" to
survive on less and less input, enabling the "financial"
economy to absorb more and more without completely choking
out the "real" economy. But my gut level intuition says the
financial economy can easily suck-up everything offered it,
and then some.

Further, if Drucker's estimates are correct, it suggests
that at least 80% of the population of "developed countries"
will be doing something _other_ than "making and moving
goods." How about similar stats for the world as a whole?
What, exactly, will people be doing? Service things?
Gambling, ah, financial market things? What?

Regards,
Journeyman

I'm aware of PD's insinuations - developed countries only "move and produce" 18% of stuff of their GDP. OK - the post industrial society may be happy in servicing the post- service industry and LDC's!
I may have a "virtual" problem right here in my mind, as
to how the rest of the world will get paid for the accrued account deficit of the US (and EU to a similar degree)- after all it is consumption of mostly "moved and produced" stuff by others, only partially (poorly) benefitting from the grand services offered by the paper $/Euro/Yen claimants.
Even if developed nations only need a puny part of their
GDP to take care of their livelyhood - great (though I would intuitively contest it, since I feel it may turn out to be a short sighted phenomenon, based on virtual unreality of the fiat Bucck), I would point out the Garden of Eden on this world was already closed to even the few Hollywoodians before Jurassic Park.
Consuming and moving real products, eventually may again
be defined by real countervalue, weighed and measured by real money.
Regards CB2
PS: Agriculture - is a matter close to my heart - wi'll disscuss anytime!

I've just read Trail Guide's Message ID 26375 (several times) and can't help but wonder why BOE would continue to sell their gold reserves if such a scenario were to unfold. What could they possibly be gaining? What am I missing here?

TG writes:

. Soon, bullion will return to doing what it did centuries ago. Representing the value of the worlds assets and productive wealth. Only, with the world having far more in the way of modern things than ever before in it's history, "Freegold" trading as a "reserve asset" will be valued as never before.

end quote

It would seem that just a little gold will go a long way. We (the general populace), will largely be caught off guard when the rain comes.

After much thought on the subject, it is my opinion that the Brits are protecting calls on gold, probably their own. By selling in the manner which they've set-up, they insure attention is paid to a lower price paid as the lowest excepted bid price is the only price quoted and the entire 25 tons is moved at this lower price. They are losing money on possible returns on the gold they sell, but probably less of a loss than if gold went to $400+ an ounce and endangered the calls. They must be in MASSIVE trouble on those calls. It's the least of two evils for them...it's the only thing that makes sense to me -- why else would you give up the potential gains from a closed offering such as the Dutch have used (and already moved 100 tons within a matter of what, less than 6 months?).

It's the best explanation I have for the manner of the sales and the timing of their original announcement - right as gold was about to break above $300 last spring.

Lamprey

Thanks for the insight. I'm starting to gain an increased appreciation for physical.

On investments and financial insurance.....Your analysis is of course the most compelling reason to own gold. The accuracy of your predictions will reward the investor as well as the paranoid gold bug (that's me).

My hard metal investments are much same as yours thanks to the excellent coaching by MK. I'm wondering though; in such a world as you envision, for the average American and in fact for the average person generally speaking in a global context, what better investment than gold period! After all, gold is very liquid if needs be.

Peter Asher makes a good point regarding woodlands and farm land. Myself, I prefer the latter. For US citizens whose personal residence and perhaps rental property or second home are denominated in USD, the through the looking glass perspective might not be appealing at the time of "troubles" you forecast and thereafter.

Certainly a US citizen can change USD for Euro or any other currency and maintain an offshore account. No longer does a person have to go to Switzerland or an exotic Isle and/or have huge sums of currency to open an account. Why, if I had a notion (as we say in the midwest), for as little as $3K I can open an account in privacy at the Bank of Ireland and avail myself of other "depository" services. One need not even be a citizen of the European Community (although I am.) With the current change rate for Euro, although it could go lower and well might, to me, it looks like a decent play; at least to get started in a small way.

Regarding 401K and IRA's, really, if time proves all things as you suggest, who needs 'em? Why not take a hit or two and buy metal? I understand the part about multiplication of principle tax deferred. One can buy American bullion "legal tender" coins for example and hold in an IRA but, at the end of the day, all you really have in a very troubled gold market using that strategy is a piece of paper, a receipt. Sure, the custodian insures the account I suppose but probably the insurance is USD and not AU.

Now, our good friend Holtzman has repeatedly counseled diversification and certainly, that is a good, no, very good thought. It is wise and prudent. My question is, diversify into what? I never thought Y2K was a good reason to own gold and as far as wars etc. are concerned, there are other tangible materials that a person should be prepared with. I am really getting concerned (now) about the US equities markets. If the US market "crashes" the pain will be felt in equity markets around the globe. On top of that concern are your walks (not!) in the park. My friend, that's a peck of trouble (not happiness for you Brian Auger fans) just around the bend.

I'm way too long here and my cigar and pint of Guinness are waiting on the front porch so I'll take my leave. I am interested in any and all thoughts. Thank you all. What excellent company! Good evening.

Sorry, that was addressed to the entire Forum as well as TG. Any and all comments are welcome for discussion. Thanks.

Trail Guide

I would beg to differ with you on the value of mining companies...just a little.

I will agree that if distortions in the paper pricing gold market drive the price down dramatically, the classic result will be for the price of gold mining cos to fall too...but in the end, these companies are not producing paper gold ... they are producing real gold. We should also remember that when the paper POG falls below the cost of production, unless miners have an outlet to get a "real price" they will simply stop producing.

It is also not really in the interest of the short sellers to drive the price way down...just keeping it tame where it is is enough to keep their books in line..as a matter of fact, as the paper and physical markets begin to separate, the shorts will look even better, since the paper POG will fall dramatically. Until counterparties tell the shorts that they have to "go into the new physical markets to buy back"!!!!

I look to the BIS to be the "new market" in a crisis. When they see that the Yankee market is locking up, they will be the default for large parties who want to sell or buy real gold. They will do this because they will want to stabilize the bipolar currency market (dollar/Euro) to allow an "organized slide" of the dollar. At the BIS (or the market backed by their name), mining companies (who have material free from hedged contracts) will be free to deal with gold buyers. Euroforces will have a vested interest in showing a publically traded real price for gold both in Euros and in Dollars.

I and a few others around here think that the paper default could come first in the silver market...given that silver inventories are almost gone and the chronically low price has kept new mining production investment on the sidelines. The short squeeze in silver is not going to be a paper battle....it will be manifested by the phenomenal "official" physical silver shortage and production deficit vs. physical demand. Fortunately for us gold investors, we might be able to get a preview for gold in watching how COMEX and LBMA manage the soon to come silver catastrophe...

The reason this silver catastrophe is guaranteed is because almost all of the silver that could be brought into the market by "leasing" is in...there are only now 2 pools left. The first pool is what is already in the market vaults...and in principle can be "purchased" at today's price....the second pool is material outside the market which can only be brought in by letting silver price rise...and not just from $5 to $6....rather to $10+ which will do a lot of damage to the short side of the market. All of the fundamentals are much worse now (meaning more bullish) than when the Hunts took silver to $50, so either it does something like this again, or there is a "halt" to paper trading. Silver will set the tone and method for how to handle a problem in gold.

You also imply that the understood purpose of owning a gold mining company would be that the "market value in dollars" would grow fast enough to allow one to convert those dollars later to more gold. I see another value to owning mining stock....the largest debt which I have today is the mortgage on my home. If there is serious hyperinflation, I am concerned that the terms of the loan might be changed to protect the banks "return" (ie obligation to covert debt to new fiat of some kind)....At that time, I don't really want to be walking down to the bank with my gold coins to cut a deal....but, if I own stock in gold mining companies, I "hope" or (hedge) that in a crisis towards gold, I can sell out my gold shares "at anytime" in the crisis which I deem correct, to "lock in" a "dollar sum" which is able to cover my mortgage obligation. Thus, with the dollar value increase of my gold stock I do not chase a rising bullion price, I chase only a fixed priced obligation.

Certainly this is the same reasoning that many others use for "normal" stocks...and I may be a fool to think that a gold stock can rise when all others are falling...but those are the chances I take...

My real gold is held for even harder times (or even better times).

See you out on the Trail

Poor old Solomon

USAGOLD (03/04/00; 16:51:08MDT - Msg ID:26370)

---------Why not?-------

Michael,
This whole inflation picture fits so perfectly together now, that none of us want to believe or fully accept it. Even I reserve a small corner of my brain for doubt. Honestly, none of this thinking came my way on it's own conception. It was drilled into me by others over many years. Long before most of what the last few years made apparent.

Today, I have the luxury of accepting this broad hyper-inflation view with confidence. After watching it progress for so many years and using this different perspective, all the current contradictions make sense to me. It does all fit so well:

Allowing the stock market to run away with no hint of trying to stop it.

Letting the money supply and bank reserves grow uncontrolled.

Forcing down interest rates after the LTCM problem.

Watching the trade deficit explode with no thought of intervening to lower the dollar exchange rate.

Changing the rules for calculating the PPI and CPI.

Buying in 30yr. treasury bonds so the markets would not expose the cost of a runaway money supply.

Promoting to the world that we are paying off the national debt when we clearly are not.

Even going against their own system and accepting a new definition of gold in the IMF. Just so they can keep some foreign dollar assets alive a little longer.

Paper gold traders talking about slicing out their piece of the pie using the same leverage that got us here in the first place.

Oil prices that can only indicate a withdrawal of support. Indeed, the very kingpin of support that has made the dollar last so long.

On and on and on!

These are all the things of a dyeing money system. One running on it's last breath as those that control it can only maneuver to prolong it. Not save it!

Yes, the trail up close is so very clear while the fog of human emotions clouds the far view.
Thanks TG

----------------------------
Golden Truth

Hello,
I see that you need concrete advice.

First, you can only own your wealth in a way that your heart and understanding tells you. Perhaps you placed far more of your assets in metal than you could hold "through thick and thin"? I have been buying bullion for a long, long time, but it's not so much of my wealth that I have to sell it. I admit, it is probably much more than most anything read here. But then, I don't know who is here, do I? How about you? Do you have to sell because you own "too much"??
Owning physical gold as I and others do is like having a bank account. I don't check my bank every day or month to see if the dollars and Euros have gone up or down against other currencies. If the dollar fell against the Yen by 30% (as it has in the past) I can tell you I won't draw it all out and dump it (the dollars or Euros). The simple truth is I don't own gold for trading as so many "Westerners" do. I own it because some very sharp people have educated me about how the real world works. I fully well expect that world financial dynamics and human nature will drive gold sky
high and keep it there for the rest of my life time. For myself and my friends, we don't need to know exactly when. Whether it's next month or five years from now is good enough. The fact that around 1997, political conditions existed that could have prompted a bid for gold didn't change my plans or lifestyle. Placing a good portion of ones wealth in gold at $380, $370 or $360 didn't destroy their future or mine. I still own that very same gold today and have never sold. I have only brought more. Truly, it didn't disappear as some stocks or leveraged options did. It didn't plunge like the major mining shares did. We didn't buy gold stocks or leveraged derivatives based on any possible outcome. Nor should have anyone else in in this "new era",,,,, in my opinion.

Second, knowing what you know now, should you sell it all and buy back later. Or never buy back? Or invest in the stock markets. Perhaps the Dow will double several times over again. Is that the answer? It could be for you?

If you do decide to hold only paper wealth, you will certainly not be alone. Many people are going to sit in paper and watch and see how this all plays out. Some in the "right" investments and some in the "wrong". Where will you be?

Third, I give this insight from myself and others. It gives you a view through other eyes. All through history people have won and lost. Others have watched the ones that win and lose. I can only say that wherever you stand when the music stops, it will be a place you remember all your days. For
myself, if the Dow goes to 1,000,000, the Euro goes to 30 US cents and gold hits 5 cents,,,, at least I will know where I stood,,,,,, when the music stopped! But even then, I will not be broke.

Truly, some people cannot by nature gain by following the path of others. I can and I do.

If you don't understand my position now my friend,,,, you never will.

Thanks TG

Cavan Man (03/04/00; 20:42:02MDT - Msg ID:26382)

Sir Cavan Man,
The real unknown here is the total amount of physical gold we all hold in out portfolio. I remain vague about it because one can only buy wealth with their own understanding. None of us know how long we will live, and I can tell you it takes most of a lifetime to understand gold. So it's best to buy a percentage equal to what you can grasp. With the rest do as you say, buy land and other
forms of wealth.

Just as I mentioned to Golden Truth in what I believe is the proper perspective, gold is not an investment. It's buying another form of long term wealth. Yes, I'm certain that all the items I point out will eventually impact gold for the better. But I don't buy it with the perception of making those forces work for me through trading. Once one does that, you lose the ability to see it as a wealth
holding. It becomes an investment you can win or lose with. Or worse, we leverage it. Then it loses all the fine attributes a hard wealth holding was intended to have in your portfolio.

Many, many people have learned that bitter lesson. We only read and hear about the wise people that "just brought that mine share" around it's lows. Not too long ago! And if they had it earlier, they were smart enough to "trade it" using moving averages and "Comex traders commitments numbers". It seems everyone will admit to the "little loses" but will never tell you the whole story. That is that their current "gold investment" would really have to go up 1,000% for them to just get even from all the "little loses" (and in truth big loses) they took over these last many years. Still the song is sung about their recent 50% gain they just made. I just (smile)!

We only point out the Euro because it's dynamics are what will impact gold the most. A Euro account will only benefit you if you can live abroad. I can and sometimes do. I don't present it as a "trade", it's a possible bank account or demographic unit one may want to hold some of their wealth in. As an American, I have always presented physical gold as the very best way to protect our other wealth. For myself it is a great portion of my wealth.

I also present from the position that our present paper gold market has in itself leveraged the actual physical market. If the dollar paper market fails, it will make physical gold rise in the greatest percentage. Further, the inflation of all dollar assets are what creates an even greater leverage against physical gold.

In this position I am not a "gold bug" in the modern "western sense". They are almost 95% in paper derivatives of gold. Gold stocks included. Here, I am truly in the minority. Actually, if one looks around world wide, official physical gold trading is less than 10% of paper gold trading. Off the records it's huge.

Again, most of the paper is put in play by dollar based traders.

I hope this further expands my views (smile), TG

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

Solomon Weaver (03/04/00; 21:15:43MDT - Msg ID:26384)

Hello again Sir Weaver,

You write:-----I will agree that if distortions in the paper pricing gold market drive the price down dramatically, the classic result will be for the price of gold mining cos to fall too...but in the end, these companies are not producing paper gold ... they are producing real gold. We should also
remember that when the paper POG falls below the cost of production, unless miners have an outlet to get a "real price" they will simply stop producing.--------------

TG:
In the end, could be yes and could be no! You know how a true forward sale works. So, if contract gold falls far enough and interest rates spike high enough,,,,,,,,,,,, their banks will force them to forward sell below production and let the rates on the "portfolio pool" bring their cost back to break even. This selling further puts pressure on the contract prices.

Then there is the political agenda. If the mine means enough to the local economy, the government could carry the shortfall by carrying the "pool note" at an even higher rate.

--------It is also not really in the interest of the short sellers to drive the price way down...just keeping it tame where it is is enough to keep their books in line..as a matter of fact, as the paper and physical markets begin to separate, the shorts will look even better, since the paper POG will fall dramatically. Until counterparties tell the shorts that they have to "go into the new physical
markets to buy back"!!!!-------------

TG:
Solomon, these modern market sponsors mostly do not actually sell gold short in the old sense. They write contracts against their cash equity. They don't even think physical gold, they think in cash settlement terms. If someone shoves cash at them and says write contracts, it's done! Gold isn't part of it. Indeed, the lower the contract price sinks the less likely any counterparties are to call for gold. Because, if,, and that's a big if,,, any physical callers are still in paper by then, they know a big call is an invitation for arbitration, plain and simple. Today, starting Sept. last year,,,,,, this market became a huge cash settlement arena and all the big players know it. The few physical sales (BOE and Dutch) are but little band aids that are used to manage it to some degree.

-------I look to the BIS to be the "new market" in a crisis. When they see that the Yankee market is locking up, they will be the default for large parties who want to sell or buy real gold. They will do this because they will want to stabilize the bipolar currency market (dollar/Euro) to allow an"organized slide" of the dollar. At the BIS (or the market backed by their name), mining companies (who have material free from hedged contracts) will be free to deal with gold buyers. Euroforces will have a vested interest in showing a publically traded real price for gold both in Euros and in
Dollars. ------------------

TG:
I mostly agree. But, mining companies free from hedged contracts are not out of the woods by a long shot. The present group of Bullion Banks finance virtually all new mined gold from beginning to end. Don't think for a minute that a BB in deep water because it's paper market is sinking will let it's mine clients just sell their gold wherever they want.

If the world contract prices are in the dumps, and a physical market is not considered "legitimate" yet (as in not the true price or black market), all mine valuations will be in the toilet. Pardon my french! In this brief atmosphere, banks will have a free hand to seize assets and force financing at will. Plus all the government intervention that may happen.

My point is that the risk of investing in most gold mines is far greater than the perceived reward. That's because most investors rule out a great rise in physical gold while seeing only the positive side of the stocks. At best, mines have ten times the risk of gold with only a small possible gain premium. Yes, under some possible workouts they could soar. But tell that to the people that own mines today that are on the edge of shutting down.

As Mr. Eastwood would ask "You just got to ask yourself,,,, do you feel lucky?" (big smile)

---------I don't really want to be walking down to the bank with my gold coins to cut a deal...-------------

TG:
I agree, it would be far more profitable in selling only a little of your much more appreciated gold to MK and using that proceeds to pay off the mortgage. Thus having extra gold already and not having to buy bullion later with cash (another smile)

Solomon, I hope my views offer a different perspective for yours and others thoughts.


I must go now,,,,,,,, see you on the Trail,,,,,,,,,,, Trail Guide

View Yesterday's Discussion.

Apparent last gasps of a dying money system
Golden Truth:
Please, do not be disheartened! Truth is responsible to no one. This was a statement from a friend today as we were discussing the "state of the world"...his viewpoint is as an extreme sceptic who believes the international powers that "be" have things under control as they want to contol it...and anyone "messing" with the illusion they have created will just disappear. Although I concurr with some of his thoughts, he will concede a slight chance for a major mistake. But...one can still gather in their experiences and perceptions of the world...utilize the intelligent meanderings of the many on this golden forum...give their thoughts a perspective they can feel comfortable with...find a balance...prepare for several different scenarios...mentally, emotionally, and financially...get comfortable with their doubts and scepticism...hold true to their convictions with flexibility...and, I believe...find the path truly golden...yellow "bricks" maybe, but probably not "concrete".
The "maddening of this crowd"...could take us just about anywhere...but, I believe the path (I've been on it for almost 20 years now...and although not financially rewarding up to this point it has kept me in tune with world "happenings") that Trail Guide and others have chosen...is as good as it gets...and I thank him/them for that.

Trail Guide:
But even then, I will not be broke!!! Thank You!!!

A little story on a slow Sunday morning.

I live a couple miles from the Corel Centre home of the Ottawa Senators. Over the last 3 or 4 years I have watched the area transform from farmland into a 5 square mile plot of 'strip mall' after 'strip mall'. There is now every conceivable restaurant, retail store, and shopping convenience (non-convenience) known to man.

On 'game night', usually starting at 6:00 pm, the entire area gridlocks with traffic. I avoid the scene like the plague; I always get home before the rush for it is guaranteed every man, women and child going to the game has the pre-game dinner et al planned and driving anywhere in this little sub-urban city is impossible.

This Friday was 'spooky', my better half and I were caught in the middle of 'it' around 7:00pm. We were in the most dense 'restaurant' area where SUV upon SUV were parked (the one I took note of was on the front lawn of a near completed fast food joint), massive line-ups of mini-vans and SUV's and general traffic chaos when this conversation broke out.

I said, "...oh sh*t, it's 7 o'clock.... who's in town tonight." (refering to the visiting hockey team)

Better half replies, " There's no game tonight."

" What do you mean 'there's no game tonight', look at all these morons, what the hell are they doing?"

B.H., "They're eating and shopping."

"They're eating and shopping??!! That's nice. Did everyone on the planet get paid today?"

It was at that moment it struck me; money sloshing, fiat money, SUV's, negative savings, the FEVER PITCH. All the discussions at this highly enlightened forum were brought into focus. It was a snapshot of a society gone mad. These people were willing to eat highly inflated $20 burgers then drive their gas guzzling monster trucks around the malls weaving in amongst themselves to spend a fiat night in their fiat world. It was truely frightening. I wish them luck. As we left 'fast-food-land' I recant second dialogue.

I said, " Let's get out of here, movie and relax dear?"

B.H., "Sure... can we stop at the movie store?"

"Ok....I'II bet you a buck you can't find one 'For Sale/For Rent' sign on any storefront"

I watched the scenery as we poked from stalled traffic light to the next. Strip mall after strip mall and not a single vacancy. Each and every store mulling with people
handing over their cash, no need to save, the economy is only onward and upward. It brought about another thought,
the system is 'maxed' out, this is the top. It was only a few years ago that the malls were empty and now they have built many, many more. When the music stops, this is going to be one scary looking mess, the ghost town of the '90's.

The movie store was packed, a line-up of 40 or more, every single person standing there looking mortified, the sheeple.
Nasdaq was way up and surely they added to their fiat nestegg but they didn't show any happiness, only sullen remorse of being caught in a system unconscious of it's ultimate outcome. I felt like running into the store and yelling to them, "Hey freaks ...let's go get a beer or 10,
buy some gold and talk about money, real money."

I said to the better half, "Let's go home watch some old re-runs, have a couple 'silly pops' and see what happens."

Upon arrival in the real world I noticed the kids playing hockey under a streetlight just a couple doors down from the house.

My son raced over to me and blurted, " Hey Dad,
get your stick, there's a major game going on!!"

As I walked over to the corner I could see the aura burning in the sky above the fiat hockey stadium only a mile away. The little streetlight flooding the real game seemed to be incredibly bright.

Excerpt from long (G.E) post:


-------------------------------
OT: The latest from RC.
(ScarletPimpernell) Mar 04, 20:02

RC's recent post on TB2000

"Several weeks ago I was hounded from this forum by certain gangster tactics of the Pollyanna "Gestapo" brigade. Why? Because, I persisted in the notion that Y2K was only just beginning and that my pre-rollover predictions might still be on target for the oil industry due to embeddeds problems."

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

This man (RC) insists that Y2K is responsible, or at least to some degree, for recent oil prices. Is this verifiable?
His accusations are profound.

While there might be a y2k issue, I suspect that the
oil price rise is due to the reason posted by ORO
on Friday.
It is a way to recycle a lot of the excess dollars
going out of the US at the rate of 25 billion a month.

I would love to see a "Better World" catagory in the halls for that kind of story.Thank you.

March 1, 2000

INTRODUCING LEGISLATION CALLING FOR THE
UNITED STATES TO WITHDRAW FROM THE
WORLD TRADE ORGANIZATION

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

Statement of
HON. RON PAUL
OF TEXAS

[Page: H612]

Mr. PAUL. Mr. Speaker, I rise today to announce my introduction of and request cosponsors for a privileged
resolution to withdraw the United States from the World Trade Organization.

Last week, the Wall Street Journal reported that the United States was dealt a defeat in a tax dispute with the
European Union by an unelected board of international bureaucrats. It seems that, according to the WTO, $2.2
billion of United States tax reductions for American businesses violates WTO's rules and must be eliminated by
October 1 of this year.

Much could be said about the WTO's mistaken Orwellian notion that allowing citizens to retain the fruits of their
own labor constitutes subsidies and corporate welfare. However, we need not even reach the substance of this
particular dispute prior to asking, by what authority does the World Trade Organization assume jurisdiction over
the United States Federal tax policy? That is the question.

At last reading, the Constitution required that all appropriation bills originate in the House, and specified that only
Congress has the power to lay and collect taxes. Taxation without representation was a predominant reason for
America's fight for independence during the American Revolution. Yet, now we face an unconstitutional
delegation of taxing authority to an unelected body of international bureaucrats.

Let me assure Members that this Nation does not need yet another bureaucratic hurdle to tax reduction. Article
1, Section 8 of the United States Constitution reserves to Congress alone the authority for regulating foreign
commerce. According to Article II, section 2, it reserves to the Senate the sole power to ratify agreements,
namely, treaties, between the United States government and other governments.

We all saw the recent demonstrations at the World Trade Organization meetings in Seattle. Although many of
those folks who were protesting were indeed rallying against what they see as evils of free trade and capitalist
markets, the real problem when it comes to the World Trade Organization is not free trade. The World Trade
Organization is the furthest thing from free trade.

Instead, it is an egregious attack upon our national sovereignty, and this is the reason why we must vigorously
oppose it. No Nation can maintain its sovereignty if it surrenders its authority to an international collective. Since
sovereignty is linked so closely to freedom, our very notion of American liberty is at stake in this issue.

Let us face it, free trade means trade without interference from governmental or quasi-governmental agencies.
The World Trade Organization is a quasi-governmental agency, and hence, it is not accurate to describe it as a
vehicle of free trade. Let us call a spade a spade: the World Trade Organization is nothing other than a vehicle for
managed trade whereby the politically connected get the benefits of exercising their position as a preferred group;
preferred, that is, by the Washington and international political and bureaucratic establishments.

As a representative of the people of the 14th District of Texas and a Member of the United States Congress
sworn to uphold the Constitution of this country, it is not my business to tell other countries whether or not they
should be in the World Trade Organization. They can toss their own sovereignty out the window if they choose. I
cannot tell China or Britain or anybody else that they should or should not join the World Trade Organization.
That is not my constitutional role.

I can, however, say that the United States of America ought to withdraw its membership and funding from the
WTO immediately.

We need to better explain that the Founding Fathers believed that tariffs were meant to raise revenues, not to
erect trade barriers. American colonists even before the war for independence understood the difference.

When our Founding Fathers drafted the Constitution, they placed the treaty-making authority with the President
and the Senate, but the authority to regulate commerce with the House. The effects of this are obvious. The
Founders left us with a system that made no room for agreements regarding international trade; hence, our Nation
was to be governed not by protection, but rather, by market principles. Trade barriers were not to be erected,
period.

A revenue tariff was to be a major contributor to the U.S. Treasury, but only to fund the limited and
constitutionally authorized responsibilities of the Federal government. Thus, the tariff would be low.

The colonists and Founders clearly recognized that these are tariffs or taxes on American consumers, they are not
truly taxes on foreign corporations. This realization was made obvious by the British government's regulation of
trade with the colonies, but it is a realization that has apparently been lost by today's protectionists.

Simply, protectionists seem to fail even to realize that raising the tariff is a tax hike on the American people.

You are welcome.

It is not necessary to respond to this comment, but I wanted to add a little local area insight to your commentary about Ottawa and its citizens expenisively oblivious driving habits. While everyone and his uncle may have been lurking and troughing out at the Corel Centre yesterday in Ottawa, our observations on a little expedition to Toronto the same day drew some remarkably different observations. Gas prices in our area were running on average $.749 per litre and this was reflected in both traffic volumes both coming and going to the city. On our way back, I would estimate the volume down by 30%.

I also note that it is fashionable to SUV bash (I know this is an snide abstraction on the energy waste of driving these vehicles and agree to some extent), but I can also say that our Ford Explorer gets very close to 30 miles per gallon with careful driving. Many will differ I am sure, but it does underline the fact that some makes are neither as extravagant energy wasters as is seen by the general public, nor as useless as the "utility" in their name suggests. I cannot speak for GM products, however.

My trip was also not an extravagance as I made perhaps my last dirt-cheap silver bullion purchase of the year. (I also picked up a Birks Sterling trinket box - 8-1/2 oz troy
for $85CAN. The savings on what this box would go for on the market would pay for the gas.) Just out of interest for those who follow these things: I found a dealer who was liquidating 999 Ag one oz wafers for $8.50CAN each. Maple Leafs are now selling for $14.99CAN.

To keep on the gold topic. I also saw a Panda 1/10 gold coin selling for $120 set as a pendent in a flimsy 14K setting. I heroically reined in my enthusiasm for buying it.
((;^)

Turbohawg Dollar Bill, Journeyman, Marius ORO, 4Ducat Harley Davidson.
How about a "write-in" vote for Ron Paul

I believe January 1st 2001 is when all the countries in the EU are required to surrender their national currencies and trade in one single currency (Euro). In your oppinion, could the Euro take the place of the Dollar as the world reserve currency (on the scale that you speak of) prior to this taking place? If it can, could you explaine why?

http://www.kitco.com/_a/news/6070.htmState to loosen hold on gold
Source: China Daily

A senior gold industry official has confirmed that China's gold market will be deregulated within two years.

A gold exchange, expected to open in the near term in a city to be named, will be the first step of the deregulation, said Wang
Dexue, director-general of the Gold Administration under the State Economic and Trade Commission (SETC).

As a free market reform, deregulation is a set strategy, but a schedule for implementing a gold exchange awaits confirmation by the
central government.

Operation of the Huatong silver exchange in Shanghai, which Wang described as a success, is expected to speed up the
establishment of the gold exchange.

The silver market deregulation was widely viewed as a prelude to opening China's gold market.

Wang told Business Weekly gold market deregulation will stimulate the gold sector in China which is suffering from funding
shortages, especially in gold prospecting.

"With the country's financial reform deepening, the industry is losing government financial assistance," said Wang, who also serves
as president of the China National Gold Corporation.

The government invested only 100 million yuan (US$12 million) in the sector last year, compared with nearly 2 billion yuan (US$240
million) per year from 1988 to 1993. A special fund for prospecting will also be abolished next year, Wang said.

But the sector requires large amounts of money, and will need it to deal with challenges stemming from China's approaching
accession to the World Trade Organization, Wang said.

"The sector must explore more fund-raising channels including foreign investment," Wang said

The coming gold market deregulation will help the sector accelerate utilization of foreign investment, because the central
government's tight control of gold production and allocations will be relaxed, Wang said.

Foreign companies have been allowed to invest in the sector in line with interim provisions guiding foreign investment issued by the
SETC, the State Development and Planning Commission (SDPC), and the Ministry of Foreign Trade and Economic Co-operation.
But exclusively foreign-funded gold mines are still banned.

The SETC and SDPC are working out programmes to remove barriers to foreign investment in the sector and to allow risky
prospecting for gold resources using foreign investment.

Companies from the United States, Canada, Australia, Singapore and the Hong Kong Special Administrative Region intend to
co-operate with domestic gold miners in more than 10 projects.

The gold sector used little foreign investment under the tight control of the central government, Wang said.

Foreign companies were granted access to mines with lean and hard- smelted gold ores only after 1993, and the gold they produced
could not be sold abroad, which dampened their investment enthusiasm.

Publication date: Mar 05, 2000

I just sent this to almost everyone on my e-mail list and asked that they write their Rep and Senator. I then sat down and wrote a letter to my US Rep and Senator urging them to support this bill. I also suggested that they read the US Constitution and understand why they would support Rep. Ron Paul and H612.
Folks, while I think GATA is representing those of us in favor of Gold, we better send Washington our thoughts on issues like this also or GATA and GOLD will be outlawed by some non-elected world government body like WTO. National freedom FIRST, then financial freedom. Can't get #2 without #1.
WRITE YOUR CONGRESS PERSONS!

Pilgrim reported on Gold Eagle @ 13:23 today that three junior mining shares moved significantly. Of course I will be watching this with interest, I happen to belong to one of them (BFM).
Saint Jude (SJD) and Battlefield Minerals (BFM) are on the Vancouver Exchange, Greystar (GSL) on the Toronto exchange.

GSL has been trading in the 45-65 Canadian cents traded as high as 92 cents Friday.

BFM trading in the range of 5-10 cents per share for several months went to 21 cents Friday.

