"0">

5/5/00 Indications	Current	Change
Gold June Comex	281.90	+0.70
Silver July Comex	5.13	-0.04
30 Yr TBond June CBOT	93~20	-0~06
Dollar Index June NYBOT	111.30	-0.40

Market Report (5/5/00): Gold surged ahead this morning
on sound fundamentals, inflation fears, short covering and a sense that
the negatives on gold have become a known quantity and already discounted
in the price. In addition the gold market is beginning to benefit from
the growing sense among investors that the equity markets are possibly
running out of gas, and a prudent hedge is in order 'just in case.' We
can attest to the presence of this new group of investors by reporting
a surge in business over the last few days primarily from first time investors
who are telling us that the "feel" in the markets is changing.

The good news for gold has added to the rising tide of optimism
in the gold industry itself. Randal Oliphant, Barrick Gold Corporation
CEO, "sees a stronger gold price due to the nature of gold deposits,
strong supply-demand fundamentals" and the Washington Agreement among
central bankers to limit sales and leases, according to Bridge News report
yesterday. He went on to say that demand to borrow gold will likely remain
at reduced levels. Ronald Cambre, Newmont Mining chairman, echoed the same
themes yesterday saying he was optimistic about prices adding that "hedging
has lost favor with investors." In what can only be described as a
somewhat cryptic comment that begs for elaboration, Goldfields CEO Chris
Thompson was quoted in Bloomberg as saying, "We do believe the industry
does need to consolidate. The industry needs one or two dominant players
who can ensure that the gold price doesn't get managed by others (non-gold
companies). Our industry has a crying need for that. The climate is warming
for us to do a deal." In that we agree with Mr. Thompson that the
gold price has been "managed" in the past, the reference makes
one wonder what Mr. Thompson has in mind. How would a mega-mining company
thwart the "managers?" I would say that given Mr. Thompson's
solid pro-gold stance both by word and deed, that if I had a vote on who
would run that company, he would get it.

In gold news,Asia reports short covering overnight with good dealer
support. There was selling in the London market early on. The unemployment
numbers came in at 30 year lows -- the sort of thing that has rattled the
stock market in the past. As we go to send this over to the server, stocks
are ignoring the unemployment numbers and gold is down a little. We'll
see what happens as the day progresses. This might not hold.

That's it for today, my friends. Have a good weekend. See you here
Monday.

The May News & Views is now on its way and should be
hitting your mail boxes over the next few days. We think you are going
to like this issue written during the weekend after the April 14 Wall Street
Meltdown.

If you are looking for a pro-gold view of the various financial
markets as well as a summary of the events affecting the yellow metal,
our monthly newsletter might be of interest. News & Views
-- Forecasts, Commentary & Analysis on the Economy and Precious
Metals has been characterized as witty, urbane, intelligent and
down-to-earth. Not to mention it's Free of Charge If you want to
keep up with gold, this is the way a large segment of the gold owning public
does it, and has done it for over a decade.

Just click here ---> TARGET="external">ORDER FORM <--- and make the appropriate
entries.

For an on-going discussion on the gold market and the investment
universe that revolves around it, we invite you to visit our very popular
and highly visited TARGET="external">DISCUSSION FORUM.

---

PLEASE REMEMBER: It is your purchase of gold from Centennial Precious
Metals that nourishes these pages.

---

"2">

USAGOLD

(05/05/2000; 09:05:57 MDT - Msg ID: 29984)

Let's try this again. . .Today's Report: Gold Industry Optimism Prevails

http://www.usagold.com/Order_Form.html5/5/00 Indications
�Current
�Change
Gold June Comex
281.90
+0.70
Silver July Comex
5.13
-0.04
30 Yr TBond June CBOT
93~20
-0~06
Dollar Index June NYBOT
111.30
-0.40

Market Report (5/5/00): Gold surged ahead this morning on sound fundamentals, inflation
fears, short covering and a sense that the negatives on gold have become a known quantity and
already discounted in the price. In addition the gold market is beginning to benefit from the
growing sense among investors that the equity markets are possibly running out of gas, and a
prudent hedge is in order 'just in case.' We can attest to the presence of this new group of
investors by reporting a surge in business over the last few days primarily from first time investors
who are telling us that the "feel" in the markets is changing.

The good news for gold has added to the rising tide of optimism in the gold industry itself. Randal
Oliphant, Barrick Gold Corporation CEO, "sees a stronger gold price due to the nature of gold
deposits, strong supply-demand fundamentals" and the Washington Agreement among central
bankers to limit sales and leases, according to Bridge News report yesterday. He went on to say
that demand to borrow gold will likely remain at reduced levels. Ronald Cambre, Newmont
Mining chairman, echoed the same themes yesterday saying he was optimistic about prices adding
that "hedging has lost favor with investors." In what can only be described as a somewhat cryptic
comment that begs for elaboration, Goldfields CEO Chris Thompson was quoted in Bloomberg as
saying, "We do believe the industry does need to consolidate. The industry needs one or two
dominant players who can ensure that the gold price doesn't get managed by others (non-gold
companies). Our industry has a crying need for that. The climate is warming for us to do a deal."
In that we agree with Mr. Thompson that the gold price has been "managed" in the past, the
reference makes one wonder what Mr. Thompson has in mind. How would a mega-mining
company thwart the "managers?" I would say that given Mr. Thompson's solid pro-gold stance
both by word and deed, that if I had a vote on who would run that company, he would get it.

In gold news,Asia reports short covering overnight with good dealer support. There was selling in
the London market early on. The unemployment numbers came in at 30 year lows -- the sort of
thing that has rattled the stock market in the past. As we go to send this over to the server, stocks
are ignoring the unemployment numbers and gold is down a little. We'll see what happens as the
day progresses. This might not hold.

That's it for today, my friends. Have a good weekend. See you here Monday.

The May News & Views is now on its way and should be hitting your mail boxes over the next
few days. We think you are going to like this issue written during the weekend after the April 14
Wall Street Meltdown.

If you are looking for a pro-gold view of the various financial markets as well as a summary of the
events affecting the yellow metal, our monthly newsletter might be of interest. News & Views
-- Forecasts, Commentary & Analysis on the Economy and Precious Metals has
been characterized as witty, urbane, intelligent and down-to-earth. Not to mention it's Free of
Charge If you want to keep up with gold, this is the way a large segment of the gold owning
public does it, and has done it for over a decade.

Just click here on link above and make the appropriate entries.

SHIFTY

(05/05/2000; 09:13:56 MDT - Msg ID: 29985)

Albania Gold Heist

Hannibal Cannibal crowd WAS out of amo. Looks like they got some now. Hmmmmmm I wonder ???

SHIFTY

(05/05/2000; 09:16:02 MDT - Msg ID: 29986)

Albania Gold Heist

I did hear " GOLD is were you find it "

YGM

(05/05/2000; 09:33:56 MDT - Msg ID: 29987)

Ahhh!...Another Day of Goldbugs Getting

screwed by the PPT.....There is one "Major" positive event for us....The "Three Horsemen" of Manipulators Appocolypse riding into Washington.......Three of the greatest Advocates for Gold and free markets that we have to offer...Reginald Howe, Frank Veneroso and our own Bill Murphy.....We should be thankful for GATAs efforts.....or do we just sit back and take this crap like whipped dogs......Send $$$$ to GATA, and become a part of the solution.......YGM.

Henri

(05/05/2000; 09:47:13 MDT - Msg ID: 29988)

Holtzman 29935/29978 and ORO 29940

Thanx for putting some numbers to my query and turning around my perception that gold is an appreciating asset :-(

Interestingly, I find the UN population figures disturbing in 10 year increments

from 1970-1980 the global population rose 20% while gold stores rose 23%

from 1980-1990 the global population rose 19% while gold stores rose 19%

then from 1990-1999 the global population rose only 13% while gold stores rose 34%?

Has aids stifled population growth of the world that significantly! I think not. Sure it is only a 9 year period and the others are 10, but this could not make up the difference of 7% could it. We are living longer here in the US but dying earlier elsewhere? Did the ZPG folks actually get their message across in the seventies (I know it worked on me) Certainly China's policies could have impacted the numbers but to this extent? I would like to see the global population decrease but fear the types of circumstances that could bring this about.

The 34% rise in gold stores is believable since the price spike in the eighties and subsequent mining no doubt came full force in the last decade.

Is this all that is needed to enforce a depreciation of this asset? A higher price? More Mining/exploration? I say right on! Bring it on!

ORO

What's up with that last set of #'s you posted?
$/oz divided by Humans/oz = $/human!!!
Is this how much we as humans are worth when sent through the gold valuation filter, or is this how much each human should have invested in gold???? Looks like humanity is a depreciating asset if was ever one (an asset) at all. Seems like the # of $ circulating vs # of humans should factor in somehow. :-)

Leigh

(05/05/2000; 09:55:12 MDT - Msg ID: 29989)

Henri

http://worldnetdaily.comDear Henri: WorldNetDaily had an eye-opening article just the other day about how population rates are actually falling. Click on WorldNetDaily, then do a search for "population" in their search engine (on the left hand side of the screen). The article is called (something like) "The Overpopulation Myth."

Henri

(05/05/2000; 10:04:25 MDT - Msg ID: 29990)

@ Lady Leigh

Thanks for the link, I have visited their site frequently over the last few years. Always something curiously interesting there.

TheStranger

(05/05/2000; 10:09:06 MDT - Msg ID: 29991)

Cavan Man's Question

People who are bullish tend to hold off buying until bad news is out of the way. Today, the bad news was the employment numbers. Many of these same people are short-term traders who will sell prior to the next widely expected bad news, which is likely to be the PPI and CPI.

Few investors saw inflation coming. Now that it is here, few doubt the Fed's ability to quickly dispatch the problem. For this reason, lots of people think they are going to outsmart this bear market by buying "at the lows". At the final bottom, however, these sentiments will be all but gone.

PEs are still very high by any historical standard. Bond yields are still way too low to compensate investors for the inflation we are already getting. Despite widespread predictions to the contrary, the economy has not yet begun to slow (sorry, Farfel). The Fed absolutely has NOT YET EVEN BEGUN TO FIGHT. It has taken them a YEAR just to push rates up 125 basis points. (This is why they will now have to accelerate the process. Yet, ironically, the pollyannas are hoping the Fed WILL raise 50 basis points so that we can declare it a coup de grace and get back to the bull market). Meanwhile, the supply of money continues to grow. M3 has gone from 6 to 6.7 trillion dollars in just the last 4 months(Even the Treasury is now contributing by retiring billions of dollars worth of bonds).

So, my take on this is that the dipsters are WAY TOO EARLY here. As I like to keep saying, "They didn't see the problem coming, so why should we believe them when they tell us it has passed?"

We here at the forum need to remember that, in the short run, markets ebb and flow. But, if we have done our homework well, as I think we have, things will turn out fine in the end.

Thanks for asking, CM.

Henri

(05/05/2000; 10:17:45 MDT - Msg ID: 29992)

Found it

http://www.worldnetdaily.com/bluesky_lobaido_news/20000502_xnlob_the_overpo.shtmlYep there it is but there are no documented #'s to back up the claims. Just referrals to other studies from which the numbers were lifted (in context?)

Hey Al Fulchino
There is an ad at the bottom for the "Finding God in Physics" book you sent.

WilloTheWarthog

(05/05/2000; 10:26:47 MDT - Msg ID: 29993)

From Berlin-Online

http://www.BerlinOnline.de/wirtschaft/.html/dpa_w3_afp161_4_0505_0505180800.htmlECB vice-president: Euro-guardians could intervene on foreign exchange market
Budapest, 5 May (AFP) - in view of the weak euro exchange rate the European central bank (EZB) did not exclude an intervention on the foreign exchange market. An intervention is possible, if it is judged necessary, said EZB vice-president Christian Noyer on Friday before journalists in Budapest. Over such a step he would meanwhile never express in advance, added the deputy Wim Duisenberg aside at a commercial conference in the Hungarian capital. "We always said: That is a tool, which we have in our hands "

WilloTheWarthog

(05/05/2000; 10:46:38 MDT - Msg ID: 29994)

Euro

http://www.lemonde.fr/article/0,2320'seq-2070-53522-QUO,00.htmlHere is another article on the Euro, from Le Monde. You can run it through Babelfish and translate it into English if your French isn't so hot (http://babel.altavista.com/, paste the url into the slot). It's saying that the UK is the Trojan Horse of Europe, anaylzing the fall of the Euro.

Although much has has been forgotten by the general population in Europe over the past 50 years about the r�le gold plays as a monetary instrument, remember that the first shot was fired back in September for the remonetization of gold. Not much favorable is reported in the US about the EU; however, attitudes are changing in Europe. While there in March, I read articles in different financial periodicals about a conference that was being held in Portugal. Europe fully expects to overtake the US during the next ten years. They also expect the US stock market and the dollar to take a big hit sometime. Of course, the ECB may have to intervene in the short term; but there is a confidence in the future that has been slowly developing over the past several years.

Perhaps the Euro is not directly backed by gold, in that there is not a set redemption rate. But the gold reserves held by EU banks is still significant.

Sure, Europe is stuck in a quagmire of socialism and overregulation. Things are loosening up, though. Some breakthrough came this year with the allowance of temporary (work) agencies in Germany; this could develop as a backdoor way to lower the cost of employment.

I know this opinion is not popular in the US, but I view the setback of the Euro as a temporary anomaly, due to overvaluation of the US dollar rather than a fundamental problem of the currency.

Black Blade

(05/05/2000; 11:02:47 MDT - Msg ID: 29995)

RossL and THC, Palladium squeeze

It should not come as a surprise that there be a palladium squeeze. We hear that persistent cry "The Russians are Coming, The Russians are Coming!". Yet there is no confirmation of official deliveries from the Russians. Likely there are black market sales from the Russian Mafia and Corrupt Russian officials (Usually one and the same). The supply draw-down of palladium will likely become more severe. Even if Russia resumes deliveries, there is no way that the demand can be met. I would suspect that there will be little if any announcements about palladium. The big users of palladium don't wish to run up prices, and the exchanges don't want to create panic or else they will just follow TOCOM's lead and default. Simply put, there isn't enough palladium to satisfy demand. This monkey business with the TOCOM is just one of many red flags here. Ted Butler could be right about the silver market being in as bad of a situation as well. The big money - Buffet, Soros, and Gates have placed their bets on Silver (and possibly other PMs too). I'm afraid that much of the news about these PM markets is being suppressed. If news about severe shortages were to become common knowledge, we could expect to see the PM markets default and declare Force majuere on all deliveries. I for one will remain with physical and mostly unhedged producers. BTW, added 6.5 more ounces of Barrick safety award gold yesterday (at spot!), plan to get a bit more this afternoon.

ORO

(05/05/2000; 11:05:11 MDT - Msg ID: 29996)

Henri - Real dollars per person

The Holtzman figures in H/Oz are compared to real $ per oz. The result is real $ per H as a price rather than a ratio of totals (# of dollars in float per H, or something like that). H/Oz is the supposed measure of supply (Oz) and demand (H) ratio.

The concept is that there should be some correlation between them, if there is one, it should either come out when the two figures are divided (for a linear relation going through 0,0) or plotted one against the other.

The numbers don't quite work out, but they do show a consistent floor. Gold production in the 1840s and 1850s expanded dramatically, as it had at the turn of the previous century. The surprising thing is that these periods should mark the same bottoms in the price relationships.

Black Blade

(05/05/2000; 11:10:52 MDT - Msg ID: 29997)

YGM and getting screwed!

hey guy, don't think of it as getting screwed by the PPT. Think of it as a big sale on PMs. Actually I use my profits from my other stocks (techs, and gulp - yes dot.coms) to purchase PMs and PM stock and even some high yeilding utes. I'm content to bide my time accumulating a nice stash. I get fewer ulcers if I think of it in this manner. Besides, the manipulators will eventually get their comeuppance. You can only push a balloon under water so far, before it breaks loose and skyrockets above the surface! Take care - Black Blade.

SHIFTY

(05/05/2000; 11:21:52 MDT - Msg ID: 29998)

Just for fun

A man takes the day off work and decides to go out golfing.He is on the second hole when he notices a frog sitting next to the green. He thinks nothing of it and is about to shoot when he hears, "Ribbit 9 Iron".
The man looks around and doesn't see anyone. Again , he hears, "Ribbit 9 Iron." He looks at the frog and decides to prove the frog wrong, puts the club away and grabs a 9 iron.
Boom! He hits it 10 inches from the cup. He is shocked. He says to the frog , "Wow that's amazing. You must be a lucky frog, eh?" The frog replies, " Ribbit Lucky frog." The man decides to take the frog with him to the next hole.
What do you think frog? the man asks. " Ribbit 3 wood."
The guy takes out a 3 wood and ,Boom! Hole in one. The man is befuddled and dosent know what to say.By the end of the day , the man golfed the best game of golf in his life and asked the frog , "ok where to next?" The frog replies," Ribbit Las Vegas".
They go to Las Vegas and the guy says, " Okfrog, now what? The frog says "Ribbit Roulette." Upon approaching the roulette table , the man asks, " What do you think I should bet?" The frog replies, "Ribbit $3000., black 6." Now , this is a million-to-one shot to win, but after the golf game the man figures what the heck. Boom!! Tons of cash comes sliding back across the table.
The man takes his winnings and buys the best room in the hotel. He sits the frog down and says, "Frog , I don't know how to repay you.You've won me all this money and I am forever grateful." The Frog replies ,"Ribbit kiss me". He figures why not, since after all the frog did for him , he deserves it. With a kiss the frog turns into a gorgeous 15-year old girl.
And that, your honor ,is how the girl ended up in my room. So help me GOD or my name is not William Jefferson Clinton.

Rhody

(05/05/2000; 11:31:17 MDT - Msg ID: 29999)

Lease rates, gold above ground, EURO

LEASE RATES
An across the board increase of about .01% predicted
the fall in spot prices today, also, gold usually has a
bad day on Fridays. A lease rate surge of this magnitude
indicates that actual leasing volumes rose about 2%.
It is my opinion that the inflationary unemployment
rate figures guaranteed an attack on pog to head off any
rotation into the ultimate safe haven. Even the XAU was
hit, and this was done before the attack on pog about 10:30,
as gold stocks were weak from the opening of NY markets.

HOLTZMAN
Your study of above ground ounces of gold per capita
was very interesting. To those who are concerned that there
is a tripling of per capita gold supplies since 1850, and
that population growth seems to be slowing while mine output
remains high, we must remember that slower population growth
enhances per capita incomes, allowing more investment income
per capita to be available for gold consumption. Besides
the somewhat pessimistic ratio of gold supply to population
ignores the volume of paper assets that have been printed
in excess of physical reality. Population growth has fallen from 2.1%/yr in 1980 to about 1.8% now. This is
still exponential, and will result in the total mass of
human protoplasm equalling the total mass of planet earth
in approximately 400 years. This scenario is about as
likely as the US dollar surviving as the world reserve
currency for ten more years.

Willo The Warthog
Yes the EURO is suffering a little birth trauma here,
but I really do think the EU is far sounder as an economic
entity than the US. In fact the decline of the EURO is
a function of the lower interest rates set by the ECB, while
the high dollar is high only because of the capital sucked
in by high US rates. The high US rates are signalling
weakness. The real question here is what the ECB is likely
to do about this, given that in this second volley of the
currency war (Washington Accord was volley #1.) the EURO
appears to be seriously damaged.

1. The ECB could raise interest rates. (doubtful, as this
would damage European recovery out of the Russian collapse and Asian Crisis.)

2. The ECB could sell US treasuries. (This would be highly
inflationary in the US as they would just monetize, and
then raise US rates again to control inflation. This
in turn might collapse both US equity and bond markets,
creating systemic risk)

3. The ECB could raise the gold backing of the EURO, and
buy gold on the open market to offset the inevitable
retaliation on the price of gold.

4. ? Perhaps someone with more financial knowledge could supply some additional strategies here.

TownCrier

(05/05/2000; 11:46:18 MDT - Msg ID: 30000)

Glitches, hackers, and extremely virulent computer bugs...

http://biz.yahoo.com/rf/000505/g4.htmlJust another among many reasons to value to yellow metal even in a high-tech world.