SJD had bottomed out at 40 cents last December traded as high as 75 cents last week.

Could this be an indication of things to come, or mere speculative kiting? I preferr to think they are leading the other golds into a major conflict with the .COM's.

Peter Asher,
Certainly that third party we have could use him for a
front runner.
That much brave contrarianism would face howls of derision,
but that would put those subjects on the table, which
would be interesting. I am uneducated on his subjects.
I'm sure he has validity.

I don't know a lot about Ron Paul but lately he certainly has been impressive. I hope he has aspirations to higher office because this country needs people like him - cut from the same cloth as the distinguished gentleman from North Carolina, Senator Jesse Helms.

I was watching Alan Keyes on C-Span on Saturday and he made some interesting statements which I will paraphrase:

No party has ever beat the incumbent in a presidential election during a time of economic prosperity. Keyes went on to say the only way Al Gore could possibly be defeated would be for the Republican nominee to convince the country of the complete lack of morality and integrity of the Presidency over the last eight years, of which Al Gore was a part, and the need for a change. So if G. W. Bush gets the Republican nomination, Al Gore will be the next president of the United States simply because the only candidate who could/would articulate the morality/ethical/integrity issue is Alan Keyes and I think he is correct. Here is a scary thought...if Alan Keyes doesn't get the nomination (and he currently has about 5% of the vote), Al Gore is going to be the next president of the United States. God help us.

Something better happen soon or the Father of the Internet, is going be handing this country over to the Chinese on a cash and carry basis.

I could really get excited about a Keyes/Paul ticket!!!

http://www.house.gov/paul/openingpage.htmRon Paul's web site.

http://www.house.gov/paul/openingpage.htmDr. Paul has already run for president once. In 1988 he was the presidential candidate for the Libertarian Party. That was the year that I signed "the pledge", joined the libertarians, and voted for Dr. Ron Paul for president.

Kitco's charts are not always correct. I certainly hope the Bid $256.30 it's showing now is wrong. The ask price is $289.30 so maybe someONE is bidding low and the other traders downunder are still drinking their morning coffee.

Wow, Kitco is telling me Au at $256.30 and silver at
$5.09 !!

God bless those good fellows downunder. The bid price of silver is $5.08 but the asking price is $39.08!!! They certainly appreciate their silver in Sydney. Again, these fiqures are from Kitco and are obviously wrong.

http://www.crbindex.com/curquote/crbquote.mhtmlGold not at $256.

See 'link'. March 5 20:14pm : $290 and change.

Have another cuppa ! ( believed reliable disclaimer ), hehe.

I too really enjoyed the 'road hockey' event. There just can't be better fun (You have to take into account my advancing age). Thank you for sharing.

As to Scarlet P. post @ G.E. I would suggest he is way out there as far as any Y2K 'downhole' problems. I have nearly completed my third decade in the 'patch' and can state the vast majority of the downhole PRODUCTION equipment has zero embedded chips in them. Now the directional drilling stuff, wireline equipment & some other exotic stuff does contain some of these chips I'm sure but I haven't seen anything to indicate any Y2K problems thus far and have heard no talk of any potential problems in the future. Some of my cohorts in the processing/pipeline side of the industry are reportedly going to be nervous for a bit yet but again I haven't directly heard of any substantial problems from Y2K.
------------------------------------------------------------
Peter Asher

I too like some of the things Ron Paul has been saying. I believe he may be a sincere fellow looking to do the best he can for his constituents. Although I believe the WTO is a good thing too much power corrupts so if he postures a little and brings them down a notch great. There is always some danger of a politician getting caught up in his own rhetoric but from what I have heard he sounds like both his feet are solidly on terra firma.

jdoub

You state:
Here we are with a currency that's been in it's most recent extended inflation for 15+ years and almost no statistics show "major" price rises yet. Considering the overall world-wide expansion of dollar assets during this period, we would think 15% price increases would have already been the norm for several years. Along with seeing 15% interest rates. Clearly this is not the case as somewhere, someone has been buying up our expanded dollar assets and holding them in support of the dollar system. This portion simply cannot be held as an investment, because one must eventually buy something here to gain from it.

I reply:
As a reader of Mises you should understand that this is only part of the picture. The generally-accepted measures of rising prices are inadequate especially during periods such as we've seen of wide-spread technological advance. These advances serve to increase our productivity such that we've been able to reduce the inputs needed for a given level of output.

Granted the productivity measures we use are just as inadequate as the inflation measures. We know they exist, however, because, by deduction, businesses and entrepreneurs would not be using these techniques if they weren't better than the techniques used before they were employed.

The effect of these technological advances are to reduce our costs of production, and, in a market economy, would lead to falling prices rather than stable or slightly increasing prices. Therefore, once the boom comes to an end the deflationary pressures will push the prices lower than previously measured inflation statistics indicated. I believe this is what happened during the bust of the 1930's.

The fact that our "overall level of prices" has not been allowed to fall as it would in a true market economy represents de facto rising prices due to inflation that could never be measured by any government statistic. This is the old "what is seen" vs. "what is not seen" from Frederick Bastiat. It's my understanding that the European economies suffer from the same condition.

Regards,
Elwood

Kitco is showing Gold bid @ 256.50 down 31.80. I hope this is an error!

Coinguy

I have always believed for Alan Keyes to win the presidencial nomination the Stock Market would have to crash.

Then people would be crying to the government to get rid of the IRS and Income Tax because most would have gone broke and have no money to pay any taxes, let alone have them taken out of their paychecks.

Of course, there are always the bleeding heart commy liberals who would want the Gov't to bail out all their mistakes.

http://news.excite.com/news/r/000305/21/minerals-forecastThis may be what's causing the price of silver to weaken. The expectation of increased supply due to expanded base metal mining activity

"With demand for metals such as nickel, copper and zinc
increasing as countries pull out of the economic malaise of
the late 1990s, the next few years will see demand outstrip
growth in some segments of the base metals market, they
said."

I've seen it plummet on KITCO. Anyone confirm?

Coinguy

http://www.mrci.com/qpnight.htmIt's just the usual Kitco GIGO. April @290.96 + .60

No49

Canuck,

I thank you for the link to another site(Finally got smart and scrolled down). Kitco is screwy, I AM not going over their again for any information.

Coinguy

No49

http://www.usagold.comtest

http://www.ancofutures.com/quotes.htmFOR THOSE THAT ARE INTERESTED.

DAYOOPER

http://www.egroups.com/group/gata/402.html?To subscribe to GATA's dispatches by email
and get them immediately so you don't have
to go look for them, send an email to:

gata-subscribe@eGroups.com

That Gata would provide a link to the writings of Rodney Smith leaves me wondering why they ignore the threat that thier actions carry. Writing to congressmen is sophmoric.
If it is truly the case that the gold derivitive market could be tidied up with just a conference call, then why the
worries mentioned in the article?
The interest rate derivitives and Greenspans catering to them is perhaps the true cause of the credit bubble that is so stupendous and so completely out of anyones control.

Here is an excerpt from the 1994 Fed meeting transcripts released on March 1 of this year.
This is Greenspan talking about a recent(94) interest rate rise. "When we movedon feb.4, I think our expectation was that we would prick the bubble in the equity markets. What has in fact occured is that...while the stock market went down aftere our actions, it went down marginally on net over this period"
If we were dealing strictly with the economic outlook as it stands now, there is no doubt in my mind that this economy could absorb a very large increase in interest rates without a problem. the difficulty I have is that i dont think the financial system can handle a very large increase without a break in it's tensile strength...It's a risk, frankly, that I think we should be quite concerned about."
(Ithink "tensile strength"=interest rate derivitive market)

Well, Mr. Greenspan, the nasdaq was at 800 in 94 and is now 4,800.....amex WAS 100, Now 740....philidelphia semiconductor index WAS 100, Now 1172....S&P WAS 450, Now 1380...not to mention internet and telecommunication manias...Financial borrowings WERE 3,8 trillion, Now 7.5 trillion....non-financial debt has increased by 4.5 trillion...If greenspan WAS worried about financial fragility and stock prices THEN, he must be absolutely terrified today. What a fiasco.

Thanks to David Tice for his writings.

Sorry to do double posts.
I didnt mean to type that comment about writing to congressman. I just meant that they have no power over the real powers of money and so I view it as a waste of time.
Might as well alert the PTO as far as how much it will help.
On THIS issue.

http://csf.colorado.edu/forums/longwaves/mar00/msg00194.htmlDidn't have time yet to read any commentary by them or explore their forum either...

The BBC article cited by GATA suggesting the IMF is "the only international institution that may still be
able to help" if the financial tidal wave hits the U.S. Sorry, but the IMF and the US together couldn't even help Brazil in any significant way because of the amount of money necessary. Brazil's economy is big, but, well, let's just say it's not quite as big as the US economy.

When the tidal wave hits, NOTHING is big enough to help.

Regards,
Journeyman

I predict greenspan will kick the bucket in office.
He must be so stressed. The stoic front is such a facade.
The russian threat receded in the eighties. The euro was a distant dream.
There was no essential reason for greenspan to just hand control over credit creation to.....well, EVERYBODY and lie about new economy/new paradim shifts. Economic historians will talk about this time period forever...... When they finally catch thier breath.

Jeez............I gotta quit lookin at the KITCO chart each night just before I hit the sack! I really do hope its one of those usual Kitco chart freak outs.....if not, I don't want to get out of bed this morning. YIKES!View Yesterday's Discussion.

Although Kuhn did not give us paradigm, he was the first to make one shift.
According to my OED, the first known use of paradigm occurred in 1483 in a book titled "The golden legende". Several amazon.com reviews of "The Structure of Scientific Revolutions" mention it as the origin of paradigm shift. Many years and miles have passed since I read Scientific Revolutions, but I recall finding it well worthwhile.
Goldsun

http://www.iol.co.za/news/bus_newsview.php3?click_id=81&art_id=ct20000305212227424K523182&set_id=1All the gold is in Fort Knox....but....no one has been in the vault to check. (Last audit in 1950)

some US oil equipment companies are investing their cash in the stock market while they await contract expiration with Saudi oil interests. In other words, some of these companies are investing in stocks instead of US produced oil!

A major car company is investing in an IPO with a company that will theoretically pay for a 350 million dollar program to buy computers for all Ford employees. In six months when the IPO price rises and they can cash out their position they will have paid off the computers. Hmm?

The Kitco chart is showing gold bid in NY at $256 ???? Anybody else wondering what is happening?

would like to buy some stock, does anyone have a contact # or an e-mail. thanks ahead of time.

Serves to demoralize gold bugs.

Next we will be told that we should just throw gold out in the street, mix it with asphalt, cause its so worthless.

Dont buy paper on the dips, cause its a shell game, but we can see the ball roll from cup to cup now, with our gold glasses on. The shell game is losing its appeal, and as Trail Guide says, the paper price will be discounted to bring in fresh meat, but it s unredeemable, so why play?

Buy physical for peace of mind, and security

http://www.usagold.com/Order_Form.html3/6/00 Indications
�Current
�Change
Gold
289.00
+.20
Silver
5.12
-.03
Gold Lease Rate
0.5700%
nc
Gold Comex Stocks
1,373,896
nc


Market Report (3/6/00): Gold started the week on a quiet note. There
was little or no reaction to the news that China will deregulate its
gold market. With the start-up date two years out traders basically
viewed the announcement as a non-event. Likewise, the market took in
stride the British announcement over the weekend that it would continue
its gold auction strateg. The market was experiencing "good physical
demand" according to one London trader. On a bullish note for gold, John
Reade at Warburg Dillon Read, the old-line banking house, forecasted a
300 ton deficit between gold supply and demand and predicted the price
would average $315 an ounce, up from its $300 forecast earlier in the
year. As we go to fetch this over to the server, the dollar is getting
beat up on the forex markets, the Dow is wavering and crude oil (Apr) is
making an attempt at breaking the $32 barrier. Upcoming we have Alan
Greenspan delivering a speech at Boston College today, tomorrow we have
oil stock levels will be made public and money supply figures come out
on Thursday. We could get some surprises. The oil stock number could be
especially interesting with shortages and price rises becoming standard
fare in the energy sector. Reuters is reporting this morning that the
battle over who will head up the International Monetary Fund continued
unabated over th weekend. The wrangling over who will head-up IMF
demonstrates all too clearly the split between continental Europe and
the United States on the future direction of IMF. The United States is
opposed to the European candidate backed by Germany -- Caio Koch-Weser
-- saying he doesn't have the political clout to deal with the sensitive
issues IMF faces particularly in Russia and Asia. Europe disagrees.

That's it for today, fellow goldmeisters. 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 herelink above and make the appropriate entries.

Hello Mr. H.,

Heading says it all!

Regards,
Journeyman

A few birthday salutes for Rip Van Greenspan.

"Irredemable paper money has almost invariably proved a curse to the country employing it." Irving Fisher 1911
"There is no surer means of overturning the existing basis of society than to debauch the currency." J.M.Keynes
"The reckless policy of benign neglect for the stability of the US financial system that is now the hallmark of the greenspan fed, should be recognised as nothing but an unmitigated disaster. Wall Street has assumed the reins of maney and credit creation-the lunatics now are running the asylum." Doug Noland 2000
In the 1700's John Law's monetary regime in France had inadequate safegaurds against over-issueance of money. As rampant money supply expansion and a self-feeding stock market advance, stoked public confidence, Law completely lost control of his monetary system to the bubble mania.
Indeed it took only a brief period of time for uncontrolled credit issuance combined with a stock market bubble to completely destroy his system. In the first place, the essence of Law's scheme was his proposal for the monetization of certain existing assets. We strongly argue that the monetization of existing assets, largely real estate and stocks, is the essence of the Greenspan boom.
This prosperity is not about productivity, but about unprecedented asset inflation. It is furthermore our strong contention that a monetary system dominated by asset monetization, inconjunction with Federal Reserve policy accomodating unlimited money supply expansion, is an absolute recipe for disaster. In fact, it is a senseless replay of John Law's fiasco.
A full fledged mania has been allowed to develop and is now an uncontrolable monster. This is a tragedy that should never have happened." Noland, Tice, Vickers. 3/1/00

If there are any forum readers looking for a growth industry to invest in or run as thier company, might I suggest debt collection? The new bancruptcy law about to be passed will close that escape door for most people and the credit bubble aftermath will make debt collection the industry of the future. I will make a business plan for that available in some future post.
Happy Birthday greenspan, the debt collection industry salutes you. bill burke

Just to put the icing on the cake, here is greenspan himself: "The difficulty is in defining what part of our liquidity structure is truly money" Greenspan 2000
To which Tice responds: "shame on you"

Drucker and Ohmae are both pointing out the same things in this regard. There is a transition in marginal values of farming, production, service and intellectual products.

The first loaf of bread is satisfies hunger. The second will be eaten only in part and the rest fed to the goats. The third is fed to the cows and some is given away. The fourth is simply not worth producing.

As technology develops, more can be produced from the same resources, and more resources become available. The productivity of farmers has grown tremendously. Indeed, so much so that farms were deserted or sold to large corporate farms because fewer farmers could satisfy all the paying demand. Needless to say, the efficiency of farmers was so great that the few remaining farmers could produce much more than their predecessors who were half the population.

Industry undergoes the same process, as more can be produced with fewer people. The farmers turned to production people. As production increased in efficiency, production workers were freed up to do other things - R&D, marketing, PR, trading etc.. Entertainment was also expanded in this process, as prices per hour's popular entertainment fell with higher efficiency delivery through recordings and broadcast (mass media).

As technology has come to increase the efficiency of its own creation, the values that remain at high marginal value are rarities, fresh technology ideas, creation in the arts, and most of all - judgement - a.k.a. business decisions.

However, the transition was greatly accelerated in the US because the dollar reserve and settlement systems acted as a substitute for productivity gains in the manufacturing and resource sectors, thus we have arrived at the future unprepared and without the requisite capacities in the industrial sector. While software, hardware, design, marketing and research done for foreign industry were booming tremendously up till 1997, these are still quite small relative to the general economy. What is more important in these sectors, is that the expertise dissipates as the industries move overseas more completely.

I have documented the effects of the dollar and international trade on the productivity numbers - particularly the fact of the movement of cutting edge production overseas. The movement of semiconductor and circuit board manufacturing to Taiwan, Korea and Singapore over the past 5 years has completely erased any apparent productivity enhancement in US manufacturing of these products.

Where is there a change in productivity? Where is the change in the way of doing business? There is a tremendous change in productivity of interbusiness contracting and supply chain integration. Though management has improved its productivity mostly in the 1986-1994 periods, but has slowed this to a crawl in recent years. The move from negotiated supply contracts to exchange based real time supply contract allocation commoditizes industrial products and industrial production itself. Electronic product assembly is now a service business with a commodity style bidding process. That puts design and marketing at the top of the list of factors determining sales and providing margins. These activities have increased in productivity during the 80s, and are now "stuck" with incremental gains. Production has not increased in productivity noticeably, some research indicates that it has dropped slightly.

The exchange system now growing into dominance in a just in time inventory management environment is the main source of increased productivity within the US. Most of these improvements are not exactly what is normally referred to as productivity. Rather than changes in output per hour worked, there is a change in the inventory to sales figure - which has dropped persistently since the late 70s. The number of different products and variants has grown, but the worker time going into them has increased or stayed the same - not decreased. On the corporate purchasing and sales side we have seen substantial improvements, everything else in the chain from supplier to customer has remained the same. The one great difference is in the time that products spend in warehouses and the reduction in the number of warehouse workers moving those products around.

One might think that secretarial work has improved with the advent of spell checkers and form letters, and electronic filing, but it hasn't. Secretaries now routinely cycle business letters through corrections 40 times before these leave the office. Electronic files double up with paper files, increasing secretarial workloads. Sales-people sell a wider variety of products each, but have not improved as much on their volume where automated ordering and bidding is not used.

Much of the change in inventory efficiency is not reflected in inventory figures because the figures are skewed by the increase in the number of product variants replacing volumes of products in inventory for each variant. However, these changes have not increased the productivity of the whole economy greatly, what has increased it is the rise in the level of assembly - no more subassembly and multioperational shaping is done in the US. Today's US worker deals with final assembly of imported sub-assemblies. Fully automated production of parts is still done within the US, however, the manual work is sent out to Mexico and other countries and returns for final assembly or packaging here. The number of operations per hour worked has not increased, just the number of sub-components within the assemblies in each operation increased. Also, the general transition from product manufacture to product handling has made apparent productivity increase as imports have expanded.

The exchange model for inter-business contracting is only now gaining sufficiently in market share to be a major component in productivity improvement, but it has limits and does not change productivity anywhere near as much as has the transition to imports.

The squeaky cog gets the oil. The area where bottlenecks are greatest gets the most attention by business. As these bottlenecks are declogged, the remaining parts of the production and supply chain - the efficient operations -often languish from lack of capital, since improvements there are slower than in those areas where current inefficiency makes the value of a problem's solution greater. Those relatively efficient areas eventually become the limiters to expansion of volume and variation.

The most problematic area is in natural resources. Particularly in minerals. Exploration technologies and automation were much improved from the 70s into the 80s as were competing recycling operations for some minerals - iron and aluminum in particular. They are nearly at the level of automation of a chemical plant. Recycling has lowered the prices for competing new minerals, leading to slower growth in capacities. However, longer lifespans of many material intensive products (e.g. cars) have extended to the point of lowering the annual supply of material for recycling and raising the amount of fresh minerals needed for additional increases in product volume. Any additional expansion of product volumes will require greater output from this sector.

The currrent bottlenecks in supply chain contracting and retailing, which were the most inefficient and highest cost component of any operation till recently, are droppping away, thus allowing greater consumer purchasing power in terms of volumes. Though many products have lowered their marginal values because of their being replacements for consumers in industrialized countries, new features and expanding markets in the developing world are creating additional demand that was not met because of the costs of retailing, contracting, delivery, and inventory management. The new technologies' effect in lowering the latter costs has been steadilly shifting the bottlenecks to the raw materials sectors. This process will accelerate greatly as the exchange model gains use in business. A boom in natural resources will arrive soon. What we have seen in oil is just the slightest example of what can happen (though OPEC did not wait for the demand side of the equation to steady but limited supply).

Since lead times in the mineral resource sector are so long, the ongoing shift in bottlenecks from the product handling and contracting area to the resource area is going to take much longer to resolve. The longest lead times are in exploration, often up to the 5-7 year range. Next up are lead times for capital installations and for worker preparation which can take from 1-2 years to 3-4 years. Furthermore, the movement in prices of commodities is met with skepticism by market participants who expect a pull back in prices when the first new installation is put in place. This pushes forward responses to the information on the supply-demand balance that higher prices indicate. It has been a year since oil prices started rising. There is yet to be any major response in enlargement of exploration budgets.

During the last 20 years, inventory has been reduced to a single production cycle's supply. Though actual business conditions along the supply chain were making lesser inventory levels necessary, there was a strong monetary balance driving this trend as well. This was because of the interest rates being well above 0 in monetary balance terms - meaning that central banks have kept interest rates high enough so that there has been a deficit in the creation of new dollars relative to their demand for the purpose of interest payments. As a result of this, inventories that had been a profit center during the 70s were causing losses because of the interest payments on the working capital loans the inventory required.

As inventories were dumped into the markets at a steady pace in the industrialized economies, commodity prices were falling or maintaining their levels. Furthermore, many of the resource rich countries were heavilly indebted during the monetary surplus periods of the late 70s and were caught in debt traps which forced them to sell their production to raise funds to pay interest due on their debt. This pressure distorted the global economic system so badly so as to put the industrial countries currencies - which were hooked up to the dollar - at levels of overvaluation seldom seen in history. Definitely not since just before the 1970 break into controlled monetary chaos.

The improvement of the current accounts of the resource and industry heavy developing nations has been rapid and steady since the 1997-8 crash in their economies. History shows a strong correlation between these countries' positive trade balances and high dollar price inflation. This is because in their efforts to repay debt, these countries' industries obtain vast cash balances that are in excess of what they need to repay the debts. Theeir experiences of the recent past would have them unprepared to go into debt once again, and they simply let go of excess cash balances to finance business expansion rather than do so out of debt. Thus the cash accumulated has no demand associated with it within the country's businesses. The resulting cash flows remain in the markets with no debt repayment demand associated with them from outside the country of issue (the US).

The next item to speak of is that of the bloom of variety. The tailoring of products to consumer needs has been the major driver for business advantage. Not cost reduction. That is the "New Paradigm" of the 80s and 90s in the industrialized countries. The complexity of logistics that current consumer expectations demand from their suppliers was not possible in 1980, but has been the leading driving force for making a sale since then. The sales floor of insurance companies have not shrunk as the accounting pools of the 50s disappeared in the 60s as computers raised the productivity of accountants. Instead, the computer on every desk is used to customize the insurance company's product. Many of the intermediaries that used to do the customization (your friendly insurance agent) for higher end clients will be driven out of business. However, the customization will now be available to lower end clients as well as it was available before to the higher end clients for a goodly fee.

Thus, the productivity we measure is not what we think it is. It is not improvement in the output per hour, but the import of foreign output at reduced prices coupled with an efficient (rather than productive - in the traditional sense) retailing, inventory and contracting system. The force driving this is a short squeeze on the dollar debtors and the technology that is eliminating the Chen-Woods effect. The Chen-Woods effect essentially says that because retailing and distribution are far less efficient than production, GDP accounts can show an increase as imports grow, as a result of gross margins within an importing country being greater than the cost of the imported item. As the retailing and distribution system grow in efficiency through the use of internet and other technologies that enhance reaction speed and reduce retailing and distribution costs, their portion of the final cost to consumers will fall below the 50% mark and lead to GDP figures showing a decrease with importation rather than an increase. I venture to guess that we are nearing that point and will certainly reach it within the next 2 years.

Finally, the current advances have made an impact on productivity in manufacturing. They have decreased it. What has improved is distribution, selection, timeliness, and lesser consumer inputs. One good example is the incredible availabilityof books on the net. Books once found only in the largest or the most specialized collections are now available on the net through new and used book retailer networks. The paid labor involved is greater than that of a sale in a bookstore, however, the consumer is saved browsing time, the drive to and from the store, and the multiple phone calls and searches among stacks of books that leave one empty handed. Though the single book was handled by many more hands, the total inputs required by consumer, retailer and producer have been reduced tremendously, but mainly on the consumer's part, significantly on the retailer's part, and not at all - or very slightly - for the US producer.

Test...

Journeyman,

Key Cases in Second Amendment history (some):

Presser v. Illinois
US v. Emerson
US v. Miller
US v. Verduigo-Urquidez


Here is latest on Emerson:

Docket Text



02/22/00 Joint motion filed by Appellee Timothy Joe Emerson in
99-10331, Amicus Curiae St of AL in 99-10331, Appellee
Timothy Joe Emerson in 99-10499, Amicus Curiae St of AL in
99-10499 for 30 minutes of oral argument [1548173-1], to
allow the amicus curiae, State of Alabama, to participate in
oral argument for a period of 10 minutes taken from the
total time allotted to appellee. [1548173-2] Excess Pages?
(Y/N) N. [99-10331, 99-10499]


The Emerson amended opinion is a great read. See www.saf.org

I am half way through your last one and have learned a great deal. Thanks for the effort it is appreciated. I am going back to finish.

widespread. I have seen numerous products be downsized at the same price. Where the 28 ounce of Heinz catsup is reintroduced as the 24 ounce bottle at the same price of course and the soup cans from Campbell have been shrinking as well. This is a game I haven't really seen since the 1970s and is getting more and more widespread. Meanwhile at Walmart the prices are generally rising not falling anymore. Part of this is a harvest strategy having driven most of their competition out of business they can fairly safely raise prices on many items. They are doing this in so many areas that where two years ago in Maryland they were always the lowest on almost everything. Now they are the price leader on less than ten percent of the items I regularly buy. It is hardly worth the extra miles to drive there.Sam Walton would be spinning in his grave. Of course gasoline and home heating oil have exploded in everybodies budget but the interesting thing is to watch as the middle men try and pass this along. Prices at restaurants are rising where they can and many mall outlets where they think they have the strength to get away with it are trying to make bigger margins stick. Teen girl clothing and kids impulse buys in sport ware and equipment are rising when the competition allows. Othere who see specific items being raised please contribute your insights so we can accurately measure the debasement of the US dollar before it dawns on our stock entranced brethern.

http://cbs.marketwatch.com/archive/20000224/news/current/erdman.htx?source=htx/http2_mwDoes the German central bank (Bundesbank) know something that Alan Greenspan and the Fed don't? Or perhaps Greenspan knows but is choosing the route of ever-increasing interest rate hikes in order to deflate the stock market bubble and thereby hopefully avoid a market crash. Technical indicators from several (so far) reliable sources indicate that the month of March will be the turning point for stocks. Watch market action around the Ides (the 15th) as well as at the end (after the 27th). Gold should respond with a huge rally. Just remember Friday, Feb. 4th when gold jumped $23 in a single day.

http://news.excite.com/news/r/000306/01/taiwan-election-chinaHow many people remember what gold and silver did when Chinese authorities crushed the student rebellion at Tiamenen Square in the late 1980s? The upcoming presidential election on March 18th (note the proximity to the 15th) could set the stage for a repeat performance if Taiwan votes in pro-independence candidates and Bejing makes good on its threats.

This short essay should be a pleasure to those who can find it. Thoreau speaks of the chivalrous nature of "walkers" and describes them as knights of a new/old order...the "fourth guard" "...outside Church and State and people." "It requires a direct dispensation from Heaven to become a walker. Ambulator nascitur, non fit."

Hi Marketalk,
Paul Erdman is a comedian.
"Alan, stick with what you know best. If your principle aim is to contain inflation, you might want to consider paying more attention to the money supply."
He cant possibly pay more attention to the money supply.
He has nothing to do with it at this point. All he can do is ask the Saudi's to raise the price of oil for a couple years to drain off our money. Hitting the small guy as usual. February was the hottest auto month since fall 1986.
The natural gas industry will have a lot of sales as soon as people realize that this oil price rise is not temporary.
The birthday cake for allen is rising in the oven.
And back at the fed job, the numbers pour in showing that the credit bubble is rising in the supercharged money oven.
The german CB is hardly playing mr helpful to the american people. They have thier own agenda. It is the euro as the reserve currency. They LOVE our current account deficit. Thier own economy needs our purchases to stimulate buying by all the other countries of the world. They know Greenspan cant do anything. They are fighting with greenspan and summers about the new IMF head and thier helpful comments are just part of the battle. Summers has the Germans over the barrel at this point and they dont like it. They tax the hell out of thier people and businesses. They are hardly a shining citadel of financial utopia.

Another dismal day for gold but here's the good news...

BARRICK GOLD SET A NEW LOW!!

Keep selling this scam company into the ground.

Thanks

F*

From today's Wall Street Journal, page A2:

The supply of available homes has fallen to a record low, prices are
escalating, and buyers are forgoing the customary practices associated with
buying a home -- including having it checked out by an engineer -- to
entice sellers to accept their bids. Among the worst markets: New York,
Washington, Boston and parts of California, Florida and the Midwest.

"We've not seen any sense of demand slowing," says Larry Brackett, a
broker in the San Francisco Bay area. As for rising mortgage rates, "it's
like people don't care."

Strangers Note: According to the article, the slowing in new home sales lately has been due to shrinking supply and not lack of demand.

One problem with discussing Erdman's books is that they seem
to bring out the worst in people. Either they hate them -
regard them as a "sterile" investment that does nothing of
benefit, or they see Erdman's books as containing clues
which will solve all of mankind's problems...

It is left unsaid that a return of Erdman's books to the
market might have also solved a lot of the goldbug's
personal financial problems if, during the past decade, a
new dollar link with Erdman's books had been established at,
say, $5 a book, or even $3.

All one can say to them today is: Dream on. But it will
never happen. Recently at the charity shop
in London the price of "The Crash of '79" was set at 30
new pence Sterling, down about 70 percent [but this
excludes all inflation since 1977!], and at its lowest
level since 1977.. And "The Panic of '89", down to 45 pence
from its 1987 price of $4.50..

And not forgetting "The Last Days of America" now priced at
50 pence, even in hardback.

Why? Because Erdman's books are being remaindered and the
process is irreversible. The stark facts bear this out.
The Bookshop of England is going to sell 415 tons of Erdman
Books, or more than half of its book reserves. This means
that England, which invented the bookshop in the 19th
century, is now getting out of the Erdman book business...

Switzerland, traditionally a nation of bookbugs, is doing
the same. Last April the Swiss voted to sever the official
link between Erdman and the Swiss bookshop. The Swiss
National Bookshop intends to dump 500 of its 1,300 volumes
of Erdman books to finance its "Solidarity Fund.", with the
rest to follow later. According to the President of
Switzerland's central bookshop: "Erdman's books are no
longer of any monetary importance."

The International Book Fund plans to sell between five and
ten million Erdman books to relieve the debt burdens of the
world's poorest nations. In this it has the full support of
France, Germany and Japan - the remaining key holders of
Erdman books as part of their literary reserves.

So now Erdman books are just another commodity. As is
"The Billion Dollar Killing". Its price dropped
below 41 pence last year, no doubt affected by what was
happening to the stock market. From now on, the prices of
these books will be set by charity shops in the pits of the
world's cities such as London, Chicago or New York.

How the mighty books have fallen.

Economist and author Paul E. Erdman is a columnist for CBS
MarketWatch.

elevator guy.

Indeed, the paper game could be just about to unwind now! You are so very right to say-------------------
" " Dont buy paper on the dips, cause its a shell game " "!

Gold has been in an unfolding story line for several years now. We have tried to isolate political and private movements that would impact the price of gold even sooner, as it travelled along it's destine path. But with each twist and turn the coming gold crisis was controlled with no perceivable change. At least not on the surface.

Oil always was the catalysis that would eventually begin the impact phase on gold's future. Whether it cam from outright intervention in the physical marketplace or by destroying the house of dollar credit with a large price rise,,,,, the dynamics of oil would eventually launch the Euro into reserve position. During that currency transition, physical gold would literally soar in price! Taking with it the entire financial structure of most of the dollar based banking system. Including most of the gold Bullion banking process.

With oil now above $32, it looks increasingly likely that we are about to start this process. With this in mind I repost an old piece. Perhaps I will also place it on the Trails page to remind everyone exactly how myself and others will be positioned for this turn of events.

Thanks Trail Guide

FOA (3/14/99; 17:33:37MDT - Msg ID:3369)

It should be obvious to all that I am not a trader. I do not think Another is either. Most of the observations given are offered to instil a path to follow for research, not to direct. Most gamblers (traders) try to find private information and act on it before it is common knowledge. Greed is the main motivation, certainly not the expansion of ones knowledge or protection of wealth. We often see people blindly follow the words of others without creating their own logical conclusions. No one will ever successfully manage their family wealth in this manner. Indeed, many have used the leverage of paper precious metals (including the white metals) to create great losses of wealth. Yet, Another has always striven to put the average citizen into physical gold as a percentage of their net worth. If you follow in the footsteps of giants, you gain proportionately as do these conservative people. My agenda is found in offering others an agenda that will hold true in a changing world.
Follow the news, think for yourself, observe the outcome of events in a different light. I think you will find this an interesting story as it unfolds. Yes, it is slow, but it holds true! The game of chess has many outcomes, but the objective is always to complete the journey with all of your
pieces (wealth) intact! FOA

Does anyone have the specifics on the Swiss gold sale of 1300 tonnes? I thought that March 10th was the last date for the Swiss people to effectively oppose/block this action. If I was the buyer of all this gold, I would not want the price to rise or attract to much attention until my purchase was secure (beyond recourse), but after I was confident that nothing could get in the way of this wealth transfer I'd be happy to see an increase!!

I feel like I just got a star on my forehead! Thanks!

http://www.cnnfn.com/2000/03/06/markets/markets_newyork/Greenspan's speech today about further interest rate hikes rattled markets, including the high techs. Oil surging $0.68 per barrel did not help stocks either. And OPEC meets on March 27th to decide whether to increase oil output. If OPEC can't or won't increase production, what a great cover story to sell stocks and/or to sell them short.

http://abc.net.au:80/ra/newsdaily/rael-6mar2000-198.htmA United States Government report claims the Pacific Island Nation of Nauru(400 financial centers) is the worlds second largest tax haven operator. First is The Cayman Islands.(584 financial centers) Click URL for full story.

beesting comment-Don't the owners of these Financial Centers know how to store real wealth, tax free??
Those in the Know.....Buy Gold.....beesting.

I've done the homework and could pass with at least a solid B+ but still can't figure out the right percentage. How does one determine the correct percentage in PM? A mutual friend has said 50/50 (gold/cash) excluding real estate. Depending on a households cash flow, I believe the percentage could be much higher and probably should for the medium to long term. What do you think?

http://www.goldminingoutlook.com/All:
It's not easy to trade an impending currency crisis. Especially one in the making for so many years.
I submit that all the contract forms that this gentleman tracks will soon become a whirlwind. We shall see!



From Mr. KAPLAN'S web site--------------

QUESTION:
Why are there so many recent changes to your outlook for gold?

ANSWER:
Rarely are there so many conflicting signals.

Sentiment is somewhat bearish, but not markedly so;

fundamentals are improving steadily, with unexpected setbacks;

commodities as a group remain strong, but a few key ones are still in danger of a pullback;

the U.S. equity market and the U.S. dollar are acting oddly;

the Australian dollar looks as though it is recovering and then moves to new lows;

technical indicators indicate an important pivot point but are less clear on direction.

If you believe the dollar is indeed the sick man of the international monetary system and that the political will exists to break the dollar hegemony as described by TG, then, you must buy all the metal you can with both hands IMHO.

Today I had the good fortune of visiting with some old acquaintences in KC. These gentlemen are very wealthy and they were kind enough to toss me a couple of million bucks of business. On my way back to the airport I began to wonder how many people (like Pat & Mike)there must be in the same city; in the same county; in the same state; in the USA and in the world. The answer is of course, too many to even begin to contemplate. These two gentlemen are "new money" types; not the "old money" variety. What will happen to the POG when this "new money" set begins to buy metal due to the circumstances so ably detailed by TG/FOA? Can $10K/OZ be far away?

Why would someone expend so much time, energy, emotion and intellect for so long without absolute conviction and certainty as TG has. The voice behind the page is one of wisdom and experience. Please permit me to also say "kindness". If you're new to this site, call USAGOLD tomorrow and take the plunge! Buy as you are able!!

Sorry for the rambling. Good evening.

Thanx -- will pass this on to a couple lists of pro-self defense writers!!

Regards,
J.

Hello Cavan Man,
If the hard portion of your investments were like their 50% (or larger or smaller) in bullion (or even gold stocks and options). Now say they went to zero for a while, would it change your lifestyle much? Could you sleep at night?
Or if it went sky high,,,,, could you stand not to sell for a while?
It would not change anything for me. So my position and perception of this market is right,,,,, for me.
How about you?

Be back tomorrow TG

That helps. Then, like marriage; to have and to hold till death do you part! who wudda thunk it?

Excellent Post!! Kudos!

Excellent, naturally! Thanx.

Your response way over-compensated for the Ohmae info I posted.

I particularly resonate with your insight on the return of time to the consumer made possible by internet distribution. This is very interesting to me from several perspectives. It seems to me that the Austrians don't like "labor theory of value" type reasoning, mainly because Ricardo's insights were morphed into socialist excuses by Marx. But an expansion of the definition of "labor," it seems to me, can make a modified Ricardian approach highly useful for micro-economic explanations.

Regards,
Journeyman

Many thanks. I understand (I think) your reluctance but, more importantly, I understand your reply. I'll not consume any bandwidth here again with the likes of that.

Without the www, how to get to know (a wee bit) someone like you? Kind regards........CM

Classic Skinnerian behavioral conditioning: we've had two POG spikes in the past six months, and little else. But it's enough to keep us checking Kitco's graph twice a day --whenever we log on, right?

Intermittent reinforcement is the strongest for conditioning.

POG-watching's the antithesis of what FOA and Aristotle are talking about, but -- hey, we're human, and most of us are new at this POG game.

I still think of incessant POG-watching as pretty silly compared to a stock in the $30 range -- who cares if it's $28 one day, $32 the next, and back down to $29? Happens all the time with stocks, and those are the same scale of movements we spend our thoughts energies upon. ("A watched POG never ______"?)

FOA's thesis on this is, basically: Because of the politics, and TPTB pulling out their stops, you'll see nothing happen for long periods, until they can't keep it stable any more. And then all of them who are going to get on board probably will have done so, so let 'er rip!

I still wonder who the agents of that policy are, and whether they're all trading for their own accounts, or whether some are promised loss reimbursement for the bets they make in the "line of national duty."

Now to read today's juicy stuff...

Long time ago for me reading "Structure of Scientific Revolutions" also. The most striking thing that sticks with me from that book, relevant to economics especially in bubble times, is that the thinkers who went against the establishment, EVEN IN SCIENCE!!, were risking at least their reputations and futures, if not, in days gone by, their freedom and their lives. Pastuer and Copernicus come to mind as past extremes. Which remids me of a more current example from a book called "The Third Culture:"

"In 1966, I wrote a paper on symbiogenesis called, "The
Origin of Mitosing [Eukaryotic] Cells," dealing with the
origin of all cells except bacteria. ...The paper was
rejected by about fifteen scientific journals ...the editor
of _The Journal of Theoretical Biology_, accepted it and
encouraged me. At the time, I was an absolute nobody, and,
what was unheard of, this paper received eight hundred
reprint requests. ...Even today most scientists still don't
take symbiosis seriously as an evolutionary mechanism. If
they were to take symbiogenesis seriously, they'd have to
change their behavior. The only way behavior changes in
science is that certain people die and differently behaving
people take their places."
... "Symbiogenesis has many implications, which is part
of the reason it is controversial. Most people don't like to
hear that what they have been doing all these years is
barking up the wrong tree."
..."Scientists and those who pay them have to dismiss
or ignore this potential reorganization [caused by accepting
the implications of "symbiogenesis"] because accepting the
shifting boundaries and new alliances is strange and costly.
It is far easier to stay with obsolete intellectual
categories." -Lynn Margulis, "_Gaia Is a Tough Bitch"_, in
John Brockman, The Third Culture, (New York, NY: TOUCHSTONE
1995), pg. 136 & 137
+
"If science doesn't fit in with the cultural milieu, people
dismiss science, they never reject their cultrual milieu! If
we are involved in science of which some aspects are not
commensurate with the cultural milieu, then we are told that
our science is flawed." p. 140

Suppose these same observations apply to people dismissing
economic ideas that also don't fit the current "cultural
milieu?"

Regards,
Journeyman

There is way to drop the world banks to there knees. There
is a way to remove the strangle hold they unethically maintain on the value of gold. The manipulation can stop, now! I will paint an oil analogy which will paint the picture of gold.

The value of oil is determined by the oil cartel, OPEC. If they want the price of oil to rise, they simply reduce production. The end result; supply less than demand; the price increases. That's pretty simple.

Now for gold. If two or three of the worlds largest gold producers simply said we are stopping mining because we cannot afford to dig it out of the ground, and cease operation, what will happen? Supply will be less than demand; the price of gold increases.

I haven't a clue how to get these thoughts into the minds of the few people who could make this happen. Anyone out there up to the challenge?

http://www.stratfor.com/SERVICES/giu2000/030600.ASPThis is an interesting article on the "secondary" powers behind USA, China, Russia.....it is using France as the primary example...and by extension the EU.

Good read for rounding out the Another/FOA scenario.

Poor old Solomon

Despite the bias opinions of some.....ABX and others
like PDG, HGMCY, NEM, HM, are looking good on the long
term(monthly) charts, and should start a major bull market
shortly.
Great, if you have investments you can take profits on
and switch some to gold in bullion, coin, stock and other
PMs.
Check out the charts, read all the opinions, and make
your own decisions.....it's your money after all, now
isn't it?

Journeyman
Glad you enjoyed The Structure of Scientific Revolutions. You've reminded me that Thomas Kuhn had an Austrian outlook. He felt scientific theories were valued at the margin. A few stray bits of data cause a theory which explains all the rest of the facts to be discarded.
Investors have an advantage over scientists. We are not at the mercy of journal editors, Nobel committees, etc. If our theories are correct, we are rewarded. Subject of course to market manipulation, taxes and outright confiscation.
I don't recall that Copernicus suffered for his theories. He was actually an employee of the Catholic Church and its hierarchy encouraged him to publish.
GoldsunView Yesterday's Discussion.

$32.62 and rising (up .44). SUV for sale.

Kitco shows spike up at NY opening

Assuming the SUV is a late model, and in very good condition, I might pay you 1 Krugerrand for it. Let me know if you are interested.

"Procter & Gamble (PG:NYSE - news - boards) warned
investors that it would post third-quarter earnings 10% to
11% below the year-ago 72-cent report. The company
blamed their earnings shortfall on the higher cost of pulp
and petroleum-based materials."

Stranger's Note: This is a story which will continue to unfold until Main Street recognizes that higher costs are not going to go away. (Psssst, Procter & Gamble, just raise your prices. Your competition will follow just like they followed Fed Ex).

"Subject to of course to market manipulation, taxes, and outright confiscation."

(Smile)

What does SUV mean / stand for?

http://www.usagold.com/Order_Form.html3/7/00 Indications
�Current
�Change
Gold
289.90
+2.00
Silver
5.14
+.03
Gold Lease Rate
0.5700%
nc
Gold Comex Stocks
1,373,896
nc


Market Report (3/7/00): Gold surged in early New York trading after a
quiet night overseas. Over the past several weeks we have heard
recurring reports from wholesales traders that there is an abundance of
metal on the market. Why then haven't prices reflected the large sales?
Instead gold has hung within a narrow range at one point surging well
over $300. Our view is that demand remains very strong in the physical
market both in the United States and overseas and traders short the
market are forced to square their positions on any significant dips.
Once a downside trading range establishes itself -- buttressed by the
physical buying -- the shorts find themselves forced to cover realizing
that chances are the metal isn't going much lower. We expect this set of
circumstances to dominate market thinking in the weeks and months ahead
as the gold carry trade continues to unwind at the major banks and
brokerages that have fed at the gold loan/forward trough since at least
the mid-1990s. Many prominent gold traders have lost their jobs, if
rumors are to be believed, gold trading departments closed down and
those still hanging on to their jobs wonder what will greet them at
their desk when they arrive at the office in the morning. These are the
aftershocks of the Washington Agreement earthquake which shook the gold
business in late September last year and sent the gold price careening
toward the $350 mark. We believe that those aftershocks will continue
for some time and we could even get another earthquake or two as we go
along through the year 2000. The net result in our opinion will be a
stairstep demarcation to the charts with gold moving steadily upward,
more short players losing their jobs as positions are unwound, investors
steadily acquiring physical metal, and the paper markets steadily but
relentlessly losing volume.

Today's action has all the earmarks of short-covering given the
suddeness of the move -- as if someone lost their nerve. We'll see what
happens as the day progresses. My advice -- cover those shorts; we're
going higher.

That's it for today, fellow goldmeisters. 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 and link supplied above and make the appropriate entries.

Sport Utility Vehicle.

http://quote.yahoo.com/q?^DJI&d=1dCheck out the chart, the Dow Jones average lost over 300 points in about 30 minutes this morning, and at this minute Gold is up almost 5 dollars and rising!!!

Gandalf, WAKE UP THOSE HOBBITS, to see the action!!!

Those in the know....Buy Gold....beesting.

http://quote.yahoo.com/q?s=^DJI&d=1dSorry too much excitement.....beesting.

I keep an open window on the SP premium during most of the day. During PPT interventions it sticks out like a sore thumb.

As the SP 500 anvil index fell, the premiums went up to the 900 range. The drop stopped at established support levels. Contrary to normal market action, the premium dipped to near 0 immediately after stabilization. Probably because of an effort to avoid the leakage of general market support funds into the NASDAQ stocks common to both the SP and the ND100.

From Bridge News -

Audit office confirms probe into UK Treasury gold sales
London--Mar 7--The National Audit Office confirmed on Tuesday that it was conducting a routine investigation into the Treasury's decision to sell a share of its gold reserves but said it would not be in a position to publish anything
until around December. An NAO spokeswoman dismissed newspaper speculation that the inquiry would "savage" Chancellor of the Exchequer Gordon Brown's decision
to press ahead with the sales, saying it was far too early for the investigation to have reached any conclusions. (Story .12629)

http://biz.yahoo.com/rf/000306/9o.htmlThe wrangling over choosing a successor to former IMF head Michel Camdessus is said to rest upon the future role of the IMF as much or moreso than upon the particular qualifications of any given candidate.

Reuters reports "The United States wants to make it into a leaner body dealing with economic crises rather than sponsoring and encouraging long-term economic reforms."

Doesn't that imply that the U.S. is simply wanting a scaled-down version of "business as usual"? I say, "Nuts to that. Bring on the reform."

http://biz.yahoo.com/rf/000307/ym.htmlExcerpt:
The Russians confirmed on Tuesday that an export decree has been signed, but they would be unlikely to sell on the London Fix, because it would send prices tumbling. Prices have been frozen on the largest Palladium Futures Exchange, The Tokyo Commodities exchange(TOCOM){A PAPER PALLADIUM EXCHANGE} until at least March 15, and the Russians are expected to avoid it.
Therefore, Russia will probobly sell through a small trading house to industrial clients, yeilding only a small price effect, while healthy car demand will prop up prices....Click URL for complete news release.

Comment: From producer to consumer without the aid of middlemen.

WOWSERS --- Just let the Hobbits sleepin one morn and see what happens !! -- Missed both the dog SPIKE and the return of the PPT actions. -- Looks as if things are getting interesting again. Is Spot awake now Goldfly ?
<;-)

http://biz.yahoo.com/rf/000307/ym.htmlExcerpt:
The Russians confirmed on Tuesday that an export decree has been signed, but they would be unlikely to sell on the London Fix, because it would send prices tumbling. Prices have been frozen on the largest Palladium Futures Exchange, The Tokyo Commodities exchange(TOCOM){A PAPER PALLADIUM EXCHANGE} until at least March 15, and the Russians are expected to avoid it.
Therefore, Russia will probobly sell through a small trading house to industrial clients, yeilding only a small price effect, while healthy car demand will prop up prices....Click URL for complete news release.

Comment: From producer to consumer without the aid of middlemen....Where have I heard that before???....beesting.

http://biz.yahoo.com/rf/000307/ym.htmlExcerpt:
The Russians confirmed on Tuesday that an export decree has been signed, but they would be unlikely to sell on the London Fix, because it would send prices tumbling. Prices have been frozen on the largest Palladium Futures Exchange, The Tokyo Commodities exchange(TOCOM){A PAPER PALLADIUM EXCHANGE} until at least March 15, and the Russians are expected to avoid it.
Therefore, Russia will probobly sell through a small trading house to industrial clients, yeilding only a small price effect, while healthy car demand will prop up prices....Click URL for complete news release.

Comment: From producer to consumer without the aid of middlemen....Where have I heard that before???....beesting.

http://www.bog.frb.fed.us/BoardDocs/Speeches/2000/20000306.htmDelivered to the Boston College Conference on the New Economy, Boston, Massachusetts; March 6, 2000.

"In the last few years it has become increasingly clear that this business cycle differs in a very profound way from the many other cycles that have characterized post-World War II America. Not only has the expansion achieved record length, but it has done so with economic growth far stronger than expected. Most remarkably, inflation has remained largely subdued in the face of labor markets tighter than any we have experienced in a generation."

"When historians look back at the latter half of the 1990s a decade or two hence, I suspect that they will conclude we are now living through a pivotal period in American economic history. New technologies that evolved from the cumulative innovations of the past half-century have now begun to bring about dramatic changes in the way goods and services are produced and in the way they are distributed to final users. Those innovations, exemplified most recently by the multiplying uses of the Internet, have brought on a flood of startup firms, many of which claim to offer the chance to revolutionize and dominate large shares of the nation's production and distribution system. And participants in capital markets, not comfortable dealing with discontinuous shifts in economic structure, are groping for the appropriate valuations of these companies. The exceptional stock price volatility of these newer firms and, in the view of some, their outsized valuations indicate the difficulty of divining the particular technologies and business models that will prevail in the decades ahead.
How did we arrive at such a fascinating and, to some, unsettling point in history?"

"At a fundamental level, the essential contribution of information technology is the expansion of knowledge and its obverse, the reduction in uncertainty. [...]
Of course, large voids of information still persist, and forecasts of future events on which all business decisions ultimately depend will always be prone to error. But information has become vastly more available in real time--resulting, for example, from developments such as electronic data interface between the retail checkout counter and the factory floor or the satellite location of trucks. This surge in the availability of more timely information has enabled business management to remove large swaths of inventory safety stocks and worker redundancies. Stated differently, fewer goods and worker hours are now involved in activities that, although perceived as necessary insurance to sustain valued output, in the end produced nothing of value.
Those intermediate production and distribution activities, so essential when information and quality control were poor, are being reduced in scale and, in some cases, eliminated. These trends may well gather speed and force as the Internet alters relationships of businesses to their suppliers and their customers..."

"The impact of information technology has been keenly felt in the financial sector of the economy. Perhaps the most significant innovation has been the development of financial instruments that enable risk to be reallocated to the parties most willing and able to bear that risk. Many of the new financial products that have been created, with financial derivatives being the most notable, contribute economic value by unbundling risks and shifting them in a highly calibrated manner. Although these instruments cannot reduce the risk inherent in real assets, they can redistribute it in a way that induces more investment in real assets and, hence, engenders higher productivity and standards of living. Information technology has made possible the creation, valuation, and exchange of these complex financial products on a global basis."

[Next up...A CAUTION: where the illusory economy meets the real economy...(sounds familiar, doesn't it, ORO?)]

"There can be little doubt that, on balance, the evolving surge in innovation is an unmitigated good for the large majority of the American people. Yet, implicit in the very forces of change that are bringing us a panoply of goods and services considered unimaginable only a generation ago are potential financial imbalances and worker insecurities that need to be addressed if the full potential of our technological largesse is to be achieved.
+
As I testified before the Congress last month, 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 pickup in productivity however tends to create even greater increases in aggregate demand than in potential aggregate supply. This occurs principally because a rise in structural productivity growth, not surprisingly, fosters higher expectations for long-term corporate earnings. These higher expectations, in turn, not only spur business investment but also increase 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, is a reflection of 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.
+
Outlays prompted by capital gains in equities and homes in excess of increases in income, as best we can judge, have added about 1 percentage point to annual growth of gross domestic purchases, on average, over the past half-decade. The additional growth in spending of recent years that has accompanied these wealth gains, as well as other supporting influences on the economy, appears to have been met in equal measure by increased net imports and by goods and services produced by the net increase in newly hired workers over and above the normal growth of the workforce, including a substantial net inflow of workers from abroad.
+
But these 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 indefinitely an excess of demand over supply. 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.
+
Imbalances in the labor markets perhaps may have even more serious implications for potential inflation pressures. While the pool of officially unemployed and those otherwise willing to work may continue to shrink, as it has persistently over the past seven years, there is an effective limit to new hiring, unless immigration is uncapped. 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. In short, unless we are able to indefinitely increase the rate of capital flows into the United States to finance rising net imports or continuously augment immigration quotas, overall demand for goods and services cannot chronically exceed the underlying growth rate of supply."

"Until market forces, assisted by a vigilant Federal Reserve, effect the necessary alignment of the growth of aggregate demand with the growth of potential aggregate supply, the full benefits of innovative productivity acceleration are at risk of being undermined by financial and economic instability."

The oil market continues its relentless move higher today, as light sweet crude just hit $33.75 per barrel. Today's Wall Street Journal, section C, carried a story about Norway and Nigeria unable to pump oil due to "computer glitches." Thus, the real Y2K story is and remains oil. Rumors are now circulating that Clinton will resort to rationing. Say goodbye to the summer vacation in the RV driving across country and say hello to $2.00 per gallon gasoline. As an aside to those readers of Wolanchuk, he predicted in an interview with Stockhouse (www.stockhouse.com) that oil would see $50 per barrel sometime in 2000. In another interview with Stockhouse, Wolanchuk predicted that gold would go over $800 per ounce--and soon.

The basic point separating economics theories is the motive - study vs. politics.

Economists - like anybody else atune to the changing times - see no point in study of economics if the main employer would be politics. In this case, the politics are dictating the economic picture and nothing is as important as telling politicians that no negative consequences would be forthcoming if the economist gets the job of running the programs, or at the very least a big research grant. What else would they say? That any program sponsored or run by government will reduce the overall welfare? That government is the tool of thievery? That the parliaments are but the vanguard of the Hun?

In the actual study of economics - something that rarely happens outside of econometric models for microeconomic analysis - has been relegated to the sidelines for the better part of a century. This was the century of government. The bulk of the century was dominated by the single generation of cannon fodder - the global GI generation. A generation engineered for the promotion and use of government for itself - a contract of sorts between the government and the generation. It was the one group that voted in any and all government programs that would benefit itself at the world's expense and at the expense of their parents and their children.

Before WWII they were young and poor and focused on the socialist non-economics of Marx - not in the study of it but the implementation of the power equations that Marx set up to describe the ability of labor to forcibly take over vulnerable industrial installations and for government to control and take away the benefits of business. It was the generation of collective rule. Theirs were the economics of coercion - in Union-Industry negotiation, in the only foreign trade policy this country has had for 60 years - whatever else happens, the dollar will be the reserve currency. And the policies in the times of gold settlement of international trade in the 20 years before - we will only export.

The only true economic study this generation did was of the means to maximize its own allocation of world resources. Using the military to force all competition out of the former European colonies (by holding overwhelming forces on the territory of all European colonizers) the US supported more dictators than did the Soviets while forcing the European nations to unload their colonies into "independence" under US sponsored rulers. Often, this would backfire as the countries would change allegiance to the Soviet side, which favored Europeans who were better equipped to do business.

US government military-economic studies I had seen from the 50s and 60s dealt with the methods and means to obtain resources from "developing nations" - i.e. collonies - for US "strategic needs". Particularly when the possibility of obtaining them for no payment (i.e. pay in dollars with a promise of non-redemption in gold given by the seller) was possible. These studies by microeconomists and industry experts were where honest efforts were made to understand the economics. There was little one could gain from any other economic work, since its motives were propaganda, not study and analysis.

This generation of economists is largely gone. Their caretaker successors are disappearing as well, leaving behind many economists beleaguered by the inability of orthodoxy to explain any economic phenomenon they observe. Because of this, there is a trend of transition to Austrian economics. Another reason for this trend is that the ability of government to exact tribute from its citizens (read "serfs") and from citizens of other lands is falling rapidly as the information technology infrastructure is put in place that makes possible the total hiding of transactions from governments' searching gaze and its prying hands.

Economists started talking of the damage government does because government reach was weakening and its ability to employ economists was falling. Government has responded within the US with the slow dismantling of regulation and lowering of tax rates so that the motive for hiding income and assets is reduced and more of them can be taxed. This was where economists - "supply siders" - were just beginning to study economics instead of providing propaganda. Now, however, there is a strong move of capital out of both the US and Europe - and prior to that from Japan - into the developing nations and the tax havens.

These movements have put both Europe and the US in danger of losing their physical and human capital. Where capital goes, people are soon to follow. The EU economic zone was intended, among other things, to allow the Europeans to deregulate and lower taxation. This is in order to both allow big money to exit, and to bring back Europe's competitive edge in sophisticated design and high standard craftsmanship of custom products. By publicizing its coming lowering of taxes, and by practicing habits of tax havens for large capital, Europe is following its "old style" economist's advice, not because they want to, but because they have to. The state can't maintain taxation and regulation at current levels without losing its most productive people to the developing world, where a greased palm is ten times cheaper than paying official taxes for a lifetime.

Austrian economics is gaining in following everywhere because of the current trends of government action being forced by the real economy. The study of actual economics has become more important than the provision of propaganda for government. The infrastructure of technology and political will in smaller nations is in place to provide shelter to capital and high income individuals.

The question remaining is just how far will governments of "industrialized" countries go in either succumbing to reality, or taking all-out action to prevent it from coming. The fight between the US and Europe for monetary dominance is only one symptom of the sclerotic nature of government power in the early 21st century. If a 2-2.5 fold overvaluation of currency in industrialized nations is not enough to keep the high value business and people within reach of US and EU taxes, but only those of one of the two regions; then the fight for control of the monetary system will most probably result in the destruction of both group's powers. If they raise taxation in order to cater to their ancient retirees, they will cause a mass migration of their technology elites elsewhere.

During the 50s and 60s - and well into the 70s, European governments at once tried to control its own citizens while attracting wealth from the US, which was penalizing its high income earners with 70% Federal tax rates and total marginal tax burdens above 93%. Though these rates have fallen somewhat in the US, the slightest damage to the dollar would push us all out of US assets and out of US residency, and would cause the US government to attempt the collection of tax at levels of complete confiscation. This could be excercized as it is by many US marshals and county governments by confiscation of "drug related" property.

If popular opinion is ignored and the governments of the US and Europe simply reduce taxation and regulation to a level of competitiveness with the developing nations, then the US would win out over Europe. Otherwise, the trade mechanism of the EU will force governments to compete among themselves to retain business and high value individuals.

Current talk of opening the US to imigration and of flat taxes is the positive side seeking to tune government to the reality of the global economy.
Talk of extending medicare is just a last grasp by government at what might become a popular platform for retaining some power. I hope the social "safety net" (it really isn't there) will be taken apart before it tears and causes a disaster when people are not prepared for it.

In this debate among the economists and economic propagandists as to which direction to take the country, I would side with those who care to study reality and recognize that actions have consequences.

Dow Industrial 9,793.40 -377.10
NASDAQ 4,869.50 -35.35

Advance Decline
NYSE Adv/Dec +964 -2,028

NYSE Volume 1,136,295,840 shares

PG looks like the bones left after momentum leaves a tech stock. Beware of the shape of things to come.

Ick.

in full view of the super tuesday ending in a vote of no confidence for both? contenders - at least according to the DJII, where the president's electorate is seen selling their (poor) multiple choice short.
Reminds me of EU's new Pariah, Austria. A country acclaimed as the sound heart of Europe is now seen in need of 14 EU-Pacemakers.
I M F(ed) up - CB2

Thank you, Sir - right on the dot - loved it- Best CB2

***** (Five star/Highest Rating)

Wake up call; hello America. Anybody home?

Rom Yahoo:
U.S. oil industry hit by labor shortage

By Richard Valdmanis

NEW YORK, March 6 (Reuters) - The labor shortage that has savaged U.S. industries
from high-tech to financial services has now hit the oil patch -- another blow to the nation's
fuel consumers.

With oil and gasoline prices hovering at nine-year highs, U.S. oil companies are anxious to ramp up crude production and
rebuild emaciated inventories, but they are finding the task difficult because there aren't enough rig hands and field engineers to
go around, industry watchdogs say.

``Any kind of substantial increase in production would be most difficult now because we don't have the people to fill the jobs,''
said Don Briggs, head of the Louisiana Independent Oil and Gas Association (LIOGA). ``From Texas to Louisiana to
Oklahoma, producers are having trouble finding people, and the domestic industry is suffering.''

I am starting to establish tech index shorts beginning tomorrow - when I expect they will enjoy a rebound if the DOW and SP recover late in the session - depending on the global market's reaction. Intend to scale up shorts if there is a rise, buy back when there are signs of strength following further falls on the heels this initial weakness. If the current slide resolves (as I expect it will soon - as the $ is still strong and strengthening - at least today) then the techs should enjoy a rally into early summer accompanied by a slightly broader market advance. There is a good chance for a tech blowoff at that time, if not now.

Farfel - I sold another 1/4 of my remaining VENGF - now have only 1/8 of the original position.

Town Crier - quite a bit of the thinking I put into my analysis came from Fed papers and Greenies' speaches and Q&As. It is somewhat like reading a Mark Twain riddle story, but ends up being quite informative.

Disclaimer - dis ain't financial advice, do not do as I do.

If I am aware of the great uncertainty in markets I follow daily, then if you need advice you should not even consider doing this!!!

May be forming the largest banking entity globally. The potential new banking group would cater to more tan 10 million clients, with 120.000 employees globally.
Some may want to get too big to sink - what'ya think?
CB2

' Labor shortages ravaged by U.S. Service Industries - from Hi Tech to (Hi) Fi(nancial) Services has now hit the Oil Patch (among other fundamental resource sectors as farming and mining - expendable as non core CP -Inflation indicators) - is seen as another "fuel" to blow-torch the Nation's overconsumers.
Seriously - don't take me for serious my friend and Fremder - CB2

Today's news from Proctor & Gamble was a watershed event which had everything to do with the rally in oil and gold.
The admission that P&Gs profit margin is now being sqeezed by higher costs hit the street like a lightening bolt. After this, Wall Street will no longer accept unquestioningly the heavily massaged inflation reports which emanate from Washington D.C. The notion that it is "only oil" has now been exposed for the silly fraud it always was. The fact is, oil is the most pervasive of all commodities with respect to overall price influence. If oil prices even drive up costs for such mundane products as Tide and Crest, then they are effecting everybody.

... Protector's of Gamble's will be like the proverbial needle in the haystack? Is that's what your implying or is it the rusty pitchfork digging up all the extra soiled paper "bucks" in AG's overhedged aand derivative germ contaminated dungheap?
Sorry for being snide - had a great day - Best CB2

Wall street is now noticing what eveybody who does his own shoping must know about prices.