According to this Reuters article, the "love bug" and is offspring have rapidly spread around the globe from astarting point thought to be in Asia. It is said to have disabled tens of millions of computers, and has created losses now estimated to be in the billions.

Samir Bhavnani, a research analyst with Computer Economics said, "We estimate $2.61 billion of damage has been done. By Wednesday, the total can reach $10 billion. We see damages growing by $1 billion to $1.5 billion a day until the virus is eradicated."

WilloTheWarthog

(05/05/2000; 12:06:00 MDT - Msg ID: 30001)

Rhody-More on Euro

4. They can play a waiting game. That is what I believe they are doing.

It is not only the Europeans who could dump US debt. This is a strategic weakness that is not recognized (at least anywhere in the US that I have read) by most US analysts.

China certainly recognizes this. From the book "Unrestricted Warfare", two quotes:

"Today, when nuclear weapons have already become frightening mantlepiece decorations that are losing their real operational value with each passing day, financial war has
become a "hyperstrategic" weapon that is attracting the attention of the world. This is because financial war is easily manipulated and allows for concealed actions, and is also highly destructive. By analyzing the chaos in Albania not long ago, we can clearly see the role played by various types of foundations that were set up by transnational groups and millionaires with riches rivaling the wealth of nation states. These foundations control the media, control subsidies to political organizations, and limit any resistance from the authorities, resulting in a collapse of
national order and the downfall of the legally authorized government. Perhaps we could dub this type of war "foundation-style" financial war. The greater and greater frequency and intensity of this type of war, and the fact that more and more countries and non-state organizations are
deliberately using it, are causes for concern and are facts that we must face squarely."

"...if the attacking side secretly musters large amounts of capital without the enemy nation being aware of this at all and launches a sneak attack against its financial markets, then after causing a financial crisis, buries a computer virus and hacker detachment in the opponent's computer system in advance, while at the same time carrying out a network attack against the enemy so that the civilian electricity network, traffic dispatching network, financial transaction network, telephone communications network, and mass media network are completely paralyzed, this will cause the enemy nation to fall into social panic, street riots, and a political crisis. There is finally the forceful bearing down by the army, and military means are utilized in gradual stages until the enemy is forced to sign a dishonorable peace treaty."

I have seen *very* little on this in the US press. The world economic situation could change rapidly if such attacks were to occur.

WilloTheWarthog

(05/05/2000; 12:18:56 MDT - Msg ID: 30002)

Unrestricted Warfare

http://www.terrorism.com/documents/unrestricted.pdf...For anyone who cares to peruse this 20th century masterpiece.

Galearis

(05/05/2000; 12:24:32 MDT - Msg ID: 30003)

@Willo-the-Warthog re: Rhody

I agree, I agree, I agree. The EU really does not have to do anything except sit back and let the fiscal fundamentals assert. As ORO stated earlier, the demise of the dollar was set as of 1998 - or really from the Nixon default. Thank goodness the Euro is the firefighter to catch the victims leaping from the house of dollars.

Rhody also believes, as do I, that the ECB will not make a fools rush in to fire another golden bullet at the US again, as the fundamental weaknesses of a paper derivative market will over time address and reflect the reality. Paper burns, gold doesn't.

If they can maintain the farce over the coming months, then the bleed of physical will end up in some honest pockets (ours) at the discount of paper prices. It is the price they pay for a crooked market and it never hurts to remind gold bugs of this. For every gain there is a loss, for every loss there is a gain. Their loss is the cheap gold.

WilloTheWarthog

(05/05/2000; 12:49:22 MDT - Msg ID: 30004)

Press Release from Wim Duisenberg Today

http://www.ecb.intThis just came up on the ECB site. I don't want to beat this to death, hope it's interesting:

ECB PRESS RELEASE

Statement on the euro by Dr. Willem F. Duisenberg, President of the European Central Bank

5 May 2000

The current development of the euro's exchange rate has given rise to questions from European citizens who are concerned about the value of their currency. To them, I would like to say the following: I understand their concerns, since a persistently lower euro exchange rate might ultimately lead to higher prices in the shops. It may also undermine the perception of the euro as a stable currency. Therefore, we at the ECB monitor the euro exchange rate very closely.

Citizens should feel reassured by the fact that prices are currently stable in the euro area. Indeed, over the last decades there have been few periods in which prices have been stable for so long. This internal stability of the euro means that people can be confident that their savings and pensions will keep their value over time.

In order to counter risks to price stability the ECB has over the past six months taken measures and increased interest rates four times already. It will continue to do all it can to maintain price stability in the euro area. This will also help to turn the current economic upswing into a long period of high economic growth and falling unemployment. European citizens can be assured that the future of the euro is that of a strong currency, based on price stability and the strength of the European economy.

ORO

(05/05/2000; 13:31:00 MDT - Msg ID: 30005)

THC - price setting in futures markets

There is more to the PM markets than the futures. The PMs have a status as money and one can open gold accounts at almost any major bank and some (few) offer silver, and plat. The IMF has official settlement prices for the PMs mentioned, it does not have one for Pd.

Because of there being banking activities in these PMs the futures markets in these function as currency markets do. The one exception to this is the case of physical shortage.

The trading on the futures markets is "equalized" by arbitrage as described in the Black-Scholes equation in its various guises. The one limitation on effective arbitrage between the most active month (where the dollar volume is) and the physical markets is the availability of physical with which to take a position.

In the kind of severe backwardation we see today in Plat, and we have seen before in Pd, the arbitrageur wanting to play the "sure thing" 5.5-5.8% return on monthly backwardation would need to do one of the following, according to their position:
Holder of Pt would simply sell the Pt and buy the next month future. Alternately, he would make available the Pt to a dollar based arbitrageur at a portion of the "lease rate". Another wat to profit is to sell active month call options (which have high volatility premiums) and delta hedge the option on the same-month future. The risk is that of losing your Pt while being locked out of the market during limit up days that don't allow you to continue the delta hedge. You would not lose DOLLARS, but you risk your Pt holding.

The dollar arbitrageur can profit from the arbitrage by:
1. borrowing physical Pt below the lease rate (if possible) and selling physical while buying the future contract.
2. Selling the current active contract and buying the next contract.
3. Become a Pt owner by buying Pt and using one of the holder's strategies above.

Since PM accounts at banks (bullion banks) are not normally fully allocated, the bank has ownership of the deposited bullion and owes you the bullion upon demand or at a set date (a Pt CD). The bank will make use of the above strategies to gain profit from the arbitrage.

The most common form of arbitrage is the delta hedged option. However, delta hedging is not the smartest way to profit in "normal" circumstances. Normally, the bank will be familliar with the positions of its competitors and allies in the markets and can join with them in pushing the markets in their favor.

To make the banker's position clear, the business of banking is the marketing of debt. The demominator of the debt need not be on hand at all. When one opens a non-allocated gold account (the normal type of gold account), then the bank is under no obligation to have any gold to back the account. The bank only needs the gold when the gold is requested for delivery in hand or into a fully allocated account.

Thus the banker will take your dollars deposited as a gold account, and use them to buy bonds or lend. If gold or Pt was deposited the bank will do one of the following:
1. If currency interest rates are higher than metal lease rates, it will sell the metal, buy the currency and invest it.
2. If the lease rate is the higher rate, the bank will lend the metal itself.
3. If reserves are low, and there is danger of a "bank run" (depositors of metals asking for their metal) then the bank will keep the metal for reserves, however, it will sell call options into the market in order to make a return on the reserves. Often, these calls would be delta hedged.

When the banking system is over-extended, which is very very common, it can:
(1) take a defensive position by buying metal - the plus is coverage of positions, the minus is that the market will move against the bank,
(2) it can try to move the market towards its position - the plus is that the danger of depositor psychology moving against the bank is likely to be eliminated, the minus is that the banks will be further burried in their position, (3) roll over obligations to longer maturities to limit immediate demand and buy short term futures and physical to assure supply,
(4) Work with other banks to avoid them all stepping into the market in the same direction. Since all banks do the same kind of business, they will all share the same problems at the same time. The Fed got the banks together during the LTCM crissis in order to avoid having them "run for their lives" and try to liquidate the same positions as LTCM held at the same time that LTCM was doing so. Before that and since, the banks regularly confer and make decisions on this kind of "systemic risk" so as to avoid their seeking liquidity at the same time. Since banks can only supply more "paper" or liquidate more reserves, that will be what they will all do.
(5) If a bank has a very large client who has an allocated account, or has physical, the bank may look for the appropriate return for the holder so that the physical could be made available to "liquify" the bank. The return is not necessarilly in the form of monetary reward by high interest rates. It may take the form of political assistance, the selling of a desired asset well below market price (say, arranging for the buyout of Chrysler, helping Prince Alwaleed -sp? get a chnk of Microsoft, or getting both French and American forces to stage an appearance with massive force in Kuwait).

In short, things in the PM markets are in no way similar to those in the commodities markets.

Peter Asher

(05/05/2000; 14:41:05 MDT - Msg ID: 30006)

TownCrier (05/05/00; 11:46:18MT - usagold.com msg#: 30000)

I would like to think that our group here are not part of the great thoughtless masses who havn't yet "Got it" that you don't open up an E-mail "Attachment" from a scource you don't know! As P.T. Barnum said "there's a sucker born every day."

Hill Billy Mitchell

(05/05/2000; 15:09:58 MDT - Msg ID: 30007)

Official release

Official: Federal Reserve Statistical Release

Release Date: May54, 2000

Rates for Thursday, May 4, 2000

Federal funds 6.05

Treasury constant maturities:
3-month 5.90
10-year 6.46
20-year 6.59
30-year 6.19

right-side up spread FF vs long bond = +.14%

Harley Davidson

(05/05/2000; 15:38:03 MDT - Msg ID: 30008)

Peter Asher, TC, additional info...

The reason this particular virus propagated so quickly is because it sent emails to everyone in the individuals machine's address book so if your email address was in my address book and I opened the attachment (which would have come in an email from someone who has my email address in their address book) then you would have received an email from me with the viral attachment. The rule is - never open an email attachment (especially a .exe, this virus is a .vbs) from someone you don't know. Having received email from me in the past (as your email address was in my address book), I suspect you would have opened the attachment.

I work at a software development company. One of our software engineers received the virus email from one of our clients. The natural thing to do would be to open the attachment, and he did. Of course he is kicking himself now. Immediately, the email showed up on my machine but I had read the CNBC article about fifteen minutes earlier and brought the issue to his attention.

This issue exposes a very real problem with the Microsoft Windows environment which is that it is incredibly vulnerable to this kind of attack. The virus was a .vbs file. This is a Visual Basic Script file. So all one has to do is write a program using this scripting tool and attach it to an email. When it is opened, it has complete and total access to the entire host machine and Windows will execute it without question. In other words, it is way too easy for anyone with a computer and a VB Script for Dummies book to cause potentially billions of dollars of damage. I went on a rant several days ago about Microsoft and what I thought of their technology so I will not repeat those thoughts here. I wouldn't be surprised if there aren't some lawyers out there wondering if there might be a class action suit against Microsoft in all of this.

Lastly, this "hacker" was no genius as he missed several opportunities to do some "serious" damage. For instance, instead of sending emails to all addresses in the address book, it would have been far more effective to cycle through the "Sent Mail" folder and email to everyone that the host ever sent email to. There are other examples but they are better left unsaid.

Rhody

(05/05/2000; 15:55:14 MDT - Msg ID: 30009)

@ Willo The Warthog

Your press release from W. Duisenberg suggests that the
ECB may resist raising interest rates to defend the EURO,
as this might stifle European economic recoveries.

I am quite sure that the ECB would prefer to do nothing,
and allow the EURO carry to continue to expand the debt
trap. I don't think the EURO is ready to confront the
dollar directly yet. For one thing, the EURO group
won't issue currency and coins until Jan 2002.
The LBMA, at present rates of volume decline will not
dead market until April 2002, and I'm sure ECB members
want more time to withdraw their earmarked (monetary)
gold from the NY Federal Reserve Bank. If the currency
war becomes hot, I expect the US will seize this European
gold, and perhaps use it to bail out the derivative
exposure of GS, J. P. Moragan and other bullion banks
involved in this intervention.
If the Fed raises rates by .5% in mid May (increasingly
likely) then we could see one of my first 3 options, but
doing nothing will be difficult.
It occurred to me that a flanking attack on silver
might put a great deal of indirect pressure on the minions
of the Fed. My impression that silver is so tight that
direct purchase of a large quantity of silver, say 50 M oz
would blow up that market and place the same people shorting
gold under unbearable pressure. It might put a large number of American gold producers with large silver books
underwater, and out of business. At the present price
of silver the whole move would cost ECB members only
$250 million, all funded by sale of soon to be worthless
US Treasuries.

MarkeTalk

(05/05/2000; 16:29:35 MDT - Msg ID: 30010)

Propping up the euro

Reuters wire service today carried a story by Apu Sikri, who stated that "financial heavy-weights" were backing intervention on behalf of the euro. He quoted such luminaries as George Soros (famous currency speculator who made about $1 billion shorting the British Pound), Lionel Jospin (French Prime Minister), and Eisuke Sakakibara (also known as "Mr. Yen" when he was Japan's former vice finance minister). All of these gentlemen believe it is time for the European Central Bank to intervene and sell U.S. Dollars. Keep in mind that such currency interventions have in the past occurred over weekends when markets are closed. It appears that the U.S. Dollar is in a blow-off phase and could turn at any time. Most likely, the ECB will wait for an opportune time when economic data weaken the U.S. stock market and the inflows of money from around the world turn into outflows of money going back home.

Cycles indicate that gold and silver are bottoming between now and Memorial Day. Prices may have already seen their lows for this move and may be ready to spring higher on weakness in stocks. Commodity inflation is coming back with a vengeance. Just look at the weather around the country and you will know why the grain complex is soaring and cattle, hogs and bellies are selling off. It is the driest in the Midwest since 1934, the dustbowl days of the Great Depression. And America is now the bread basket to the world. Food prices are going higher and there is no PPT to keep them down as is done with gold and silver. Why? Because you can't print cornflakes or oatmeal. Watch the CRB Index because Alan Greenspan does. Commodity price inflation is the sleeper this year which will catapult the precious metals.

Peter Asher

(05/05/2000; 16:36:13 MDT - Msg ID: 30011)

Harley Davidson (5/5/2000; 15:38:03MT - usagold.com msg#: 30008)

That's pretty scary! Sounds like the only sure-fire protection is to query the alleged sender of an attachment before opining it.

Peter Asher

(05/05/2000; 16:50:13 MDT - Msg ID: 30012)

Harley re- Virus

Robin just told me that this virus suceptibility is only in Microsoft's "Outlook" e-mail program.

This may be an off-site discussion. Peter@peterasher.com

(no attachments please {:-)

Harley Davidson

(05/05/2000; 16:51:38 MDT - Msg ID: 30013)

Peter,

Probably the best solution is for people to understand what kind of files can cause this kind of damage. Not only are .exe files and .vbs files dangerous because they execute when opened, but even a Word document or an Excel spreadsheet (I believe) can contain a macro that executes when the document is opened and can cause damage. At least Windows will tell you that the Word document contains a Macro and ask if you want to open it. So, in addition to .exe attachments, never open a .vbs or a .doc file or .xls file without (as you said) verifying with the sender first.

BTW, I just saw on TV that, in less than 24 hours, the FBI thinks they know who the guy is - a 15 year old in the Philippines. They want a search warrant to search the kid's home. Like I said, this guy was no genius.

Peter Asher

(05/05/2000; 16:53:58 MDT - Msg ID: 30014)

Once-upon-a-time, on The Forum

Euro, We Hardly Knew Ye'
USAGOLD (12/2/98; 17:10:50MDT - Msg ID:1110)
"A monstrous wooden horse.........
Will gold move upon euro introduction? Yes. I think euro introduction will turn out to be the
most important monetary event since Nixon devalued the dollar in the early 1970s. We all know
what that did to the gold price. And yes. I think it will move the price of gold substantially
higher (though I would be surprised if the movement was immediate). Why? Because it will no
longer be necessary to defend the dollar, or accede to the dollar, with a viable alternative
available to anyone who would want to use it. I think that's why the euro was introduced in the
first place. Let me put it this way: If the world financial community and central bankers,
particularly of the European variety, were satisfied to live with the dollar, why would they
bother introducing a new currency in the first place?........ In the upcoming issue of News &
Views (about ready to go to the printer) I liken euro introduction to the Trojan Horse. While our
illustrious leaders tell us ad infinitum that somehow the euro is going to be good for us and the
dollar, many of us wonder with what understandings these statements are being made. In looking
up the passage in The Odyssey about the wooden horse, I was interested to see that Homer is
very specific that the Trojans themselves wheeled the horse within the walls of Troy.

USAGOLD (12/2/98; 17:22:46MDT - Msg ID:1111)
FORUM BUSINESS....CALLING ALL FELLOW GOLDMEISTERS!
What is the most often mentioned reason for purchasing gold these days:

1. Euro introduction
2. Y2K
3. Stock market over-valuation
4. Economic breakdown (Asia contagion)


bmacd (12/2/98; 18:21:36MDT - Msg ID:1112)
USA Forum Business
I haven't posted much at all lately, and I've felt a bit out of touch, but this sounds like something I
can tackle. Personally I think that the strongest reason used for the rise in the price of gold is
between the Euro Introduction and Economic breakdown. I think the two are fairly well linked
really. The Asian contagion, is setting off a wave of currency troubles and devaluations. It is
also setting off a wave of economic troubles due to trade balances and imbalances and
commodity pricing. That's a very short summation, and overly brief I know. The US dollar as
the last bastion of currency safety doesn't look too stable when you pick apart the economy, the
ridiculously overvalued market, and paramount, the over-time rolling of the printing presses
(again very brief). So as this happiness is all hitting the fan, along comes the Euro (in like a
month!!). Well now what happens. If people flock to the Euro, down goes the dollar, and up
goes the price of gold. Definitely central banks are going to hold some Euro in reserves. I see
selling of American dollars to do so. None of this is going to be smooth. Enter some extra
confusion and turmoil....enter gold. Now I know that Another could (and I wish would) go into
incredible depth about these balances, he/she is great at it. There is no way that the Euro
introduction will be easy and flawless (humans are involved) and already too many doubt that
it'll survive anyways. Also with world trade, certainly with commodities and oil priced in US
dollars, there's got to be incredible turbulence with the Euro's introduction, and this will hit the
dollar. The dollar has been that last strength for so long now, that I believe to hold value, buy
financial insurance, and level off massive fluctuations, that then people will go back to gold.
Now maybe these are the arguments that I hear the most, because I tune into them, and maybe
they are two entirely separate issues (#s 1 and 4) but that's the way I hear/see it anyways.
Hey it felt great to post again. Thanks USA Gold for asking the right question!!!

bmacd (12/2/98; 19:55:00MDT - Msg ID:1116)
USAGold
No doubt, your friends are dead on right that the Fed is printing like crazy to buy back the flood
of US Treasuries coming back into the market. But here's the paradox (keeping in mind that I'm
no genius, nor do I have Alan Greenspan's job, but sometimes things seem too obvious not to
comment on). So they manage to buy back the debt being sold into the market. In doing so, the
world markets are now awash in US dollars. What has really been accomplished? Central banks
and investors have been holding US dollars as well as US Treasuries for security. So one has
been replaced for another. Seems pretty useless to me, especially when in 29 days and counting
there's a new currency (a major currency I might add) to give the oversupplied US dollar some
competition. Fill me in- is there a method to this madness? To boot, some central banks will sell
US dollars, as well as US Treasuries to buy Euros. I'm not clear on how simply buying time,
isn't going to backfire really badly. The last thing I'ld be happy with is hard currency right now.
Hey, I really missed this!!!!