The question now remaining is whether they will ask for higher pay as a result. The labor shortage pretty much dictates that they will get it if they ask. What will the golden years brigade do about their higher costs not being reflected in the COLAs? Will someone lose his bid at the presidency as a result?

What do the EU people want from the Krypton administration (capable of turning Super America into mush) that prompts them to come out with threats over the stock markets and the dollar? Perhaps they don't want the Fed to continue with its tightening (forcing the ECB to raise rates in order to maintain steady prices in the EU)?


CB2, C Man, THC, Journeyman, thank you much for the kind words.

back to reality - An unprecented 100 billion $'s of long bonds (30 yr tsy's) have been sold in the week from Feb. 11 -18, coinciding with Ts'y Secretary Summers' statement to pay back accrued debt from (virtual) budget surplus.
As Summers was accused of causing (excelerating) the invereted yield curve, some obstinate observers are still arguing this unprecedented 100b sale (as it seems to foreign, though friendly CB's), may have been the smokescreen to hide some gigantic systemic risks, which would not weather any taxpayers scrutiny after LTCM - The derivative scam seemingly haunts not only the economy - the global politics, but "virtually" the future of the cannibalistic capitalism of the few -too big to tank!
X-cuse venting & rambling - I'll Pro... & G(o)ambling
CB2 - ... You too - Yahoo... See through ... See U!

During one of the segments on CNBC this evening they showed a graphic of today's best performing sectors. There, at the top of the graphic was the gold sector with over a 9% increase and the oil sector with over an 8% increase. I wonder what was going through the minds of all the viewers as they looked at that?

Then in another piece, one of the parrots said "with some of the 'old economy' value stocks i.e. Coke, etc. at 3 to 4 year lows, its unclear whether there will be a sharp recovery or will the DOW slip into a bear market". Hah!

In another clip, they said "oil is 50% as important to the economy as it was in the 1970s". Does that mean oil can double in price to $64 per barrel and everything will still be ok?

Oh yeah, and $300 billion dollars was vaporized in the DOW today.

It is becoming very apparent that the very same con artists who ran the stock market into bubble territory this past decade on the backs of various commodity and currency carry trades are now ready to attack the only remaining huge source of available capital: DOW stocks.

Most of these con artists have long since departed the major DOW stocks and parked their monies in various NASDAQ high tech darlings. They recently moved the NASDAQ into sheer verticality with the NASDAQ rising virtually every single day this past month.

In order to maintain such verticality in the NASDAQ, it becomes necessary to draw funds from wherever they can be sourced. With many commodities and currencies now under scrutiny of various government regulators, then the easiest market to raid for NASDAQ capital inflows is none other than the DOW itself.

Thus I predict more Proctor and Gamble surprises in the DOW/Old Economy/Smokestack stocks as the NASDAQ bubble-manipulators and their captive media slaves seek to draw more capital into their vertical market tower.

Look for many articles slamming Old Economy smokestack companies over the next while as the NASDAQ furiously competes for funds parked in DOW investments.

I would not be surprised to see a surging NASDAQ occurring right alongside a collapsing DOW, no different than what occurred during the Nineties when gold & resource-dependent currencies collapsed during the surging US stock market.

Thanks

F*

Very similar to the corners in the early days of this century in the Fisk and Gould era. They have got the shorts (who are anyone who thought the markets were still somewhat legitimate and sold the ridiculously overvalued tech stocks short) are cornered in their shorts and need to meet margin calls every morning to keep their shorts from being bought in. the only way for fund managers and hedgefund managers is to sell the Dow stocks that they own to raise the cash they need to cover the morning call. The end is near but not here yet.

I cant find that interview you spoke re stockhouse in msg 26486,
Can you be more specific re: directions please ?.
thanks :).regards.

In response to your request on Wolanchuk's predictions, I got part of my information from a post on the gold eagle website (www.gold-eagle.com) dated March 2, 2000. This post was an excerpt of an earlier interview done in 1999 when he stated that gold would go to $800/ounce. This same prediction was made to Stockhouse again on Feb. 8, 2000 and can be found on their website (www.stockhouse.com/interviews/feb00). The prediction on oil is from a recent issue of his newsletter. A friend of mine read it to me over the phone last month and, after repeated attempts to get a hard copy from him, I have yet to get my hands on it. So I would suggest subscribing to his service if you want verification. Sorry, that's the best I can do

Found it :)

CoBra(too) (3/7/2000; 16:16:09MDT - Msg ID:26499)
An unprecented 100 billion $'s of long bonds (30 yr tsy's) have been sold in the week from Feb. 11 -18, coinciding with Ts'y Secretary Summers' statement to pay back accrued debt from (virtual) budget surplus.
As Summers was accused of causing (excelerating) the invereted yield curve, some obstinate observers are still arguing this unprecedented 100b sale (as it seems to foreign, though friendly CB's), may have been the smokescreen to hide some gigantic systemic risks...
--

CB2 - Since I admittedly do not really understand the area of bonds and do not follow the markets...I have a hard time with understanding your quote...perhaps you, and or ORO could cover this topic of the 100 billion in 30 year T-Bills a little for us here at the forum.

Here is my present understanding: Back in the time period you mentioned in a period when the interest rates on short term bonds were rising rather dramatically, Secretary Summers announced that the Treasury would be "buying back" 30 years bonds...this "apparent pending shortage" of these important long term investments used by insurance and annuities investments drove the "price" up and the "interest rates" down...creating a sudden and unexpected inversion of the bond interest rates (which also seemed to cause some serious problems in interest rate swap portions of large derivitive programs at major banks).

Around this time, there was also an "auction" where T-Bills sold very poorly.

Now, you point out that at the same time Summers claimed he was going to call in 30 year bonds...it appears that foreign Central Banks are suddenly "buying" them (and I assume they are newly issued and sold directly).

One question I have is "what are those Foreign CBs buying these bonds with??? Dollar cash reserves which are accumulating because of trade deficit? If so, is this a way for the USA to call back some of the "big float" back home??? Can it be that some of the free dollars which this program liberates (from reserves) are being used to prop up "too big to fail types"? Is this a way for the US Gov. (Not FED) to generate some liquidity today in exchange for additional future obligations. Can it be that CBs who are buying understand that they will lose on the T-bills but those losses are needed to prevent serious hedgebook degradation?

This sounds like a story that goes way beyond "boring bonds"...

Poor old Solomon

All: I received this interesting post by e-mail...Perhaps we should encourage this goodly knight to apply for a posting code and take his rightful place at this Table Round.......MK

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

FOLLOW THE MONEY


I have been observing the gold market for two years now and heartily agree
that these are indeed difficult times for the gold industry. However, I
continue to repeatedly take note of several interesting circumstances to
keep my sanity so that I may remind myself that these are not normal times
and that the present woven thread cannot remain woven forever before it
eventually snaps.

To keep my perspective & sanity I consider these facts:

1 Concerning the tightly held 280 - 290 gold price range. This is indeed
magnificent skill and craftsmanship (manipulation). Just the odds that
this
range can continue forever are greatly against its favor.

2 The stock market bubble is definitely a bubble and every bubble in
>history eventually breaks.

3 Generally, the achievements of one presidential administration do not
continue into the next presidential administration. Even should Gore
become
the next president Greenspan cannot live forever nor can this psychological
euphoria surrounding the financial markets continue forever unabated.

4 Is there really a present demand for gold and are its derivatives being
traded in a significant size each day? Even as sizable quantities of gold
have been sold by the central banks over the years was there ever a sale
where a buyer could not be found? Who has been doing this very significant
buying these past years?

5 Why are the major banks so eager to continue making very considerable
loans to mining companies if gold is such a poor investment and considered
by many financial "experts" to be in its death throes?

6 Follow the money.


Consider again these 3 most significant observations.

1 There is always a buyer at every central bank sale. Always an unknown
buyer.

2 Through hedging contracts the major banks are always willing to commit
themselves to purchasing gold at prices higher than the present market is
asking. Would this willingness to purchase gold at higher market prices
exist if the banking industry truly thought that gold was in its death
throws and had no
future other than as jewelry?

3 Most importantly, in my opinion, the major banks are continuing to
provide significant loans for the gold mining industry. Again, would the
major banks continue to provide support for an industry that in their
opinion had no future?

Yes. Follow the money. Always follow the big money.

The day that I see central banks and everyone else dumping their gold
reserves into the deepest ocean then I will give up on gold and the gold
industry in general. As long as I see ready and willing buyers for every
gold sale then I am reminded that gold has worth and significance.

Gold will have its day again and I personally believe that day is getting
closer.

I also will continue to "follow the money".

David Vaughn

Aren't we about due for a Holtzman post?

One (all encompassing) question for you, Sir Holtzman....

What is the overview from Britain on the euro and the latest announcement to continue the gold sales? I hate to see my second favorite country in the world go the way of the dinosaur (or Tony Blair). What does the typical British small business owner or medical/legal professional think of what's going on there? From afar, it all seems to be too much to absorb. It's happening so fast...or is that my imagination. And now this situation in Austria which almost serves as warning. What are the British people thinking about all this? I would really like to know. Does Margaret Thatcher speak anymore, and does anyone listen?

Farfel (3/7/2000; 17:01:12MDT - Msg ID:26502)
The DOW Carry Trade....You Heard It Here FIRST!
------
Farfel

Is it true that at "carry trade" is:
1. selling one investment short
2. taking cash proceeds from that sale
3. investing them in a different investment long

I could agree that selling DOW Index stocks short is a ripe source of funds for new carry trades but do you really believe that these folks would go long in the NASDAQ? Unless it is just day traders who short the DOW and then use the funds to take brief positions in momentum situations.

Would it not be more interesting to go long in another sector than stocks???

If it has been popular to short gold and buy stocks...why can't it become popular to short stocks and buy (paper) gold?

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

By the way...gotta tell you this one from my Broker...

Latest suggestion: Eastman Chemicals...why? Well, a while back they spun off from Eastman Kodak and are now a leader in BtoB...(Business to business sales of products over the internet)..

I told the broker ... Eastman Chemicals must be negatively correlated with the price of oil (a key raw material)...the broker (who worked as a futures trader in the recent past) thinks oil is ready for a "technical correction". Does he mean someone is correcting those y2k glitches?? (smile).

Eastman was "spun out" because Chemical Industries are very capital intensive (lots of capital on the books and lots of the cash flow pays for new plants which are amortized over 10+ years) and look bad when one calculates "return on equity". On the other hand, as long as they have chosen reasonable products, they can survive through most of the business cycle. Also, considering what ORO discussed yesterday about the next (and last?) wave of "productivity" improvements coming in "sales and distribution", there is a good chance that companies like Eastman Chemicals who feed directly at the commodity trough, will have a much better chance at passing on raw material costs than the guy at the end of the line making a 25% markup by selling over the internet.

It is interesting to me that as a Contra Investor, buying Eastman might be worth it now...but not at all for the reasons my broker gave.

What scares me is how much most brokers and investors believe the same crap.

Poor old Solomon

PS. What is the "market cap" Microsoft?
What is the "sharholder equity" of Microsoft.

Annual Reports publish return on sharholder equity.
Stock owners want return on person equity which equates to "return on market cap" (capital appreciation).

Are we coming to times when a new capital appreciation emerges...meaning appreciation of what capital really is?

http://www.usagold.comVery interesting day. What is happening in the Nasdaq as Nickel62 pointed out is that shorts are being squeezed and are scrambling to cover what they can thus pushing up the Nasdaq. This is very dangerous to the Nasdaq because once most of the shorts are burned out then there will be only long positions left. Short covering is what makes a falling market bounce back. With only longs selling in the next downturn, there is nothing to stop a freefall in tech stocks(shorts are gone). The DOW will be shorted more and may be more crash resistant because a lot of its stocks are already a beaten up. As I see it the falling of the blue chip stocks was the ringing of the bell high above the city. There is no safe haven for capital in the giant corporations because they are all so overvalued. Let's talk about B2B commerce when everyone will be cutting back to boost earnings. "Well since we can't sell anything lets find some one out there who has cash and lets merge with them." We can see how the strong companies don't need to merge while all the second tier corporations and laggards are on a consolidation binge with the mergermania. Mergermania allows the accountants to befuddle the numbers and add another mirror to the smoke. I think money is running into bonds and when the dollar gets weak then that game will get old. Gold is just another commodity like anything else and it should catch up to the rest of the metals. Those two steps up in the POG in NY today looked really nice with a little stalled rally at the end of the day. Notice how it didn't loose ground but only fell back to level, that's a healthy sign. The XAU may be in the beginning of a rally here. I think neither is first in the old POG vs XAU debate. They work on each other psychologically. Whichever one initiates the rally or decline, then the other one follows. We had a few goldstocks that were over shorted. That is all that rally was today, short covering. I suspect about half the shorts have covered and the rest are going to cover tomarrow sometime.

I think about this "wireless internet" they say is the wave of the future. Sure, the CEO will be running the corporation from his picnic table. If he gets an urge to trade a stock at a red light, capabilities are just awesome. You never know when you go trout fishing at that critical moment when you have to make a conference call. I wouldn't dream of climbing Mt. McKinley without my laptop. So as this wireless crap can only be really utilized by a few, therefore the prices of the stuff have to be sky high because they won't be achieving any mass productions of scale. The few who need it will have to carry the whole wireless industry.

This is exactly what was said about "electricity" in the 1920's. It's the new paradyme, electricity!!!!!!!!!! It will revolutionize every aspect of your live. Machines will do all the work. A motor in every device. No more gas powered streetlights. It's all going to electricity. So the valuations of those corporations then were boosted up in everyone's mind because of man's imaginations with electricity. So what is the synergistic effect of B2B commerce with a compounding credit implosion? An explosion is when things blow outward. An implosion is when they collapse inward. Bill owes the bank but can't pay them because he needs to get paid from Sam who needs to get paid from John, but John lost half his money in the stockmarket. So he is pulling all his IRA money out penalty or not. So the mutual funds will be selling to provide for redemptions.

When the market goes down, where does all the money go? Answer. IT NEVER WAS MONEY, only lofty evaluations. So long as only 100,000 shares are sold each day and the buyers want 125,000 shares then the price went up to flush the stock out of tight hands (to get the 25,000 to come up for sale). There is no allowance for the day when we have 75,000 shares sold with not one buyer!!!!! The price will fall until buyers step in. So it is pure supply and demand. Your stock only has value so long as buyers can be found. The liquidity crisis of '98 was when few buyers could be found. Greenspan quickly lowered interest rates to tell buyers of equities "Look we will provide easy cash, I want to encourage you to speculate a little and prop up this market. If one drop in the rates isn't enough then I'll do it until it's low enough for you. Do we have a deal?" He needs to raise rates alot but if he does,then we will have the same crisis. Tokyo is the deciding factor in the game of liquidity. If they sell their US bonds to bailout their banks, then we can't sell many bonds until the Japanese held US bonds are sold. Their ongoing acceptance of US debt has been indexed into the numbers I believe. "They will always buy our bonds". It is like this: As long as we buy all the computer crap and camcorders then they can accept our debt because they have foreign source income (money made from exporting). When we stop buying the gizmos then they will suffer financially and say "Sorry because we have to service our debts we are selling these bonds." Big float needs a home. The foriegn held portion of US debt becomes the pea that needs another shell to hide under. Interest rates went to 20%+ under Carter because he had to go to the capital markets to borrow to pay for the government. The government competed for the available cash by paying a higher rate to get it. Inflation was already running out of control so he couldn't just print more money. It killed business. Exact same thing would happen if the Chinese and/or Japanese decided to sell their portion of US held debt(bonds). How can we sell bonds at the same time everyone else is selling too? This is why we need some one as brilliant as Mr. Greenspan to tweak the system and keep it running. I think as Americans pull redemptions ontheir mutual funds, that foreign investment will rush in to take its place. Why? Because Europe cannot deregulate its markets to spur competition to compete with Asia and the US. They have to keep a weak Euro so they can export. Their educational systems are too vertically integrated to allow for the retraining of mass populations of displaced workers. It's all going to devolve into a socialist nightmare with a rebellion among the overtaxed northern countries. All they can do is take all the little fences and add them to each other to make one big fence around Europe to keep the US and Asia out. Where else can they invest and feel intelligent? We can all look at a few worthless internet companies and see serious valuation problems, but there is no comparison to real American Tech. We put a man on the moon in '68. We don't even care if they steal our technology because they cannot utilize it. We have the computer that designed the computer that built the robot that built the chip that went into the next computer. Great, steal every bit of information Chinese student. You still can't put A to B to C. Build more rockets and mortars. We have lasers.

Where are Asians supposed to invest? They have no SEC that has any teeth. Their economies will crumble if they don't export and the markets are saturated now. American Tech is not internet fizz. You can pull all your money out and foreignors will buy in right behind you. This is still the land of Franklin,Edison,Ford and Einstein. I'm pro-gold and it's not wrong to be realistic. I could not sleep at night going long in equities at this point. I'm saying it is fine if foreignors want to buy US stocks, I still call it tulipmania.

A carry trade is nothing more than arbitrage in which a person buys in one market and sells in another to earn a spread. It's not necessary to "short" the item being sold in the way we normally think of shorting (selling something you don't yet own). I believe the term "carry trade" is an Asian (Japanese?) translation of what we would call arbitrage.

http://www.dailyreckoning.comORO's post 26487 exactly right. Above is a link to same trai of thought. Says nations will have to compete with each other for brilliant people who can utilize today's technology and they can live anywhere and still plug-in to the office. This twilight zone has a rainbow for a horizon.

http://www.egroups.com/group/gata/403.html?Latest from GATA Chairman Bill Murphy.

To subscribe to GATA's dispatches by email
and get them immediately so you don't have
to go look for them, send an email to:

gata-subscribe@eGroups.com

The one thing I forgot to mention is this: in light of the continuing divergence in performance between the DOW and NASDAQ, if in fact the DOW is about to serve as the primary source of funds for maintaining NASDAQ verticality, then it is almost inevitable that an internecine war may break out between the two camps of stock investors: the Old Economy DOW investors vs. the New Economy NASDAQ investors.

After all, many investors/funds have enormous positions and much of their wealth tied up in Old Economy stocks. They will not take kindly to being "raided" by NASDAQ funds and investors for the sole sake of maintaining NASDAQ verticality.

One would expect some kind of war between the two camps and if I were to bet on who would win, I would vote for the Old Economy.

Why?

Simply because when it comes to knowing the way around the political landscape, the Old fellas in Old Economy stocks are much more experienced and shrewder than the young pups driving the NASDAQ through the roof.

Imagine what a simple political action INCREASING NASDAQ margins might do to that particular market?

KABOOM!!

Thanks

F*

Follow the money. Ominous signposts. Feds buying in 30 yr. bonds. Big core stocks being liquidated. Conclusion ; elite old money interests heading to bunkers. Their connected advisors know there is no spoon and further there is no soft landing. All outcomes uncertain if markets have to be shut down. The physical gold is noble. Gold is the good.View Yesterday's Discussion.

http://futures.tradingcharts.com/javachart/GD/40Neat free charts also in non-java format

Mr. Howe has another commentary posted.

http://www.rain.org/~gadal/Is this our trail?

And it's only just begun. I have customers in Pago Pago, American Samoa...Athens, Greece...Helsinki, Finland...and various Canadian cities. I've bought from Japan. Not much of what I need coming from other countries. And I expect that if the American dollar were weaker and other currencies stronger I would have a lot more international trade. And here I sit in little ol' Nashville, Tennessee.

Just goes to prove, you don't have to be very smart, or well-connected, or backed by big money to go global these days. All you need is communication and UPS pick-up.

In fact...that may be one of the pieces of the puzzle about why the Big Caps are falling and Nasdaq on the rise. The small, versatile, flexible companies are the wave of the future. Not big clumsy giants. The company that can change their entire inventory, staff, and advertising image in 60 to 90 days is the company that can make the most of society's latest "need-it, want-it, gotta-have-it". Of course, somebody's got to manufacture the stuff to sell. But the analogy still stands...the manufacturers are going to have to be able to switch products pretty fast too. Last year it was Pokemon, the year before it was Furbees. This year it's State Quarter's and stuff to hold the collection...but who knows for how long?

The front page of section C in this morning's WSJ has an article on gold. Prepare yourself for a barrage of negativism. Gold is going nowhere according to Peter A. McKay of the Wall Street Journal. And we are now all conspiracy theorists.

Murphy from GATA is quoted, but not until you turn back to page C21 to read the rest of the article. In fact, nothing positive about gold appears on the front page. Only those who bother to find the rest of the story buried in the back will see some semblance of a balanced article.

http://www.usagold.com/Order_Form.html3/7/00 Indications
�Current
�Change
Gold
289.90
+2.00
Silver
5.14
+.03
Gold Lease Rate
0.5700%
nc
Gold Comex Stocks
1,373,896
nc


Market Report (3/8/00): Gold initially fell overseas after the solid
run-up in New York yesterday, then roared back toward the $293 level
pushed by strong physical demand and short covering in London by
investment funds. Echoing our read on the gold market published here
yesterday, FWN reports one London dealer as saying, "There's steady
physical buying in any dip and while technical support exists at the
$288.00 and $281.00 levels I think we would see good buying in between
there." Gold was boosted overnight by the Dow cratering and the
continued rise of oil -- now over $33 per barrel. Standard Bank summed
it up nicely in their report this morning: "The rally in gold and
sell-off in shares was fueled by inflation fears that were fanned by
another increase in oil prices."

We'll leave yesterday's report up for a couple days for newcomers and
those who missed it yesterday.

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

Yesterday's (3/7/00) Report: Gold surged in early New York trading
after a quiet night overseas. Over the past several weeks we have heard
recurring reports from wholesales traders that there is an abundance of
metal on the market. Why then haven't prices reflected the large sales?
Instead gold has hung within a narrow range at one point surging well
over $300. Our view is that demand remains very strong in the physical
market both in the United States and overseas and traders short the
market are forced to square their positions on any significant dips.
Once a downside trading range establishes itself -- buttressed by the
physical buying -- the shorts find themselves forced to cover realizing
that chances are the metal isn't going much lower. We expect this set of
circumstances to dominate market thinking in the weeks and months ahead
as the gold carry trade continues to unwind at the major banks and
brokerages that have fed at the gold loan/forward trough since at least
the mid-1990s. Many prominent gold traders have lost their jobs, if
rumors are to be believed, gold trading departments closed down and
those still hanging on to their jobs wonder what will greet them at
their desk when they arrive at the office in the morning. These are the
aftershocks of the Washington Agreement earthquake which shook the gold
business in late September last year and sent the gold price careening
toward the $350 mark. We believe that those aftershocks will continue
for some time and we could even get another earthquake or two as we go
along through the year 2000. The net result in our opinion will be a
stairstep demarcation to the charts with gold moving steadily upward,
more short players losing their jobs as positions are unwound, investors
steadily acquiring physical metal, and the paper markets steadily but
relentlessly losing volume.

Today's action has all the earmarks of short-covering given the
suddeness of the move -- as if someone lost their nerve. We'll see what
happens as the day progresses. My advice -- cover those shorts; we're
going higher.

That's it for today, fellow goldmeisters. 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 on link above and make the appropriate entries.

I'm sure the writer was responding to a request from his editor to write the piece. I am also certain the writer enjoys what he does and where he does it.

I have studied the subject of gold in the context of international monetary and economic discussion here and at other referenced sites (not forums) for almost one year. I have devoted much time and thought to the effort. If only 10% of what I have learned is true, the price of gold should be double what it is today at minimum.

To see an article positioned in the WSJ as you point out tells me loud and clear how very much trouble the international monetary and financial markets must be in. I will buy more gold.

I am lucky to have been Blessed by our Creator with a very good and strong intuition which often compensates for my other shortcomings which are many. I tell you there are treacherous rapids approaching that will unseat many from their canoes. Something is terribly wrong in global financial markets.

Got a floatation device? Got gold?

Cavan Man:

You are writing:
" I have studied the subject of gold in the context of international monetary and economic discussion here and at other referenced sites (not forums) for almost one year. I have devoted much time and thought to the effort. If only 10% of what I have learned is true, the price of gold should be double what it is today at minimum."

Twelve months ago, I held this reasoning for Y2k and concluded that it would lead to a catastrophe.

What do you answer to that?

I'm not criticising you, I have the same reasoning as you concerning gold's future, I just want to avoid the same mistake as I made concerning Y2k (and get rid of all the toilet paper and water I bought - smile).

I am kind of new to this, what exactly is the XAU, how is it tracked, how does it affect gold and why, and where can someone find out where the XAU is speculated to go. Any answer would be helpful , thanks.

http://www.SelectSectors.com/agpm70.gifFSAGX moving Up!

The XAU is the Philadelphia Gold & Silver Index, an index of about 10 precious metals stocks. They are mostly large cap stocks. People track the index just like the Dow. It's a weighted index.

What people don't easily understand is that the some of the largest components of this index are in trouble, specifically ABX and ASL. Both of these companies have been hurt by their near-sighted hedge positions. ABX, the largest component of the XAU, is not positioned to share the big gains coming. ABX has sold their future for derivative gains today. ASL is off 70% since their hedge book blew up.

So people who track the XAU are only seeing part of the picture. The gold market is very complex right now. Pure traders like Steve Kaplan, don't look at the inherent problem with the XAU when they make their comments.

The mid-caps and small-caps will see the biggest gains when gold really gets moving. My favorite play is BMG (Battle Mountain Gold) - which is in the XAU. BMG has size and strenght, and is traded on the honorable NYSE. But it's price is still dirt cheap. It's the one stock that has most closely followed gold's gains. It was trading around $25 when gold was healthy, now it's around $2.

I am long on this sector, and have 100% of my money in gold stocks right now. But I only buy the unhedged (or very lightly hedged) ones. Good luck!

That's a very good question. I, like you expected at least some economic disturbance from Y2K and am amazed nothing happened at least not yet. I have asked myself that same question and have also considered that many of the people who post here including myself are deluded and enjoy the benefits of forums like this one because it gives them a venue where they can find people that agree with them for the greater world certainly does not. I even have included the stock market/economic issues/monetary issues on a list with religion and politics as those topics not to be discussed in polite company.

I own gold because of the wisdom and opinions offered by Mike Kosares, FOA and Stranger. MK I have met personally. He is very bright, articulate, knows his subject and market incredibly well and is no Don Quixote. Stranger's credentfials speak for themselves. His perspective is conventional as well as incredibly accurate in my view in assessing inflation and inflationary trends. FOA, well, you either buy off on his analysis or you do not; I DO. There is no middle ground there. His timing is probably off like everybody else but his analysis of past and current events is spot on as they say IMHO. I believe it is the future he projects that causes so much doubt in some people's minds. But, as they say, da nile is not just a river in Egypt.

Let's see, there's John Hathaway, Reg Howe, ORO....well, back to your question. Y2K was a non-event becuase a problem was recognized and remediated. I'd like to see someone address the many economic, monetary and financial issues that are debated here daily and tell us all how these problems are being remediated. They can't.

Can I rest my case? Thank you.

http://www.phlx.com/products/xau.html About the XAU:

From http://www.phlx.com/products/xau.html

Gold/Silver Sector (XAU)

The Gold/Silver Sector Index Option is capitalization-weighted and composed of ten widely held companies in
the gold and silver mining industry. The XAU is an American-style option. The exercise settlement value of
XAU is based on the closing prices of the component stocks on the last trading day prior to expiration.


Most Gold investors use it as a proxy for where Gold Stocks are going.
Some Gold mutual funds (eg) FSAGX tract the XAU very closely
but have less variation, and may be easier to use for prediction.

At present if you view the XAU long term ( 10 to 15) years, the
chart shows that we are at a multi year low. It has been lower
but only for a very brief time.

You can generate XAU charts using any of the Web Chart URL's
For the Chart enter, XAU or $XAU or ^XAU depending on
which chart package you use. It is important to get the correct
perspective to view both long and short term charts.
Good Luck!
Schippi

http://biz.yahoo.com/rf/000307/bnt.htmlYes. We've (globally speaking) found ourselves to be using the wrong tool for the job for much too long...past the point of diminishing returns and now into negative returns. A prime example from today's news:

HEADLINE: U.S. offers to forgive all Mozambique debt

U.S. SecTreas Lawrence Summers said the amount of U.S. debt held by this former ally of Russia during the Cold War amounted to "a small number of millions" and told reporters "We are prepared to relieve 100 percent of U.S. bilateral debt at the earliest possible multilateral opportunity." It's will be coordinated with other arrangements of international debt-relief.

The SecTreas said, "As well as being a moral imperative, debt relief is a good economic investment for the United States." As the thinking goes, by removing the oppressive burden of debt that is blamed for keeping many countries from pursuing positive steps in economic development, these countries will one day become good customers for U.S. goods and services. Essentially, the official line of thought is 'It is more important to have the American people fully employed in the future than to jeopordize that by insisting that the credit we lent in the past be returned.'

Imagine that you are middle-aged, and you lend your house and retirement savings to another person. Can you imagine a situation where you would prefer to maintain a job with which to try to rebuild your accumulated wealth as an acceptible substitute for the safe return of your original wealth? No, of course not. Why would you want to re-earn that substance which, by contract, should be simply returned to you through no additional effort of your own?

You can see by this that paper credit is clearly recognized by national leaders not to be a form of real, sustaining wealth. If it were, the return of real wealth would be seen as more important than future job security...because the purpose of "jobs" is to create sustaining wealth to begin with. Having real wealth today makes the need for a future job less important...just ask any new lottery winner or person who feels his wealth has brought him to the threshold of retirement. Just as leaders recognize this paper credit (dollars) to be little more than disposable grease for the important wheels of sustainable progress and human development; so should we, too, sooner recognize that our paper is not our meaningful wealth. It is important to recognize that our paper accounts are not worth more than others say it is. To see this, ask, "How highly do I value the Turkish Lira?" So as it is, my friend there, Jocquon, has little power to inspire your assistance or your surrender of goods with the offer of his lira even in large amounts.
Choosing independent and universal gold for meaningful savings is like selecting the right tool for the right job.

test

http://biz.yahoo.com/rf/000308/b8.htmlLast night the Bank of Japan effectively strengthened the dollar in their bid to weaken the yen. Acting through the foreign exchange markets, the BOJ sold yen and bought dollars at the direction of the Japanese Finance Ministry. As you should know and appreciate, these strong dollars help to keep our gold nicely cheap for acquisition during this time.

So why don't the Japanese spread the good vibes to our euro neighbors, too? The euro currency has now reached its new lifetime low against the yen. Reuters reports "The BOJ did directly intervene in defence of the euro on a couple of occasions last year, but the action did not find favour with the European Central Bank, which was keeping a strictly hands off approach to currency management." As you may recognize from past reports, this new euro seems clearly to be a bird of a slightly different feather...and the ECB becomes vexed by a short-term "gift" at another's expense. Their focus seems to be against the "dirty float" in favor of a purely market-driven means of price discovery, even if it means taking some short-term lumps along the way. Kudos.

http://www.iht.com/IHT/TODAY/TUE/FIN/yen.2.html
The link is about Japan's Debt.

Are there ANY countries that have NO debt ?

I know you mean well, but I am afraid you are spreading fiction when you make such remarks as, "[ABX has] been hurt by their near-sighted hedge positions."

Most of ABX's hedges were placed when the POG was about where it is now or higher. Consequently, most can be offset or closed right now at a profit. Furthermore, ABX has the strongest balance sheet in the industry precisely because they foresaw the weak gold market of the last several years and did something about it to protect their stockholders.