USAGOLD (12/2/98; 20:22:09MDT - Msg ID:1118)
bmacd: "What has been really accomplished?" bmacd: "What has been really
accomplished?"
What has been accomplished is inflation -- beyond anything that we already understand. The
floodgates are open. What is astonishing is that a man of Greenspan's character and
understandings would be a party to it. Few people know that Greenspan started as a gold bug
(he used to address our conventions before going over to the Fed). He learned his economics at
the knee of Ayn Rand. His deep-seated concern about inflation stems from the fact that his family
lost its wealth in the Nightmare German Inflation (at least that's the story I've been told.) The
name of the game for many years for the U.S. government and the Federal Reserve has been to
buy time. Like the characters in Ayn Rand's novels, Greenspan perhaps sees himself as the
heroic figure who with the full impact of his intellect and will stands against the gathering tide.
bmacd, I have puzzled about this for many months. I do not know if the U.S. Federal Reserve's
position is to fight the euro in behalf of the United States or succumb to it in the full bloom of a
new world order. This is the question on the table, and the one for which I greatly anticipate an
answer in 1999. Your question and concern is a good (valid) one but at the moment it cannot be
answered. This dovetails into the timing question on the future price of gold. If American
decides to fight for the dollar, this battle could stretch on. If America is throwing in the towel on
the dollar, the market's retribution could be quick and deadly, like it was in the early 1970s
when gold rose fivefold in less than 24 months. This is where Another's argument finds
application.

As you can see, I have no answers only a framework within which perhaps we can all consider
what we are really facing here.

PH in LA (12/2/98; 20:39:34MDT - Msg ID:1119)
Forum Business, Golden Reasons and News Items.

Forum Business:
Thanks MK for tossing a little fuel on the fire here. This forum is unique in that there is already a
tradition of extremely well-thought-out posts (from Another and FOA to Aragorn and all the
other thinkers who have graced these pages) that are not easy to just toss off. Much thought goes
into them and it helps motivate us knowing that someone will read them. It would be interesting
to have an idea of traffic on the site even on days when there is little (or no) posting activity. In
any case, it is great to see a little life here again on one of the (potentially) most important sites
on the web.

Reasons for gold purchase:
As for the questions before us, I like bmacd's point that the Economic Breakdown in Asia is
Euro related. This has been discussed by Another and I even recall his (or FOA's) assertion that
Asia was smashed by the BIS to forestall a pre-euro rally in gold. Furthermore, inasmuch as the
gold and yen carry trades have been encouraged by the BIS (and other European CBs) to
provide international liquidity until the Euro becomes reality, the over-valuation (#3) of the
stock market is also part of the same big picture. The strength of the dollar shows that
international investment funds have flowed into US equities (and bonds) which has added fuel to
the US markets. And it has often been pointed out that the introduction of the Euro just at this
time was done to take advantage of financial chaos, offering a whole new financial system that it
would appear will come complete with new computers, software, etc. However, this theory
does seem like a bit of a stretch since the Euro has been in development for decades...more than
long enough to have fixed the Y2K computer problems, as should have been done long ago. In
any case, it would seem like the Euro WILL get some added impetus from financial choas in the
dollar-denominated world, should that actually materialize as predicted (by some). Just the mere
perception of this should be a tangible factor.

So, my thinking is that the financial turmoil headed our way is in many ways a combination of all
of the reasons set forth. Not very original inasmuch as all this has been discussed at length here
with Another and FOA, but that's the way I see it.

News
I was working on a post consisting of a translation of a newspaper story clipped from the
Spanish press in October that was lost during a power interuption yesterday. Rather than slog
through it all again I will sumerize:

Until now, gold purchases in Spain have been subject to the Value Added Tax (VAT) regardless
of whether the purchase was for investment purposes or for industrial usage. The European
Commission has now determined that the application of this tax creates inequallities between
countries and could serve to encourage or discourage investment in gold from one country to
another. Therefore, it has decreed that the VAT tax will no longer be applicable in any of the
Euro countries. The effect is expected to stimulate gold purchases in Spain. The question of
privacy was also behind the new regulations, since the paperwork involved in administering the
tax could be utilized in tracking private gold movements, something that would not be seen as
liberalizing the flow of investment in gold.

There was also a story this morning on "All Things Considered" (National Public Radio) about
efforts within the European Union to equalize tax laws and eventually criminal laws to further
homogenize conditions throughout Europe. The focus of the story was on the reaction to these
trends in England, where popular opinion has precluded (for the moment) England's
participation in the Euro. Prominent mention was made of the politicians' support for English
membership in spite of popular resistence, etc. Mention was also made of a growing awareness
that the Euro is expected to bring economic benefits to participating countries, something that
English leaders are reluctant to renounce.

Did anyone else hear the story? It would be interesting to hear FOA's take on this one. In any
case, an important implication of both items is the progress already being made towards the
monumental task of creating a single European currency. Also, how the currency is but another
step towards the overall goal of European unification, which will ultimately even include
standardization of the various legal and tax systems from one country to another. The
implications of this story just keep getting bigger and bigger. Michael Kosares is right on when
he says that the Euro is argueably the biggest story for gold in the whole 20th century (and
beyond).

PH in LA (12/2/98; 20:56:24MDT - Msg ID:1122)
Little-known facts about Alan Greenspan?
USAGold:
In addition to your mention of Alan Greenspan's previous incarnation as a gold bug is the
equally little-known fact that he is a full-blown member of the board of directors of the BIS. I
have commented on this before, and recall also that Another replied to my comment.

Is this a clue to the direction the Fed plans for defense of the dollar versus the Euro? In many
ways, it almost seems like the Fed has aided and abetted in the creation of the Euro. For
example, their maintenance of the high interest rates that nourished the yen and gold-carry trades
for so many years.

USAGOLD (12/2/98; 21:53:01MDT - Msg ID:1124)
PH in LA....Thank you for showing up tonight...
I want to say how much I appreciate your kind words with respect to me and the FORUM.

As I understand it, Greenspan is not a full fledged voting member of BIS' board, but an observer.
Is this right? I think that the Europeans have seen the handwriting on the wall for some time with
respect to the dollar's overproduction and are simply taking advantage of a bad situation for the
United States to free themselves of long-standing dollar hegemony.

Greenspan's motives are another thing. This massive printing of money that is going on today and
distributed worldwide might be the dollar's swan song. Mr. Greenspan should be questioned
rigorously about gearing up the printing presses "to save the world." I am sure he understands
what this will mean to the American people in the years to come especially when the euro
comes on line to make the dollar "honest" so to speak. He surely knows that the United States
will be unable to keep the paper dollar game afloat when the world has a better alternative, yet
he prints money like there's no tomorrow. This is being done by an individual who should know
better ( as alluded to earlier.)

In the past we could export our inflation and keep prices down in the U.S. by keeping the
dollars, by one machination or another, overseas. At least as chairman of the Fed he could
intellectually justify his actions to some degree by assuring himself that the dollar reserve
advantage made inflation possible without damaging the U.S. economy. Soon we will be unable
to do that. Then what? Are we to endure hyperinflation in this country in order to save the
world?

The great compromise of values engendered by the current Greenspan policy, as we grow to
understand it, could mean the final betrayal of the dollar.

USAGOLD (12/03/98; 17:22:07MDT - Msg ID:1136)
From today's International Herald Tribune..........
"Also hurting the U.S. currency was widespread talk in the markets that the new European
Central Bank, which will manage monetary policy for the 11 countries adopting a single
currency next year, might sell billions of dollars as it looks to beef up its yen reserves."

Such sleight of hand....with one hand you lower interest rates to support the dollar, while you
sell your dollar holdings with the other.

Peter Asher (12/04/98; 12:09:26MDT - Msg ID:1150)
So, starting with the Euro. Much has been said about the potential of this "composite" currency
to compete with the dollar. However, what quacks like the mark and the franc, also quacks like
the lira and the peso. The Euro is, by packaging the Common Market, a currency equaling the
dollar in its scope. But, the strength of the major currencies converting into it could be
weakened by the historical vagaries of the other components. Therefore, the fact of
UNPREDICTABILITY could actually drive assets INTO the dollar, and this could even be
negative for Gold.

USAGOLD (12/4/98; 15:40:04MDT - Msg ID:1151)
Our chief supplier, who does major business with the European banks, tells us that once the euro
is introduced, if the dollar starts sliding, premiums on all these items could go up dramatically
as the dollar goes down -- once again no matter what gold does. Supply could tighten even
more. He says, "I would hedge my bets and buy at least some portion of my gold nest egg now
before January 1, 1999." As most of you already know, $20 gold piece premiums have already
gone through the roof. Also, most pre-1933 items come from European hoards. Another concern
he had is why would any European take dollars for gold if the dollar goes in the tank. Something
worth considering...on a balmy day across the land.

Peter Asher (12/5/98; 00:21:11MDT - Msg ID:1157)
About the Euro: Michael, you questioned why a European would take dollars for gold if the
dollar was going in the tank. Why indeed? We forum folk "believe" that the introduction of the
Euro will cause a fall of the dollar. Certain logics predict this. But what is the truth, and
furthermore, is that truth to be unfolded or is the script already written. It has been said, in
designer circles, that the most powerful man in the world sleeps in a room with floral
wallpaper, but they were referring to the President of the United States not of the Federal
Reserve!

Possibly not even God knows what the Greenspan Gang is really up to, but if A.G. sat down
with all those banks and LTCM, etc., they weren't being speculators!! Now Aragorn III is
referring to the Euro as a Gold Standard, but I thought I caught the word "commemorative" in the
original announcement. A hundred Euro coin could be five cents of zinc, twenty cents of copper,
five dollars of silver, or whatever of gold. (Weren't people turning in pennies for copper in
1979 or so, triggering the zinc alloy of today.) I remember traveling in Italy in 1956 when
anything bigger than fifty lira (eight cents American) was paper. You needed a wad of money to
go to dinner. However it falls out, the coin would have to have a gold value far enough below
its face value to maintain its existence through the highest anticipated (or planned?) price of
gold. Otherwise, the old-fashioned meaning "melt down" would come into play. So what would
be the point? I think the Euro may be as wild a card as the stock market. "Perceived values"
could rule the season, and the trading in the Euro could then create a new set of fundamentals.


Peter Asher (12/6/98; 17:27:05MDT - Msg ID:1184)
Euro/Gold
I just now read a Sunday feature on the Euro. The one item that jumped out was the claim that
corporations will incur far greater expense converting their systems to use it than they are
spending on Y2K. But also, many companies are putting off coming up to speed on the currency
because they are immersed in Y2K preparations.

It seems that "electronic transactions" must be denominated in Euros only after 2002.

I'm just wondering if my theoretical argument on Friday, that the initial uncertainty might in fact
cause the dollar to go up, is what's mysteriously holding Gold down. This is a question, not an
assertion.

bmacd (12/6/98; 18:06:00MDT - Msg ID:1185)
Peter Asher
I think that there will no doubt be plenty of initial uncertainty about the Euro. I, myself, can't
believe that it'll go through nice and smoothly at all (ultiamtely if at all). However, the European
community has made this decision, and at this point, are determined that it will work. Japan will
hold Euros, China has also stated that they will hold Euros as well (to name two). China has
also stated openly that US dollars and or US Treasuries will be sold in exchange. Assuming that
most central banks will be holding Euros as well as US assets, then it seems likely that there
may actually be more US paper put back into the system initially. Supposing, the Euro was
really shaky and looked iffy. Personally, I'ld rather hold Swiss francs or German Deutsche
Marks then instead of the Euro. I see the Swiss Franc being very strong over the next while for
this fact alone. Maybe, just maybe, then another scenario will take place, where in people totally
lose faith in any paper currencies. Now that leaves only gold. I still maintain that how can the
bastion of safety and stability be virtually bankrupt, as is the US dollar?

USAGOLD (12/6/98; 18:12:25MDT - Msg ID:1186)
bmacd and Peter Asher........
There is a possibility that it will take awhile before the full impact of the euro is felt. There is
much uncertainty about this new currency on both sides of the Atlantic, and I do not expect
January 1, 1999 to be like a light going on in the currency markets. However, when the
realization hits that the euro will comprise a significant share of the world's reserves at the cost
of the dollar, it will be as Aragorn III says like "Lightning in the Night." This last lowering of
interest rates by the Europeans was meant to help the yen...not the dollar, just as the lowering of
U.S. rates was to help the yen. This is all meant to deal with the Asian contagion which is still
very much a reality. The reality however that disturbs me the most in all this interest rate
maneuvering is that for the first time in my many years following the money game, a U.S.
chairman of the Fed has moved not to deal with the U.S. economic situation by printing money
but the world economic situation by printing money. To my knowledge this is unprecedented.
The net result is a skyrocketing money supply that has all the old time market watchers blowing
a gasket. It is this money printing -- coupled with euro introduction -- that is so dangerous for the
dollar as I mentioned a few days ago. Anything can happen...Personally I think next week and the
following will be critical for the dollar. Now with all the moves made that are going to be made
going into the end of the year, the dollar to me looks incredibly vulnerable. We will see how
this all plays out, but this is not a time to kick back and get ready for the holidays. Anything can
happen.....Keep your ear to the rail. If things remain placid going into year end, 1999 might start
slow. If they don't, duck.....there's a train coming through the tunnel-- freight train euro...

Richard, Oregon (12/6/98; 20:54:30MDT - Msg ID:1193)
Sunday Paper - Euro
I just read our Sunday paper article on the Euro (creating Euroland) and how it will effect
pacific NW businesses. Mostly an uneventful piece but one thing jumped at me when I read it
because of a similar post here regarding US banks tracking deposits/withdrawls of customers.

The following is by John McAdam president and CEO of Sequent Computer: "Companies out
there are going to be buying new software systems and often hardware, too, McAdam said.
Banks, for example, have us

Peter Asher

(05/05/2000; 16:59:56 MDT - Msg ID: 30015)

Euro Anthology, the rest of the kilo-bytes

used the euro as a catalyst to install systems that track spending habits
and credit-card usage of individual customers across Europe".

You didn't think big brother was only in America did you!!

ET (12/6/98; 21:25:15MDT - Msg ID:1196)
Uncertainty
It seems to me that the reason people are stocking up is uncertainty. What we've always
regarded as 'normal' now seems abnormal. The Euro, y2k, stocks, the economy are all reasons
that have created this uncertainty. But overall, I believe people are detecting the end of an era;
the era of unsound money. It is at the root of everything we see around us. The euro would not be
created if the dollar were sound. Y2k has bought out in the open the faults of not considering the
long term picture. If money were sound, such judgments would be thought out much more
thoroughly, not wanting to risk capital on short term 'investments'. Stocks would never have
reached these levels. The economy would be based on producing real things.

It is the perception of some kind of change in 'money' that is driving this movement. I believe
many people know that the end is near but can't put their finger on it. But this is where
uncertainty will drive markets. If we knew the outcome of the Euro introduction and y2k, we
would certainly be looking at things differently. If we knew the outcome of the spreading
deflation ..., the equities bubble ...

Many events of worldwide importance are coming to a head. The uncertainty of the outcome is
what is driving the demand for hard assets.

History shows us the best money is made when things are changing rapidly. It looks to me that
things are about to change rapidly and with a magnitude very far removed from most people's
experience. This is a once in a lifetime opportunity. My goal is to make the best of it.

THC

(05/05/2000; 17:02:28 MDT - Msg ID: 30016)

Oro - Thank You

This is the kind of stuff that I LOVE to find here at USAGOLD.

Thank you......

Will be back with my thoughts soon.

Cheers,

Leland

(05/05/2000; 17:56:19 MDT - Msg ID: 30017)

Dotcom Cash Turns to ash in a Flash

BY SAMANTHA MAGNUSSON
06may00

THE boys down at 131 Shop.com.au had a lavish season. They wined and dined with the best
of them in a box provided as part of their Brisbane Broncos sponsorship package.

The next season, however, is not looking so good.

Like many of Australia's fledgling high-technology companies it is burning cash at a rapid rate.

If the online directory company continues to spend at its current levels it will be out of pocket
by June.

During the March quarter, it spent $2.83 million leaving it with just $2.5 million in cash. Of that
money $1.5 million was spent on advertising while it received just $368,000 in receipts.

The company's share price has already slumped from a high of 90c to 11c yesterday. In its first
half to December, 131 Shop announced a $3.3 million operating loss.

The Australian has compiled the most comprehensive list summarising the cash flow
statements -- the first ever to be issued under Australian Stock Exchange requirements.

The table shows the 75 companies held just over $920 million in cash at the end of the March
quarter. However, with more than a third of that held by pay TV company Austar, the remaining
74 companies have little more than $542 million in the bank.

At the beginning of that quarter they held more than $657 million.

There are some success stories. A handful are cash-flow positive, a few can boast acceptable
revenues and there are some with solid business plans that will ensure their survival.

But many have stunned investors with the rate at which they are burning their cash. About 14 of
those that have been operating for more than three months have less than a year's spending
money left at their current spending levels.

Some of the most troubled stocks include online real estate company Realestate.com.au.

During the quarter it pulled in $417,000 in receipts and at its current revenue rate has just over
four quarters of cash left.

Another is POS Media, which puts video screens into shopping malls.

With receipts of just $71,000, its cash positioned halved during the period, falling from $8.4
million to $4.2 million. Aspiring Internet service provider eisa started the year with $35 million
but by the end of March this had dwindled to just $6.9 million. The company has until next
Thursday to raise about $180 million as it attempts to buy Internet company OzEmail.

But with the April 17 technology stock market crash souring investors' appetites towards such
stocks, finding new funds to carry these companies through is proving more difficult. Investors
are less willing to commit money and banks are also increasingly reluctant to provide further
funds to companies with poor cash flows.

As a result, expect a spate of takeovers, mergers and perhaps collapses in the industry. Those
that have run their balance sheets too low could well find themselves ripe picking for those left
with cash.

ith cash.

Others will need to reassess their business strategies to stop the money tap from being turned
off.

"If they are low on cash they will be doing everything to adjust their business," Gerard Eakin,
Ord Minnett technology analyst said.

While it may be the start of some tough times for companies, it is good news for investors.

"The shakeout has ended the capacity to take rubbish to the market ... and it will stop
investors getting hurt," an analyst said.

There will be much more scrutiny applied to business plans and this week's requirement by the
ASX for companies to provide cash-flow statements for the first time is a step to further
informing the market.

However, access to that information remains difficult for the vast majority of unprofessional
investors, many of whom were not informed of its release by the company or the ASX and
would have difficulty finding it anyway.

(Thanks to THE AUSTRALIAN, and Fair Use for Educational/
Research Purposes Only)

SHIFTY

(05/05/2000; 17:56:52 MDT - Msg ID: 30018)

Ponzi

Nasdaq 3,816.82 + Dow 10,577.86 = 14,394.68 divide by 2 = Ponzi 7,197.34
Up 130.98 Ponzi points

TownCrier

(05/05/2000; 18:09:50 MDT - Msg ID: 30019)

Sir ORO, please permit me to take a risk...

It is a risk that all men are familiar with who compliment their fair maidens on occasion, only to then be met with some such nonsense as "Well, if you are saying I am a gem today, what was wrong with me in the past??"

Of course, we all know the answer to that one.

Putting all that aside, allow me to say that your posts have really been a marvel lately, almost as though you turned an important corner in your thought about six weeks ago, I would say. To this observer, it is as though you uncovered a vital piece of information to bridge some tiniest gap in your perceptions and evaluations, leading to an onslaught of exceptional commentary outclassing your prior work. Can you recall some moment of clarity arriving in mid-March at which everything seemed to "fall into place" for you, or do you not share my perception on that account?

Bottom line: Thank you for sharing your time and analysis with us. We are certainly made the better for having it.

THC

(05/05/2000; 18:22:23 MDT - Msg ID: 30020)

Oro - Futures

Oro, good evening, and thank you for the very detailed response to my inquiry.

I agree fully that "there is more to the PM markets than the futures." But at the same time, there IS a futures market for the PMs! (smile).

I understand the importance of the "PM banking system" that you have described, and I can see how the lack of "metal in hand" could result in serious problems should the depositors ever ask for the metal. I accept the possibility that these deposit slips may in the end not allow one to take delivery of metal.

And, I accept that at some point in the future, other PM futures markets may follow in the footsteps of Tocom palladium -- metal not available for delivery. It is clear that Tocom Pt, and Nymex Pt and Pd are highly vulnerable.

However, as long as a futures market enables delivery of metal to those who request it, I find it goes against my common sense to accept that:

"There could be a large and ongoing discrepancy between spot prices and prices of futures contracts on the day of expiry."

The reason is that longs would take delivery and sell into the spot market, bringing the prices of the two markets together.

Naturally, should delivery no longer be allowed, this type of activity will cease, and the futures market will die out.

Are we in agreement?

A good day to all........