In recent weeks, Barrick has publicly stated their belief that the bear market in gold is now over. They have significantly altered their hedgebook in order to benefit from the bull market they see developing. In fact, just last month the company's CEO, Randall Oliphant, told an interviewer he now expects gold to go "higher, a lot higher."

No other company is better positioned to take advantage of this bull market in gold than Barrick, if they want to. They have the wherewithall to close out most of their remaining hedges at a profit if they wish or to start buying other gold mining assets at will.

I don't mean to shout you down, Luv, but this is a forum where people go for guidance about money. I should think some effort should be made to stick to the facts.

Thanks.

Stranger - yes, Barrick is NOT in trouble at the moment...that is true. They do have the strongest balance sheet and much of this comes from the fact that they pioneered the idea of extreme (many years out) hedging, and did it in a prolonged bear market. It has been my opinion for some time that Barrick Gold is "tied in" to the forces which drove down the POG since 1996 -- the bullion banks and possibly certain CB's. If you look at the people associated with Barrick (G. Bush, Mulrooney(sp?), V. Jordan, etc.) you can see why they have so much clout it the industry. They are the "tell" for gold producers.

Having said all this, they have delivered very little to their shareholders, and going forward I agree with many that ABX is simply not the best way to play gold equities. The stock has become more of a hedge fund then a true gold producer in that regard. They have, and probably will continue, to underperform even other large producers....and as a simple matter of ethics, I find placing money with them distasteful considering what they've helped bring about in the industry - namely the idea that you can sell forward many years of production to bullion banks who can then keep a lid on prices.

As an aside, I recently sent an email to a gold producer and suggested they form a B2B company, preferrably with other producers, in order to sell their product DIRECTLY to the consumer. I have my doubts whether this industry is savvy enough to see the logic behind this approach, but I did receive a positive reply concerning the idea. We'll see.

Lamprey

I have some monies in Fidelity mutual fund from a previous employer of some 20 years ago. I am considering moving these monies to Fidelity Select Gold fund. This fund's top ten holdings are as follows:

Top Ten Holdings as of 12/31/1999
MERIDIAN GOLD INC
NEWCREST MINING LTD
STILLWATER MINING CO
ANGLOGOLD LTD
FREEPORT MCMORAN COPPER CL B
AGNICO-EAGLE MINES LTD
FRANCO NEVADA MINING CORP LTD
PLACER DOME INC
NORMANDY MINING LTD
GOLD FIELDS LTD
62.7% of the portfolio

I would be interested in any thoughts or comments on this fund and it's holdings?

Barrick is a very well capitalized company which produces gold at a lower cost than anybody else. This they have accomplished while numerous competitors have either gone out of business or are, in some cases, "on the ropes". To me, this constitutes protecting the interests of one's shareholders.

While it is true Barrick's hedging contributed to the recent gold bear market, it is not true that it was the essential element in the bear market. Most miners participated in forward sales to one degree or another. All who did were guilty of doing exactly what you and I are guilty of doing, which is trying to time the market. This behavior may seem nefarious to some, but I submit it is precisely what a free market might expect of a commodity which is never used up and always on hand.

Was Barrick's hedging immoral? It certainly would have been had it been kept a secret. But such was not the case.

Is the company in "trouble" as a result of their hedging practices? Absolutely not. Far from it, as a matter of fact. The company has benefited greatly and arguably sidestepped what was a nasty gold bear market.

Why is the stock so low? Largely, I suspect, because it is the whipping boy of every misguided gold investor who has sat on gold the last twenty years and failed to take responsibility for his own losses. Does Barrick deserve this reputation? Probably, but that is not the same as saying they are in trouble.

Some thoughts:

The Fidelity portfolio has a very good selection of gold stocks that are lightly hedged - some 1/2 are unhedged.

Good beginning.

If you do not have bullion, I suggest that in opening a gold portfolio you start with bullion. Best way to own bullion is to directly hold it physically in small denomination coins 1/5 oz to 1 oz such as to pay minimal premium while focusing on the older gold coins that had high premiums in the past (e.g. Helvetias sold at some point at 60% premiums).

Second best is to open a bullion IRA account at a good local coin dealer, who is sufficiently familliar with them. It is important to establish a good rapor' with the dealer and understand that there is a greater possibility of custodial accounts being raided by the government. Good relations and locality could allow you immediate delivery at the first rumblings of trouble. Have withdrawal forms ready and keep enough dollars to pay most of the early withdrawal penalty.

Third best - E-gold accounts - from which you can obtain delivery for a slightly lower premium than average.

Fourth option Central Fund (CEF) which is 50% silver.

I prefer a gold portfolio with 50% physical.

Gold Stocks - Fidelity is a good fund. I would allocate 25% or somewhat more of a gold portfolio to gold stocks.

Hedges.
Use 5% of your gold portfolio to buy put options on gold. Options should be spread a few months forward at strike prices 5-10% below current prices.
Use 2-4% of your gold portfolio to buy put options on the XAU or on individual gold stocks. ABX NEM and AU are the most liquid options. ABX puts were quite good last October and would have provided more of a hedge than either NEM or AU.

Disclaimer - Do not consider this to be investment advice - you should seek counsel with a trusted advisor who has some experience in the gold markets. This formula is not good for everyone and requires a rather largish initial outlay.

The gold markets can be very volatile and the portfolio should be rebalanced when it is out of kilter, particularly your option hedges and gold stocks.

Rebalancing should be done if put options have more than doubled in market value and are prices are near strike values - sell them and buy lower priced puts at the proportions indicated. Use the cash generated to buy bullion and a bit of it to add to your gold stocks.

Your portfolio hedge is supposed to allow you to accumulate more bullion at lower prices if you happen to miss the boat on the lows.

Keep cash around in your portfolio to buy on the dips.

Disclaimer from previous post holds here as well.

I do not wish to be an apologist for this company. Nor do I intend to promote any gold stocks at this very fine USAGOLD site. Rather, I challenged the honorable Sir Luv's statement out of a belief that we who line up in favor of gold ownership ought to stand together. As the noble canamami has said, if we wish to prevail in this crusade, those of us in the stocks and those of us in the bullion ought to learn to appreciate one another. Barrick has chosen now to go "long" the market. As such, I suggest we save our contempt for the real enemy, whoever that may be.

According to the World Gold Council's Demand Treands #30 released a few weeks ago, the official holdings of gold were 1106.0 million ozs in 1996, and 1080.6 ozs in October, 1999.

In other words, central banks over the past four years have lost in the aggregate a mere 25.4 tons -- or a little over six tons per year.

That after countless mainstream press articles bemoaning the surety of central bank sales, the Bank of England dishoarding, Dutch and Belgian central bank sales, Canadian, Russian, Malaysian , Jordanian sales -- and others.

What the mainstream press fails to point out consistently is that while some central banks have been selling, others must have been buying.

I want to thank my good friend, Voyager, for prompting me on this subject.

Unfortunately, I completely disagree with you.

Barrick has created years of misery for the gold industry (excluding itself) and many gold companies, investors, and employees went bankrupt as a result. It's actions back in '96 triggered other major gold companies to follow suit and forward sell huge amounts of gold. But Barrick began the whole rotten process.

It has major negative karma and the executives/owners deserve to rot in hell. Period.

Barrick has NOT gone net long in the gold market either. It's purchase of gold calls is simply a defense mechanism against possible jumps in the POG but there is no evidence it is closing out its gold forward sales. Moreover, when it had the opportunity to spark the gold price higher AFTER the Placer Dome announcement, it failed to do so.

Finally, its investment banker, Goldman Sachs, is a leader of the gold shorting bullion bank pack.

Enough said.

I first wrote about this miserable company in the TORONTO GLOBE AND MAIL back in '97. The company had the audacity to call me up at my home and attempt to intimidate me.

I URGE anybody who wants higher gold prices to BOYCOTT this company in perpetuity. SELL IT!!!

Thanks

F*

"I URGE anybody who wants higher gold prices to BOYCOTT this company in perpetuity. SELL IT!!!"

Fidelity seems to agree with you. Around the beginning of the year I believe Barrick constituted the largest percentage of their Gold Portfolio.

As inspector Cleuseau (sp?) would say with his heavy French accent, "Not anymore!"

Well, I guess one man's meat is another man's poison. Last December, when you adamantly predicted a quick move to 13,000 by the Dow and to $200 by gold, I thought you yourself were short the PMs. Evidently, I was wrong.

Anyway, I am glad we are on the same side. I just wish you would quit running down one of my investments.

I repeat: Barrick is NOT in trouble. They are arguably the strongest of all the world's gold miners, and they are now leveraged TO the market, not against it. The hype against them may be well-deserved, but it has also created one of the best values in the sector, IMO.
Peace, Brother.

If any of you don't read Fleckenstein's Rap page, here is what he said tonight regarding the Crude Meister:
"Crude takes a hit... Overnight, the API statistics came out and there was a surprising build in crude. Industry experts that I talked to were somewhat skeptical of it and thought it might be more political in nature."

Hmmm...

Also, in looking at the DOW, since its high in January there have been five selloffs, each followed by a modest retracement. While I'm no chartist, what I gather from this pattern is 1. today's uptick was to be anticipated and 2. more importantly, the direction since the high continues to be a steep decline.

And I have not increased them a single dollar in well over a year. In that sense, I stand on the sidelines.

My most pessimistic predictions about gold and insanely maniacal predictions about the stock market occurred BEFORE the Washington Agreement was announced.

After the Agreement, I became more optimistic about gold, yet remain convinced that the gold market is NOT a market yet. In reality, it is a de facto private banking account set up by the bullion banks/gold hedgers to which gold "investors" make donations under the erroneous assumptions that there is a free market there.

So I remain on the sidelines doing absolutely nothing with my money except collecting interest.

In my heart, I remain a goldbug, although NOT a fan of gold companies, if you can understand the distinction. I am particularly unhappy with certain gold companies and their notably incompetent unethical managements.

I am particularly negative toward Barrick and will remain so ad infinitum. Barrick and its gold shorting conspirators hurt me financially to a great degree and of course I hurt myself in my erroneous beliefs in a free gold market.

We absolutely do not have one and until we do, I can root for gold but I refuse to participate any longer. When and if I see evidence that the so-called gold market is a market again and not simply a carry trade designed to STEAL money from naive gold "investors" foolish enough to believe in the integrity of the COMEX, then and only then will I move money into gold again.

Thanks

F*

Peter I agree with you. Especially that <<"Hard assets will continue to store value long after a future society that has learned that speculative profiteering is as counter-survival to the common good as rape, pillage and burn. All profiteering dilutes the amount of goods and services that are available to be exchanged for the labor of the true producers." Well said! The poem brought back memories of an old friend who grew up in Istanbul, when they called it Constantinople. He recited that John Donne poem every time we got together to ponder the world. Thanks.

You say ABX now believes we are on the verge of a gold bull market. If so then why do they not start to buy back their hedges instead of purchasing gold calls? Buying back hedges or at least delivering into the hedge book would do a lot more for POG than purchasing gold calls. Could it be that their hedge position is too big to cover?

Thanks for sharing your thoughts. It made me do a quick analysis of where my assets are currently invested and it was kind of an eye opener.

Real Estate 42%
Fixed Income 33% - 401K monies, Limited options and I am leery of both Stocks and Bonds currently
Equities 13% - mostly in and international fund that was up 64% last year.
Gold & Silver Stocks 6%
Gold & Silver Bullion 6%
Gold Options 1%
Gold mining Claims ? may potentially be worth more than all of the above.

1. For as much time as I spend reading and thinking about gold, I am a little surprised my total gold investment percentage was not higher. It turns out that my gold investments are currently approximately 50% bullion and 50% Stocks. I have never hedged my gold investments, I have mainly held and wept and tried to buy more on the dips. Currently my gold options are calls not puts. I may have to give more thought to hedging.
2. The majority of my assets are not doing much for me other than the real estate is paid off and thus provides some comfort. I suppose similar to what gold coins do for Aristotle. The fixed income has me befuddled because it just sits there, and should the dollar tank I don't know that it would buy much of real value. Stranger did make me feel a little better a week or so ago when the one measure of a broad market top occurred in April 1998. That's when I moved most of my 401K monies out of equities. I have been kicking myself off and on ever since. Recent action in the equities markets is making me feel a little better.
3. Should the price of gold double from today's levels as some at this site are suggesting, I may be tempted to quit my day job and spend my time and effort working the mining claims.


I figure I gain much from my visits to this site and appreciate the efforts you make to assist in my education.

http://www.SelectSectors.com JA check out above URL for Charts and info
on FSAGX Gold Fund.

Boy am I ever glad we don't worry about the big guys switching to a "dollar carry trade".

They couldn't could they.

They wouldn't would they.

Is it possible? Surely not!

hbm

What a scary thing if next in line were a "Euro carry trade"
because it would be more of a credible possiblity.

If it would be a possibility we who follow the footsteps of Giants could get really smashed when the giant steps backwards.

hbm

Fleckenstein says, "Oil hurts gold......The setback in crude knocked gold for about $3, and that caused the XAU to give bck about two-thirds of its gains from yeaterday."

It appears that the real concern has to do with the price inflation caused by increased fuel costs. The real fear is and always be eventual price inflation which is what is required to cause the price of gold to go up, up, and away in the US.

hbm

Has any noticed that the creeping price of crude went to another level yesterday and today. We haven't seen that kind of volatility in oil. It had a similar effect on gold each day. We should watch this, no?

hbm

Farfel - thanks for your response.

oldgold - among my apparent idiosyncracies is a strong sketicism toward claims that the world is about to become desperately short of deliverable gold. You may, of course, not share my views on this question. But I think the theory flies in the face of all human experience with marketplace dynamics. There is, in my opinion, always a price at which markets clear, however high or low it may be. Failure to appreciate this reality may explain the ready acceptance with which some PM stalwarts have treated astronomical price predictions for gold. I don't know.

But, to address your questions more specifically, you may wish to reread the explanations given by Barrick themselves in their news releases of Feb.7 and 8, 2000. The releases are available in PDF at www.barrick.com.

On January 1, 1999 1 Euro would buy about $1.17. Today(22 months later)1 Euro will buy about $0.96. I believe that the spot price of Gold was about $290 then as it is now. That means that the price of gold for those who have as their national currency Euros has risen to the equivalent of approximately $354 in terms of their currency (22%).

If you were holding physical gold in Euroland would you want the US $ to tank. I think not. For the Euro gold bugs they must bet on the future worthlessness of the Euro or at least the strength of the US $ vs. the Euro as long as gold is priced in Dollars world-wide.

From this it seems to me that the Euro goldbugs would want quite a different scenerio from what we US goldbugs want. Whether we admit it or not a strong US dollar is anathema to us goldbugs.

Of course those who are at war with the US dollar and using the Euro as their weapon to do battle are not goldbugs at all. They simply realize that a Euro backed by gold is the answer to victory.

hbm

I should make a clearer statement concerning the cost of gold in Euros:

If Gold is @ $290 and the Euro will buy $1.17 then one ounce of gold costs $248 Euros.

If Gold is @ $290 and the Euro will buy $.96 then one ounce of gold costs $302 Euros.

In other words while the price in gold for us has not changed for us it has gone up by 22% in terms of Euros.

This should at least show us that others in this world view the current situation quite differently from us.

Any comments?

hmb

ps: re: #26556 I should have said 14 months later not 22 months later. Sorry!

http://www.egroups.com/group/gata/404.html?Latest from GATA.

To subscribe to GATA's dispatches by email
and get them immediately so you don't have
to go look for them, send an email to:

gata-subscribe@eGroups.com

"The Fed is controlling only a portion of the money/credit creation mechanism. The ability of today's non-bank institutions to create credit is without precedent in modern times."
"If Greenspan tried to change margin requirements, the "big boys" can go offshore for money."
"There is little fear among banks that the Fed will change banks lending activities related to securities lending and maximization of lending relative to total capital is the order of the day." Tice commentary from today

The gold boys you mention are doing what you say, but cracks in the foundation are being made as we type because of the credit bubble. Which is not remedied by a stock market decrease.
At least two battering rams are at work, the front door Gata approach which I fear, and the credit bubble which I fear more. Either way, gold's day is coming:)

Thanks for sharing the site.

http://www.usagold.com/wgc.htmlOn this last day of the two-week reserve-maintenance period, the Fed boosted the values for the weighted average with an overnight add of $5.55 billion today.

On another note, this is a convenient opportunity to pass along a quick reminder that the weekly gold market commentary provided by the WGC is updated weekly (oddly enough), and may be viewed at the link above.

Sir Cavan Man,

Thank you for your answer
"Y2K was a non-event becuase a problem was recognized and remediated. I'd like to see someone address the many economic, monetary and financial issues that are debated here daily and tell us all how these problems are being remediated. They can't."

Your case has been very well outlined in 26523 and 26528 and you can rest it now.

Seven paradoxes of gun control

Dr. Michael S. Brown
SPECIAL TO WORLD TRIBUNE.COM
Thursday, March 9, 2000

Few public policy discussions have become so bitter and divisive as the endless debate over guns. None is so burdened with contradictions and misinformation. The dictionary defines a paradox as, "something or someone with seemingly contradictory qualities or phases". Here are seven paradoxes that have developed during the course of this conflict:

1. Women are usually at a physical disadvantage when confronted by a male attacker and violence against women has been a major societal issue. Some women have discovered that a firearm combined with training is a true equalizer. They have taken steps to educate themselves and safely provide for their own security. However, many women reject this opportunity. They seem to accept the concept that guns are evil and promote violence. Thus, those who could benefit most from gun ownership are least likely to own one.

2. Police Chiefs are famous for blaming crime on "guns flooding the streets", and generally support more gun control. However, rank and file police officers are overwhelmingly opposed to stricter laws. Why the disagreement? Most Police Chiefs are political appointees selected by the Mayor. Most Mayors favor stricter gun laws and would be unlikely to choose or keep a Chief who disagreed. Officers who work on the streets are much more practical. They know they can't be everywhere at once and are usually limited to processing crimes after they have occurred. Unlike the Chiefs who are surrounded by tight security and VIPs, officers who work on the streets know all too well what the world is like for the rest of us.

3. Celebrities and politicians who promote gun control are the ones who don't need to protect themselves. They have access to the best bodyguards that money can buy. Even if the strictest imaginable gun laws are enacted, they will still be protected by armed men.

4. As a result of state laws passed in recent decades, citizens in 31 states are now entitled to concealed weapons permits if they have a clean record and fulfill various requirements. Data gained from this change has provided important new knowledge for gun law discussions. To the great surprise of anti_gun groups, it turns out that permit holders are far less violent than the general population. Even more significant is the fact that crime decreased in the areas where permits were made available. As one researcher put it, "more guns, less crime".

5. Criminals victimize minorities at a much higher rate than the general population, yet many gun control efforts such as buy_backs and neighborhood sweeps of low income areas are aimed at reducing gun ownership by minorities. This paradox has operated as long as human history. Immigrants, political dissenters and ethnic minorities have been disarmed many times by governments seeking to bring them under tighter control. They are always told that its for their own good.

6. The position that gun issues have assumed in the political spectrum creates a very interesting and hotly debated paradox. Liberals, who defend the right of a woman to have an abortion, would deny her the use of a firearm to protect herself and her family. Conservatives, who typically support a woman's right to kill an attacker, would deny her the right to terminate a pregnancy. Both sides base their arguments on the sanctity of life.

7. The seventh paradox is the most profound. Gun control simply does not work as crime control. Case after case shows that when cities, states and nations implement gun control, crime goes up. Washington, Chicago, New York, Australia, Britain; the list is long and getting longer as the seductive appeal of gun control spreads. The reason that gun control doesn't work is obvious, but often ignored in the emotional rush to pass more gun laws. Criminologists explain that disarming the law_abiding population only makes life easier for criminals who are going to ignore the law anyway.

No other major political issue is so plagued by paradoxes. They arise from a variety of sources that could serve as a list of societal ailments; racism, sexism, classism, political corruption, excessive media influence, fear of the unknown, and honest disagreement.

Whichever side you choose to support, it is fascinating to observe the debate.

The author is an optometrist who moderates an email list for discussion of gun issues in Washington State. He may be contacted by email at: mb@e_z.net. c


Friday, March 9, 2000

Liberty in the US is guaranteed in writing by the US Constitution's Bill
of Rights. Today, the greatest enemy to liberty is Public Health. Why?

Because there is a cost to liberty in lives. Where public health sees a
cost in lives, it moves in to restrict that activity. Take for example:

Cigarette law suits Motorcycle helmet laws Car safety belt laws Gun
lawsuits and Gun manufacturer law suits

Let's come back to the above in a moment. First, let's talk about why
the Founding members of the US sought to guarantee liberty by the Bill
of Rights. In a nutshell, they were taxed without representation, run by
a country from a far, who sought to enslave them, who sought to disarm
them.

In return for doing that the US revolted and wrote the document we all
studied in school but since put out of mind: the Constitution and the
Bill of Rights. They were not written at the same time. Two camps
existed back then on exactly what the new Government should be allowed
to do. In the end, the Bill of Rights were incorporated into the
Constitution to prevent the new government from becoming the government
that they just took the time to overthrow. Seems simple enough.

Back then they didn't have Corporations, lobbyists, public health
organizations, or mass news media who could talk at you in your living
room within minutes of an event taking place. What media they did have
was owned by many different people of all backgrounds. Today, media is
owned by fewer people who realize their power to persuade and choose to
do so in ways that suit their fancy and not always ours.

So, the Constitution and the Bill of Rights that were written back in
the late 70's and 80's (1700's that is) have stood surprisingly well to
the test of time. Yet, this is not entirely true. It seems that some
organizations, using public health as the reason, have decided that
certain public actions warrant restricting liberty, even ones that are
guaranteed by the Bill of Rights.

Specifically, certain very well-funded organizations have decided that
it is important that Americans should not have guns in the home,
especially homes with children. There reason is because every day
children are harmed or killed by guns in the home. There logic is
simple. Guns kill children, let's kill guns. This worked with
cigarettes, and those other things above. Cigarettes kill people, let's
kill cigarettes. Not using seat belts kills people so let's kill not
wearing seat belts. Not wearing motorcycle helmets kills people, so
let's make people wear helmets.

Everyone, including me, were glad to see cigarettes banned from
restaurants. I can remember the smell, the smoke, the clothes, the
burning eyes. I felt bad for the smoker, but let's get real. But, now I
look back in retrospect, and see that a whole way of life going back
hundreds of years, was wiped out by lawyers going after cigarettes and
the media going after smoking and smokers. The change was subtle and
slow, but they did it. Cigarettes are still there but not nearly what it
used to be.

So, American's were willing to accept the destruction of an entire
industry for Public Health reasons? Seems that way. Sure proves my point
though. Public health is dangerous to liberty, even liberties that are
dangerous to the person enjoying them.

Is it possible that Public Health can go too far? Oh, yes. I believe
this is the case with gun control. What is obvious to me and perhaps you
now, is that there is a difference between gun control and these other
areas of public safety. Gun control is stepping on a liberty and a
right, whereas these other areas of seat belts, cigarettes, and helmets,
are certainly liberties, can they actually be called individual rights
guaranteed by the Constitution?

Obviously the pursuit of happiness has limitations. Limitations set by
Public Health. But back to gun control. The meaning of the Second
Amendment is hotly debated and from memory states, "A well-regulated
militia, being necessary to a free state, the right of the people to
keep and bear arms shall not be infringed." What does this really mean?

Courts have gotten it mostly wrong. To make matters worse, the Second
Amendment hasn't been deemed protected by the 14th Amendment like all
the rest of the individual rights in the Bill of Rights. That said,
however, doesn't mean that the courts won't get it right eventually, nor
that some case won't be won that does ultimately get the Second
Amendment to pass through to the states.

Before discussing the specific historical meaning of the Second
Amendment, we must first understand whose job it is to ensure that it is
protected. The Congress is the one most affected by the Bill of Rights.
It is the legislatures primary job to ensure they don't pass laws that
infringe on the Bill of Rights. Law enforcement also needs to make sure
they support and defend the constitution (Miranda, civil rights, search
and seizure). Finally the courts need to perform judicial construction
on laws that are unclear in their constitutionality, which also means
that when the legislature passes a law, it must go out of its way to
make sure it is clear. Finally, the courts assume that a law is
constitutional unless it is blatantly not constitutional. So, clearly,
the onus is on the legislature to make sure laws meet Constitutional
muster before passing them. (Because it is so hard to get it right if
they get it wrong)

Now, back to the historical meaning of the Second Amendment. When a
court rules on the meaning of a law or a right, they often must go back
to understand the meaning the law or right had back at the time it was
created. In the case of the Second Amendment, that is quite easy, but
requires a lot of reading. Since I have taken the time to do some of
that reading, I can save everyone lots of time and simply state: the
Second Amendment meant what it said. The problem is the words the
founders used have changed slightly in today's meaning and thus lies the
confusion.

We can dispel with the confusion from this point forward: the Second
Amendment means that the individual has a right to keep and bear arms as
an individual and fundamental right to protect one's personal security
and security of the state and country. In order to accomplish this, the
concept of a well-regulated militia must be maintained. A well-regulated
militia, which is different from a select militia (national guard and
reserve), is the whole body of people in the United States. In other
words, every person in the US is a member of the well-regulated militia.
The well-regulated militia is every person in the US. Every person in
the US has the right to keep and bear arms. Why?

Because our founders lived in a time when the government they started
with, tried to control their guns, they then tried to take them away. As
they took them away, they tried to take other rights later. Guns were
considered by our founders to be the guarantee of liberty and all the
other rights they were willing to die for.

Congress's job is to ensure that this right will not be infringed. Have
they done a good job?

No. Have the courts done a good job of not infringing on the Second
Amendment? No. Has law enforcement done a good job of not infringing on
the Second Amendment? No. Does Public Health infringe on the Second
Amendment? Yes. Why?

Public Health, as we discussed, views guns as a health risk to children.
In their view, it is the same as seat belts, tobacco, and helmets. It
can and must be legislated or curtailed, in their opinion. After all, we
have the police to guarantee our safety, what do people need guns for?
After all, children are killing children, people are killing children.
We must ban all guns to protect our children. Stop.

America is about personal responsibility, it is about choice, it is
about Liberty and Rights. Liberty and rights have a price in lives.
Since the Second Amendment was guaranteed in writing by the founders to
protect liberty and the other rights, what would be the cost of giving
in to a misplaced Public Health movement to infringe guns, and a
Congress that is allowing that to happen, and a legal entanglement that
will take the courts years to unwind? The cost will be more lives. That
is correct.

History has shown that in all societies that have given up their right
to protect their liberties and rights with guns, the cost of lives was
in the millions. So, if the politicians can't admit it out loud, I shall
do it for them. The ultimate cost of gun control will be millions of
lives and not just the few children that could be potentially saved if
all hand guns, rifles, were removed from homes, cars, works. Why?

Going back to the basic premise of the Second Amendment, it is to
protect other liberties, to protect the people from their own
government, from their fellow citizens run amuck, from other countries,
to act as a deterrent against invasion. The founding fathers wanted all
children to be taught about the proper use and maintenance of guns. They
sought to protect that in the Bill of Rights. They didn't want their new
Government to infringe on the right of the people to keep and bear arms.
Yet every day there are more laws passed, more infringement. Why?
Because Public Health restricts liberties by taking away rights for the
common good. It won't work with the Second Amendment and guns. Why not?

It is simple. It is a practical matter and a philosophical matter.
Practically speaking, in order to prevent the 1500 accidental deaths of
children each year from gun accidents, all guns must be removed from the
homes. If people merely put gun locks on all guns at home, the 1500
children saved by all gun locks would cost 10's of thousand in
additional lives per year from law-abiding citizens who couldn't get to
a gun to protect themselves. If there were no guns in the home, this
would be absolutely contrary to the purpose of the Second Amendment that
our founders would roll over in their graves with disdain.

Philosophically, America would not be American without the
well-regulated militia. That is all the people trained to arms, with the
right to keep them and bear them. Giving up hand guns or rifles or one
or the other is tantamount to the same thing. We need to protect our
right to keep and bear arms from infringement by Public Health. Because
in this case they have it all wrong. For the short term gain in saving
children's lives today, it will cost American what it is, and ultimately
pave the way to the loss of millions of lives because Public Health will
create an America that won't be a strong supporter of liberty and of
rights. In other words, to save 1500 children we must loose what America
is. Liberty cost lives. Public Health needs to work with American's to
educate children and families on gun safety. They must stop the unwanted
attacks on American's with the false pretense of saving lives.

Put this in perspective:

Deaths due to medical malpractice over 100K per year
Deaths due to automobile accidents over 25K per year
Deaths due to accidental shootings of children less than 1600 per year

Just how important is for Americans to remain patriotic to the goals and
aspirations of our founding fathers to maintain that well-regulated
militia of men and women trained to arms from an early age so that no
faction from with this country or from without will dare tread on
America? In my opinion, it is vital to the security of this country that
we remain true to the Bill of Rights, and that means all of them,
including the Second Amendment, which is the ultimate protection against
tyranny from within or from without. Liberty cost lives. Not that we
can't try to reduce this, but ultimately we must get it right. Public
Health is not a reason to infringe the right to keep and bear arms.
Congress must put a stop to the misinformation and unwanted infringement
against the Second Amendment now.

Are you going to let the public health movement to ban all guns from
homes to save 1500 lives, cost you your freedom to protect yourself from
criminals or from other countries? Are you going to allow the saving of
1500 lives of children to cost 10's or 100's of thousand in lives of
people who no longer can protect themselves because only the criminals
have guns? You decide. But ask yourself why CNN, CNBC, and the rest of
the mass media all are 10:1 in stories against guns. Why does the media
not see the big picture that our founders saw? Why can't they see that
by using their wide powers of influence against guns that they are
acting against our founders wishes, which makes them public enemy number
one? Remind yourself next time you watch the news and see a negative gun
story that the station running it is likely harming this country because
they are being biased and short-sighted. The media and public health
needs to remember why they have the right to say what they do is
protected by the Second Amendment (yes, the 1st is protected by the 2nd,
How ironic).
View Yesterday's Discussion.

It occurred to me as I was reading you piece that just as the right to own a gun is a protection of our liberty , the right to own gold is as well.

You stated yesterday"No other company is better positioned to take advantage of this bull market in gold than Barrick, if they want to. They have the wherewithall to close out most of their remaining hedges at a profit if they wish or to start buying other gold mining assets at will." Barrick had roughly 12 million ounces hedged forward and an additional 4-5 million ounces worth of calls they had sold coming into their early february announcement of their change. There current production is around 3.2 million ounces so prior to the end of last year they were in a situation where they needed to produce for the next 4 to 5 years to deliver on their existing already sold gold hedges. So effectively their "price" was already guranteed and actually sitting in their money market accounts earning the contango. As a stock investor you know that any change in earnings that is more than five years out has very little impact on the actual net present value of a company because of the effect of discounting so ABX is dead in the water because it has little ability to participate in much upside if the gold price were to move higher. At least little upside that the market doesn't already know about. Now granted with the buying of a large call position with a $319 average strike price they have papered over part of their gold physical short with a paper long call and as long as the counterparty is able to deliver they will have minimized their short and therefore given their shareholders more exposure to the long side of a gold increase in value. But this begs the question about why they had to use paper calls unless they knew they couldn't buy that much physical to retire their shorts and in fact didn't want to because they knew if they did it would set off a market swueeze what with Ashanti,Cambior and many Austrailians strung out already.
So just as an investor why would you want to own a share in a company who has total costs of about $305/ounce not the cash costs of $175/ounce they tout. Yes that is right $305. Hedging when the current cost of buying!!!! their gold hedges back is still below their full all in cost and they are not doing it. To understand the difference between the often quoted cash costs and the $305/ounce that I am quoting for Barrick it is necessary to use a little brutal common sense and remember all these miners have always wanted to talk about how low their cost of production are. Well obviously the cash cost doesn't include the cost of acquiring the property or of exploration or of depreciation so that added back brings us up very significantly for the quoted cost of all mining companies not just Barrick. But the real bottom line is take the total number of ounces produced and divide it into the net profits of Barrick and then subtract this number from the quoted average realized sale price per ounce and whamo! you come up with $305/ounce for Barrick as of last year end not the much lower numbers you hear all miners quoting. This very simple and straight forward approach will drive accountants and gold mining executives crazy but it shows all the cost of the entire operation included into the cost per ounce of the only net product they produce and is very enlightening in its clarity of statement. In other words the management can't bullshit the shareholders into believing that they are producing at much lower levels. The other numbers such as cash cost and all in cost are valuable accounting measurements to do marginal analysis and to run a mine or business but from a providor of capital point of veiw the only real number that counts is the true net profit divided by the number of ounces produced. All the corporate expenses after all need to be carried by each on of those 3.2 million ounces since they don't make anything else. Why don't they talk about that? Because it would be obvious that they are selling gold short not only below the average cost of the industries true cost to produce it but their own as well. Appropriate perhaps for members of a conspiracy but ridiculous for the management of a company that is supposedly responsible for shareholder return on capital. So rethink your positon because they are maybe less culpable than some of us think but they sure as hell aren't looking out for their own shareholders.