THC

Al Fulchino

(05/05/2000; 18:31:03 MDT - Msg ID: 30021)

Henri

Henri (05/05/00; 10:17:45MT - usagold.com msg#: 29992)


Hey Al Fulchino
There is an ad at the bottom for the "Finding God in Physics" book you sent.

***********
Henri,
Long time no talk! Hope all is well. Yes I see the ad around from time to time. I believe Joseph Farah, the Editor of World Net Daily and the author, Roy Master's are friends. Anyway, hope the book was meaningful to you and others who have read it.

Best to you,

Al

TownCrier

(05/05/2000; 18:46:34 MDT - Msg ID: 30022)

Sir THC, on "spot" prices and gold futures...

This is an exercise you may enjoy.

Imagine that you are given nearly inexhaustible cash resources, but are not allowed access to physical gold either directly or indirectly.

Your assignment, should you choose to accept it, is to cap the cash price of gold. Could you do it? And more importantly for this exercise, HOW would you do it? (Remember: unlimited cash...no gold.)

This tape will self-destruct in five seconds...

TownCrier

(05/05/2000; 18:59:39 MDT - Msg ID: 30023)

One quick point...

Unlimited cash is certainly not necessary to acheive the end, but I figured that giving you ample ammo would assist the initial process of creative thinking to arrive at a solution...

Sir Henri, you might like to try your hand at this challenge also.

TownCrier

(05/05/2000; 19:07:38 MDT - Msg ID: 30024)

Here's a starting point...

COMEX gold futures

Contract _ Open Interest
=========================
May _ _ _ 0
Jun _ _ _ 89,734
Aug _ _ _ 16,713
Oct _ _ _ 4,029
Dec _ _ _ 19,991

NOTE: Delivery cannot be demanded on June contracts until the last day of May.
Delivery cannot be demanded on August contracts until the last day of July.
Delivery cannot be forced on October contracts until the last day of September.
And so on....

Another hint: Back in February, the April Open Interest numbers looked similar to what we now see for June, whereas the June OI numbers looked more like what we now see for August.

TownCrier

(05/05/2000; 19:13:28 MDT - Msg ID: 30025)

That was the longest five seconds I've ever seen!

;-)

lamprey_65

(05/05/2000; 19:25:46 MDT - Msg ID: 30026)

My Take on Today and Important Link

http://pacific.commerce.ubc.ca/xr/plot.htmlCheck the link above...very handy for plotting gold in different currencies -- very illuminating too! Place gold in the "Target Currencies" section.

My take on today...cautiously optimistic on our May rally. Accumulation of major gold stocks continues.

lamprey_65

(05/05/2000; 19:35:57 MDT - Msg ID: 30027)

MarkeTalk

Appreciate your analysis. I agree - the CRB will be important to gold's rise - just as a falling CRB was an important reason for gold's fall over the past few years.

TownCrier

(05/05/2000; 21:00:38 MDT - Msg ID: 30028)

Picking up on two brief comments we made yesterday from The Tower

From <>:
<+
As we suggested days ago, don't look for forex intervention from the ECB, unless it is their only "politically correct" avenue to rid themselves delicately of unwanted foreign currency assets. To this Crier's eyes, when you have gold reserves being regularly marked to market in a "free gold" climate, there is simply no reason to maintain foreign currency assets beyond what is convenient for the purpose of short-term international settlements with those specific nations.>>

Additional note that I should have stated at the time of this original post: Evidence points to these days as the infancy of a "free gold" climate, with obvious incentives in place for the ECB (among others) to see it through. Gold will truly be set free to shine when it breaks the shackles of the derivatives markets and when the metal is also made immune to the effects of artificial supply inflation at the hands of the banking sector's lending operations. Such lending seemingly puts the "funds" into two hands at once (the owner of the original deposit who is earning interest on the deal, and the borrower). This "supply inflation" depresses the value of gold in the same fundamental manner as lending also inflates the dollar (or other currency) and erodes its value over time. Evidence of the turnaround and birth of "free gold", you ask? The Washington agreement, and the IMF gold revaluations.

<>

Additional note: as stated before, the UK auctions were surely in reaction to stress in the bullion banking business...an imminent run on the banks, in all likelihood, by the owners of the multiple pockets holding claim on the same gold (as described above). Why do I suggest the Swiss gold could be "sold" (allocated) in one fell swoop? Because all euroland gold "sales" within the Washinton Agreement are very likely a disguise for "lender of last resort" operations to mollify those many nervous "pockets" who are sharing the same small gold on account. Essentially, that entire quantity of gold is already "spoken for." Alternatively, this WA supply of gold out of euroland could also in part be seen as a regulating operation...similar to when the treasury buys back in its bonds prior to maturity.
+
It is perhaps like this, in either case. The reason the same small gold is in multiple pockets is because it has been put on deposit for interest, and lent out to borrowers for the purpose of earning interest. As in normal banking operations with cash, how many times can you imagine the same gold to be put on deposit by its new owner, only to be lent out again, and again? These gold loans are the assets of the bullion banks. Back to that in a moment.
+
Under current market forces, gold today is perceived to have a low value, near 300 in either euros or dollars. Let there be no doubt that gold is held by strong hands not for its "value" today, but for its value "tomorrow". I hope by now all of you have come up to speed on the Fed's operations to add reserves to the banking system through such things as repurchase agreements or coupon passes. Through repurchase agreements, the Fed provides a loan of funds to the underlings of the banking system against the collateral of these banks' assets. Through coupon passes, the Fed provides permanent funds through the outright purchase of these banks' assets (i.e., U.S. Treasuries.) But do not worry overmuch for the "poor Fed" who "sold" (allocated) its "precious funds" (i.e. dollars) to the banking system in exchange for these assets. As these assets (interest bearing loans, bonds, etc.) reach maturity, the Fed will thereby regain these "precious funds" that it originally parted company with, plus the "extra value" of interest. And why is the Fed adding these reserves? Partly because those with funds on deposit are pulling them out.

Must I now complete the parallel to the Fed's operations in terms of the Euroland gold allocations via the Washington Agreement? I hope it is already growing clear. Wouldn't you agree that it is rather fatuous to think that the euroland central banks would be so dull-witted as to part with gold in exchange for nothing more than the dollar-equivalent as the market currently perceives? Would you be more comfortable thinking that the central banks are getting in return for this gold...a simple cash payment, or ownership of the loan asset that will theoretically upon maturity repay the gold, plus interest? Again, strong hands hold gold not for today's value, but for tomorrow's value.

Please think back to the Dutch sales. Regardless of the market price at the time or the tonnage allocated through the Bank for International Settlements, the book value reported by the ECB's weekly balance sheet was always based upon the ECB's official gold valuation for that quarter. When you are holding an asset that is a gold-denominated loan, how else would you show it's value on your books?

Quick review: Current perceptions of gold's value is low. "Free gold" is in its infancy. Strong hands hold gold for "tomorrow". Can you now imagine the central banks who are supporting the tenets of "free gold" would keep themselves in a position for the return of their gold assets at some point "tomorrow"? As the many nervous "pockets" sharing the same small gold account sees it, the central banks will have much better luck dictating the eventual repayment of these gold loans in time than they would as "lowly bullion bank depositors" at the mercy of the bullion banks' future viability as "supply deflation" sets in from the eventual phaseout of gold lending. Time is on the Central Banks side, not to mention the ability to tap into national legislative power to apply heavy mineral taxes to gold mines. And ultimately, should a number of the gold loan assets now held by the CB's in place of their physical gold assets actuall fall into default, just imagine what an enhancement that is to the currency value of "free gold". Where these gold-denominated assets may be forced to settle in cash, you can imagine what a huge return will be realized at that time, compared to the rather meagre cash value they "appear" to be getting with their "sales" today. Truly, if all gold doesn't return, it would nonetheless be as though they sold at the top. And better still for the future of "free gold", this same gold would then remain in private hands.

And lastly, here is a brief look again a part from the earlier discussion of gold market pricing where futures are involved:
<>:
<*snap* it's all over.
Enough said.>>

Indeed. Enough said.

TownCrier

(05/05/2000; 21:21:38 MDT - Msg ID: 30029)

On that last post...

Do not for a minute assume that that is the way of it simply because I emptied the case all over the lawn.

I am only suggesting that perhaps this would be a fine "starting point" for some of your own musings on the nature of the evolving gold market. If you can see the markets for what they are, you will surely be better able to see them for what they will become.

Time to go. It is way past my beer time...

lamprey_65

(05/05/2000; 21:34:44 MDT - Msg ID: 30030)

More on the CRB Index

http://stockcharts.com/commentary/mitch/mitch20000505.htmlEnjoy

Goldsun

(05/05/2000; 21:37:13 MDT - Msg ID: 30031)

The Price of People

Gold has purchased people ranging from slaves to kings. But it will also purchase many other commodities.
The total value of the world's above ground gold is inherently equal to the total value of the world's goods and services. The latter likely more than doubled during the recent period in which the quantity of gold doubled.
However, I wholeheartedly herald Herr Holtzman's pursuit of the gold/humans ratio through the ages. If our host has a modest empty room in the castle it might usefully be employed as a repository for the fruits of this quest as they are gathered by Ritter Holtzman and other knights.
Goldsun

Simply Me

(05/05/2000; 22:17:59 MDT - Msg ID: 30032)

Town Crier's exercise.

Hi, Town Crier. I read and very much appreciate your news and your patient lessons.
Since the adroit students don't seem to be around. Maybe the student in the back of the classroom could take a crack at this one.

Goal: Drive down the price of physical gold.
Terms: Unlimited funds and no access to physical gold in any form.
Answer: Buy as many "puts" as possible in about the $240.00 to $270 range in the futures market, concentrating on June. Then after May 15th, begin rolling them over into August "puts". Completing the action before May 30th.

I just want to know if I'm on the right track to understanding this stuff. Logging on to this forum is like sitting in on a Nuclear Physics course without taking Physics 101.

simply me

Topaz

(05/05/2000; 22:43:44 MDT - Msg ID: 30033)

TownCrier (5/5/2000; 18:09:50MT - usagold.com msg#: 30019)

Sir TownCrier:
Well said and "ere-ere" re above Townie- and while the bouquets are being thrown about, I'd like to acknowledge your own 1st class contribution of late. (with a similar disclaimer)
Where in the world does one get such a wealth of world-class Fiscal Education? Nowhere I know of other than USAGOLD; (Kitco for grown-up's)
Keep it comin good Sir!!

Peter Asher

(05/05/2000; 22:50:13 MDT - Msg ID: 30034)

Leland (5/5/2000; 17:56:19MT - usagold.com msg#: 30017)

http://www.wired.com/news/politics/0,1283,36044,00.html?tw=wn20000503 >>> Dotcom Cash Turns to ash in a Flash <<<

At least they had some cash. Take a look at the total scam version at the above link.

Synopsis: Two companies are created and a lot of press releases are put out creating the image that Company #2 is buying out Company #1 but there is no cash no business, nothing; yet the stock of Co.#1 10X's.

Peter Asher

(05/06/2000; 00:00:08 MDT - Msg ID: 30035)

Getting on subject in the big world too

Does home schooling provide a better
education than public schools?


Yes

49% => 21573 votes

No

37% => 16392 votes

Don't know

13% => 5977 votes

Current Vote Tally: 43942 View Yesterday's Discussion.

Leland

(05/06/2000; 02:24:33 MDT - Msg ID: 30036)

Peter Asher, Your Msg. #30034

Opened a whole new subject...escalating online fraud. So,
I went to Alta Vista, typed in "online fraud"...there were
5,402 pages! I wonder, how many pages will there be after
the stock markets "blow up"???

Peter Asher

(05/06/2000; 09:00:35 MDT - Msg ID: 30037)

Test

Is the site down or are we tongue tied.

Peter Asher

(05/06/2000; 09:02:45 MDT - Msg ID: 30038)

(No Subject)

Hooh-boy, nothing! I'm going back to the Arcives and look for somthing to disagree with.

Peter Asher

(05/06/2000; 09:23:27 MDT - Msg ID: 30039)

Empty Forum

Nah, nothing to dissagree with' ever-one's brilliant.

I see this Item I found on Dec.6 '98

>>>It seems that "electronic transactions" must be denominated in Euros only after 2002.<<<<

I wonder if some countries are thinking "Let's cut our losses now before investing in all that data programing that would be wasted if the EURO doesn't survive."

Harley Davidson

(05/06/2000; 09:33:07 MDT - Msg ID: 30040)

Peter...

Wow things DO look slow today.

I just finished showing the bike to a prospective buyer. He gave me a deposit and we'll do the deal next week. Lots of mixed emotions today.

Leland

(05/06/2000; 09:45:18 MDT - Msg ID: 30041)

Bill Fleckenstein Sorta' Puts His Finger on Whas' Happn'

http://www.users.dircon.co.uk/~netking/finan.htm#tquotns"I can share a story from the waning days of the Tokyo bull market in 1989 that may
shed some light on the situation. As the fundamentals began to deteriorate in late 1989,
often I would call Japan and check in to see how my short position was doing (I was
short Tokyo throughout 1989). The news would be bad, and the situation would be
dire, and the market would be going up..." (Click for
more)

Hipplebeck

(05/06/2000; 09:45:38 MDT - Msg ID: 30042)

smart money

I just listened to the smart money radio program one PBS.
They were talking of the success of tech stocks as though they were in the past tense.
A lot about Soros, Buffett and Soro's co hedge fund guys quitting on the market and saying it's irrational.
This sounds to me like a complete compitulation that the boom days are over.
I don't know how many people like to listen to that show, but I know it is broadcast all over the U S,
I also saw that bank CDs are nearing 8%.
The wave has crested, and is now breaking,
If you have got yourself set up right you'll be surfing, if not you could get washed up in the whitewater, maybe even washed onto the rocks.
Own gold

Hipplebeck

(05/06/2000; 10:04:58 MDT - Msg ID: 30043)

central bank leasing

I have said this before, but it has been awhile.
When the central banks sell gold, they are merely making available the interest that they will recieve when gold leases come due. If central bank lease agreements really do demand interest in gold instead of cash (as I presume they do), then they are playing the smartest game in the world.
They will eventually own all the gold if they want.

Hipplebeck

(05/06/2000; 10:19:09 MDT - Msg ID: 30044)

central bank leasing

I have said this before, but it has been awhile.
When the central banks sell gold, they are merely making available the interest that they will recieve when gold leases come due. If central bank lease agreements really do demand interest in gold instead of cash (as I presume they do), then they are playing the smartest game in the world.
They will eventually own all the gold if they want.

Leland

(05/06/2000; 10:39:08 MDT - Msg ID: 30045)

Reading Oil & Gas Articles Today, Here's the Best One

OFFSHORE TECHNOLOGY CONFERENCE, HOUSTON�
US natural gas prices "definitely" will climb to $4/Mcf this fall, with
world oil prices escalating to $40/bbl probably within a year, unless
producers dramatically increase spending to offset depletion and to
supply growing demand, a University of Houston professor told
reporters at the Offshore Technology Conference Monday in
Houston.

But that's nothing compared with what will happen when the real
gas shortage hits North America within 2 or 3 years, says Michael J.
Economides, coauthor of "The Color of Oil," a book about the
economics of the oil and gas industry.

With rapid depletion of current gas resources and steady escalation
of demand, Economides said, freezing Chicago residents will be
paying a whopping $40/Mcf for gas in the middle of some
not-too-distant winter. "It's the biggest energy story not being
written about," he claimed.

Economides said US gas producers are not discovering enough
new gas reserves to offset rapid depletion of current reserves and
meet growing demand that is expected to hit 30 tcf by 2010. It's the
same scenario that Matthew Simmons, president of Simmons & Co.
International, Houston, has been arguing for years.

Moreover, Economides said many of the gas-fired power plants
now being planned won't be built in time to meet demand projections.
"You couldn't buy a turbine today if you wanted to. General Electric
has a 3-year backlog," he said.

Still, he predicted, "We'll see $4 gas before $40 oil."

Oil prices
Economides expects world oil prices to spike again next year,
however, because most OPEC members don't have the excess
capacity to meet their new production quotas. "Saudi Arabia maybe
has 1 million b/d of excess capacity. But the rest of them don't.
Venezuela, [the US's] biggest supplier, is working hard to meet its
present production quota," Economides said.

His supporters point out that he correctly predicted the last price
peak of $30/bbl back when oil was still selling for $11/bbl.

At his OTC press conference, Economides rejected what he calls
the "myth" of low lifting costs in Saudi Arabia and other major Middle
East countries. Nor can big producers turn oil production on and off
at will, he says. Any significant ramp-up in world oil production will
take huge capital investment, said Economides.

Based on his "Production Activation Index" of the investment
required to add one new barrel of daily oil production, Economides
said such additions would cost Saudi Arabia and Venezuela's
western oil-producing provinces some $3,500/bbl. Even allowing for
the potentially huge reserves a new discovery could add in those
countries, Economides said both Saudi Arabia and Venezuela would
lose money on any oil market price less than $21/bbl�the same
clearance level required for West Texas Intermediate crude.

"The Kuwait oil minister estimated that a $7 billion investment would
be required to bring an additional 350,000 b/d production in North
Kuwait, implying an activation index of $20,000/bbl. Iraq has
announced that it seeks $30 billion for an incremental production of
4 million b/d, resulting in an activation index of $7,500/bbl," he said.

To turn a profit on that production, Iraq would need a market price of
$76/bbl, while Kuwait's equilibrium oil price is an eye-popping
$201/bbl, he figures. In contrast, Economides said, the mature
shallow-water region of the Gulf of Mexico has one of the lowest
activation indexes in the world�$1,000/bbl, about the same as
West Africa. That translates into an equilibrium oil price of $4/bbl for
the gulf and $6/bbl for West Africa.

Economides acknowledged that his Production Activation Index
calculations are simplistic. Actual results will involve other factors,
including shifts in market shares, the move to greater gas
consumption, and the "seemingly-always underestimated positive
effects of investing in technology," he said.

Nonetheless, said Economides, an average oil price of more than
$25/bbl for the next 2-3 years "is not unrealistic."

(From O&G JOURNAL ONLINE, and Fair Use for Educational/Research Purposes Only.)

YGM

(05/06/2000; 11:01:08 MDT - Msg ID: 30046)

Feel Lucky?.......Prospect Oz........

Nice Watch Fob.........Friday May 5 11:11 AM ET

Australia Lets Prospector Keep Gold



PERTH, Australia (AP) - A state supreme court ruled Friday that a taxi driver and amateur prospector could keep the 141/2-pound gold nugget he had unearthed on someone else's land.

George Dimitrovski found the nugget, valued at $590,000, five years ago while prospecting near Marble Bar, 750 miles north of the West Australia state capital of Perth.

Landowner Frank Welsh complained to police that Dimitrovski had been prospecting illegally on his property. Welsh became aware of the find after Dimitrovski took the nugget into a local bar to boast.

Dimitrovski, 52, was charged with unlawful possession, and the gold was confiscated and stored in a vault in Perth's mint.

After a series of court hearings, West Australian Supreme Court Judge Graeme Scott upheld a lower court decision throwing out the prosecution's case.

Dimitrovski said Friday he would not sell the nugget.

``I want to put it on display at the Sydney Olympics and try to get some sort of cover charge on it and give it toward a charity,'' he said.

Gandalf the White

(05/06/2000; 11:51:25 MDT - Msg ID: 30047)

YGM -- Question !

is that 14.5 Pounds ? aka = 174 oz.
<;-)

Henri

(05/06/2000; 12:38:17 MDT - Msg ID: 30048)

Harley Davidson Question for a slow day

Why the H*ll do asparagas have to have such long d*mn roots!
You'd think there was something way down there to go after that they can't find up above.

YGM

(05/06/2000; 12:44:48 MDT - Msg ID: 30049)

Gandalf....

14.5 lb Nugget.....I'm not sure of troy oz p/lb......but 14.5 lbs yessss! What about the one in, I believe Australia, where the farmer high centered his tractor on a boulder in a muddy field.....It was in the tonnes......????
Regards...YGM.

Harley Davidson

(05/06/2000; 12:50:21 MDT - Msg ID: 30050)

Sir Henri..re: esparagus roots on a slow day!

Not exactly HOF material but here we go. I'm gonna take a wild guess here. Actually, I think your on to something with "something down there to go after"...water. My understanding (which could be way off - I thought I was wrong once before but I was "mistaken" (smile)) is asparagus grows best in sandy soil (New Jersey?). If that's the case, then the water would drain easily and the the roots would have to go deep to get it. Just a hunch.

Peter Asher

(05/06/2000; 13:03:37 MDT - Msg ID: 30051)

Gandalf, YGM

14.5 lbs. X 16 = 232 oz. X $278 =$64,496.

Even if you take Troy including Helen you don't get a value of $590,000. Although --- What is the value of a "Face that launched a thousand ships"?

HI - HAT

(05/06/2000; 13:06:36 MDT - Msg ID: 30052)

Fundamental Time

The exchange rate of the Euro was by calculation set to high to begin with. All world economic and trade computer models work off of dollar ratios. As such the Euro creators know that the NEW must transverse the road of introduction,acceptance,familiarity,true world fundamental value price discovery.

For whatever reasons the Euro is trading in this lower band it is succeeding in getting the worlds attention and thereby forcing a deeper analysis in the process of finding a price value discovery perception. It must go through a run from pillar to post in order to equalize out in its future range.

The Euro since it is NEW must have time to be firmly "Fixed" in the world consceisnous. The point I am making here is like the old publicity ditty, "print anything you want, but make sure you spell my name right".

As FOA says, we have a 007 going on here.

TownCrier

(05/06/2000; 15:44:00 MDT - Msg ID: 30053)

Sir Simply Me, thank you for pursuing this line of thought

Goal: Drive down the price of physical gold.
Terms of operation: Unlimited funds and no access to physical gold in any form.

Your answer: Buy as many "puts" as possible in about the $240.00 to $270 range in the futures market, concentrating on June. Then after May 15th, begin rolling them over into August "puts". Completing the action before May 30th.

"I just want to know if I'm on the right track to understanding this stuff. Logging on to this forum is like sitting in on a Nuclear Physics course without taking Physics 101"
---------------------------------
While it is true that economics can seem quite obscure on the surface, it is actually quite accessible. The only coursework prerequisite for this "class" is life itself. If you are conscious, you can surely attend, and if you have time for thought, you will surely thrive.

Are you on the right track, you ask? Let's let you decide. Please do some "thinking out loud" (post on the forum) on the cause-and-effect of your proposed action to drive down the price of gold. Meaning, why did you choose to buy these put options, and what do you anticipate would become of them? Would you expect them to expire worthless, or would you be in a position to exercise them? What actions do you anticipate this activity would inspire among others in the market? Thanks in advance. We can kick this around as much as you'd like. You don't have to present a Master's Thesis all at once. That would take the fun out of it all, wouldn't it?

TownCrier

(05/06/2000; 16:06:12 MDT - Msg ID: 30054)

Some fun on a slow day... Can you say, "Inspiration"?

http://www.three-kings.com/For those of you who wondered, it is more about gold than you ever had imagined. You will never see the top of the forum in quite the same way again.

Leland

(05/06/2000; 16:10:53 MDT - Msg ID: 30055)

I Flunked...See if You Can Guess Without Reading the Answer

Guess Which Country This is

* 709,000 regular (active duty) service personnel;
* 293,000 reserve troops;
* Eight standing army divisions;
* 20 air force and navy air wings with 2,000 combat aircraft;
* 232 strategic bombers;
* 13 strategic ballistic missile submarines with 3,114 nuclear warheads
on
232 missiles;
* 500 ICBMs with 1,950 warheads;
* Four aircraft carriers, and;
* 121 surface combat ships and submarines, plus all the support bases,
shipyards and logistical assets needed to sustain such a naval force.

Is this country:

Russia? . . . No
Red China ? . . . No
Great Britain ? . . . Wrong Again
USA? . . . Hardly










Give Up? Well, don't feel too bad if you are unable to identify this
global
superpower because this country no longer exists. It has vanished.

These are the American military forces that have disappeared since the
1992
election.

Sleep well, America.

Gold Trail Update

(05/06/2000; 16:45:22 MDT - Msg ID: 30056)

The Gold Trail Discussion has been Updated

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

Henri

(05/06/2000; 18:45:06 MDT - Msg ID: 30057)

Town Crier Post 30023

I'm Thinkin'...I'm Thinkin'
Thanks for the invite. I'll respond when I ponder it out

SHIFTY

(05/06/2000; 19:06:13 MDT - Msg ID: 30058)

Leland

That is a frightening statistic.

SHIFTY

(05/06/2000; 19:31:51 MDT - Msg ID: 30059)

Neil Young- Silver & Gold

Neil Young has a new album out titled SILVER & GOLD !
Some of his past work was " Hart of gold" and " After the gold rush." He will be the musical guest on Saterday Night Live tonight.

SHIFTY

(05/06/2000; 19:33:28 MDT - Msg ID: 30060)

Off to the gold trail ! ! !

See ya

USAGOLD

(05/06/2000; 19:40:23 MDT - Msg ID: 30061)

Asian Nations Back Currency Plan

http://biz.yahoo.com/apf/000506/asian_bank_4.htmlAP Report (5/6/00)

"Thirteen Asian nations agreed Saturday to help defend each other's
currencies in the event of an economic crisis like the one that devastated the region in 1997-1998.

Economic powers Japan, China and South Korea decided to take a role in the fledgling currency protection
scheme adopted two months ago by the 10-member Association of Southeast Asian Nations, part of a wider goal of creating a more united Asia on the world economic stage.

Finance ministers from those countries met on the sidelines of the annual meeting of the Asian Development Bank, a Philippines-based institution
some Asian officials would like to see become a lender of last resort to troubled nations."

From same article:

"Malaysia, which has long urged fellow Asian nations to rely on each other for help, rather than on the West, refused the IMF's treatment and suffered less in the crisis than others."

Also:

"We firmly believe that it will not end here. This is a beginning. It can evolve into something bigger,'' said Mustapa Mohamed, deputy finance
minister of Malaysia."

Cavan Man

(05/06/2000; 20:04:27 MDT - Msg ID: 30062)

USAGOLD

The future can be seen in the present.

Cavan Man

(05/06/2000; 20:07:56 MDT - Msg ID: 30063)

Hello Trail Guide

Two questions please:

1.) Will you tell us of your favorite gold stocks?

2.) Have you been in the very general vicinity of Aiken, SC recently. I'm trying to confirm a sighting :).

JavaMan

(05/06/2000; 20:14:46 MDT - Msg ID: 30064)

RE: Harley Davidson

As is customary with the passing of all things dear, I would like to ask for a moment of silence.

(Insert moment of silence here)

This week I ran an add in the newspaper to sell my Harley and today someone came to look at it. So impressed was he, that he gave me a substantial cash deposit on the spot, and asked if we could conclude the deal on Monday. And so ends an aspect of my life that goes back to 1966.

If you ask someone what the mystique is about a Harley Davidson, they would say "if I have to explain it, you wouldn't understand." I talked to a factory representative once and he said "its not a motorcycle, it's a way of life."

Oh well, my son goes off to college in September and I have to take care of business. Not that the bike will cover all of that but it's a start. The HD sure is expensive and they hold their resale value like no other transportation I know of.

So, to transition into my new life, sans HD, I feel it inappropriate to continue at the round table as "Harley Davidson" as that era has come to an end, and because of the seemingly unlimited technical prowess of our Town Crier, I am now able to post with my new handle, "JavaMan"!

Oh yeah, I never bought all that crap about "its not a motorcycle, it's a way of life." It is a unique piece of engineering though. 88 cubic inches (more displacement than the early Volkswagens) of throbbing, tree stump pulling torque, thunder, and chrome. It is art in motion...poetry on wheels...and the experience of taking one down the road is not for the faint of heart, but that "way of life" stuff is pure, unadulterated, well...maybe they have something there...nah!

TownCrier

(05/06/2000; 20:20:43 MDT - Msg ID: 30065)

Welcoming the new pedestrian...

Glad to see that all is in working order for you, Old HD.

Simply Me

(05/06/2000; 20:21:21 MDT - Msg ID: 30066)

To Town Crier and Trail Guide

To Town Crier,
I love puzzles. Thank you for the challenge! I must work on the answer 'till tomorrow, though. I've had one too many Mai Tai's this afternoon. I couldn't get myself out of a Chinese finger puzzle right now!
The rest of my post are thoughts from yesterday.
Will respond as soon as I'm able.

To Trail Guide, and all,
An idea I've been working on seems to mesh well with the thoughts you've expressed today on the 'Gold Trail'. (The salmon was heavenly!) In trying to gain some perspective on the western mindset, I think it is meaningful that as the US stock market has boomed this past twenty years...the casino business has also spread all over the US landscape. The following is a post I was working on earlier today, before I started working on a hangover. (With all the sugar in the mixer, it should be a doosie!)
I would be interested in everyone's thoughts about the similarities/differences in gambling vs. investing, and why market philosophy is starting to look so obviously like casino psychology.

It's a very slow Saturday. Everyone seems to be holding their breath, trying to feel which way the wind will blow next.

Watching the stock market all this year has been very much like sitting in a casino. Strategically placed machines are looser than others. So that those machines are making the "sounds of winning" all over the casino. Even though they're spitting out only small jackpots with any regularity, the sight and sounds of winning are driving everyone sitting at the tight machines to keep pumping those tokens in with the hopes that the next spin will be the jackpot. And they keep moving around looking for a loose machine.
Ah, but the poor shmoe sitting at the loose machine is the REAL loser! Because after a couple of adreneline pounding jackpots, he's hooked! He'll keep pumping those tokens in the slot till he's broke, trying to hit it again. After all, it's his lucky day!
Next time you're in a Casino, get a drink and go stand on a stairway with a good view of the slot machines. Stay there till the drink is gone. (I suggest the drink because everything else about the place is designed to draw you into the crowd.) Watch the people at the machines.
Yep, they'll keep buying tech/communications/biotech stocks on the dips all the way down to the bottom. They have to. This long bull market has hooked a lot of people who don't know any other way. They're looking at the blackjack (commodities) table, but they don't know how to play that game and they know they're likely to loose their butts learning, so they keep loosing at the easy game they know.
This is surely not the case with the OLD professional gamblers, Soros et. al. They've been playing at the poker table (not the slots) all along.
But the poor schmoe with the least to loose is at the slot machine, with every machine rigged to make the sound of winning without actually paying out.

Where does gold fit in all this? It's the money that purchases the slot machine tokens and poker chips.
Right now the casino is offering $2 in chips for $1 in gold. The irresistable chance to double your money, double your chances to win big! How can they do that. Easy,
they make the chips...they can make as many as they want. And they know once you have the chips in your hands, you're going to gamble them. They get your dollar in gold and they will eventually get their chips back, too.

The only way to win is to keep your dollar's worth of gold.
simply me

Cavan Man

(05/06/2000; 20:27:04 MDT - Msg ID: 30067)

The Euro and "Leadership"

What do the two subjects, one a currency, one a quality have in common?

I have reached the conclusion (and I'll not be swayed even by the great intellects that inhabit this cyberspace)that people in our times, today, do not want leadership of any sort. In my view, people want bureaucracy; they want "management", not leadership. Leadership requires thinking "outside the box", it requires daring, it requires risk, it requires a strong spirit. Leadership can be very hard work and tricky business. I have observed this human emotive tendency that seeks maintenance of the status quo in every aspect of our lives over the course of some years.

BTW, you might ask, how do you define leadership? If I might borrow from and excellent tome on the subject, "On Becoming a Leader", by Warren Bennis, I define it thusly; "Leadership is a lot like beauty. I know it when I see it." This short book by Bennis is one of the most inspiring I have ever read.

The Euro might have been concepted out of necessity but its birth in my view is an expression not only of "political will" but of a daring act of leadership to conceivably take a large part of the world's citizenry to a higher economic level. These Euromeisters should be congratulated and respected for their audacity in challenging the post-'47 monetary order. Furthermore, their resistance to intervene in FOREX markets and bow to journalistic sentiment is another feather in their caps.

Good luck to you Euro. May the best currency(ies) win!
That's the "American Spirit". That's the "American Way".

Good evening.....CM

Cavan Man

(05/06/2000; 20:29:41 MDT - Msg ID: 30068)

HD

Welcome J Man!

Leland

(05/06/2000; 21:04:07 MDT - Msg ID: 30069)

After What Happened This Week...I'm Building a Linux Computer

And, what reeeleee bugs me.....
Sat May 6 22:50:38 EDT 2000
Microsoft Stock Price:
$71.125
Bill Gates's Wealth:
$80.320000 billion
U.S. Population:
274,747,123
Your Personal Contribution:
$292.342


"If you want to know what God thinks about money, just look at the people He gives it
to."
-- Old Irish Saying

pdeep

(05/06/2000; 21:06:44 MDT - Msg ID: 30070)

Euro "Weakness"

I think Oro had something to say about this a while back, but I'll air my confusion again.

In the WSJ today, there's an article quoting a few economist-pundits bemoaning the weakness of the Euro, and one suggesting supply-side solutions to the "Euro Crisis." However, isn't it true that Europe probably holds a few hundred billion dollars in dollar currency reserves? Europe has run a current account surplus with the US for a decade or so. If the ECB decided to bolster the Euro, couldn't they just start selling the dollar reserves and buy Euros? It probably woudn't take much to burn Euro shorts, and they have plenty of ammo.

Since they are not, is it safe to say that the Euro "weakness" is not something that the ECB wants to fix via forex interventions?

TownCrier

(05/06/2000; 21:35:21 MDT - Msg ID: 30071)

Sir Cavan Man (msg#: 30067) ... nice post on leadership

You said:
"The Euro might have been concepted out of necessity but its birth in my view is an expression not only of "political will" but of a daring act of leadership to conceivably take a large part of the world's citizenry to a higher economic level. These Euromeisters should be congratulated and respected for their audacity in challenging the post-'47 monetary order. Furthermore, their resistance to intervene in FOREX markets and bow to journalistic sentiment is another feather in their caps."

I also liked your comment on the "daring" which is required when choosing to live in a manner where you are NOT being led around by the hand. As such, we can all either sit back and wait for things to unfold, whereby we would be essentially be hand-led by the events of the day; or better, we can actively look for evidence and read the signs (as we may) while we pursue a more thoughtful and sovereign existence.

In light of your comments, I truly hope you have found (or will soon find) a moment to read this post from yesterday:
-----------------------------
TownCrier (5/5/2000; 21:00:38MT - usagold.com msg#: 30028)
-----------------------------

It touches on many items that would not be conducted on the front page of the newspapers, yet the leadership is there nonetheless, should we all choose to follow the signs or not.

To build just a bit more on my post, and to fold in the important element of your post, it strikes me as significant that these 11 independent nations took the trouble to form a NEW currency even as they were surrendering their individual national perks of currency manufacturing. In a very rough sense, when you are planning your national budget in Helsinki or Madrid, you might just as well well turn to the Fed in the U.S. as to the ECB in Frankfurt, no? If they are giving up their own ability to print money, why all the trouble to form a new currency unit instead of just joining the dollar and the currency union of 50 states plus assorted banana republics that use the dollar? The reasonable answer is that the intended objective is a fundamentally new monetary architecture not available through the current dollar system.

Your quote could very well be right on the money. Again, please have a look at yesterday's post if you haven't already. The best kind of leadership generally operates from plans that are credible. (You be the judge of the credibilty of what I have mapped out in that post.) The tough part for leadership is finding the resolve to do the "right" thing during calm times when so many have become accustomed to the "easy" thing.

Gold Trail Update

(05/06/2000; 21:50:38 MDT - Msg ID: 30072)

The Gold Trail Discussion has been Updated

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

JavaMan

(05/06/2000; 21:54:02 MDT - Msg ID: 30073)

Simply Me, psychology 101...

You said "I would be interested in everyone's thoughts about the similarities/differences in gambling vs. investing, and why market philosophy is starting to look so obviously like casino psychology."

You're well on your way to identifying, in part, what is going on in the markets today. The key, as it relates to your observation above, is in what is known as behavioral psychology. B.F. Skinner, the well know psychologist of the �70s became famous for his work in behavioral modification. He discovered some interesting characteristics common to most, if not all, living creatures. One of his experiments that ultimately had far reaching implications was a follows: Put a white rat in a cage with a container hanging on the side of the cage that dispensed a sugar pellet when a lever was depressed. In no time at all, the rat learned that, by depressing the lever, he was rewarded by a sugar pellet.

Now comes the "revolutionary" part. The container is controlled by a switch that the experimenter operates so they can override the dispensing of the sugar pellet when the rat presses the lever. In other words, sometimes the rat presses the lever, and he gets the reward of the pellet and sometimes he presses the lever and no reward is forth coming.

So what is so revolutionary about this you might well ask. Simple. The real discovery was the observation that when the experimenter "turned off" the container so it would no longer dispense more pellets, the rat would press on the lever some number of times before walking away, never pressing the lever again. This was called "extinguishing" a behavior. But then, with another rat, the experimenter manipulated the container in a random fashion so sometimes the rat was rewarded for pressing the lever and sometimes he wasn't. Then, in conclusion, the experimenter turned off the container so no pellets were dispensed when the rat pressed the lever. And guess what happened. The rat would continue to press the lever far beyond the number of times of the other rat.

B.F. Skinner discovered that reinforcement of a behavior "randomly" was a much more powerful form of behavioral conditioning and, consequently, much more difficult to extinguish. So we come full circle to gambling which is random reinforcement at its finest and I give you the stock market which, today, is gambling at its finest.

This gives a whole new insight into the "buy on the dip" mentality. Based on the information above, I wouldn't be surprised to see people buying into this market all the way to the bottom...looking, hoping, knowing, there is another sugar pellet on the next press of the lever.

Black Blade

(05/06/2000; 22:07:57 MDT - Msg ID: 30074)

Harley......Uh, I mean Java

Sold your Harley? Bummer. I know the feeling, but my last Harley was a Wide Glide. Still have my 69 Charger, 76 CJ-7, and 92 F-150 4X4. Now, my the handle Javaman? This to do with a lot of coffee drinking or a little evolutionary phase that your going through?

Black Blade

(05/06/2000; 22:09:34 MDT - Msg ID: 30075)

Correction

Should read Why the handle....? Whew, good beer tonight! New key board too!

Black Blade

(05/06/2000; 22:17:40 MDT - Msg ID: 30076)

US Reserve Assets Decrease $930 million.

Source: Wall Street JournalThe following from WSJ May 3rd, page C9.

US official reserve assets fell $930 million last week to $66.83 billion after a revised $379 million the previous week, The Treasury Department said.

US reserve assets consist of foreign currencies, gold, special drawing rights at the International Montetary Fund and the US reserve position - its ability to draw foreign currencies - at the IMF.

The nation's holdings of foreign currencies dropped $483 million last week to $30.27 billion, while it's gold reserves were unchanged at $11.05 billion. US holdings of IMF special drawing rights fell $178 million to $10.12 billion, and its reserve position at the IMF fell $270 million to $15.39 billion.

ET

(05/06/2000; 22:23:32 MDT - Msg ID: 30077)

Peter, Leland, HD

Hey Peter - I saw you posted some of my old stuff. It's strange reading one's old quotes. I can't say I'm anymore certain about the future than I was a year ago. The stock markets seem much weaker than a year ago and the charts look very weak for paper yet strong for hard assets. Even copper is finally moving to the upside. Stranger has it right in most respects.

Hey Leland - I made the switch to Linux last year and can proudly say I use no Microsoft products. At this point however I wish I did as it is distressing to see what the US government is doing to the company. Mr. overherd and I have been keeping in touch as he has also made the switch. Linux is an outstanding system and is getting better by the day. The real problem facing Microsoft is the fact that most of the software that they rely on for profit is becoming free under the Linux operating system. No matter how you look at it, free is the better deal.

Hey Harley Davidson - sorry to hear of your loss. I suffered a similar loss recently when I lost oil pressure in my Corvette and cooked my roller-cam small block. Life can be cruel. I will rebuild however and possibly be looking to trade for one of those 2-wheeler's.

ET

JavaMan

(05/06/2000; 22:31:17 MDT - Msg ID: 30078)

Sir Black Blade,

Yes, the brewskies are flowing here too. Just sold my '99 Dyna Wide Glide. Aztec Orange. Beautiful. Ughh. Massive mid-life crisis.