Re: Your discussion yesterday

Re: "Twelve months ago, I held this reasoning for Y2k and concluded that it would lead to a catastrophe."
------------------------------------------------

I bought into the Y2K concept fairly big time; I have 'unwound' my position since. I am not confident we are out the 'Y2K woods' yet. I have a couple of questions/thoughts; maybe you guys can offer a comment.

I read recently a post from an engineer stating the oil industry (in particular refineries) do their annual maintenance in the spring (April/May) and this traditionally involves a shutdown. He said something to the effect of , "... these plants are going to have problems comong back up with dates of 19100...." In my personal experiences (telephone, IVR/voicemail) we lost a few systems over the rollover; dates of 1980 or 19100. Repair was simple due to the simplicity of the system. I can say Y2K was really, there is absolutely no debate on this. My question is then, is Y2K done? I feel many systems, sub-systems have not encountered the rollover (boot/date/etc.)

Thoughts?

The recent producer pledge of reducing hedges has brought a question to my mind. With BOE auction #5 at the doorstep (March 21) is this a golden opportunity for the mining companies to put 'money' where their 'mouth' is? If there is an opportunity to close hedges, 'unwind' shorts, do you feel a severe 'over-bid' at BOE #5. Please recall BOE #4 at a bid ratio (I forget the commomly used term; oversubscribe?) of 2.1. Do you feel that if the miners, ie. Placer, Anglo, Normandy, et al REALLY intend to cover then
we may encounter a high bid ratio/bid subscribtion???
As a sidenote, I believe we are at nearend of the 400 tonne allotment of the Wash.Agree. are we not? There is plenty of talk of metal shortage, does this not re-inforce my thought of fireworks March 21/BOE #5?

Thoughts? Comments?

TIA,

Canuck

http://www.wnd.com/page2.shtmlWorldNetDaily quotes Crudele article on CPI manipulation

gidday mates ! love yaz !.

Great post Steve. You are on to something big. Allow me to recommend a book called "Racial Hygiene - Medicine Under the Nazis" by Robert N. Proctor. One quote should make the connection : "In an early speech before the National Socialist Physician's League, he {Hitler} argued that he could, if need be, do without lawyers, engineers, and builders, but that "you, you National Socialist doctors, I cannot do without you for a single day, not a single hour. If not for you, if you fail me, then all is lost. For what good are our struggles, if the health of our people is in danger?""

Thanks.

There is a direct correlation to illegal searches and seizures -- something gold is subject to (and was when, I believe, they locked down safety deposit boxes in the 30's), especially were it to rise dramatically -- and the Second amendment.

Public health has a dark side. Liberty is more costly in lives than a well-regulated society. In short, a well-regulated militia is more costly than a well-regulated society. But, our country was signed up for the well-regulated militia. So why all of sudden is public health more important than something we have lived with for 225 years? Public health has crossed into the darkness when it comes to the Second Amendment. This is treason with a reason, but treason nonetheless -- a most unpatriotic phenomena couched in the public interest, but reminiscent of a life-costly past. Stop the nonsense now.

Sir Canuck:

Y2k guru Peter de JAGER suggested in 1997 to read Tony COLLINS and David BICKNELL, "Crash - Ten easy ways to avoid a computer disaster", Simon & Schuster, 1997.

It states on p.14:
" when a bridge collapses it is not something that can be covered up, especially if it is carrying people. Many bridges have collapsed in history. In contrast, the computer industry has had only a few decades to learn from its mistakes. And it seems to learn little or nothing because silence usually follows a computer disaster."

Has this been suspended by Y2K through the intervention of Adam Smith's invisible hand (not me)?

And what about BROOKS' law?

" Adding manpower to a late software project makes it later.
This then is the demythologizing of the man-month: the number of months of a project depends upon its sequential constraints. The maximum number of men depends upon the number of independent subtasks. From these two quantities one can derive schedules using fewer men and more months. (The only risk is product obsolescence.) One cannot, however, get workable schedules using more men and fewer months. More software projects have gone awry for lack of calendar time than for all other causes combined."
(BROOKS, F.P. Jr., The Mythical Man-Month - Essays on Software Engineering,Addison-Wesley, 1995 Anniversary edition, p.25)

Did Y2K conversion start on time?

By the way, why is oil (a product from the old economy) rising and can't the producers (agree to) increase production?

Nothing is ever new under the sun. Machiavelli distilled down into its essence the balance a prince ( government ) ,must strike to perpetuate a legitamate virtuous governing. This being the agreed upon laws and premises being adhered to from top to bottom by all, so as to promote the free and fair general welfare of all the people. We are no longer a virtuous people. We have at our head an abstract national security state mentallity that is most probably fundamentally insane. They have de based de frauded de spoiled. These are thugs who are in fact true anarchists. What we have here is kind old uncle sam doting on the customers out front in the candy store while in the back room all his relitives are engaged in rachets and every concievable con game. I weep and live in fear for our country. Aside from trying to live the golden rule as best I can having real gold in hand is an expression of earths cocentrated natural virtue.

I didn't expect my remarks to go unchallenged, but I stand by them none the less. I understand and agree with your argument that stated production costs do not reflect all expenses and thereby fail to square with the bottom line. But that is true of all mining companies and does not impugn Barrick's competitive cost advantage.

It is impossible for me to represent Barrick's hedgebook accurately because it can change day to day and frequently does. I can only do what you can do which is read the company's public releases carefully and trust that management is smart enough not to risk jail by deliberately misleading the public. Having done that, I am convinced that Barrick's upside for the next several years is unlimited with gold anywhere below about $600. What happens beyond that would depend largely upon what the company does in the meantime.

Meanwhile, the company is quite sound and is one of the very few with capitalization large enough to attract institutional interest should the bull market in gold continue.

One thing nice about bullion is one doesn't have to worry about all this stuff.

Thanks.

Hi-Hat, I am a great fan of Nicolo's and I believe the founding fathers were as well. He traced the fall of the Roman Empire to the disarmament of its citizenry. "..[I]t is certain that no subjects or citizens, when legally armed and kept in due order by their masters, ever did the least mischief to any state...Rome remained free for four hundred years and Sparta eight hundred, although their citizens were armed all that time; but many other states that have been disarmed have lost their liberties in less than forty years." (Discourses-1525?)

SteveH - Great Post Public Health advocates are often blinded by their own good intentions, they too are social justice advocates in principle.

http://www.usagold.com/Order_Form.html3/9/00 Indications
�Current
�Change
Gold
291.70
+1.70
Silver
5.15
+.03
Gold Lease Rate
0.4887%
nc
Gold Comex Stocks
1,373,896
nc


Market Report (3/9/00): Gold regained momentum this morning shaking
off yesterday's correction on continued strong physical demand and fund
short-covering on the Comex. Elise Shaw's FWN European gold report
contained this enigmatic lead: "Spot gold was flat with dealers
suggesting that many had been ordered to stay out of the market short
term." She did not specify whether it was the KGB or the Waffen SS that
issued the orders and no further elaboration was given, but it does
provide a clue as to what traders might be telling reporters when the
tongue happens to slip ever so slightly. Apparently -- with gold up
nearly $2 as this is written -- some in the market did not follow their
marching orders as precisely as others might have wished. (In the old
World War II movies, we would have arrived at the scene where Hitler
loses his cool and promises that heads will roll.) And so we launch
another day in the gold market....

We'll Tuesday's report up for a couple days since, marching orders
aside, it summarizes how we see this market at present.

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

(3/7/00) Report: Gold surged in early New York trading after a quiet
night overseas. Over the past several weeks we have heard recurring
reports from wholesales traders that there is an abundance of metal on
the market. Why then haven't prices reflected the large sales? Instead
gold has hung within a narrow range at one point surging well over $300.
Our view is that demand remains very strong in the physical market both
in the United States and overseas and traders short the market are
forced to square their positions on any significant dips. Once a
downside trading range establishes itself -- buttressed by the physical
buying -- the shorts find themselves forced to cover realizing that
chances are the metal isn't going much lower. We expect this set of
circumstances to dominate market thinking in the weeks and months ahead
as the gold carry trade continues to unwind at the major banks and
brokerages that have fed at the gold loan/forward trough since at least
the mid-1990s. Many prominent gold traders have lost their jobs, if
rumors are to be believed, gold trading departments closed down and
those still hanging on to their jobs wonder what will greet them at
their desk when they arrive at the office in the morning. These are the
aftershocks of the Washington Agreement earthquake which shook the gold
business in late September last year and sent the gold price careening
toward the $350 mark. We believe that those aftershocks will continue
for some time and we could even get another earthquake or two as we go
along through the year 2000. The net result in our opinion will be a
stairstep demarcation to the charts with gold moving steadily upward,
more short players losing their jobs as positions are unwound, investors
steadily acquiring physical metal, and the paper markets steadily but
relentlessly losing volume.

Today's action has all the earmarks of short-covering given the
suddeness of the move -- as if someone lost their nerve. We'll see what
happens as the day progresses. My advice -- cover those shorts; we're
going higher.

That's it for today, fellow goldmeisters. 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 on the link above and make the appropriate entries.

nickel62 and Strangernickel...I agree with your remarks regarding Barrick, well said.
Stranger...To each his own. My point was merely that Barrick will probably underperform other producers such as Newmont which is lightly hedged. History has shown that all of Barrick's hedging HAS NOT saved shareholders from a falling stock price, and it HAS hurt their upside potential. You may disagree, but I also see the possibility that Barrick MAY find itself in some difficulty if gold goes wild to the upside.

Barrick brings out strong feelings in many of us "bugs", but we realize that divergent opinions are nothing to get upset about!

No position on NEM (Although I have recommended it to my father)

Lamprey

Yes, I too have been thinking about the word "Liberty" lately.

I believe we have much less of it than we believe. Some examples:

1. The right to sound money. Whoops! Now here's a topic we are all well versed in but about which the majority of people are entirely oblivious.
2. The right to life. Abortion means you have NO rights...luck of the draw that any of us are here with legalized abortion.
3. The right to control your own income. Allan Keyes has this one pegged...since the government sets MANDATORY withholding levels, in principle they control 100% of what we earn. Sales taxes give the individual the power to decide how much and when taxes are paid -- THAT'S LIBERTY!
4. The right to bear arms. I am now a card carrying member of the NRA, and I don't own a firearm (yet). Enforce the laws already on the books and let the law abiding gun owner be.

Just a few off the top of my head. Good day, everyone.

Lamprey

Was that a PPT action at 10:59 ?
<;-)

that should be 9:59 !!!!
<;-(

Sol W. - didn't go unnoticed - will try to reply over the weekend - sorry - very short of time - best regards CB2

Interesting post at Gold-Eagle today by Harry who has analysed the gold closing prices ex COMEX and overseas. 69% of gold price movements have been a drop on COMEX after the price had risen outside the U.S. Decidedly non-random and another indication that they do not want the price to rise in the U.S. He suggests that this is a likely manifestation of currency wars. I wonder how long this war will rage before we see the final resolution.

Guess "viagra" doesn't work for very very old entities like comex gold, the "bull" and the US$.

The hobbits are starting to dance...what does that mean?

To: ALL

Are the HIGH-TECH stocks still a freshion in the markets?

Xie Xie

F. C

The perception of Y2K being a major catastrophe was wide spread and included those in high places. No one should feel fooled or mislead by "a concept they bought into" or an urban legend

On Jan. 6, I got this from a friend who has been part of programing major projects for decades. --- It seems the Bureaucrats believed in Y2K more than the technical people "on the ground."

"So, we all survived Y2K. Actually, X--- and I didn't believe the dire warnings. Guess that comes from being in the computer business for so long."

"You are right, of course, that NASA wasn't taking any chances. In addition to the shuttle return, we had huge generators parked outside of a number of the Goddard buildings, ready to mobilize in case of power failures. Those of us who work on site at GSFC were instructed to back up all critical data to external media, turn off and unplug all of our computers and peripherals, and (get this) cover them in plastic in case the sprinklers went off. All non-critical systems were shut down at noon on the 30th."

Fashion is more correct!
<:-(

http://www2.hawaii.edu/~rummel/20TH.HTM
The "public health" advantages of not using tobacco in terms
of deferring disease and death look scientifically
convincing. But whether I smoke or not is no one else's
business -- unless that someone else is exposed to _my_
tobacco smoke.

From the stand-point of physics, the "public health"
argument that wearing a seatbelt or motorcycle helmet may
save my life if I'm involved in an accident makes good
sense. Never-the-less, it's also no one's business but my
own whether or not I avail myself of those advantages. As a
friend says, "Those who attempt to protect me from myself
had better be prepared to die in that attempt."

An analogous "public health" argument would be that since
more children are killed in automobiles and swimming pools,
autos should be taken off the streets and swimming pools
should be filled in. Of course, the number of children
killed by drowning can be greatly reduced by teaching them
how to swim. Similarly, the number of children killed by
guns can be greatly reduced by teaching them about guns.

Guns are not, however, even in the same catagory as cars and
swimming pools. There is little up-side potential in going
seat-beltless or in smoking. Further, even cars -- and
certainly swimming pools -- don't save lives. Guns do.
Thus "public health" calculations in terms of implements of
self-defense, especially guns, are toatlly upside down.

Aside even from Second Amendment guarantees, the anti-self-
defense gun-stealers would have to prove guns are a NET
"public health" problem. That is, they would have to
calculate how many lives are saved by guns (including
children's lives) and compare that with how many lives were
taken by guns. If guns save more innocent lives than they
take -- not to mention the property protected and injuries
avoided by preventing robbery, rape, etc. -- then guns
calculate out as a net public health _benefit_. When these
admittedly difficult calculations are made, it turns out
that _eliminating guns_ is the greater "public health"
problem. See _former_ gun-grabber John Lott's work. He now
packs a gun as his civic duty.

And these calculations don't even take into account that the
main "public health" hazard in our environment, as it's
always been, is the institution of government. According to
the research of R.J. Rummel (see link in message header),
governments in the 20th century alone have killed 119
million men, women and children -- and that doesn't include
war (also sponsored by governments) which has killed "only"
another 35.7 million. Amnesty International puts the
current total government kill figure closer to 200 million
men, women, and children.

Weapons in the hands of the population deter governments
from engaging in such mass murder. When asked by a
reporter, "Since polls show that at least 80% of the Chinese
people favor what you stand for, what are you going to do
now?", a bandannaed leader of the Tiananmin Square rebellion
in China replied, "Nothing. They have all the guns."

As the historical record shows -- the holocaust, the
elimination of 20 million Kulaks by Stalin, Rowanda, etc. --
massive government superiority of arms and out-right gun
stealing by governments often pre-date large-scale mass
murder by governments. Just the fact we Americans are very
well armed subliminally puts the government on notice that
there are certain things they simply cannot get away with.

Perhaps that's why governments are so anxious to get weapons
out of our hands. Somewhere in the deeper recesses of the
organization is the realization that hitting up our kids and
grand kids with taxes that are projected to be over 82% of
their income (Clinton's 1994 Budget in a section entitled
"The Prospects for Intergenerational Warfare,") may cause
problems if our "posterity" is armed.

Regards,
Journeyman

First a note on the fixed income side.
Perhaps it has not been obvious to all that there are some fixed income substitutes for bonds and dividend paying stocks - some of which are available on the stock market.

1. Oil and Coal Seam/Natural Gas royalty trusts.
I think of these as hedges for your gasoline, electric and gas/oil heating bills. They produce income in relationship to the cost of energy. The nicest surprise is when your bills are tallied at the end of the month during an energy price runup, there is this terrible moment when you notice that they are $100-$200 (or more) higher per month than last year, despite a rather warm winter. After the bills are tallied you get the monthly or quarterly dividend check which had grown just enough to cover your extra energy bills.
The coal seam trusts include a capital recovery tax credit that can offset your tax bill slightly.

2. Convertible shares/bonds (e.g. Freeport McMoran), and similar ones for companies that are growing or produce natural resources - particularly oil. Most of these are not traded on the public exchanges, but you can trade them privately with the well connected people who get them in private placements.

3. For those underwieght in real-estate, REITs are very good substitutes. During high interest rate times people tend to rent rather than own and leading into the high interest rate periods (during the rise in interest rates), the REITs fall in value precipitously, often selling well below the market value of the real-estate owned - as they are today. You can get appartment REITs and any other specialized group you may like - retail space, industrial property, office-space, storage rentals, and cold storage properties.


Gold portfolios:
I view gold and its stocks in four ways: (a) financial disaster insurance - a hedge against an atmosphere of bad obligations, when people can not or will not live up to their obligations in paying bonds, rent or bills. (b) Inflation - when the monetary authorities across the globe pump up the money supply without creating fresh debt because of fear of a deflationary spiral. (c) Confiscation by property or income tax and outright seisure - gold bullion is very easy to transport to trusted hands abroad. It is not an account and can not be frozen. It is non-trackable if you want to make it so, and it is deniable if you want it to be. (Is it any wonder that governments hate it?) Since it is not an obligation, you do not need the government to be there to enforce the commitments you payed for and are not being fulfilled. (Inevitably, the government will assist the large and powerful at your expense, and take from the top to feed the bottom; i.e. take from those who have and give to those who have not - the debtors have not - the creditors have, guess on what side government ends up?) (d) As an investment when it is undervalued - when something other than gold, a gold substitute, is clearing the markets of its demand. And gold stands substantially below its production costs at the market clearing volumes.

1. Hedging your assets, a 15% level is often recommended for liquid assets - I think it is a good policy to use 15% of ALL assets as the base line for a gold portfolio allocation.

2. Hedging your liquid portfolio. If one has significant equity and fixed income in one's portfolio, it would be proper to go well beyond the 15%, according to one's view of the current situation regarding (in general) abillities and intentions of obligated parties to live up to obligations and of the monetary authority's intentions regarding monetization. A good substitute for private judgement on this matter is the interest spread between government and commercial debt. The higher the spread, the higher the market's view of the likelyhood of defaults. The higher the spread of mortgages to governments, the higher the risk to your rent income and your job (unless you are a bankruptcy attorney :) ), the higher the spread of corporate debt, the higher the risk the market sees in corporate income.

3. Investing. Gold as a portion of liquid assets can be viewed as an investment as well. Here I like to make estimates of production costs at market clearing production volumes relative to current prices and allocate accordingly. Currently the supply from fresh hedging and scrap sales is better than 30% of the supply - up from near 50% in the summer of 99 (using "official" numbers). The Production costs of an extra 1000 tons of production are on the order of $400/oz and rising. Thus the long term (2-5 year) allocation at this point would be ($400 - $290)/$400 = 28% down from the 38% allocation from summer 99. I use various forms of this calculation to determine an allocation for each time frame. I only started with this once the gold companies started to announce covering of short positions and the scrap data from the WGC showed a decline in scrap supply in 1999. I then followed the notices from Barrick and other major hedgers as to how much of their supply is spoken for to determine the portion of supply that is being met this way and whether it is growing relative to production or falling. Since early 1999 there were sure signs of peaking in hedge activity, made definite when the traditionally unhedged miner had undergone the panic selling imposed by their bankers - "we gouged their eyes out" was one quote as to how bankers deal with their gold mining clients. Few friends to be found there. To make a long story short, this structure for an asset allocation to a gold portfolio works not so much because of the estimates being right, but because of the discipline it imposes for the active long/intermediate term investor/trader. The correct estimates just make for better results.

Good luck to all.

Disclaimer - take this is the free opinion that it is - I owe none here a fiduciary duty and do not mean to imply that any of these strategies have worked or will work in the future. Gold and energy prices are very volatile and the use of securities and assets associated with them are even more so. Seek and obtain advice from a trusted financial professional.

Sixty-some percent of gun deaths are suicides. The "public health" calculations on gun deaths include these suicides. It should be clear that suicides shouldn't be included here. Once suicides are removed, gun deaths are less than 40% of the reported figure.

Regards,
Journeyman

All is quiet on the PPT front.

Regular short covering and shorting are the mainstays of today's market. Hence the SP premium spending an inordinate amount of time outside the fair value range as shorts come in and out of their positions.



Journeyman and Steve

With you on all counts.

Suggest ammendment to all gun control bills barring government agents from carrying weapons. Particularly secret service agents. If it is good for the public it should be good for the government.
We should start with an armed guard provision imposing extra sentences for gun toting VIP protectors and death sentences for secret service agents using their weapons and life in prison if found carrying a weapon.

:-)

Agree that smoking should not be restricted past the point where it does not affect me as a non-smoker. Yes, I too remember the old smoke filled restaurant days - personally,
I don't miss them and am greatful that MY right to clean air has been upheld.

If smokers want to smoke, fine. Just let me breath smoke-free air and one more thing...

I don't want to end up paying for their medical bills when they get lung cancer from this risky behavior (or head injuries when a motorcyclist fails to wear a helmet - no helmet law here in New Hampshire). This is the problem, people need to understand that with Liberty comes Responsibility.

Lamprey

http://www.SelectSectors.com/agpm70.gif Moving Up

The 9:59 $PREM jump sure kicked off the NAS to the upside.
<;-)

"I don't want to end up paying for their medical bills when they get lung cancer from this risky
behavior (or head injuries when a motorcyclist fails to wear a helmet - no helmet law here in New
Hampshire). This is the problem, people need to understand that with Liberty comes Responsibility."
-lamprey_65 (3/9/2000; 11:36:00MDT - Msg ID:26591)

Irritating isn't it? The answer is to un-involve yourself from any enterprise that forces you to
underwrite others' risky behaviors using your money. If your life/health insurance company
doesn't give a discount for non-smokers, appropriately sized for the decreased risk of payout,
change your insurance company.

The government, of course, is insurer of last resort, and very stupid at most of it's insurance
activities to boot. Thus those helmetless motorcyclists with serious brain damage often end up
on the public dole. There aren't a whole lot of these type of cases, and they would be better
handled by the Red Cross, local church charities, etc. This might also encourage riders to be
more responsible. It's difficult to not patronize governments, but not impossible. Look into
lowering your participation!!!

At any rate, it's a very dangerous precedent to endorse restricting others' supposedly risky
freedoms because some violent third party dragoons you into underwriting the supposedly risky
freedom by stealing some of your money for that purpose. That violent third party is the source
of the problem, and any solution should be directed only and directly at this source.

Regards,
Journeyman

"Suggest ammendment to all gun control bills barring government agents from carrying weapons.
Particularly secret service agents. If it is good for the public it should be good for the government.
We should start with an armed guard provision imposing extra sentences for gun toting VIP
protectors and death sentences for secret service agents using their weapons and life in prison if
found carrying a weapon." -ORO

Phew!! Only one other nearly-as-radical proposal I've seen is from columnist Vin Suprynowicz! You're
right, of course. How many readers of this forum are free enough of government propaganda to look at
such a suggestion without being completely put off by it? Remember, until they began adopting
U.S. style insane anti-drug laws, no British "Bobbies" (police) carried firearms.

Regards,
Journeyman

P.S. I neither smoke cigarettes nor currently use other drugs such as alcohol, marijuana, cocaine, heroin,
etc.

As the evidence appears to stack up that we are in a stock- mania / gamblefest,; perhaps it won`t be an event or exhaustion that snaps the spell. Could rather be Bernard Baruchs example of the flock of birds flying in unison one way , then all of a sudden in the blink of an eye in a perfect unison going another way. For no apparent reason. Greed to Fear. For no apparent reason. Perhaps we will have no sustained move in precious metals until the spell of virtual reality investments is broken.

Dear Trail Guide, I,am sorry i,am a bit late in thanking you for your answer to my question 4-5 days ago. I wanted some time to think about your response, i think you deserve it!
So i think i'll keep hanging in there and even buy some more GOLD right up to my personel pain level. I also will remain in 100% Gold coins etc, until it is time to sell for things "Near and Dear"
Thankyou so much for not losing faith in such a motley crew and all the other things you've had to overcome in trying to bring us the real truth surrounding GOLD at a time like this!

All the best to you T.G and when you find the time, keep those "juicy" updates coming in O.K :-) Thanks so much!
G.T

For USA GOLD or Town CrierWhat is the difference between the Day and Night pages of the 24 hour quotes links? Whose day or night? When should I use the Night quotes link - when it gets dark outside? Obviously, this is not a question of any crucial importance but it just struck me as a bit odd that there would be two different links to what appears to be the same page.

Sir Lamprey

Our true liberties are always in jeopardy when we accept government intervention in such small affairs. I suggest that all a person has to do to avoid breathing any air which he feels undesirable, is to simply avoid exposing himself to the air which he does not desire to breathe.

There is no such thing as being a little bit pregnant.

I do not desire to offend and of course you are entitled to your opinion as am I.

hbm

Had the risky behaviors of the above resulted in accidents - namely from their riding helmetless over thin ice while intoxicated and waving a Colt .45 caliber semiautomatic pistol (without a lisence and outside duck hunting season) with which they had forced a young maiden into unwanted sexual intercourse - thereby causing their brains severe damage and making them eligible to become President of the United States or to otherwise become wards of the taxpayer, while avoiding military service in Vietnam, then we should come to the most definite conclusion that paying taxes is not moral because it creates moral hazard that induces marijuana notinhalers and coke notusers (who regret their wrongful behavior in their young days) to expect an escape from the consequences of their behavior.

Well, it was a pleasing thought, anyway...

Seriously, if you just read in the constitution each occurence of the words "government" or "congress" using the word "thief" or "thug" - one gets the message that the framers had in mind - that government is violent and intrusive, no different from a thug and a thief - and they attempted to make rules that limit government in behaviors similar to those of thieves and thugs.

Unfortunately, the spirit of the times had changed and people whom the framers thought to be thieves and thugs managed to both populate government and obtain the vote. Of course, those thieves and thugs in government quickly found a way to contract with a large chunk of the public to join in the thievery.

Once this relationship was established, it became very easy to extend government power everywhere. Telling all what where and when they can and can not eat, drink, smoke, make, sell, buy, own, inject, or dispose of. All of this by vote of a "majority" of representatives that was representing a "majority" of voters.

I am not a believer in absolute democracy - I am a believer in constitutionally limited government that can not do anyone harm legally. That 99.999% of the poppulation/voters favoring a law is not a good enough reason to have it. The only government action that is irreplaceable by other forms of organization is military services. I think that the realities of crime make government at any level ineffective in fighting it. Furthermore, the great surge in the number of actions that are legally considered crimes has made it impossible to effectively fight any crime. "Victimless crimes" are not possible. If there is no victim, there was no harm, if there was no harm then there was no reason to make a law against it and the crime is a legal fiction.

The war on drugs is the most egregious misuse of the criminal code. Using the fictional damage that drugs do to their users (medicine has shown that contaminants in the drugs, not the hallucinogenic compounds, cause the damage) and the fear of the even more fictional notion of "addiction" (only a minority of people using drugs actually become addicted - true for most hallucinogenic drugs), government has managed to frighten us into giving up all freedoms and constitutional rights whatsoever. If we are SUSPECTED, not convicted, of carrying a certain arbitrary quantity of something the government decided was a drug, then we can be detained, our property forfeit without hearing, trial, or effective legal recourse. We have no privacy because all transactions we do above a certain monetary size must be reported, as do prescriptions (though not directly to government - yet), and practically anything we throw out in the garbage or flush down the toilet. We have no rights to legal representation because the means for representation (property/money) are taken away from us BEFORE a trial.

Finally, since time is growing short, I want to say that I believe that any service provided by government does more damage to us than would its absence - with the single exception of military protection. Furthermore, government does not represent the will of the people, and even if it did, that does not matter, rights are only in the realm of the individual, any collective organization has mo more rights than those entrusted to it by the complete and unanimous agreement of all participants.

A parting thought - make a list of laws and apply them to the government and its various agents and agencies. See if they sound absurd. If they do, they should probably be abolished.

Hi there ORO,
I have freinds from the acid daze and some of them left drugs and went to alchohol and now use coffee and chocolate and suger for thier high.
Some went on to downers then cocaine and now are mostly pot users and alcohol to some extent.
The differences in thier company are dramatic. The potheads are much less likely to laugh and are not brilliant except perhaps to themselves. If they ARE brilliant it does not transmit well to those around them. Those around alcoholics
can best describe the drawbacks they see in thier drunken loved one. I can't make a case for any of the people I know that use all that stuff. Whatever visionary moments are percieved to be gotten can be gotten by concentration alone.
And with perhaps a thanks and tip of the hat to the sponsor of the show. Perception and appreciation of life are best helped by just body healthy nutrients and good company.

the NASDAQ performance had Maria Bartiromo bubbling like a urine specimen today on CNBC.

Surely, her composure and acting talent will be tested when the NASDAQ takes the plunge and she can't get in touch with her broker because they've taken the phones off the hook or the broker's web site is in denial of service from so many hits. And even if contact were possible, who is going to be interested in buying what she wants, so desperately, to sell? It won't be pretty.

http://www.dailyreckoning.comThe president wants to raise the minium wage $2 in two years. This shows us how brainless these guys are. They talk about inflationary wage pressures and the loss of manufacturing jobs then proceed to shaft business owners with having to pay more for workers. The only manufacturing jobs left are in industries that have production equiptment so large that it can't be physically unbolted from the floor and shipped to Mexico. Increasing wages increases the costs of production which get passed on to the consumer. Well, inflation is fine for gold, guess I can't complain. We see different effects of this inflationary pressure becoming evident one at a time. Soon the costs of shipping will go up as truckers demand more per mile due to higher fuel costs. All plastics use oil derivatives for a base.

What we should do to compete with the Japanese is to allow open immigration for the Taiwanese. As in a karate fight you do not initiate the force you only redirect the other's force against himself. So you beat the Japanese with the Chinese. Then as Tiawanese naturally gravitate to manufacturing jobs we get the same products produced over here IN OUR HEMISPHERE. We need educated high tech workers. If you don't want them, Canada will take them. You want to save Social Security??? We need healthy taxpayers to provide for the generation that was aborted. Abortion killed social security. Where are all the future taxpayers? Stuffed into bags and buried in landfills. Talking about my generation. It would be a nice gesture to give the Reds an evacuated rock in the Pacific. Don't move the fleet to defend the island. Move the island. Everything that has any commercial value, move it to the US our to enterprise zones in Mexico. There are many products we take for granted that are not produced here. We are vulnerable with all this importing. We use foreign products like the Japanese import their food. Gotta have it.