Only drink coffee on weekends, otherwise I would drink to much and would never get to sleep. I work at a software development company doing work in the Java programming language.

Sir Leland...don't get me started on Microsoft. I consider myself to be an "average" programmer yet someone of comparable skill, if so inclined, could wipe out just about every Windows PC connected to a network that is connected to the Internet. Period. I'm just waiting for some nut-case Iraqi, Libyan, or Communist Chinese to go for it. Of course, I suspect it would/could be construed as a declaration of war against the US, but that wouldn't mean to much to the individual at work who has to get something done ASAP and they are staring at the notorious Windows blue screen of death.

Trail Guide

(05/06/2000; 22:35:54 MDT - Msg ID: 30079)

comment

THC (5/5/2000; 5:31:38MT - usagold.com msg#: 29970)

Hello THC,

I'll add my 2 cents to your discussion.

You say:
---- I believe that FOA has spoken from time to time of "paper being sold into the ground" while "physical gold sells at much higher prices away from the futures markets." I would content that as long as futures markets are connected to physical markets through the physical delivery rules, this would seem to be highly implausible. -----

The obvious weak part here is in your
" " through the physical delivery rules" " !

These rules are open to change. If enough traders or commercials default, no one is going to supply physical for them. The "rules" convert to "trade for liquidation only". That is usually a trade of "paper to paper". In other words "cash settlement". If you were short you lost a bunch. If you were long, you get cash and go try to buy your own metal.

The problem is that in this atmosphere any amount of metal trading will be spiking straight up with each bulk cash settlement.

The reason this perspective is important is that the "paper makers" know just how this will impact the paper markets. In reality, no one that has real capital will buy into a paper marketplace headed for any form of liquidation. So it becomes even easier for them to send prices lower. Even a hint of settlement is enough. If anything at all, during this process the arbitrage is just the opposite from
normal. Traders help the discounting process along by dumping contracts that are even in obvious discount to physical and running to buy "dealer physical" supply at higher prices.

Contracts are contracts my friend. Nothing more until settled. In a real crisis, cool arbitrage players get run down by the train as they find their own physical that was set to trade becomes "suddenly not there"! As the gold markets grind to default, the paper selling by people with nothing more than good credit will greatly intensify.

Trail Guide

JavaMan

(05/06/2000; 22:42:05 MDT - Msg ID: 30080)

ET

Oil is to an engine as blood is to a human. Neither does well for long without it.

I used to have a '71 LT1 350/330 hp in the mid '70s. Fastest car I ever experienced. Didn't realize what I had at the time and ended up selling it for about $4500.

Trail Guide

(05/06/2000; 22:58:26 MDT - Msg ID: 30081)

Comment

Cavan Man (05/06/00; 20:07:56MT - usagold.com msg#: 30063)
Hello Trail Guide
Two questions please:
1.) Will you tell us of your favorite gold stocks?
--------------
I once said one and will hold back from mentioning it (or others) again. The Western view says that if I have $100,000 to put into hard assets, I'll buy ten ounces and place the rest in gold stocks. I doubt most people could hold that ratio through what is most likely coming.

It's the same as using the grocery money to buy Coca Cola stock as a substitute for a bottle of coke. All the same arguments apply: the company could pay me dividends in coke,,,,, there reserves of coke in storage are huge,,,,,,,, more leverage than the real thing,,,,,,etc.,,,,, etc.,,,,!
Then the stock goes down in a general crisis even as the price of a cold coke goes up from inflation and everyone can't figure it out?? In the end you open the frig door and don't see what you really need........ that cold bottle of coke (smile).


2.) Have you been in the very general vicinity of Aiken, SC recently. I'm trying to confirm a sighting:).

Have you been celebrating that mexican holiday??? (smile)

Trail Guide

Trail Guide

(05/07/2000; 00:09:23 MDT - Msg ID: 30082)

Note

TownCrier (5/5/2000; 21:00:38MT - usagold.com msg#: 30028)
-----------------------------
If they are giving up their own ability to print money, why all the trouble to form a new currency unit instead of just joining the dollar and the currency union of 50 states plus assorted banana republics that use the dollar? The reasonable answer is that the intended objective is a
fundamentally new monetary architecture not available through the current dollar system.------

Hello TownCrier,

You hit the nail right on the head! The whole purpose behind all of this was to get away from the dollar, not imitate it. All the hard money people that pounded the table about the dirty float (80s decade) in dollar exchange rates now want the ECB to intervene. No sooner do we have a currency system that let's the market rule it and everyone says "Oh no! We need to do something".

I can tell you why they want something done and it's not the saving of the Euro they are interested in. They (the dollar faction) want the Euro up because it is gutting the dollar infrastructure at these rates. Just let it set around .90 for the rest of the year and the dollar will be toast. The ECB won't spend it's dollar reserves buying Euros because the Euros they would take in won't be the international float like our dollars (eurodollars?? damn confusing to use that term now a days) overseas. It would be the domestic zone supply. We forget that they are running a trade surplus
that is building local assets denominated in Euros not dollars. Not adding to the mountain of dollar liabilities like the US trade deficit is. If the carry trade wants to create Euros against their own equity just to buy dollar assets, let them. It's not hurting the international Euro float because all of it is being sucked back into their (Euro) economy. The carry group thinks this is the same act as Japan, but it's not. The Yen is being destroyed as they compress and rates are held at 0%. Yen demand for business is dead. Contrast this against Euro demand and economic growth and we can see a massive trap for Euro shorts in the making.

I think this is all coming to a head now and gold is going to be in the middle of it. Before this is over, the ECB is going to begin unloading dollars for gold through the BIS offices. This may be happening now as gold moves from our shores. Then they use gold to buy excess Euros from the
ECMBs. That same gold could be used to lend Euros again because it's marked free value reserve asset. No different than the IMF play. Beautiful!

Trail Guide


View Yesterday's Discussion.

ORO

(05/07/2000; 03:25:29 MDT - Msg ID: 30083)

Town Crier - 2 turning points of sorts +1

In March I finished an analysis of the BIS data on external debt put in terms of currency demand and currency supply.

Working out the mechanics of it was very much an eye opening experience. I followed a line of thinking which I have been arguing for quite a while in a detailed mechanical way, and was astounded by the results. How these debt positions dictate strength and weakness of economies and currencies, and how the relative debt positions in currencies determine the flow of imports and exports and distort prices. Particularly surprising was how right Davidson and Reese Mogg were about the dollar debt squeeze.

The second item, of which I am not quite certain yet, is "The Derivative" in the currency markets that connects all the currencies to gold and to each other via interest rates. The determining factor being interest rates. I have yet to work out all the mechanics, however, the first few tries at the data indicate that there is a defacto relationship that dictates a gold price according to interest rates that a central bank can maintain. The lower the interest rate the CB of a major state can charge without destabilizing its currency and economy, the lower the price of gold EVERYWHERE.

The question I asked myself was what if Greenspan had his way, and the US did issue particular bonds to central banks at a fixed conversion to gold at maturity, and at a fixed interest rate ? What if he, the obscure economist, was selected to head the Fed, because it was his concept that was being used to keep the currency markets from cracking after the 1985 currency crissis that eventually cracked Wall Street in 1987 ? What if he was maneuvering to maintain equal interest rates on both types of bonds? What if the fixing was done at the IMF through the SDR, and it was the SDR that was fixed?

Then, after some attempts to see in the interest data what is happening, I came to the conclusion that it is likely that there was such a derivative. The question was then shifted to what the fixed values were. For kicks, I started by plugging in the values from the Phillipine gold contracts, $280 floor, $442 at maturity, 9% interest. It worked for many periods of 3-5 years since 1983, though it was way off at some periods. So this gave some credibility to the Phillipine gold story in my eyes.

Then I thought of the nature of a modern currency as "that which the borrower must return". What made for a national (or regional) currency being different from one nation to the other was the location of the borrower and the government controlling the central bank. Borrowers are different in different regions, but it is their action of seeking currency units that provides value to these units (something I was arguing with Aristotle a wee bit before). If the borrower gave up (bankruptcy) seeking the currency (deflation), its value would fall. If the borrower had no problem obtaining currency (inflation), its value would fall. If some borrowers HAD TO reurn loand and some borrowers were not under such pressure, the Have To borrower would have more pressure to sell more goods/services for the same currency units. If the Have To borrower were outside the currency zone (nation or region), then a discrepancy in currency buying power would be expected between the two areas. If interest rates for a currency were higher outside the currency zone than within - say because the borrowers within could borrow from the central bank, but the borrowers outside could not - then the purchasing power discrepancy would be even greater. This is "old hat" so I'll leave it at that.

Going back to the nature of currency, we have, in essence, a single currency with local colors that vary according to the nature of the local borrowers, the local legal terms regarding debt obligations, and local central bank policy. Economic activity and tax, as well as other issues are not touched on yet, and we already have a common denominator and a difference between currencies. Under a gold standard, the different zones would only be distinguished by the interest rate charged there. The rate would be determined by the following for each region:
1. Upper limit, the borrower's perceived or actual return on borrowed funds.
2. Bottom limit, 2.1. the lender's estimates of credit worthiness - the risk of funds not being returned, 2.2. the lender's perceived or actual opportunity cost from not using the funds immediately, or conversely, of not having an income.
3. Actual value of the interest rate - the "market clearing" rate - allows the borrower his return, and the lender is provided his income at the appropriate risk to funds.

Under duress (the shortage of gold caused by over extension in banking), the borrower will pay any rate in order to avoid immediate bankruptcy, while the lender will perceive high risk, thus rates would rise initially. After the squeezed borrowers are bankrupt, the lenders still need to turn their remaining savings into income, however, and will lend again soon after the crissis is over; which is when the distressed borrowers are taken out of the markets.

This simple theoretical description provides the background to the next leap. Having come to the conclusion of there being a gold derivative at the center of the currency and debt markets, the question then becomes what is the status of currencies then?

Often, people speak of the backing of a currency being the assets in the country of issue. When a government bond is issued, the country of issue has its tax base to support the payments of the bond, and a central bank that can issue further currency by taking government bonds off the markets. Indeed, this is the Anglo - American concept of central banking as that symbiotic relationship of banks and government that makes it possible for government to float a currency. Banks need a way to sell their wares at maximum capacity (in essence, banks sell other peoples debts). The reason a bank debt currency carries a value at all, and does not go directly to 0 is that each unit was borrowed into existence and has a demand by the borrower to return the currency created by his loan. Banks want to eliminate the competition for their product - namely any form of cash. Cash would be a physical commodity money or a government (or private)issued paper that has no debt associated with it.

Governments have attempted many times to create paper cash. They had failed miserably even when death penalties were given to those refusing use of the government paper. Failure came from the obvious reason that there was no natural demand for the government's cash currency.

Beginning with the Bank of Venice and culminating in the old BOE, which later evolved into the BOE's gold standard of the British Empire, banks and governments formed a partnership in which the government gets to issue currency through the issue of debt, and banks get the competition from cash eliminated from the market. The government does not get the full benefit of segniorage from this endeavor, but the currency created out of its debts is inseparable and indistinguishable from the currency created out of the honest debt of individuals and corporations. Thus, the government's currency wins the demand from other borrowers seeking to return the currency they borrowed.

This is the core of the Anglo banking model and has served both bankers and government well over the years, though it has paupered billions and made everyone a serf of sorts since no money is independent from the will of others to seek currency to return to the lender.

The BIG GAPING HOLE in this system is that there is no such thing as cash. Furthermore, the system is highly deflationary, since future demand for money is allways greater than current supply, and new supply can only be created by new debt. In the event of a debt liquidation due to an economic problem, the currency will implode in cycles of hyper inflation and severe deflation. Even with the best run central bank, the best that can be had is a delay in the date of destruction.

Now comes the point of this discussion: In order to keep the global economy functioning past the nose dive of the dollar in the 70s, it was necessary to reestablish a gold standard. However, a gold standard makes all currencies equal - a definite no-no for the Paper Empire of America. Furthermore, it would have reestablished a cash gold monetary system - the nightmare of government and banking alike. What was necessary was a credible Gold DEBT standard - FOA's "paper gold". That system would work by allowing the interested party to exchange dollars into a gold bond that converts into gold at maturity.

Each country can issue such a bond and the credibility of that bond would dictate interest rates, just as the true economic performance within a country would reflect in the local debt and currency creation rates and the interest rates necessary to maintain stable purchasing power without destroying the banking system. Thus the lowest interest rate available from any of the members in the scheme would dictate the value of the gold bond - and the POG. The lower the rate, the lower the POG.

So why the Euro?
To the Continental European, Asian, and Eastern view, this cash free system still contains the fatal flaw of debt unwinding. Furthermore, experience has shown repeatedly, that government participation in the debt system ends up with a major issuance of government notes and the monetization of these notes when the deflation and economic contraction occur.

The key differences for the Euro are (1) that eventually there would be a cash version for debt settlement, namely gold, (2) The governments of members can't enjoy seigniorage because the currency is issued by a separate structure that is forbiden to lend to governments, but hold only commercial and retail debt.

Perhaps more later.

Elwood

(05/07/2000; 03:38:22 MDT - Msg ID: 30084)

Late Night, Early Morning

Trail Guide (5/7/2000; 0:09:23MT - usagold.com msg#: 30082)
Thinking about taking a Yen/Gold cross. Get the Yen for next to nothing, and exchange for physical. Easy money. I prefer Pepsi, btw. It tastes better.

All, thanks for the kind words, and all the mail on the GoldTango analysis. If only a tiny fraction of the people who read it sent a comment then we PGAs are an army indeed.

Harley, sorry to hear of your "loss." I'll raise one for your hawg.

Oro, love your work, keep it coming. Specifically, what's magic about the $450 billion number for the trade deficit?

SimplyMe, gambling risk is created risk for the excitement of the game. Speculative or investment risk is transference to another party of an existing risk without regard to the intelligence, or lack thereof, possessed by the assuming party.
Regards,
Elwood

THC

(05/07/2000; 05:19:36 MDT - Msg ID: 30085)

Towncrier

Good morning!!!

Japan's GOLDEN WEEK Holiday is now coming to an end......

Thank you for proposing the "exercise" the other day. Taking the other side of a debate/discussion is a great way to maintain an "objective view" of things.

Let me first clarify:

*I don't doubt that the US gov't has an interest in keeping the POG low.
*I don't doubt the importance of physical metal as an insurance hedge and "store of wealth."

I just have trouble accepting the concept that the price of physical metal will soar, while the expiry price of futures contracts (which can be converted into gold) would dive.

Regarding your "exercise," Ted Butler has described how the US futures exchanges favor shorts over longs, and the issues he describes may be important for manipulation.

However, we must keep in mind that all short positions must eventually be closed by:
1. Buying back the position
2. Delivering the gold

The fact that we do not have a gold shortage at present indicates that the current price level has been sufficient to get metal to those who want it. Not that this will never change, as this is all HISTORY.......tomorrow is a new day.

Good luck to all!

THC

Henri

(05/07/2000; 07:17:03 MDT - Msg ID: 30086)

Thoughts for a Sunday Morning

The truth is to the human mind as the sun to a tree. The leaves of a tree are as thoughts reaching out to capture the greatest amount of illumination possible from their limited reach. Often the intensity of the light is diminished by those leaves occupying a higher position than themselves yet they reach out nonetheless for what meager scraps of brilliance are left to them. From this light the leaves create nourishment and structure to reach ever higher in the pursuit of those elusive beams. The wind rustles the leaves above confusing the leaves below as to where the best position might be to capture the most light. First it is here, then it is there. How is a leaf to perform well in these squalid conditions?

Then slowly but surely the light dims everywhere. Where has all the light gone? The source of our life and structure. Surely this is the end of life as we know it. Darkness sets in for what seems an eternity. The leaves so intent on the higher pursuit of the light of life become as all other creatures, mere consumers of earth's bounty.

Then the dawn begins sending out its dim tendrils of hope. The leaves quiver in revelation. The cycle renews. The light becomes brighter. The leaves of the highest trees look down upon the lowly subsistance below them. See how we confuse them and take all the sustenance for ourselves. Surely we are superior to that below and deserve to rule over their antics. See how they stretch to catch a glimpse of the bounty we choose to allow them. See how they cast their seeds in the hope of attaining a better position in life where they may be free of our influence. They see how we starve them as we take not only their light but the major share of the mother earth's nutrients and water.

But the upper leaves are deluded. Since they cannot conceive of existence from the perspective of the lowly, they do not realize the perspective. No matter how much light they obscure form the lower levels, no matter how diminished the intensity or quality of the light, the essential essence of the light remains unchanged. The purity of its purpose is so simple it cannot be diminished in essence...only in quality and intensity.

The lofty have ample opportunity to learn of this amazing fact when clouds obscure their own light. What affliction is this that brings the darkness upon us! Surely it is evil. They see not that it brings life as surely as the light. The rain wind and lightning ravage their ranks. This can not be a useful thing. We all know the water comes from the great beyond and is carried by the sacred river to bathe our deep roots. Yes, and our roots too are superior those of the lowly for we can drink deeper and deprive them of the moisture they require. They worship the rains...the bain of our existence...see how they cavort and celebrate its arrival. They mock us as our leaves are shredded and our limbs buckle. See how they race to fill the ground below where the rains have provided them a bright spot not occluded by our magnificence. We cast our seeds among them but they choke our children before they have a chance at life.

The lofty choose not to see that which is. They know not that the source of all is constant and unrelenting and if their leaves should ever encounter its true intensity,they would wither and burn in its glory.

They do not realize that it is only the love of the earth mother in its eternal love dance with the sun that gives the illusion of night and day, of winter and spring.

May we all strive to find the truth by observation of only its pure essence whereever it appears. That which obscures the truth worships false gods. While they thrive they lose touch with the joy of a simple rainfall. It is they that are the inferior life form.

USAGOLD

(05/07/2000; 10:38:06 MDT - Msg ID: 30087)

Test. . .

Test. . .Got a message that our system might be down. Checking.

schippi

(05/07/2000; 13:33:24 MDT - Msg ID: 30088)

Gold Roadmap Chart

http://www.SelectSectors.com/gldresit.gif Multiyear Gold resistance chart:
The above chart displays the current Gold roadmap.
1) A multiyear downtrend has been concluded.
2) Currently we have a well defined sideways trading channel.
3) Presently, Gold is at the bottom of this channel and moving Up.
4) A spike down below this channel is possible, but should be
for only a brief span of time.

Cavan Man

(05/07/2000; 13:39:32 MDT - Msg ID: 30089)

Trail Guide, my big holiday is......

Saint Patrick's day. Seriouly though, while 'tis good to have your leadership along the trail, why do you spend your time here the way you do? What is your incentive, your motivation?

thanks....CM

HI - HAT

(05/07/2000; 13:54:28 MDT - Msg ID: 30090)

ORO

A question if I may? With the combining of the stock exchange in London and the one in Frankfurt, it seems the Continent is near completion of consolidating their Bourses. The British did not want their shares quoted in Euro's, but they have now reluctantly agreed. Talk is now Nasdaq seeks to enjoin this Powerful network. These are all electronic exchanges. The NYSE is the only major exchange that is not electronic. My question is, are the US exchanges hands tied and do you think they will lose premminance to a vast Continental 24 hour a day electronic exchange, iX ?

da2g

(05/07/2000; 14:19:07 MDT - Msg ID: 30091)

FOA msg#21

Many thanks to FOA for giving me a sense of the future purchasing power of an ounce of gold (today apparently discounted by a factor of up to 100 times in dollar terms). I guess this was the insight I was originally looking for with my cheeseburger posts. This number absolutely blows my mind.

Journeyman

(05/07/2000; 15:16:26 MDT - Msg ID: 30092)

Where the stock market boom-bubble came from @ ORO, ALL

http://www.mises.org/humanaction.asp
Hint: It didn't come from value creation or productivity increases.

The next time you listen to the heads talking about the "new economy" and
how stocks aren't overvalued, consider that the FED (Federal Reserve) has
been expanding credit at an unprecedented rate since the early ninties - - -
in the context of Oro's post earlier today and the following from von Mises:

The objective of credit expansion is to favor the interests of some
groups of the population at the expense of others. This is, of course, the
best that interventionism can attain when it does not hurt the interests
of all groups. But while making the whole community poorer, it may still
enrich some strata. Which groups belong to the latter class depends on the
special data of each case.
+
The idea which generated what is called qualitative credit control is
to channel the additional credit in such a way as to concentrate the
alleged blessings of credit expansion upon certain groups and to withhold
them from other groups. The credits should not go to the stock exchange,
it is argued, and should not make stock prices soar. They should rather
benefit the "legitimate productive activity" of the processing industries,
of mining, of "legitimate commerce," and, first of all, of farming. Other
advocates of qualitative credit control want to prevent the additional
credits from being used for investment in fixed capital and thus
immobilized. They are to be used, instead, for the production of liquid
goods. According to these plans the authorities give the banks concrete
directions concerning the types of loans they should grant or are
forbidden to grant.
+
However, all such schemes are vain. Discrimination in lending is no
substitute for checks placed on credit expansion, the only means that
could really prevent a rise in stock exchange quotations and an expansion
of investment in fixed capital. The mode in which the additional amount of
credit finds its way into the loan market is only of secondary importance.
What matters is that there is an inflow of newly created credit. If the
banks grand more credits to the farmers, the farmers are in a position to
repay loans received from other sources and to pay cash for their
purchases. If they grant more credits to business as circulating capital,
they free funds which were previously tied up for this use. In any case
they create an abundance of disposable money for which its owners try to
find the most profitable investment. Very promptly these funds find
outlets in the stock exchange or in fixed investment. The notion that it
is possible to pursue a credit expansion without making stock prices rise
and fixed investment expand is absurd.[6]
+
[6] Cf. Machlup, The Stock Market, Credit and Capital Formation, pp.
256-261 -Ludwig von Mises, HUMAN ACTION, XXXI. CURRENCY AND CREDIT
MANIPULATION, 5. Credit Expansion [available on-line - - - click on the
link in the header of this message]

Regards,
Journeyman

Bonedaddy

(05/07/2000; 17:04:21 MDT - Msg ID: 30093)

The nex momentum play?

Stayed home sick on Thursday. I was lying on the couch watching "Squawk Box" or some other CNBC show. The gold stocks got a little play. The mood was kinda down for this dog and pony show. It got me to wondering, when the "new economy" stocks finally do tank, and that may be very soon, what kind of fodder will keep these relatively new financial talk shows on the air? If their ratings drop, they're toast. They simply must find something to keep the "smarter investor" tuned in. The talk about gold stocks this on day was rather upbeat for a change. One guest even said that investors should start looking for stocks that paid dividends. (now there's a novel idea!) So, the talk shows, to survive, have got to find something of real value to talk about during the crash of the .coms. If that turns out to be gold stocks, some percenage of people will likely diversify into PHYSICAL GOLD! Just imagine what would happen to the price of physical if 5% of the .com money started chasing GOLD. The type of investor that chases momentum is heavily influenced by these shows. And the financial talk networks may be left with nothing else worth talking about except gold stocks. Maybe ANOTHER's price scenarios wouldn't seem so far fetched if they were viewed in relation to the PE ration of a .com stock.

Gandalf the White

(05/07/2000; 17:43:40 MDT - Msg ID: 30094)

But, Bonedaddy !

They talking heads will only speak of buying gold stocks which are only another form of PAPER !!! THEY NEVER will discuss the thought of buying the real thing of PHYSICAL !!!
That would be totally against the rules.
<;-)

Leigh

(05/07/2000; 17:48:16 MDT - Msg ID: 30095)

Gandalf, Bonedaddy

Maybe they could convey a subliminal message by wearing gold and silver jewelry. Can't you see Joe Kernan with gold chains around his neck!

Trail Guide

(05/07/2000; 18:42:15 MDT - Msg ID: 30096)

Good! our fourum is back up

ORO (5/7/2000; 3:25:29MT - usagold.com msg#: 30083)

Hello ORO,

A few comments about your work.

-------Particularly surprising was how right Davidson and Reese Mogg were about the dollar debt squeeze.----------

ORO, It has to unwind through a reserve transition. Default will only come through inflation after the fact. That is the only way a modern reserve currency can revert back to a regular currency without a complete washout of the global financial structure. Call it what we want, inflation, deflation, default or devaluation, the loss of the ability to expand a reserve fiat further becomes an end time banking crisis that requires the next system to take over. If no replacement is available we all go down.

The problem of when is a currency no longer "reserve quality" is based more on it's expansion qualities than it's comparable exchange strengths. The failing point is reached when the local economic system can no longer supply products or new productive capabilities in sufficient quantity to expand the internal debt base for real use reasons. The money then just expands because it's "Legal Tender" and anyone can get some. This shuts off the real money making engine and forces currency creation only for the sake of it's ability to buy and finance things. Not it's ability to hold a steady value. In other words, more dollars are loaned into existence just because they still have some value left in them to trade for things and that value is based on debt pay back strength. Not because their creation is matched by a productive increase somewhere in the society.

Obviously the US has been on this path for some time. Today, the only reason the dollar still has value is because of this pay back crisis. Dollar denominated debt is so far out of line with it's perceived real economic base, the rush is on to move real world infrastructure debt out of dollars
and leave the rest of these dollar claime sloshing around as trading vehicles. And boy that's a lot of slosh to move around.(smile)

They (ECB / BIS) planed for the day when this could begin and it's here, now! The Euro, warts and all is allowing this transition. In time everyone will realize that dollar demand and strength is gravitating towards nothing more than international currency contract settlement. It has no reflection of US economic conditions or the value of our real assets. For large cross country players and
governments there is no escape from this. They cannot just dump dollars to get their equity back out of it because there isn't enough free "REAL" equity in the whole world to run to at today's prices. The only way is to hold an offset position and let the dollar self destruct through inflation. Is it no wonder the foreign CBs have supported the dollar system by holding and taking in more dollars? How could everyone possibly run out of the dollar? They couldn't and won't for the most part, but will sell what they can.

Gold value today and tomorrow will have nothing to do with economic supply and demand or the cost to mine it. It will be forced to rise in value to help represent trading wealth currently held and trapped in dollars. The Euro could never do it alone. Of course, dollar hyper-inflation will gun the
process, but physical gold in real goods terms is heading way up! That's why I laugh when people talk about $700 or $800 gold being about right. That's not even close.

Again, dollar strength today is a sign of a bad situation and will only get worse. It will gut the productive infrastructure of this country even as the fed super inflates the system to fight that strength.

Your words:
----------The reason a bank debt currency carries a value at all, and does not go directly to 0 is that each unit was borrowed into existence and has a demand by the borrower to return the currency created by his loan. -----------

Yes! This hits right at the heart of why I call our dollars only an illusion of wealth. Truly it's just a contract
that can and is created between two entities with banks as the broker. The person that sees dollar value based on this demand and then holds those dollar assets as his wealth,,,,, is buying into an illusion based on that contract relationship. It's ok to own fiat money based on this concept because the human world has built a lot of value through the ongoing building of currency debt based on real productive efforts. But our money denominations and supply today are nowhere close to that comparison. Unless a free market value for gold can be established where one can
gauge the quality of all outstanding contract relationships (money supply), we cannot know where we stand. Allowing a real gold price to always rise (or contract) with no limits turns it into something better than circulating government money. It becomes a circulating asset that represents
real wealth values at all times to all people. We are on that road today.

Further you make the point that:

---------The BIG GAPING HOLE in this system is that there is no such thing as cash--------

I agree and doubt there will ever be again. This is where gold traded as an asset instead of competing with money would fill that hole.

Thanks Trail Guide

Leland

(05/07/2000; 18:59:30 MDT - Msg ID: 30097)

This is Sad and I'm Wondering...Is the Internet Going to Survive?

INTERNATIONAL HEADLINES

If you thought the 'love bug' was bad, just wait

By JASON BURKE and NICK PATON WALSH
London Observer Service
May 07, 2000

- You sit at your desk, park your coffee next to your mouse, fire up your computer and
click to check your e-mail. And in that one tiny movement, before you have even looked
to see if there are any suspicious messages, it could be too late.

Just by clicking on your "Get Mail" you could have turned your PC into a pile of useless
plastic. It is every computer user's worst nightmare _ and it's coming soon to a screen
near you. Brace yourself for the supervirus.

Meanwhile, the "love bug" has given us all a taste of what could be coming. Though its
creator must be concerned about the police knocking on his door within hours, he must
also be feeling fairly pleased with himself. The virus he set loose on the world on
Thursday has already caused millions of dollars' worth of damage, more than any other
virus or hacking attack since the dawn of cyberhistory.

The program worked because it was simple. It lay dormant for nearly a week before
surfacing on computer screens in Hong Kong. The message _ seemingly sent by
someone known to the computer user _ said "ILOVEYOU' and had an attachment which
appeared to be a love letter.

Launching the attachment allowed a program to invade the computer, which not only
sent copies of the e-mail to all the addresses listed on the machine but also scooped
up all the passwords it could find and sent them back to the creator of the bug.

Those first clicks triggered a flood. Billions of pulses raced through the world's phone
lines, spattering the virus in all directions. It was the fastest-spreading bug ever,
infecting five million machines within 36 hours. Everyone from the Pentagon to the
House of Commons to New Zealand universities was hit. An estimated 20 percent of the
world's computers were affected.

Yet it could have been much worse. The love bug worked by proliferating at such a rate
that Internet systems couldn't handle the overload. That may cause temporary collapse,
but there's little long-term damage. The damage that this bug _ technically known as a
"worm" _ did to picture and music files did cause problems, but these were far from
catastrophic.

Cyber-sabotage of a more deadly kind by was indicated by a development in November
when researchers at Network Associates, a computer security firm, received a series of
e-mails with the subject heading "Bubbleboy is back!'. As they examined the virus, their
eyes widened. It was, says Vincent Gullotto, director of the company's anti-virus team,
"a watershed."

The Bubbleboy virus broke the long-standing rule that you have to open an e-mail
attachment to become infected. By the time it was in your inbox it was too late.

Thankfully Bubbleboy, though it e-mailed itself to everyone in a computer's address
book, did not have a "destructive payload' and so did little damage. Few took much
notice of the quantum leap that it represented.

Virus writers have made advances in other areas. In April 1999 a virus called Chernobyl
was activated in hundreds of thousands of computers in Asia and the Middle East,
striking on the anniversary of the nuclear accident it was named after. Not only did it
wipe out stored data, it destroyed BIOS _ the basic instructions that tell a machine how
to start.

Now virus writers have married the destructive capabilities of Chernobyl with the invasive
capabilities of Bubbleboy and the speed of the Love Bug. The combination is the
supervirus.

According to experts, at least 50 such superviruses have already been detected on the
Internet. None have yet been launched at the public. Some may not work; some may be
shot down by existing virus defenses; some might get through. And that is the
nightmare scenario.

A hacker known as "Dark Tangent," who heads a group which advises big businesses
on their security, said the only surprise is that a "supervirus hasn't happened yet."

"For the last two years we've all been waiting," he said. "I don't know why we have not
seen one. It could happen next week."

The damage a successful supervirus could do is almost incalculable. "It would be as if
the Millennium Bug has actually done everything it was feared it could do," said one
London-based computer security expert.

The first question confronting law enforcement agencies and commercial outfits hired to
protect companies and institutions against such an attack is who would be likely to
launch it. Authorities are focusing on the threat from terrorist groups, who they fear
might use viruses to extort money or blackmail governments into giving in to political
demands.

"The supervirus is going to happen soon," said a source close to British intelligence
services. "There are people out there with that intention. They may coincide their
actions with protests against the International Monetary Fund and the World Trade
Organisation, just to muddy the water."

Many of the organizations connected with anarchist violence in London number hackers
in their ranks.

Another threat is from hostile governments. The US defence department believes 120
countries pose a serious threat to cyber-security. They include Libya, Iraq, Croatia and
Serbia. The Chinese are thought to have created military regiments dedicated to
cyber-warfare.

Experts say national security authorities are only just waking up to the threat from the
Internet _ a threat that will be magnified when technology allows e-mails to be read on
mobile phone-type units.

Many experts also say the security agencies are looking in the wrong place. Mike
Bluestone, director of Berkeley Security Bureau of London, said those who launch virus
attacks are more likely to be "cyber-vandals," not "cyber-terrorists."

"Terrorists make targeted demands and like a high degree of control over their
operations," he said. "A supervirus is more likely to be the brainchild of a spotty
adolescent than some terrorist mastermind."

(Thanks to THE LONDON OBSERVER, and Fair Use for Educational/Research Purposes Only)

Canuck

(05/07/2000; 20:46:13 MDT - Msg ID: 30098)

From FOA / Trail Guide

FOA:

"Gold value today and tomorrow will have nothing to do with economic supply and demand or the cost to mine it. It will be forced to rise in value to help represent trading wealth currently held and trapped in dollars. The Euro could never do it alone. Of course, dollar hyper-inflation will gun the
process, but physical gold in real goods terms is heading way up! That's why I laugh when people talk about $700 or $800 gold being about right. That's not even close."
-----------------------------------------------------------

To 'lurkers' and 'novices' like myself,

This statement summarizes the outlook for gold in the future, guessimates range from a few days/weeks to a few months; few guesstimates look past a year.

The USA is saddled with debt; federal, corporate and personal, dozens of sites verify this claim. Debt, leverage,
derivative speculation and marginalized commitments are at
unheard of numbers. Research for yourself, make yourself knowledgeable, decide for yourself, I merely echo a thought
of another.

The dollar's value is maintained by its inherent ability to pay back debt. What if that debt cannot be paid back?

I can buy goods with my personal cheque; my word is to back the 'chit' and pay down my debt. If I can't service my debt my 'chits' become worthless. If I expand my credit and 'float' my debt to a point where I cannot collateralize
anymore what is the confidence and faith of my 'paper'?

Your decision (partly) to invest in gold rides with the belief in the dollar. If the faith and confidence of the US$
is under scutiny, if international entities liquidate massive holdings of dollars, the value of the dollar will become so diluted and I believe this is the essence of many discussions at USAGOLD.

We watch the US$, the markets, interest rates, and numerous
economic indicators; what lies ahead? Will US policy makers
stabilize the monetary situation or is financial mayhem around the corner. I am positive of one thing, I know not for sure.

My intuition lies with the following; gold is at a very long low, the US$ is at a high, markets are unstable, each day more 'statists' mention dollar instability and economic
uncertainty.

There is one other little thing; the 'guns' on this forum do not have an agenda, in my humble opinion, why would they care if you and I bought gold or not? If a hundred people and another couple hundred 'lurkers' bought 100 ounces of gold that would be what, 10 million dollars, big deal. The USG is in debt 6 trillion; who has the agenda?

I am buying gold and silver with every spare nickle I have.
I do not recommend the same. Instead I recommend you research the data, buy gold if it pleases you and don't if it doesn't. If you elect to buy 'gold' buy physical, gold in hand is yours, there is no claim on it, it has not been collateralized a dozen times, you are the owner.

Canuck

Dollar Bill

(05/07/2000; 21:31:52 MDT - Msg ID: 30099)

Is murphy irresponsible

So much for the idea that the derivitive positions could
just be waved away like imagined by John Hathaway and some hathaway converts on the forum.

Murphy himself is convinced that the positions are a possible catastrophy (I agree) and where I differ from him still, is that his trumpeting of the the vulnerability is not needed and dangerously irresponsible.

Alerting congressmen?
He thinks higher of them then I do I guess and since when do regular congressmen have any power in this arena? The commitee chairmen and the party leaders are all on board the fiat bus. The BIS is supporting the gold priceing arrangement.

Murphy intimates that he got hit in the face on the street because of this effort of his.
I say he had a sourpuss look on his face and some passerby took it personal.
I would like to see him type one sentence that indicates he understands the full possible ramifications of his actions.

Black Blade

(05/07/2000; 21:58:41 MDT - Msg ID: 30100)

Bonedaddy and Squawk Box

I remember about 20 years ago when CNBC's Predecessor was FNN (Financial News Network) used to have fair commentary including gold and gold stocks. There was a weekly or biweekly program at night called "The Silver Baron" that was hosted by Bill Griffith (now on CNBC) and the Silver Baron was a fellow named Elliot Pearson who was an analyst of mostly small gold producers and exploration companies. BTW, does anyone know if Elliot Pearson is still around or even alive? However, after CNBC acquired FNN, the evenhanded approach to all sectors and investments ended and CNBC evolved into an all day infomercial for brokerage houses. In fact, there also was a woman anchor with a Brit. accent named Liebe Geff who also seemed to put a positive spin on PMs. This was at a time when the network was dedicated to financial news 24 hours a day, but now has pseudo-journalists such as Geraldo Rivera who have orgasms whenever they fawn all over Bill Clinton and how terrible his detractors are. If PMs become the hot sector as the others are cast aside, it will become quite interesting (not to mention quite funny) as to how quick the Ron Insanes, Maria Bartiromos and Joe Kernans start dancing to a different tune.

YGM

(05/07/2000; 22:08:51 MDT - Msg ID: 30101)

Dollar Bill...

So What's Your Point....(concerning Bill Murprhy)Do you have a problem w/ one who fights for his beliefs or "Stands For Something"?...... IMHO...Bill Murphy intimates very seldom or little but speaks aloud his vision of the truth........and his vision is shared by MANY......

Trumpeting the truth (derivative vulnerability) is "Not Needed"...Give me a break buddy....The Truth "IS" all that's needed to set the world right......

I'd like to see you print one sentence that can dispute the mountains of evidence gathered and disseminated by the likes of Bill Murphy and the GATA Team. That dream team consists of alot more than I see you offering,.......YGM.
Most here understand the ramifications of Bills (GATAs) actions....if not! ....they've been asleep at the wheel.....YGM.

Bonedaddy

(05/07/2000; 22:09:08 MDT - Msg ID: 30102)

Leigh, Gandalf, and Blade

We watch for this GOLD jewelry together, yes? (Personally I'd like to see Maria Bartiromo sporting a GOLD cap on one of her pearly whites.)

VanRip

(05/07/2000; 22:23:49 MDT - Msg ID: 30103)

What Would You Do?

It seems to me that there must be some very clever folks in Washington and the banking and financial industries that are well aware of the events and topics discussed on this forum. And I imagine that some of these folks are spending considerable time and effort figuring out ways to delay, engineer or even stop the anticipated collapse of the dollar. If you were one of these folks, what strategy would you dream up (legal, illegal, moral, immoral, ethical or unethical)?

Though I haven't a clue, I suspect that the longer this currency drama continues, the more likely it is that some clever and complex scheme will emerge.

Bonedaddy

(05/07/2000; 22:53:07 MDT - Msg ID: 30104)

Leland, just read your post

Most of us have spent quite a bit of time trying to guess where the pin would come from that would pop this .com bubble. These computer viruses may have us all talking to each other on ham radios. This cannot be good news for a "new economy". This is much worse news than the Justice Department's case against Microsoft. This is more like a rogue nation having a cyber nuke! The stock markets and bank clearing systems could become very unreliable. Sounds kind of like the Y2K disaster happening at no particular time. I don't like this at all. We are way too reliant on technology. E-banking, I don't think so. I'll be glad to own physical GOLD, impervious to rust, flood, cold, currency debasement, and yes, even cyber terror. As for the internet, I always liked Strother Martin as the Cap'n in "Cool Hand Luke". "What we got ourselves hea'.... is failya'.... to communicate."

ThaiGold

(05/07/2000; 23:04:42 MDT - Msg ID: 30105)

Soaring Silver Imports

The Trend of the Future Has Begun.!.================================================================================
5-7-2000
To ALL:

I recently received some email from a friend. (Believe it or not, I have one).
He was telling me that his lady friend had just purchased a brand new car...

From Saturn.!. With a Silver paint job. Or perhaps more cheaply, simply Silver-plated.

She traded in her outdated Izusu SUV. From Mars. Upon someone's Forum advice.

And I quickly wrote back, saying that I was surprised to hear they had dealers
now, here on Earth. She at first had considered a domestic: A Buick. But the
sticker price of it was out of this world. So she went elsewhere. Where prices
were more down to earth. Well, almost Earth. It may have cost as much as the
average EarthRanch. If inflation is taken into consideration. And POS and POG.