About LIBERTY: I have a cousin who moved from New Jersey to Colorado. Talk about transition. He got into liberty by trout fishing. He got tired of all the restrictions as to where and when he could fish. I'm proud of him because he just climbed one of the highest mountains in Argentina at 24,000 feet without oxygen. That's going for the gold. They said the last 40ft of peak took them over an hour because they could only crawl to the top. After he moved to Colorado , Telluride (before the boom), his whole philosophy of life changed. I could notice the contrast with attitudes in the Eastern US. In the West they believe in liberty not law. Liberty is the freedom of behavior due to a lack of laws. It is not a German concept but more like one from the American Indians. Our founding fathers were amazed at how the Indians could hold a council meeting and not have a shouting match where it all dissolved into partisan bickering. Franklin wrote that it was so amazing how mere savages had such a fine system of representation worked out that the whites did not have. This Iroquoy Six Nation Confederacy so amazed the other founding fathers that they strove to duplicate the same system of checks and balances that they saw. For the elders they had the supreme court. Leaders were elected with the young braves reps as the "congress" with their older fathers represented by the "senate". So the LIBERTY of the indians was what the Constitution was written for to protect for white society at the time. So this liberty was framed in the constitution. In the West there was no law except those written on men's hearts. Add some whiskey and some guns and soon the people wanted some written law. Easterners want lots of laws to this day. The Germans in the East want a law for everything they see as "bad" behavior. Laws are to promote efficient behavior. Where there is a scarcity of resources the idea has some validity. Where there are more buffalo than the eye can see what is the scarcity of resource the laws could protect? In PA Dutch country they say "There ought to be a law against that." So we have laws upon laws upon laws. Until it eventually becomes illegal to do anything without a license or a permit. That Statue of Liberty is really hollow in the Hudson. In the West they think there should be no laws prohibiting drunks from driving off of mountains. It's a "then let the odiots die" attitude. Soon there won't be so many idiots. When the drunks crash their cars that is penalty enough. The difference is in the east there are so many others affected by the sins of the few. So the drunks don't drive into the ditch but into the innocent. If laws of truth are written on men's hearts then those men don't need written laws. That was the marvel of the American Indians, no written laws. Maybe they paused from living in continuous warfare long enough to impress the founding fathers enough as to "how it should be". The the white man steps in and has to write it all down. So lawyers take away the key of knowledge by altering the meanings of written words on written contracts. So my point is that written laws take away liberty. But, without strong family structure as in a clan or tribe, then written laws are necessary to cull the disobedient from society because no moral discipline from the clan or tribe is present. Feel free to add your 2 cents. Just make sure it's 2 cents in gold.

My liberty to own gold legally is a freedom we gained in 1971 with the repealing of a written law.

http://www.mrci.com/qpnight.htm"What is the difference between the Day and Night pages of the 24 hour quotes links? Whose day or night?"

For the gold quotes given, either page (Day and/or Night) seems programmed to give the latest trade on the most active gold future contract (April at this time.) You can confirm that the time listed for the most recent gold trade is the same for each, so you can't go "wrong" with either link as your source. (You might have to hit your browser's refresh button to ensure you are looking at fresh data.)

Moore Research Center indicates at the top of their market-pricing tables that all times given are U.S. Pacific time. The distinction between "Day" and "Night" varies depending on the market you are following and when it's standard trading day ends. Careful comparison of the two charts will reveal that not all markets have price makers in afterhours or overnight trading. The best example is right at the top where you can see the DJIA Index last quote is frozen on the screen at 13:02 Pacific time (16:02 Eastern) on the "Day" chart, whereas this is not even a listed market in overnight trading.

The Bottom Line is that you can't go wrong with gold on either one...they both always show the latest trade because the sun never sets on gold. And in the short time we've been typing this from The Tower, we see that the price for the April gold contract has climbed $1.30 over what it was when we started this response.

So, with no reason for trepidation, feel free to plow into those MRCI quote pages!

Although analysts expected to see the Fed utilize a term repo at the start of this new two-week reserve maintenance period for the banking system, the Fed added $4.52 through overnight repurchase agreements.

ALL - just found a thorough treatment of the confiscation of gold in the 1930's. Worth a read.

http://www9.pair.com/xpoez/money/goldThe link would help.

http://www.StopWTO.org. Representative Ron Paul is attempting to defend our liberty again. Let's get behind him by contacting our elected representatives.

Meanwhile, the company is quite sound and is one of the very few with capitalization large enough to attract institutional interest should the bull market in gold continue.
----
One of the things which I have not really understood about the way companies "hedge". When we speak of the "forward sales" of Barrick...does this mean that they actually receive funds (dollars) now for the promise of delivering gold from their production??? If so, this means that much of the "income" which they are to receive over the coming years has already been taken on to their books....thus, if they appear "well capitalized", is it not such that much of that cash is actually designated to pay for future operating costs and is not available for things like new investments?

What if that cash pool is "unwisely invested"?

What if the actual costs of future production rise dramatically due to strong inflation in dollar costs?

Also, part of what I have understood about a good mining company is that as the price of their product (gold) rises, they shift production towards lower grade ore which has higher costs, saving the "richer" deposits for the lean times.

Something else which I have only recently come to understand: Most mining companies are recovering several metals from the ore they process....I have not read any of Barrick's materials...I can only assume that they recover silver, copper, perhaps zinc and or lead, in some of their operations. This is also part of their cash flow.

I was told by a silver mining executive that one of the reasons that silver prices have stayed so low is that as much as 70% of the world's yearly silver production comes as "secondary" metal from gold, zinc, and copper mining. These companies often fix the prices for future delivery of silver because they are unwilling to expose themselves to volatility in more than their primary metals. This also means that these companies would only be able to increase silver production if the demand for their primary metals would rise.

Let us say that we were to slide into a worldwide liquidity crisis where many investment projects and larger capital expenditures (rental car and trucking fleets) were put on ice...I would assume that it is possible for the demand for copper (electric) and zinc (steel) and lead (truck and auto) to fall (perhaps even as demand for the "hard money" metals rises). One question to ask of Barrick's program is how much of their revenues are not gold but other metals, and how "profitable" would their gold recovery be if they were not able to "sell" this additional material at today's prices?

Stranger....I admire your perseverance to convince all of us to keep rethinking...I challenge you only in the spirit of investment analysis to think of all angles.

Poor old Solomon

http://www.publicdebt.treas.gov/opd/opdpenny.htm So, I'm thinking to myself.....self I says,.... there ain't no surplus. So how is the treasury buying back all this 30 year debt with the "surplus"? I don't feel so good. But, then I thinks, self....you got GOLD! Now I'm feeling better.

Brief Interruption O Gracious Host:

To all who are expecting delivery of "Finding God in Physics" by Roy Masters, I delivered all copies to the post office last week and this week. Depending on which part of the globe you are residing in, you have either already received or will in the next couple of weeks.

Just wanted to leave one message, so you didn't think I had forgotten. Enjoy.

http://biz.yahoo.com/rf/000309/bi6.htmlHEADLINE: Japan intervened to counter rapid fx moves

Wednesday's FOREX intervention was said by Japan's Finance Minister Kiichi Miyazawa to be in response to rapid fluctuations..."There appeared to be some rapid fluctuations in currencies, and there were indeed such movements," saying also that he was unsure about the cause for the yen's strength, suggesting the a fall in the Dow and weakening euro. While Reuters reports "Japan has repeatedly said rapid movements in currency rates are undesirable for its own and the world economy and that it would take decisive action to deal with them," Japan's Vice Finance Minister has standing orders to intervene as necessary.

As you know, this is essentially a dollar/yen equation, so if the dollar falls (= yen strengthens), the standard Japanese response to sell yen for dollars temporarily weakens the yen and bolsters the dollar. Do you think Japan enjoys their new role as the world's economic "saviour"?

http://www.devvy.com/After reading several of the posts tonight with a theme about our Constitution, I thought some of you that, are not faint of heart, may find the URL above interesting. I am not affiliated or have anything monetarily to do with this site...just came across it while surfing. Pretty incredible stuff if true.

DAYOOPER

http://www.devvy.com/crockett.htmlThe Davy Crockett tale there is a particularly inspirational example of how things used to be...or could be in a better world. The good ones always seem to be few and far between.

Steve

I think that all Americans should have the right to own a gun if they so desire....I am, however, of the belief that there are serious responsibilities connected.

For example, I believe that the parents of all children who commit felonies should face prosecution as well and that the parents of a child who use a gun to kill students in a school should be put on trial for murder.

The guns which our founding fathers had required more than a minute to reload, were hardly accurate beyond 50 feet. Now 10 year old kids who watch Ranbo can get ahold of assault rifles with clips holding more than a dozen rounds and can play sniper from hundreds of feet away. The development of munitions have allowed all manner of metal piercing or highly fragmenting bullets...usually developed for the police but used liberally by criminals.

One of the reasons why Americans now feel they need weapons is not to be ready for a Chinese invasion (militia) but to protect their families from criminals who have guns.

Of course the anti-gun lobby uses the children thing because it is emotional to white yuppie mommies...the much greater tragedy is that the chances of a black male teenager dying from gunshots in certain urban neighborhoods is about 10,000 times higher than kids at a rural school being shot.

Any real gunowner should understand that guns are made for one primary reason and that is to kill. Hunting animals for food and sport - certainly reasonable if it does not decimate animal populations. If we didn't want guns to kill people, we would use projectiles with fast acting poison. The sport of marksmanship is facinating, but no less interesting done with a crossbow. A majority of marksmen are making a sport of training for the moment when they may need to use a weapon (to hunt or kill).

I do not own a gun...but if I did, I would take it down to a range about 4 times a year, and make sure I know how it feels in my hand and how to let out a series of rounds and keep my composure.

I would feel much safer in a society where I knew that gun ownership was a "right" that had heavy penalties for abuse and where gun owners knew how to use guns.

I would be interested in your suggestions as to how we can reduce the number of guns in criminal hands without limiting the access to law abiding citizens.

Poor old Solomon

please alow me a few mistakes in my post, I'm not a pro! I want to talk about silver. The bottom line is that I want to make a bunch a money on silver. But, let me entertain you with numbers: (#'s are for reference, not exact)
METAL..........ABUNDANCE.......TONS-MINED........PRICE
Aluminum .......16,400,000......21,200,000........0.72/lb
Zinc................26,400.......7,800,000........0.50/lb
Nickle..............16,000.......1,080,000........4.63/lb
Copper..............10,000......13,000,000........0.78/lb
Lead.................2,600.......5,900,000........0.20/lb
Tin....................400.........201,000........2.56/lb
Silver..................20..........15,300........5.00/oz
Palladium................2.............135.........675/oz
Gold.....................1............2700.........300/oz
Platinum.................1.............160.........490/oz
------------------------------------------------------------
The above is a "if you do the #'s" that silver stands out.
But, the market does not favor common sense and can punish fundimental correctness. I am invested up to my butt in silver, knowing that the floor is at toe touch and that the vast depth belongs to the up side. I can sleep with this, feeling that those who want to make a fortune should give this a serious thought. 2mules

ORO (03/09/00; 15:04:33MDT - Msg ID:26600)
Journeyman - President not inhale and President coke head and obverse reasoning

You're right again!! I mentioned a study awhile back that
un-insured motorists in Philadelphia are involved in far
fewer accidents than expected, apparently because they drive
more carefully. Guaranteed insurance of any kind, even
"social insurance," welfare of any sort indeed creates moral
hazard.

Dollar Bill (03/09/00; 15:23:49MDT - Msg ID:26601)
the brown acid at woodstock

Perhaps such drugs help some people some of the time, others
all the time, and some never. It was smoking marijuana in my early twenties that demonstrated to me there was more
than one way to see things -- and without that insight, it's
probable I'd have been a suicide near that early age.

At any rate, noone promised me others existed to be interesting
to me -- darn!! So while I may bemoan those deadened, especially
by alcohol, I would staunchly defend their right to that
choice.

Regards,
Journeyman

Pretty harsh punishment for a parent Sol. It goes a little deeper than this. When is a child not a child? Of course the little six year old is quite an extreme and by no means something you hear of often and should be treated differently. But to try a parent for murder because they couldn't control a 14,16,18,20 year old... where does the age of reasoning and responsibility of their actions begin?

DAYOOPER

http://www.radiowallstreet.com"Mind if I get a ride to the nearest pro-gold station"

"My rally ran out of gas"

So where are you going? I'm going to Technical Analysis with Bob Brogan. Who is he? The main dude among the wanabees. A lion among the hyenas. Says.................."We are bullish the GOLD BULLION looking for $355 and not the shares". It's time to turn on the boom box for some Classical music. Click on the above link and look on the right side of the web page for the spot. You need Realplayer installed. You can download it for free, try www.realplayer.com . Have a great day. 4-DUCATs

http://www.usagold.comLet's think about the shear size of the general population. It is so vast now and with instant access to multimedia news, any spindoctor (newsmen) can whip up any story that occured anywhere and use it to promote their slant. So a six year old gets the gun and kills some one. This goes on everyday and always will because of the size of the population. I could probably find 20 people in critical condition today from dog bites. OK lets muzzle every dog. That guy shouldn't have that dog under the bed without a muzzle on it. I could find in this country probably 50 housewives who received stiches because they cut themselves chopping vegetables with sharp knives. It ought to be mandatory that all kitchen knives be kept in sheaths. Well a new technology will be developed that will identify the user of the kitchen knife so that an untrained vegetable chopper couldn't get ahold of one and .............. More laws for morons..............But this six year old got the gun from a crack house. Or maybe his only home was the crack house. So drug dealers apparently aren't teaching proper handgun awareness to their second graders. Or maybe if the police were doing their job instead of "waiting 20 minutes till the smoke clears" and "waiting for more backup" or "Oops just received another call" anything but bust the crack house. Well that district is "dirty" so we have to wait till the dealers cross over into this other district where the DA will make it stick. Police have a tough job. Serpico may still live in France. I have personally seen in central NC where drug dealers were being protected by police in the same parking lot where the drive-in window operation was going on. They bought the law. That is how the kid got the gun. His father was never caught.

Good stuff, 4Ducat!!

Regards,
Journeyman

"I don't want to end up paying for their medical bills when they get lung cancer from this risky behavior (or head
injuries when a motorcyclist fails to wear a helmet - no helmet law here in New Hampshire). This is the problem,
people need to understand that with Liberty comes Responsibility."

Lamprey,

While I agree with your last sentence, what you describe in the first has little to do with liberty. Let me explain. Once you set a mentality like that loose among the people there's nothing to stop any group from being targeted for their behavior and/or habits.

Don't like my smoking, eh? Well, I don't like your sugar, caffein, alcohol consumption or whatever. You could stand to lose a few pounds, or pay some extra taxes and insurance premiums to cover your heart attack risk from toting that gut around. (Hypothetically, of course. I cast no aspersions about your actual appearance or habits!

The possibilites are limitless, which is why government types love this method of conquest. Divide and conquer. Class warfare, health warfare, race-baiting. It all serves the same purpose: to prevent us from figuring out who the real eneny to liberty is.

Besides, by my calculations, you ought to thank me for smoking. Statistics show I won't live as long as others, thereby saving countless Medicare & SS benefits. My tobacco taxes are providing a windfall for all manner of programs you or your kin may benefit from.

I'm only half serious with the previous paragraph, but the rest is written in all seriousness. (I do indeed respect the rights of non-smokers. I've never subjected my wife to second hand smoke in our almost 19 years of marriage. I go outdoors.) Government lives to set us at each others' throats, while at the same time trying to save us from ourselves.

http://www.egroups.com/group/gata/405.html?There's more and more "nuts" like us.

To subscribe to GATA's dispatches by email
and get them immediately so you don't have
to go look for them, send an email to:

gata-subscribe@eGroups.com

http://www.webleyweb.com/tle/le9611a02.html
Here here Marius!!

Yes indeedy!

For a good spoof on the "protection racket," see the article
by L. Reichard White, located at the above URL.

Regards,
Journeyman

http://www.egroups.com/group/gata/406.html?Reg Howe contrasts Daniel Webster's
definition of money with Alan Greenspan's.

To subscribe to GATA's dispatches by email
and get them immediately so you don't have
to go look for them, send an email to:

gata-subscribe@eGroups.com

IMHO...the only three good things that have ever come out of Federal Government are the Emancipation Proclamation, the Interstate Highway System and the Internet. And all three were begun for National Defense NOT for the benefit of the people. Our government has NEVER intentionally DONE ANYTHING that purposefully INCREASED the LIBERTY of the people.

And then they wonder why we don't trust them?
Own gold...because the Federal Government will debase your currency whenever it suits them.

simply meView Yesterday's Discussion.

I guess my main point this week (and I've spoken of this before) is that with liberty comes the necessity of responsibility. When a society denies one, the other will surely begin to fade.

Now, one more point on this which will surely ruffle some feathers...

Who would I rather see pick up the tab for medical expenses related to smoking - the tax payer (me, a non-smoker) or the manufacturers and users of cigarettes? I think you know the answer.

4Ducat...interesting point about the spread of sensationalism. To be honest, why should I even be interested if someone in L.A. (or Chicago, Dallas, etc.) gets shot? I live in a small town in New Hampshire. People today seem to know more about what is happening hundreds or thousands of miles away than what is happening in their own neighborhoods. Not a healthy recipe for one's emotional health, nor is it a good sign for active participation in the local community or government. If something happens in my town, I should care very much.

I live a half mile from the town hall, the same town hall in which Senator McCain spoke before the primary. A sense of community, we still have it in some areas, but not most.

Lamprey

"I have very large ideas of the mineral wealth of our
Nation. I believe it practically inexhaustible. It abounds
all over the western country, from the Rocky Mountains
to the Pacific, and its development has scarcely
commenced....Immigration, which even the war has not
stopped, will land upon our shores hundred of
thousands more per year from overcrowded Europe. I
intend to point them to the gold and silver that waits for
them in the West. Tell the miners from me, that I shall
promote their interests to the utmost of my ability;
because their prosperity is the prosperity of the Nation,
and we shall prove in a very few years that we are
indeed the treasury of the world."

Both Presidents Johnson and Grant, as well as a
majority of both Houses of Congress, agreed with this
sentiment by enacting these laws to encourage
exploration of the public domain.

Its been put forth that the primal human motivation is not money,power,etc., but above allthe lust to dominate... DOMINATION. Yes it is different this time. The loose cannons on deck are bigger than ever. If world socio- economic stresses boil up the sea in a coming time what will be the temptation- desperation of the mongrel alpha-male leaders of one of the power blocs to go for broke? In the entire history of the Roman Empire the doors of the temple to war were only closed TWICE. IMO the probability of this reversion to the mean is very serious. Yes we will have great gratitude to be clutching gold in our hands but this spectacle is pathetic.

You speak of the bearing of responsibility as a cost of freedom yet when you propose only the two alternatives for who is to pay the cost of smoking...you ignore the obvious. The individual/family and/or the insurance company that they paid such high premiums to all those years because they were smokers. That is who should bear the medical costs. Much of the media focus on this issue is designed to divert attention away from the responsibility of the insurance company's to pony up now that the chickens are coming home to roost. A little digging will reveal who is really behind this push to offset costs to the tobacco industry or the taxpayer.

Now we have more insight into your moniker :-)

Date: Fri Mar 10 2000 07:53
cherokee (@...fodder.for.t1...........) ID#198217:
Copyright � 1999 cherokee/Kitco Inc. All rights reserved

Hello Again,


The Strong Scent of Tyranny

- by James Hirsen ( hirsen@earthlink.net )

Once upon a time, his name was cautiously whispered within the dark confines of a militia group meeting or two. Today, Maurice Strong is up front and center in at least two recently published mainstream magazines. In September of last year, Mr. Strong was the subject of a cover story in National Review. Amazingly, the first feature story of 1998 in Forbes stars this same ascending world figure.

Strong has emerged as one of the most powerful and enigmatic figures on the international scene. He wields considerable influence in the areas of business and politics. Twenty years ago, The New Yorker magazine described Maurice Strong as the man upon whom "the survival of civilization in something like its present form might depend."

As of late, this billionaire Canadian businessman works simultaneously for the United Nations as Senior Advisor to the UN Secretary General and for the Rockefeller and Rothschild's Trusts. He is Director of the International Union for the Conservation of Nature, Senior Adviser to the President of the World Bank, Chairman of the Earth Council, Chairman of the World Resources Institute and Co-Chairman of the Council of the World Economic Forum. He was Secretary General of the 1972 Earth Summit in Stockholm and the 1992 Earth Summit in Rio de Janeiro.

In addition, his credentials include membership in the UN funded Commission on Global Governance. This body's 1995 report called "Our Global Neighborhood" contained a number of ominous proposals including the establishment of a global tax, UN control over "global commons," expansion of the powers of the World Bank, expansion of the jurisdiction of the International Court, removal of U.S. veto power in the Security Council and creation of an Economic Security Council to oversee the world's economy. Clearly, the implications of such proposals were intended to move us towards the creation of a world government infrastructure. Unfortunately, they also necessitate and precipitate the decline of U.S. sovereignty.

Strong's business arrangements have been equally convoluted and diverse. His dealings have involved major U.S. oil interests as well as influential power brokers including Saudi arms merchant Adnan Kashoggi and Canada's Power Corporation.

Currently, Strong is attempting to control a potential scandal involving Molten Metal Technology, a hazardous waste firm known for its ties to Vice President Al Gore. Molten Metals has surfaced in the Senate hearings on campaign financing due to questionable contributions made to Gore's campaigns.

Strong has complained that "the United States is clearly the greatest risk to the world's ecological health" and has forcefully advocated a new economic order based on the redistribution of the developed world's industries and wealth to the Third World.

Strong has supported New Age movements in the U.S. and once helped finance a second ark in preparation for the next great flood. His many global activities are orchestrated with the philosophical bent of a long time believer in the establishment of a new world religion.

Strong has instituted what is ostensibly the global headquarters for the New Age movement at the foot of the Sangre de Cristo Mountains near Crestone, Colorado. He and his wife run the Manitou Foundation and call this center the "Baca." It is an international collection of alternative religious beliefs. Located at this New Age mecca are a subterranean Zen Buddhist center, the Haidakhrndi Universal Ashram, a facility for Native American shamans and a Vedic temple where devotees worship the Vedic mother goddess.

The Rockefellers, the McNamaras, the Kissingers, the Rothschilds and other international bureaucrats conduct regular pilgrimages to this center for global spirituality.

UN watchers place Maurice Strong on the top of the short list to become the next Secretary General of the United Nations. No one is better positioned or as well connected to achieve this increasingly powerful position.

We can smell it coming. When values decline as they have in the last twenty years, the continuity of civilization requires that a substitute order emerge to insure societal stability. If we are not careful, this substitute could take the form of tyranny. Perhaps even a secretary general with greater powers than any predecessor has heretofore been vested. Sort of a king of the world.

The walking talking Hegelian Dialeltic

Dialogue to consensus ( make a compromise )

to destroy all liberty and freedom.

This intervention has more to it than it appears on the surface. Remember we are in the midst of a currency war!

Every year, at certain times, the Japanese companies must repatriate their yen for accounting purposes. This is a planned event. Prior to the yen repatriation cycle the yen is decreased in value(sold down)by the Japanese govt. so that more yen are obtained for each US$ that is traded in. This boosts the profits in yen terms on the books of the Japanese companies. The weak yen then sets the stage for the next cycle. Japanese products appear to be a bargain with attractive prices for US consumers. Once the sale is made the US$ is pumped up (yen sold down)to bring the yen back home. The sad truth is that, the US taxpayer subsidizes the production of Japanese goods. The yen brought home are sufficient to generate enough huge profits (in yen by the artificial sell down)for the corporations that they do not need to convert all the dollars back into yen. This would cause a shortage in yen and drive the price up. Instead they use the surplus dollars to buy US Treasury obligations. The US taxpayer supplies the interest payments which are used for buying US machines and equipment to run the factories and steel mills and to buy oil in petrodollars to power the factories and cities. This has been going on for decades. In real terms, how much do you think those cheap Toyotas cost you. Ask a UAW member.

The absolute worst thing that can happen in this environment (repatriation cyle) is for the yen to take a sudden move up vs the US$. That is what is happening. That is why they had to intervene. Whoever is orchestrating the rise of the yen at this time has quite literally dropped the equivalent of a nuclear device in the currency war and it was exquisitely timed. The yen is predominately a US$ driven ecomomy and will suffer with the US$ as it declines. Perhaps the Europeans taken a lesson from the Japanese businessmen and have worked the Euro lower in order to play the same game. When the evryone wants the dollar higher at once, it seems to have an unnatural bouyancy. Perhaps there should be a G-2 summit where the interested parties can coordinate their timing on orchestrating movements in the US$. Perhaps there already is.

Perhaps the punchbowl has gotten so full this time it fell over and 90% of the folks at the party have yet to realize it. The rest are leaving in a mass exit to unload the dollar at favorable rates to their own currencies which will probably survive.

Having visited quietly here for more than a year, I wish to thank the host of USA Gold Forum for allowing me the opportunity to be in the company of those who understand the value of honest money.

Simply Me:
Government will debase your currency while professing loudly all the while to be "caring for" you, your children, and posterity.
If power corrupts, what does that say of people who actively seek the kind of power afforded by an exclusive grant to issue a nation's currency?

On the advice of those who have come before me:
Defend yourself-
Own pure gold.

This is what I am alluding to in 26629. This western, fruit-cake, blood soaked power grab is sure not going to keep amusing the Borscht-Belt, confussians,Mohamedans, etc., These cross purpose mind sets is what can lead to epochal conflagurations.

http://www.usagold.com/Order_Form.html3/10/00 Indications
�Current
�Change
Gold
290.20
-1.20
Silver
5.13
nc
Gold Lease Rate
0.4462%
+0.0075
Gold Comex Stocks
1,373,896
nc


Market Report (3/10/00): Gold was off a bit in quiet trading in
advance of Comex option expiration. Reports from the floor yesterday
characterized the trading as very slow, but Reuters London reports that
some traders expect activity to pick up today."With the COMEX option
expiry of the April contract today and given that the highest
concentration of options are at the $300.00 strike, further gains are
not out of the question," bullion bank N.M. Rothschild & Sons said in a
report. Reuters also reports that "Metals traders Standard Bank London
expected nervous delta hedging activity ahead of the options expiry." In
Europe overnight physical buying and short covering continued on the
dips. Gold was firm in Tokyo and Hong Kong at one point reaching the
$294 level before settling back toward the $290 level.

That's it for today, fellow goldmeisters. Have a restful weekend. We'll
see you here Monday.

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.

Asymmetric Pleasure
Why Momentum Is More Fun Than Value

By Francois Sicart

Contrary to a rather vehement accusation left on our
website by a recent visitor, we are not "anti-tech." What
we are against is the purchase of anything without at
least some value rationale. To account for the explosive
growth prospects of some tech companies, we are willing
to stretch our time horizon and assess value on earnings
farther into the future than usual. But, today, many
technology stocks are selling at prices that cannot be
justified by even the rosiest of growth and profitability
scenarios.

Tech Has Been Good To Us

Though value investors, we have had our share of
successes in the technology area. Most often, however,
this has meant accumulating the stocks of premier
companies that had temporarily disappointed an
increasingly myopic crowd. Analysts and financial
reporters have become so hypnotized by quarterly
earnings that they increasingly confuse short-term details
and long-term fundamentals. As a result, companies
faced with transient problems often trade as if they were
going out of business, and that's good for us. I can't
resist mentioning our purchase of IBM at about one-tenth
of its recent highs in 1993, when the experts were
forecasting the demise of this "big box" manufacturer.
At the time, we did not have the input of the younger,
tech-savvy analysts who have joined us since. More
recently, thanks to them, we have done quite well with
sexier names such as Adobe, Hyperion Solutions, 3Com,
and a number of others. All were bought, however, when
the consensus on their prospects had temporarily become
gloomy, with a disproportionate and irrational impact on
their stock prices. Which brings me to my subject for
today.

All Stock Doubles Are Not Equal

I recently received a call from a smart young client who
works daily with technology and is enthusiastic about it.
Yet, he also has a wisdom that is rare among investors of
any age: to abide by our request that clients bring to our
attention new products that they find unusually good or
innovative in their field of expertise, but leave the
evaluation of the companies and their shares to us.
Often, we do not buy the stocks, but our friend has never
complained.

So, last week, on the day of 3Com's partial IPO of their
Palm Pilot subsidiary, this exemplary client called,
curious to know if we still owned our 3Com stock, which
had recently zoomed amid the flurry of news about the
IPO's spectacular market reception. I had to sheepishly
admit that we had sold the stock almost fifty percent
below the current quote (around $95 at the time of the
call). Always the gentleman, our young friend struggled
to hide his disappointment, but this led me to wonder
about the relative psychological rewards of value
investing and momentum investing.

As it happens, although the stock of 3Com had almost
doubled after we sold it, it had also doubled while we
owned it. Yet, with no excitement surrounding the
company, its doubling while we owned it had been
business as usual � an anonymous component of our
contrarian/value portfolios� overall performance. In fact,
if clients bothered to read the financial press, they
probably experienced some anguish at the constant flow
of negative comments by analyst and critical newspaper
articles about the company -- even as the stock had
begun to rise.

Contrast this with the excitement of momentum investors
who bought the stock when we sold it, and enjoyed a
doubling accompanied by accolades from the pundits,
Super-Bowl-style reporting (with instant replays and all)
on the specialized TV channels, and the intense pleasure
of "belonging" when the talk at cocktail parties came to
the subject of 3Com and Palm Pilot.

The Last Laugh

There is no doubt that it's a lot more fun to double one's
money through momentum investing than through value
investing. So, why don't we switch? Because, in the end,
value investing is all about survival and having the
last laugh.

Throughout stock market history, many momentum
investors have known periods of extraordinary glory but,
in essence, they have been traders. And traders, one of
my early senior partners used to say, should have no
opinions. Only the market and their instincts should guide
them and keep them nimble: when they start having
opinions, they become stubborn, and therefore
dangerous.

This is one reason why, as you may have noticed, there
aren't too many old traders around: as they age, they
develop opinions and become stubborn. Throughout the
stock market's cycles and fashions, traders have risen to
stardom only to vanish and be replaced by new
generations of traders. When you look at the few true
investing icons of stock market history, they have been
mostly long-term, fundamental investors. It is they (and
their clients) who have survived. And, among them, a
majority have been value investors.

We Are Not Masochists

Obviously, even though Lord Rothschild reportedly
traced his stock market fortune to this habit, we don't
make a point of foregoing potentially larger gains by
selling too early. In fact, we have made a concerted
effort, in recent years, to become more asymmetrical in
our value discipline (see: For The Record). Specifically,
this means applying very strict value criteria on the buy
side, while loosening them somewhat on the sell side to
allow our winners to run a bit longer. But there is a limit:
at some point, stock prices become so disconnected from
any notion of intrinsic value that our discipline demands
that we sell.

When momentum investors take control of one of our
already-appreciated stocks, further gains become entirely
dependent on the greater fool theory � the assumption
that there will always be a greater fool to buy from the
one who just bought. At that stage, the risk just becomes
too high and impossible to assess. Momentum investing is
great in theory, but you have to be able to sell when you
get a "signal", and everybody will get that signal at the
same time. We know from experience that, when these
investors rush for the exit, the door can be quite narrow.

Mindless Clicking

When we decided to sell our 3Com stock, the Palm
Pilot's initial IPO and eventual spin-off had already been
announced and well publicized. Leading analysts had
already computed likely values for 3Com's components,
and we felt that all the good news was out. This was
counting without the day-traders and the investment
bankers who have turned taking advantage of them into
an art. Let's backtrack a little�

Only months ago, 3Com had contemplated an offering
price of less than $20 per share for Palm Pilot.
Presumably, the people who know it best (including Palm
Pilot's management) thought this represented a fair
valuation of the company. However, in view of the
enthusiasm that preceded the IPO, this was raised in
February to a range of $30-$32, and the offering finally
took place at $38.

Of course, very few investors got to pay that low (!)
price. Most of the 23 million shares of Palm Pilot that
were offered in the IPO (less than 5% of the company's
outstanding total) wound up in the portfolios of hot mutual
funds and hedge funds, which generate huge
commissions for brokers and whose performance has
greatly benefited from the rapid flipping of such offerings
in the last few years.

So, the "public" was left scrambling for shares in the
open market. Of course, 3Com could have offered more
shares. But investment bankers have learned the
valuable definition of a bull market as one where there
are more pigeons than paper: the practice of floating only
a tiny fraction of a company's shares in initial public
offerings has become widespread in recent years.
Assuming decent demand from investors, this guarantees
a somewhat artificial shortage and a bidding scramble by
na�ve day traders.

Thus, the shares of Palm Pilot started trading publicly at
$145, and briefly touched $165 before settling down at
$95 � almost five times what the company itself had
thought the stock to be worth only a few months ago.
The company's entire market float traded 1.65 time on
that one day, as many funds that had bought on the
underwriting dumped their shares onto the day traders.

Now, There's Value

At $95 per share, Palm Pilot sported a total market
capitalization of $53 billion while 3Com, which still owns
almost 95% of Palm (worth $48 billion), closed the day
with a market value of only $29 billion. This means that
the non-Palm segment of 3Com -- the No.2 maker of
computer networking equipment, with promising new
offerings such as high-speed cable Internet access
systems, home networking connections and voice over IP
(a system that transmits phone calls over the Internet) --
was valued on that day at minus $19 billion (- $54 a
share)! This, incidentally, is the segment that repeatedly
has been rumored to be the target of interested foreign
acquirers.

3Com is scheduled to spin off the Palm Pilot shares it still
owns to its shareholders in about six months, once it has
received a most likely ruling from the IRS that the
transaction will be tax-free. So, day traders who believe
that Palm is worth $95 a share should be mortgaging
their homes to buy 3Com, instead of rushing to buy Palm
Pilot. But it is clear that this crowd's clicking fingers are
faster than their brains.

As for us, if the shares of Palm Pilot should by some
miracle hold their current price until the projected spin
off, we stand ready to buy the remaining portion of 3Com
for minus $54 a share. And they say we don't like
"tech"�

Fran�ois Sicart

March 2000
� Tocqueville Asset Management L.P.

I've noticed that CALVF has tripled in value in the last couple of weeks. Does anyone know what's happening to cause such dramatic growth in Caledonia stocks?

--Skip

National Defense Silver Stockpile Nearly Depleted

February 24, 2000



(Washington, D.C. - February 24, 2000) The U.S. Mint consumed nearly 10.3 million ounces of
silver in 1999 for its coinage programs, dramatically reducing stocks of silver from the U.S. National
Defense Stockpile. Once exhausted, the U.S. Mint must purchase silver for its coinage programs
from the open market, boosting silver demand by up to 1 percent annually. This increased demand
would further widen the gap between overall silver supply and fabrication demand. Between 1990
and 1999, cumulative silver fabrication demand far exceeded mine production, which resulted in
reducing above-ground silver bullion inventories by an estimated 1.25 billion ounces during that
period.

In 1999, the Mint issued nearly 9.5 million ounces of American Eagle Silver bullion coins and proofs
and consumed roughly 460,000 ounces in the manufacture of commemorative coins. Approximately
360,000 ounces of silver were used in the production of 1999 Commemorative Silver Proof Coin
Sets. Some silver is also used in gold coinage alloys, as in the production of American Eagle Gold
Bullion coins, proofs, and gold coin commemoratives.

As of December 1999, the Defense Department's silver stockpile totaled 21.2 million ounces, down
85 percent from its opening balance of 139.5 million ounces. The silver stockpile once posed a
serious threat to the market when government officials determined it was no longer needed and that
domestic silver production combined with reliable imports could sustain the United States in the
event of an emergency.

In the early 1980s, the General Accounting Office (GAO), an investigative arm of Congress,
recommended that silver from the stockpile be used for coinage rather than sold on the open market.
GAO's proposal assured that using silver to mint a bullion coin and other forms of coinage would
minimize or eliminate any short-term market price disruption by developing new demand to offset the
increased supply. GAO's proposal was implemented when Congress created the American Silver
Eagle bullion coin in 1986 and specified that metal for the coin be drawn from the stockpile, unlike
the Gold Eagle for which the U.S. Mint is required to use newly mined gold from domestic mines.
Annual Silver Eagle sales have significantly accelerated the reduction of silver from the stockpile,
using nearly 91 million ounces since it was created 14 years ago.

As bullion coins, Eagles are considered legal tender by the United States government and
their silver content is guaranteed. The $1 face value of an Eagle is largely symbolic since its market
value depends totally on the silver content. In addition to the Eagle, the U.S. Mint has struck silver
coins commemorating events and people ranging from Christopher Columbus, Dolley Madison, the
Olympics, and the Yellowstone National Park Silver Dollar.

The United States was the largest single user of silver for coinage in 1999. Having consumed almost
120 million ounces of silver over the past 19 years, the U.S. Mint is one of the largest silver users in
the world accounting for more than 1 percent of worldwide demand during that period.



For Further Information Contact:

Mike DiRienzo
The Silver Institute
1112 16th Street, N.W., Suite 240
Washington, D.C. 20036
Tel: (202) 835-0185
Fax: (202) 835-0155

The Gold Trail Discussion has been updated. Click on the link to read the latest updates.

Holtzman here,

--------------
Moods
--------------

To USAGOLD regarding (3/7/2000; 19:50:03MDT - Msg ID:26509). What's the mood in Britain, you ask? It depends with whom you speak. There's a general resignation that world events will proceed whether we approve or not, but that's a fair description of the general mood in any country in any era. At one extreme there are those who are champing at the bit to become Europeans. At the opposing extreme are those who live in terror of same. In the middle are the vast majority who, probably rightly, feel it won't substantially change their lot in life.

They have only to look across the Irish Sea to see what lies ahead. Every business article in Irish newspapers bears a sentence lamenting Dublin's lack of influence over ECB policies. But again, to the average Irishman, he had no influence over Dublin before 1999, so his lack of influence over the ECB nowadays is neither an improvement nor a worsening.

The failing of the masses in both countries is that they take no action to assure themselves that they'll at least survive the transition. They either place blind trust in their betters, or they cynically expect that nothing they attempt will make any difference.

There are a few of us, though, who actively attempt to position ourselves so that we survive, and hopefully thrive, regardless of the outcome.

These attitude divisions cut across all strata of the population, both here and abroad. Sheeple come from all walks of life, and so do knights at this Round Table. How many people in the U.S., doctors and dustmen alike, regard the upcoming election as an event of either salvation or utter defeat? How many regard it as largely irrelevant? How many people at this forum lack a wall full of diplomas, yet have more than sufficient wisdom to actively study their world for signs of impending change?

There has been recent discussion of Britain pulling a fast one on Euroland and, rather than adhere to the Euro, instead adopt the U.S. dollar. Again, the range of responses has been profound. The vast majority in the middle don't care, those at one extreme are mortified at the thought of the mother country ultimately becoming a colony of the Colonies, and those at the opposing extreme are thrilled at the thought of trading with the largest English-speaking economy while no longer needing to resort to currency hedging. Finally, those like me have attempted to spread our investments across the pound-denominated world, the dollar-denominated, and the euro-denominated, so that on average we'll survive no matter the outcome.

I must admit, I do appreciate the phenomenal irony of George III's successors possibly passing around banknotes with George Washington's face on them. The old king would twirl in his grave. But the odds of it working out that way are, in my opinion, rather slim. Geography will win out in the end. Even with Britain's and America's long history of efficient sea trade, France is just the other side of the Chunnel. We may prefer to ally with other English speakers, but our predecessors put you and the Aussies too far away. Like it or not, free trade with our nearest continent is the most practical way to go.

As regards gold, again there's the distinction between the masses and the wise. At one extreme, there are those in the UK who genuinely feel that gold is another vestige of the old economy which, in the new economy, is viable only as a highly conductive coating on electrical circuits. At the other extreme, there are those of us who feel it's only a matter of time before the virtual economy finally experiences a moment of clarity and the currency of gold begins to look attractive by comparison. The most recent shock on Wall Street evidently was caused by the devaluation of a single old-economy stalwart, Procter and Gamble. Leave aside the Wonderland wherein dot coms trade, the American frenzy had driven mere soap up to a price/earnings ratio of 40. Even after the shock the P/E remains half again higher than its historic norm. Soap's not worth that much.


--------------
Pushing on a string
--------------

To USAGOLD, who wrote in (03/04/00; 16:51:08MDT - Msg ID:26370) that, "Have you fellows begun to notice that fewer and fewer of the economic indicators that we once viewed as crucial to any legitimate economic analysis just don't matter anymore. Deficits... Money supply... Bubble stock markets... Oil..."

The sensation you're describing reminds me of what happened one winter's night when I was 19 and overly eager to return home from university for Christmas. Icy rain was falling but I was in no mood to be halted by mere weather. In my haste, however, I'd neglected to take into account two important facts. First, bridges often freeze well in advance of motorways. Second, in the darkness ahead lay one more bridge than I'd recalled there having been on that journey.

The next few seconds of my life seemed to require the better part of a century to pass. The time dilation began when it suddenly occurred to me that I was proceeding in a perfectly straight line and that, unfortunately, the road wasn't. I recall marvelling at being able to steer both left and right without exerting the slightest influence upon my trajectory. I recall standing on the brake pedal with both feet, also to no avail. Fear hadn't set in yet. The main thought running through my head during those long seconds was an almost dispassionate, "I hate this." Finally, it ended. And, luckily for me, in a soft landing. When finally the world stopped moving round me, I found I'd lodged myself in a surprisingly deep accumulation of mud alongside the motorway on the far side of the bridge.

Though my life was no longer in immediate peril, I found that my ability to influence my world had not improved substantially. The tyres found no more purchase in the mud than they had on the ice. It took outside aid to extract me from my predicament. But, as the saying goes, that which did not kill me, only made me stronger. In the decades since, I've so far managed never to let myself get into that circumstance again. And that, I believe, is how the cycle of economic Depression functions.

--------------
Depressions occur when we forget
--------------

I recall various pundits in the late 1970s and early 1980s confidently declaring that Depressions were cyclical and tended to set in at roughly 60 year intervals. Following that logic, we were then about due for another one. But a further twenty years of roaring success ensued. What was wrong with the prediction? I think it was lifespans.

I suspect that a new Depression occurs in a particular population when all the survivors of the previous Depression become too old to sing out about the warning signals. The argument for a fixed 60 year cycle failed to take into account the medical advances of the 1900s. Prior to the 1900s, very few people lived 60 years, and most of them were reduced to dottering infirms by that advanced age. As a result, 60 years after any particular catastrophe, there was no significant living memory of the event. Since children in any age are unwilling to believe they could fall prey to what felled their grandparents, we've over and again followed our predecessors right back into the same trap.

The main thing that's different this go-round is the longer lifespan. We have a ruling queen in her 70s whose mother is looking forward to 100 this summer. The average person in the industrialised world can look forward to living about 75 years. That means the gap from the previous Depression ought at least to be 75 years and possibly upwards of 90. That places us squarely in the window today.

Must it happen again? No. But does anyone think the likelier scenario is an infinite future where deficits, money supply growth, bubble stock markets and soaring oil prices don't matter anymore?

History never repeats precisely. For example, there was no internet in the 1920s... but there was wireless. RCA was a 1920s dot com. Or perhaps more accurately, a Microsoft. Germany was the basket-case economy in the 1920s while Russia plays that role today.

Must we suffer? Absolutely NOT. During the last Depression there were many people who were not trampled, who were not destroyed. Some of these people were simply lucky. Others, though, were those rare individuals who grew up listening to their grandparents. If your grandparents aren't with you anymore, you'll find books, even historical fiction, will help you regain much of the wisdom gleaned from those difficult times. In fact, the child's story of the ant and the grasshopper is an excellent illustration of what's going on today.

--------------
Diversify into what?
--------------

To Cavan Man, who asked that question in (03/04/00; 20:42:02MDT - Msg ID:26382), my answer is: a little bit of everything. The notion of diversification is to protect Most of what you own by scattering it over a wide area. You have to let go the notion that you can safeguard 100% of your wealth at all moments. There is no single investment which is completely safe at all times. But at any given moment, some investments are rising in value as others fall. If you are widely allocated across them all, on average you'll survive and progress while humanity as a whole marches forward.

In practicality, it's not necessary to be invested in everything under the sun. Few investors outside Iceland have holdings there, and the presence or absence of Icelandic assets most likely results in no significant effect on their overall portfolios.

But it is wise to have some money in at least several of the major Classes of asset. Classes include stocks, bonds, cash, commodities, real estate, etc. That by no means is meant to suggest that safety can be achieved by allocating one's wealth across dot coms, junk bonds, Russian roubles, paper gold and the deed to a dacha in eastern Ukraine. On the other hand, not a thing in that previous sentence is always a bad investment.

The trick is to identify those things which have had the overvaluation beaten out of them, but which are now poised to at least not fall much further and, someday within our lifetimes, rise again.

As you can see, I fancy myself a value investor. When the popular press uses the phrase "Twenty Year Low" to describe something's price, I'm willing to bet that's a bargain. Physical gold falls into that category, and in the unhedged cases so too do many of the mining stocks. By contrast, when headlines cry out "The Sky's the Limit," I'm ready to run for my life. Overly expensive soap, even after its recent plunge, still falls into the category of Best Avoided.

Nations take the same broadly diversified approach to their possessions, but with a twist. Real estate obviously is their core holding, though more liquid forms of wealth are carefully acquired as well, and are expended at need. The Bank of England has come under suspicion of stupidity as regards its ongoing sale of gold. Surely they see it's at a 20 year low. Why not sell some other asset which is more ripe for sale? Because governments aren't investors, and their goals are not those of you and me. The BoE has as its prime obligation the maintenance of order, not the acquisition of maximum profit.

They've evidently concluded that, in order to accommodate some larger (and as yet not obvious) need, it's necessary to present the image that the UK, like Belgium, no longer needs vast amounts of gold gathering dust in vaults. Keep in mind, the BoE's gold holdings seem vast to us but are well less than one per cent of the assets they could muster at need (both from their own coffers and from those of other governmental entities). They're expending gold today in the same way that you occasionally choose steak over hamburger. It's not a particularly big concern from their point of view.

I don't know what their larger concern is specifically, but it's likely involved with either smoothing our entrance into Euroland, or staving off market instability, or some of both. Whether the gold sales are later seen as an appropriate sacrifice, or as throwing good money after bad, is something only time will tell.


--------------
You say you want an evolution?
--------------

To USAGOLD, who asked other questions in (3/7/2000; 19:50:03MDT - Msg ID:26509). It's regrettable, but inevitable, that individuals go the way of the dinosaur, in the sense of becoming extinct. Margaret Thatcher still speaks her mind, but is listened to less and less because she's ageing. While, to be sure, she's ageing less precipitously than Boris Yeltsin and Ronald Reagan, still with each passing day her ability to influence affairs wanes.

There's a folk singer over here named Al Stewart. I think Year of the Cat made it to America, but I doubt anything else of his did. I especially like one of his songs about a retired admiral who sees the 1914-1918 war coming, and yet cannot get anyone to listen to him: "the war, it ran its course, they could find no use for me. And I live in the country now, grandchildren on my knee. And sometimes think in all this world the saddest thing to be... old admirals who feel the wind, and never put to sea." Until they scripted a movie to say otherwise, I'd always pictured Jim Kirk going out that way, but Old Admirals applies just as tragically to anyone in the real world who's no longer appreciated.

Empires, on the other hand, go the way of the dinosaurs in the sense that dinosaurs stopped being rulers of the earth yet remain among the new rulers (mammals) to this very day, merely in new forms (they became birds). In a song called All This Time, another singer, Sting, wrote a rather haunting stanza about London: "The teacher told us, the Romans built this place. They built a wall and a temple, an edge of the empire garrison town. They lived and they died, they prayed to their gods, but their stone gods did not make a sound. And their empire crumbled 'til all that was left were the stones the workmen found." The empire fell, yet the descendants of Roman citizens flourish all over the world today.

Along the same lines, and more timely here in the year 2000, is another of Al Stewart's lines: "and the world goes to Riyadh... today."

Empire is never a permanent thing. Rome was the hub of empire for a thousand years, while Londinium was an edge-of-the-empire garrison town. A thousand years or so later, London was the hub of empire, while the Maryland/Virginia border was a swamp. Living the good life in Claudian Rome or Victorian England or 1950s America required finding one's place in society and excelling there. Living the good life in the declining years of any empire requires adopting a more mercenary mindset. It's often bemoaned in the press, "There are so few statesmen today, and so many politicians." Such is typical when the bloom is off the rose in an empire.

Is the UK an empire anymore? No, clearly not. It's a loose commonwealth little more co-ordinated than the orphaned Roman provinces or the former USSR. Does that matter to living Britons? Not particularly. The worst is over in that regard: the UK is simply a nation now, a province looking for another empire to which to adhere. Naturally, we happen to think we ought to be first among equals in any such adherence, and that may cause any transition to be a bit bumpy, but in the main I think we're resigned to accept what history has left to us, as did Italy, Spain, France, Germany, Japan, and most recently Russia.

Is the U.S. an empire anymore? Yes, for the present. How long will it retain imperial (superpower) status? Difficult to tell. These things seldom end in a single day (with the notable exception of Japan). Often it requires a century. If we define the start of an empire's decline as the moment when it ceases to grow, that date for the U.S. may well have been set by the ascension to statehood of Hawaii. That marked the last time the U.S. absorbed another nation and made its citizens Americans. Having said that, the U.S. has yet to stop placing edge-of-the-empire garrison towns throughout the world (Bosnia, Haiti, Kosovo, Ecuador, next?), so maybe the empire is not finished quite yet.

The U.S. is in many respects like Rome. The U.S. did to Japan and Germany roughly what Rome did to Hispania, Gaul, and so on: overwhelmed and devastated them, then rebuilt them from the infrastructure up as carbon copies of the imperial hub. NATO is surely the modern equivalent of Pax Romana, and though the rest of us might have imagined ourselves as having equal voting rights in NATO, it's fairly apparent that the whole thing was a U.S.-run show throughout the Cold War. You've spent the past century spreading your cultural ideals, much as the Romans did. I'll grant your notions of human rights are quite a bit more decent than those presented by Rome, but both of you tended to push those notions on your neighbours without bothering to ask whether they would be appreciated.

In both empires, centuries-long monetary devaluations were made palatable by the provision of cheap food and entertainment: bread and circuses for the Romans, government subsidised cheese and wrestling for the U.S. One current U.S. state governor is a former gladiator who leaves open the option of returning to the arena some day. One of the U.S.'s recent presidents was an actor. Most U.S. television programmes are at least as violent (and as carefully we-they) as were Roman arena spectacles. I'll leave it to you to continue the list of parallels, for there are quite a few of them.


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No need to be pensive
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Speaking of monetary devaluations, the much anticipated (or dreaded) U.S. Golden Dollars are truly nothing much to become excited about. Why?

First, despite all political attempts to call them Golden, these coins will not remain even remotely so once in circulation. They will quickly acquire a colour not unlike the oddly-shaped Three Pence coins which were minted in Britain from 1937 to 1967. For those of you who've never seen one of these beauties, their circulated patina can best be described as that of oily mud. As best I can tell, they're where the term "brass in pocket" came from.

Second, this new U.S. coin is a dollar in name only. In practice, in purchasing power, it's a larger, slightly less unlovely repeat of the Three Pence.

What was the value of a Three Pence back then? A pence by definition was one 240th of a pound of sterling silver and at the same time one 240th of a single gold sovereign (a sovereign being .2354 of a Troy ounce of gold), so a Three Pence back then was worth one 80th of a single gold sovereign.

How much does a single gold sovereign cost in terms of dollars today? In the neighbourhood of $80. As I said, this new "Golden" Dollar is today worth approximately what one of those ugly Three Pence coins was worth: one 80th of a factually gold sovereign.

It seems to me that's the true message behind this new coin.

Yours,
I.V. Holtzman

PS: Here's the only colour URL I could find of the British Three Pence: http://sr2.xoom.com/talshiarr/britishcoins/Geo6-3d-1940brass-rev-xpar.gif

And here's a URL of the new dollar: http://128.192.145.172/US/one/000pus1dc.jpg Doesn't look particularly golden, now does it?

PPS: Someone recently posted that sovereigns have no face value minted onto them and so therefore are somehow free-floating in value. The premise is true, and the conclusion is true, but the one is not the cause of the other. The sovereign size (.2354) was chosen as the amount of gold which, in 1700s-era purchasing power, was equivalent to one pound of sterling silver. A sovereign was a �1 coin just like the U.S. St. Gaudens was a $20 coin. Sovereigns were used precisely as �1 pieces so long as the Empire maintained its original gold standard. Since then, like the St. Gaudens, their gold content value, and numismatic value, have caused their resale prices to float independent of their original face value.

PPPS: Did you know that a Rothschild recently began investing in dot coms? This fact alone should tell you that these people are not the ever-correct gods they're sometimes mistaken for. Centuries of inherited wealth evidently have not helped him resist the call to invest at the top of a bubble. He may ultimately lose the vineyard as a result.

http://biz.yahoo.com/p/c/calvf.ob.htmlThey should be releasing a quarterly towards the end of the month - if it is like this info:

"For the six months ended 6/30/99, revenues increased 3% to C$7.4 million. Net income totalled C$4.8 million vs. a loss of C$816 thousand. Results benefited from improved production of silver at Filon Sur Gold mine and a C$5.3 million gain from the retirement of long term debt."

It seems that the next step would be to make an actual profit rather than book generated adjustments to a negative cash flow.

http://www.caledoniamining.com/cal3q.pdf

"Spain
During the third quarter of 1999, the Filon Sur gold mine produced 7,931 ounces of gold and 46,682 ounces of silver as compared to 7,555 ounces of gold and 45,878 ounces of
silver during the same period of 1998. Total production for
the first nine months of 1999 is 24,535 ounces of gold and
161,050 ounces of silver as compared with 23,464 ounces
of gold and 158,319 ounces of silver during the first nine
months of 1998. Production of gold in the third quarter
improved over that in the second quarter due largely to the
higher head grade of 1.68 g/t gold. Dry tonnage of ore
crushed during the third quarter of 1999 was 243,227
tonnes as compared to 249,544 tonnes in 1998.

"Other
Discussions to finalize the formal Joint Venture agreements with the BHP Entity (BHP World Minerals Inc. and its affiliate Motapa Diamonds Inc.) on the Mulonga Plains properties in Zambia and with Northern Empire Minerals Ltd. on the Kikerk Lake property in Nunavut, Canada are continuing."

Their exploration activities could have resulted in anything.

This gold company used to be a great fav of the microgold speculators during 1998.

"In response to the continued erosion of revenue from gold production in 1997, which averaged
$327 US per ounce for the year, and in accordance with the accounting policies of the Corporation, a write-down in
the carrying value of various assets was recorded in the accounts. From 1992 to 1997 the Corporation has recorded
write-downs in accordance with this policy of approximately $67.9 million or 95% of the $71.8 million accumulated
deficit present as at December 31, 1997. During the fourth quarter of 1998, a further write-down of $ 46.0 million
on mineral properties and capital assets was recorded in the accounts reflecting the impact of the continued decline
in revenue from gold production which averaged $ 296 US per ounce for 1998. As of December 31, 1998, 93% of
the accumulated deficit of $ 122.3 million is attributable to write-downs of mineral properties and capital assets."

http://www.caledoniamining.com/annual.pdf

This is the recovery potential in NAV at gold POG of $400, which comes to an extra $1.2 per share on top of the current value of its operations - which are cash positive at current prices but for corporate overhead and exploration activity.

The mineral resources are at 0.05 oz. per share or $6 per ounce, and $55 per ounce for operational mine reserves. Of which 0.006 oz per share are worth $0.04 as current production at current prices.

They have a collection of 8 exploration properties, mostly of metals (Cu, Cb, Au, Ag, C4=diamonds) that are showing some encouraging results. Info may be leaking on some hits. Found nothing on the Chat spots I checked. They have a strong history of successful findings but were clobbered by the low gold prices and have not released any info on current exploration activity in a while.

Bottom line, WHO KNOWS?

I certainly don't.

I can say that at $0.05 it was a bargain. At $0.30 it ain't so hot unless they landed a good deal to develop their big reserves or had a good new strike, they still have space to make discoveries of up to some 10 mil oz of gold equivalent resources. This does not mean that they can actually find that amount or that the amount is there at all.

Clueless...

http://208.246.212.80/business/news3-03102000.htmChina appears to be more brazen and arrogant as the Taiwanese elections approach. Now China is threatening to retaliate against U.S. firms if it doesn't get its WTO entry. This bullying might just backfire in Congress. However, the real ace up the sleeve is China's massive holding of U.S. treasury obligations--somewhere above $100 billion--which could be dumped on the market (or threatened to be dumped). This action would drive down the U.S. dollar which is looking toppy now according to cycles and chart patterns. Chinese elections take place on March 18th, so watch for highs in the Dollar around this time. Any weakness in the Dollar would be a boost for gold.

http://www.bis.org/publ/r_qt0002.htmRegular Publications


Quarterly Review: International Banking and Financial Market Developments
(February 2000)

INTRODUCTION
The fourth quarter of 1999 marked the culmination of a year of rising equity prices, climbing bond yields and easing credit spreads. These developments reflected increasingly sanguine market expectations about the global economy. Not only did market participants see improved growth prospects in most regions, they also seemed assured about the ability of monetary authorities to keep inflation in check without pushing economies into recession. Concerns that the millennium date change might disrupt market functioning dampened market activity, but these concerns were allayed once central banks in general took operational measures to ensure that liquidity would be provided if and when appropriate. In the event, the new year arrived without significant market incident.

Spreads on interest rate swaps were among those that eased during the fourth quarter. This particular development was especially notable, because hedging activity associated with a surge in corporate bond issuance during the summer had inflated such spreads to unusual levels. Even after their recent decline, these spreads have remained high by historical standards. The behaviour of the swaps market may have signalled broader changes in market functioning and pricing relationships in private and government debt markets, changes stemming from the market turbulence of the second half of 1998 and current and prospective supply trends in the two types of markets.

The weeks surrounding the turn of the year highlighted how quickly market sentiment can change. By the end of the fourth quarter, stock and bond markets seemed to be brimming with confidence about the ability of monetary policy to engineer a soft landing in the United States and support non-inflationary growth in Europe. The month of January 2000 found the very same markets wavering in their views. European and US bond yields rose sharply on evidence of unrelenting strength in the US labour market and on news of continued increases in oil prices. The prospect that monetary tightening might be more forceful than initially anticipated led to a sell-off in the US stock market and heightened volatility in other equity markets.

Newly released comprehensive BIS data on the international banking market for the third quarter of 1999 show the largest volume of net lending ($188 billion) since the second quarter of 1998. The rebound was driven largely by a resurgence in the interbank market among industrial countries, in which the absorption of unusually large repayments from non-bank borrowers led to a temporary expansion in interbank balance sheets. By contrast, the third quarter saw the sharpest decline in claims on emerging market borrowers since the credit squeeze that followed the Russian debt moratorium in the third quarter of 1998. This time, however, the decline seemed to be driven by a shift in the demand by these borrowers away from bank loans to securities issuance. Aggregate activity in international syndicated loans declined in the fourth quarter in spite of a rebound in merger and acquisition deals.

Notwithstanding the more favourable credit spreads, gross and net international securities issuance declined in the fourth quarter of 1999 after three quarters of record activity. Although an increase in the amount of debt needing to be refinanced supported gross issuance, announcements of bonds and notes still declined by 25% (to $310 billion) relative to the previous quarter. The slowdown reflected primarily a front-loading of activity to earlier quarters and a postponement of other issues to the new year because of concerns about possible market disruptions related to the millennium changeover. Net issuance fell by 37% (to $193 billion), but was still twice as large as that in the fourth quarter of 1998, when activity had slowed amid generally adverse market conditions and in anticipation of the introduction of the euro. The euro's weakness in 1999 did not prevent net issuance in the currency from increasingly outpacing that in US dollars.

The aggregate turnover of exchange-traded financial derivatives monitored by the BIS contracted by 17% in the fourth quarter of 1999 (to $76 trillion), the lowest level since the fourth quarter of 1996. The dominant influence in the fixed income and currency market segments appears to have been the effort by market participants to pare down their positions to a minimum ahead of the new millennium. The main exception to the downward trend took place in the area of equity-related instruments, where the record levels reached by equity indices led to a widespread increase in the value of turnover.

An analysis of spot and forward FX trading volumes suggests that the introduction of the euro has not to date caused major changes in FX market activity. Results from an informal survey among market participants and information from electronic brokers indicate that the importance of the new currency in FX trading roughly matches that of the Deutsche mark before 1999. In particular, the reported share of trading in euros against dollars in October 1999 was about the same as that of dollar/mark trading in April 1998. Furthermore, the share of euro/yen trading still accounts for only a small part of the total market. In emerging market countries, the role of the euro so far seems similar to that of the mark, being confined mainly to eastern Europe. Outside eastern Europe, FX transactions involving the domestic currency are currently conducted mainly against the dollar.


Hopefully this has not been posted before.

The Fed gave the banking system a little room to breath with a term repurchase agreement instead of an overnight RP. Specifically, the Fed added $2.850 billion to reserves via 7-day system repos.

e

http://home1.gte.net/elvish/smoking.htmHi, I have been reading this list for awhile now. When I saw the discussion turn to smoking I decided I should add some input. The reason this is late, is because I had not posted before, and had to wait for a password. And, may I add this is one of the coolest boards out there. First, I would like to say I do not smoke. But, I believe in freedom, thats why I'm a goldbug, because it is "free" money, in that it can not be made by the government. Liberty is important. I have a web page (over 2 years)concerning the smoking issue.
http://home1.gte.net/elvish/smoking.htm
If you do not defend the rights of those you disagree with, then your rights will be next.

In Peace and Honor
David Hintz
www.DavidHintz.org

Can you explain now your preference for pre-33 non-legal tender coins?

Gotta run -- looking forward to a late night reading of today's juicy posts, and a stimulating weekend ahead on our forum.

http://www.polyconomics.com/She even has a plausable model of a gold standard dollar.

The Gold Trail Discussion has been updated. Click on the link to read the latest updates.

http://www.usagold.comDoes anyone have an idea of what will happen to the dollar if China takes over Taiwan as to how it could effect tech industry?

Do we have and indications that China would back down from taking Taiwan if it would keep them out of the WTO?

Do they really care about the WTO?

I don't keep up with enough accurate news sources to develop a knowledgeable opinion. Sincerely, 4-Ducat

It seems obvious that China wants Taiwan because of the value in terms of tech business that Taiwan has. If Taiwan was an island with a bunch of natives running around, I don't think anyone would be particularly interested.

While its just speculation on my part, I think they will get both Taiwan and entry into the WTO. The Senate just narrowly agreed to pass the bill to allow them into the WTO. Its up to the House of Representatives to shoot it down.

Support for entry into WTO is driven by US businesses. If assurances are given that there would be minimal interruption of trade, and China certainly would try to avoid any interruption of dollar inflows, Taiwan is lost.

It amazes me that Clinton is pushing for China/WTO at the same time China is threatening to nuke us if we intervene in their invasion of Taiwan. I don't buy the "lets accommodate the younger, less political faction who is more interested in doing business than communism" argument in an effort to lead China to become a more democratic country.

The threat to nuke us should be sufficient reason to set them back 20 years in their effort to enter WTO. After all, we bomb the hell out of Iraq in the expectation that the people will revolt against Sadam Hussein, why change policy for China... unless our administration owes them something.