I've often wished I could visit a Saturn factory. It must be an amazing
sight to see all those little green men. And women. Working feverishly
on their assembly line. With their pointy little ears. And dual-antennae.
Workers at the Pluto factories, I'm told, have bigger, floppier ears. But
I have no information about their antennae, if any. Is anyone here in the
Forum from Pluto.?. Or perhaps been there panning for Gold.?. Or wood.?.

I asked if it had lotsa headroom.?. Probably does. Especially if they think
Earthlings have antennae atop our heads too. Ideal, I mused, for drivers
from Rio. Plenty of room for their fruit basket hats. And too, even for
some Americans. Around Easter. Or in Europe, for those with French HairDo's.
What's that word.?. Bouffant.?. Or Brussels Sprout.?. Something like that.

She enjoys it's massive 4-channel stereo. How ironic. The Saturn designers
assumed humans have four ears. Too. But it's an ideal car for the current
era. Most motorists nowadays, to conserve expensive fossil fuel, simply
turn off their engines. And cruise with the speaker-blast pointed rearward.
Most even drive with all their windows open. So others drivers can see
-and hear- that they are being responsible and conservative. And curteous.

The Saturn vehicle apparently has round wheels. But I'm still wondering if
they already had that technology. Or did they have to reinvent it there.?.
Doesn't matter much. Most laws of physics are ...er.... Universal. We know
that to be true, by watching the Paper Markets. What Goes UP.. Goes Down.
Or viceversa.. Or is it Vice-Vice. Or Vice-VP.?.

Or like Off & On. Hot & Cold. In & Out. Up & Down. Etc & Etc. Just imagine how
frustrating it would be, if -say- the Saturnistic heater switch was like
my Ford pickup truck's: Off & Off. Why, the buying public would never tolerate
such inconvenience and irregularity. Or at least not for long. -Say- since 1977.

At Ford, "Quality is Number One". Longevity is Number Zero. On a scale of
one to ten, I think. General Motors may be worse: "Quality is Just a Rumor".
That's why they expanded to Saturn. To import some. Wasn't it.?.

Saturn imports are soaring, here on Earth. In the USA. I worry that it may
worsen our Trade Deficit. People here in the Forum should be concerned as
well. I asked my friend, if the Saturn dealer accepted US currency (dollars)
in payment.?. Or did they only accept pie-in-the-sky kited checks.?. Or kited
Gold.?. They haven't responded yet. I suppose GreenPeople, like GreenSpans,
would accept GreenBacks as legal -or even illegal- tender. Does anyone in
the Forum know (yet) what color the EURO's will be printed in.?. Or would
anyone there even want to import from Saturn. Probably trade barriers are
sufficient to rule it out for the time being.

The ride from Saturn is equally out of this world. Else how would they get them
here. Imported vehicles from Mercury don't handle as well. Too splippery. At
one time America musta imported alot from there. We even minted a special
coin to use in the intergalactic trade cycle. It was a Dime. They loved it.
Melted them all down; discarded the useless Silver content; and then recycled
them to America. As obsolete mercuric cars. Canada too. What were they called.?.
I forget the name. but it was an appropriate derivitive. Oh..yes... Comets.

I'm not sure if we import any other vehicles from outer space. But there is a
"used" one, I saw advertised in the NASA want-ads: Mir. There's no warrantee.
And the dealer isn't always very dependable. But the price is good. In Rubles.
NASA will pay it regardless, in Politiks. How many Politiks to one US$ dollar.?.
How many Politiks to 1oz of Gold.?. Or to 1oz of Silver.?. Probably too many.

And when I was a teenager, hubcaps from the Moon were all the rage. And even
my little Suzuki Samurai has a name that's obviously not local. It's probably
built on some planet I've never heard of. Nor been to yet. Isn't Suzuki the
next planet out from Jupiter.?. Sorta mythical. Or is that one Samurai.?.

You know, I think it's all in the name. Importing and exporting and success.
Foreigners probably think Americans are all crazy too. By the odd names we give
to our exports. Like: N-ash; Ply-mouth; Corv-air; Pac-kard; HP; Chev-Ro-Let;
and Hup-Mob-ile. My other friend, Rex, says the Indians lobbied Congress to
pass an export regulation that prohibits the export of any Native Artifacts.
Like: Pontiac; Cadillac; And Similac. Some things are just too sacred to
share with outsiders. Or insiders. Stock traders and such. To stay on-topic.

But I digress.. It's all in the name. I remember, several years ago, Datsun
couldn't sell very many of their cars in the USA. Too much WW-II resentment
toward the Japanese still existed. So they changed their name: To Nissan.
Americans bought them in droves. Thinking it was a deluxe Swiss'un, mispelled.
Very clever of those Japanese. What a mistake it would have been if they'd
named it Nippon instead. Taiwan's Toy-R-Us didn't make the same mistake
either, when they began to export their cars to us. Toy-O-Taz. Sorta sounds
Indian, doesn't it. Rex says he thinks they intended that. To grab market share.

Here in the small town where I live, DavenPork, USA, there's only one single
vehicle dealer. So there's not really alot of choice here. Take it or leave it.
Everyone seems happy however. Driving around, to Safeway, in their John Deeres.
Rex insists that's an outreach name to the local Tribes as well. But I disagree
strongly (as usual) with him. I mean, if they wanted to sell animalish-named
cars and such to folks around here, then Caterpillars would mostly be in vogue.
But they aren't. So that proves I'm right.

Mitsubishi is thinking of expanding their line of vehicle exports too. Mostly
we know them for their fine CRT monitors and VCRs and Floppy Drives. But back
home, they have a big line of Steam Shovels, Forklifts, and even their own
brandname of giant caterpillars. I may get one. Just to be different. Imagine
how envious all the townsfolk will be. When I pull up in my Steam Shovel.

You Can Quote Me if I'm Wrong...

ThaiGold
ThaiRanch@OperaMail.Com
================================================================================

elevator guy

(05/08/2000; 01:43:04 MDT - Msg ID: 30106)

@ Dollar Bill

Ok, Dollar Bill, you just sit back in your easy chair and watch Bill Murphy get the bruises for fighting for gold.

You needn't lend a hand, because your internal value system puts you above such endeavor.

Thank you for your tireless efforts toward the liberation of gold, which is synonymous with the liberation of truth, which sets all men free, only to the disdain of those entrenched in evil works.View Yesterday's Discussion.

Topaz

(05/08/2000; 02:17:28 MDT - Msg ID: 30107)

Thai re: Autos

HI Thai,
That previous post reminded me of an amusing tale revolving around Cars, Animals etc.
Mitsubishi have been active in the Auto Manufacturing/Sales business here in Oz for many years.
One of their early efforts was the "STARION"
Of course all and sundry were mystified as to the origins of such a percular name until it was revealed that- that's how the Japanese would pronounce the English word for a "Male Horse"
Their products nowadays are 1st class and consistently win Car of the Year awards in many catagories.

Just thought I'd share.

and Oh.. AH.. GO GOLD!!

Topaz

(05/08/2000; 04:48:11 MDT - Msg ID: 30108)

Trail Guide

On this Trail: "I'll tak the High Road and Ye'll tak the low road" and we'll both get to "Scotland" (eventually). {;>)

Good evening Sir:
As I have not addressed you directly before, just let me say how much I appreciate your efforts to provide thought provoking and informative commentary to all those who gather here --- a big effort indeed!!----- now to matters at hand;
It is apparent you perceive the current pricing mechanism (spot- futures) will implode and the POG reduced accordingly until the "penny drops" ie: Paper and Physical will go their separate ways--- Ok so far?
You came to this conclusion several months ago after "enlightenment" from ANOTHER source. (we all remember the fracas that erupted resulting in Sir Stranger's sin-binning) Since then, the possibility of an upside explosion in POG has been totally discounted.
For the benefit of those who still cling to the hope of a steady rise in the price, can you offer your thoughts on what is now a contrary alternative to your scenario?

Just for the record I would like to cite the reason I consider the Status-quo will be maintained throughout this transition:-
Accepting that Au is the centre of the Fiscal Universe and as such, (has/is/) will be manipulated by opposing interests, is it not to the ultimate benefit of both sides to effect a controlled burn to the upside thus not jeopardizing the perception of Fiat currencies as a whole?
(Similar to a nuclear standoff- where no-one wins if all the cards are played)
I mean to say- If all holders of paper Au find themselves getting shafted, it may well have the effect that these large players/ countries etc will even turn away from all forms of Fiat settlement and go straight to Metal which is in no-ones interests -No?
Whereas, a steadily rising price (in fits and starts) can be (once again) perceived as the inflation indicator it is.
The outcome would be the same in the end--Yes?
I hope this sufficiently explains my thinking and look forward to your comments.

Topaz

Hipplebeck

(05/08/2000; 05:12:29 MDT - Msg ID: 30109)

on tv last night

I watched questions for the prime minister Tony Blair on c-span. It's on every Sunday night.
On of the members asked for a report on the nations reserves since the bank had sold off the nations gold and converted some of the reserves to Euros. He also said "And are you aware mister prime minister, that in that same time frame the Germans have tripled their gold reserves from 10 billion to 30 billion" (I assume he is talking about euros here).
So I guess Germany is one of the central banks buying gold.
How much is 30 billion euros in gold?
Tony Blair deflected the question as European bashing and said some are selling and some are buying gold and that he is perfectly happy with the situation.

Black Blade

(05/08/2000; 05:20:29 MDT - Msg ID: 30110)

Reason GOLD dropped last week.

http://www.stockcharts.com/commentary/clive/Clive20000502.htmlSA gold producer Goldfeilds fell last week while other SA producers held their own. The link above tells the story.

Topaz

(05/08/2000; 05:32:03 MDT - Msg ID: 30111)

@All re: Sir Dollar Bill

I feel a bit like the Kid who got to school early and Graffitied the Blackboard this Morning, however:-

The opinions expressed by Sir Bill are exactly those one would expect from 99.99% of the Western non Au holding population.
We who choose to measure our lifes efforts in other than Currencies are sorely in the Vast Minority- cripes! We don't even rate "Minority Group" status. Woe betides us when all that is discussed here comes to pass.
Sir Bill-- know you are not alone.

Black Blade

(05/08/2000; 05:41:05 MDT - Msg ID: 30113)

Gold investment in S. Africa.

http://196.36.119.130/MGGold.nsf/Current/422567D9004530DFC12568D8005384BD?OpenDocumentWho woulda thought that purchasing gold in SA would be a problem? Seems that some SA producers are ready to challenge the law!

Black Blade

(05/08/2000; 05:50:11 MDT - Msg ID: 30114)

Branded Gold?

http://196.36.119.130/422567CB004DBB8F/(UNID)/DMKY-4JANHC?OpenDocumentOne thought comes to mind here. Why don't the gold producers coop their product? Better yet - why don't gold producers vertically integrate their companies and serve the public with upstream (exploration and mining) and downstream (Bullion, Jewelry, and finished products and investment services) operations much like "Big Oil"? Why not make a profit on expanded margins on either end when POG is both either up or down and minimize risk? Lot of possibilities here!

SteveH

(05/08/2000; 06:01:47 MDT - Msg ID: 30115)

WACO (protecting gold)

It is held by some that the BATF took the first shots at WACO.

By Cindy Loose Washington Post Staff Writer Saturday , April 29, 2000

Carlos Ghigliotti, who had been retained by a U.S. House committee to
help investigate the 1993 siege of the Branch Davidian compound in Waco,
Tex., was found dead in Laurel under unexplained circumstances yesterday.


"We're investigating it as a homicide," said Laurel police spokesman Jim
Collins. Ghigliotti, 42, was found about 1:30 p.m. in the 600 block of
Washington Boulevard. His body was badly decomposed, said police. There
were no signs of a break-in or a struggle at the home, where Ghigliotti
ran his business, Infrared Technologies Corp., police said. An expert in
thermal imaging and videotape, Ghigliotti told the House Government
Reform Committee in October that his analysis of tapes at Waco indicated
that an FBI agent fired shots at the compound on April 19, the final day
of the siege--a view disputed by the FBI.

more at
http://www.washingtonpost.com/wp-dyn/articles/A38496-2000Apr29.html

Black Blade

(05/08/2000; 06:05:24 MDT - Msg ID: 30116)

Morning Wakeup Call!

Source: Bridge NewsInvestors mull legal action against TOCOM over palladium contract

Tokyo--May 8--Some Japanese private investors who have sustained losses from the palladium contract of the Tokyo Commodity Exchange (TOCOM) are mulling a joint legal action against TOCOM, which started imposing strict market controls over the contract in February as a result of frenzied volatility, an investor source told Bridge News Monday. (Story .13328)

Black Blade: And I hope they win and end up forcing these criminals into bankruptcy too! Talk about rigged markets!!!!!!

Asia Precious Metals Review: Gold edges weaker after Friday's slip

Tokyo--May 8--Spot gold edged weaker Monday in Asia due to lack of buying interests after Friday's slip in the U.S. market, dealers said. A weaker U.S. dollar/yen throughout Japan's golden week holidays triggered some speculative buying in the Tokyo Commodity Exchange platinum market but unclear expectations of Russia's exports capped spot platinum prices in the afternoon, they said. (Story .2200)

Black Blade: Still no confirmed PGM deliveries! Yawn��

Russia's Rosbank says will buy 16 tons gold from producers in 2000

Moscow--May 5--Rosbank, one of Russia's leading operators on the precious metals market, has concluded deals with domestic producers for the purchase of 16 tonnes of gold and 145 tonnes of silver during the 2000 season. An official with the bank said these were the guaranteed amounts, while the bank's actual buying of the metals from producers would be higher. (Story .13111)

Black Blade: Don't laugh, but can you just imagine the ruble worth more that the dollar someday? ;-)

USAGOLD

(05/08/2000; 09:40:09 MDT - Msg ID: 30117)

Today's Gold Report: Quiet Start to What Could Be a Big Week

http://www.usagold.com/Order_Form.html5/8/00 Indications
�Current
�Change
Gold June Comex
278.90
-1.20
Silver July Comex
5.08
+0.3
30 Yr TBond June CBOT
93~17
-0~01
Dollar Index June NYBOT
111.70
+0.50

Market Report (5/8/00): Gold opened weaker this morning after a quiet night overseas. Trading
was thin in both Asia and Europe. The dollar continued to drub its competitors in the forex
markets particularly the euro which is down another half cent in early trading. A joint statement by
European finance ministers promising to "speed up ongoing fiscal consolidation and structural
reforms" did little to stem the growing tide threatening to engulf the euro. The Commodity Futures
Trading Commission commitment of traders report had large speculators gold short positions up
another 12,191 contracts over the past two weeks -- a 27% rise. Traders said that gold could get a
boost if inflation concerns continue to escalate given that many investors regard it as an inflation
hedge, according to this morning's Bridge News report. All in all, it has been a subdued opening
to the week's festivities which features the Producer Price Index report on Thursday. Consumer
Prices will be reported next Tuesday.

Gold briefly rallied on the highly inflationary unemployment numbers on Friday (to the $282
range), then, according to this morning's Standard Bank of London report, encountered the
seemingly ever-present and mysterious wave of selling from an unnamed source(s) which
effectively killed the upswing. Coincidentally, the stock market enjoyed a equally inexplicable and
mysterious wave of buying on the bad unemployment numbers. We will see if the dominant
downward stock market trend reasserts itself early this week as we rev-up for Thursday and
release of the important PPI numbers. Even some watered down numbers are sure to have their
effect with the current sensitivity to inflation and the upcoming May 16 Fed Open Market
Committee meeting.

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

The May News & Views is now on its way and should be hitting your mail boxes over the next
few days. We think you are going to like this issue written during the weekend after the April 14
Wall Street Meltdown.

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 link above and make the appropriate entries.

TownCrier

(05/08/2000; 10:43:46 MDT - Msg ID: 30118)

From Sir Black Blade's "Gold investment in S. Africa" link

On the topic of restrictions upon secondary listings by foreign companies on the Johannesburg Stock Exchange discussed with respect to mining companies in this article, the author says, "At the end of the day it's no big deal for these companies not being listed here � let's face it, who wants to raise rands when you can pull in dollars on the Nasdaq or Toronto exchanges?"

Hmmmmmmmmmmm.... If we were to faily construct a list, surely it would look like this:

Gold
Dollars
Rands

Now imagine this quote being used in a better world: "At the end of the day it's no big deal for these national currencies to be poorly managed by their issuing and custodial governments - let's face it, who wants to raise dollars when you can pull in gold from Centennial at these prices?"

TownCrier

(05/08/2000; 10:45:49 MDT - Msg ID: 30119)

groan....

"faily" === should be ===>> "fairly"

VanRip

(05/08/2000; 11:00:09 MDT - Msg ID: 30120)

Another Online Exchange

http://cbs.marketwatch.com/archive/20000508/news/current/aa.htx?source=blq/yhoo&dist=yhooSeems to be a trend. Would gold producers benefit from such an arrangement?

ATLANTA (CBS.MW) -- Alcoa, Reynolds and six other metal companies said Tuesday they're forming an online exchange dubbed MetalSpectrum to streamline the $200 billion
business.

Promoted as an independent online marketplace, MetalSpectrum will cater to manufacturers, distributors and customers starting in September.

The move follows similar exchanges underway by the food business and leading auto makers.

Taking part in the venture are Alcoa (AA: news, msgs), Allegheny Technologies (ATI: news, msgs), Kaiser Aluminum (KLU: news, msgs), North American Stainless, Olin (OLN: news, msgs), Reynolds Aluminum, (RLM: news, msgs), Thyssen and Vincent Metal Goods/Atlas Ideal Metals.

The MetalSpectrum initial partners say they'll trade aluminum, stainless steel, copper, brass, nickel alloys and titanium "at significant volumes."

"MetalSpectrum is about the specialty metals industry getting closer to its customers," Alcoa chief Alain J.P. Belda said in a statement. "The industry will benefit from the increased market reach and reduced costs that electronic commerce offers."

MetalSpectrum's board is made up of� the initial partners, with Boston Consulting Group acting as an adviser. Alcoa's Robert Wetherbee was named acting chief executive

MetalSpectrum plans to announce a technology partner within two weeks.

Shares of Alcoa fell 1 7/16 to 63 7/16 on Monday following the news. Allegheny's stock rose 11/16 to 24 7/8, Olin fell 1/4 to 17 1/2 and Reynolds dipped 1 5/16 to 65 3/16.

TownCrier

(05/08/2000; 11:00:27 MDT - Msg ID: 30121)

We all had a nice hike upon the Gold Trail during the weekend

http://www.usagold.com/goldtrail/Wanted to make sure you knew. The trail is still fresh...just follow the breadcrumbs at the link above to view the two new posts by Sir FOA.

TownCrier

(05/08/2000; 12:02:15 MDT - Msg ID: 30122)

It's a done deal

http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=AORbosRTLRVUgU2VlBloomberg reports:
"Euro-bloc finance ministers
pledged to boost the flagging single currency by speeding up
budget cuts and economic reforms, while declining to publicly
endorse the policy of buying euros in the open market."

If you've been following our commentary, you know that we hold to the view that this "bird of a different feather" will not likely be seen to engage in forex interventions. To do so would undermine what seems to be the very premise of the euro currency system...one that respects the sentiment of the free market. Where this benefits gold owners is that such a free market for euros goes part and parcel with a free market in gold. Without such a gold market, there would be no center to the free-floating currency universe.

The EMU FinMins did more today than to vow more rapid fundamental reforms and to poo-poo currency intervention. They also acted to finalize the initiative that increases the ECB's allowable foreign exchange reserves to 100 billion euros, double the value provided under the Maastricht Treaty.

It will be interesting to see how they put this new allowance to their advantage, and whether any announcement regarding inclusion of gold as some portion of any new reserve subscription by EMCBs will wake up or shake up the market.

YGM

(05/08/2000; 14:16:47 MDT - Msg ID: 30126)

Did You Know......

Gold Paid for & Built the Smithsonian Institution????Well here's the rest of the story........


HeadlinesAdd to My Yahoo!Monday May 8 1:27 AM ET

James Smithson's Surprising Will

By LAWRENCE L. KNUTSON, Associated Press Writer

WASHINGTON (AP) - The Englishman's gold that founded the Smithsonian Institution seemed at times like a castle in the air - illusive, vaporous, hard to hold on to.

John Quincy Adams said the whole project was as exasperating as trying to extract something of enduring value from the fangs of a rattlesnake.

Exasperating, but worth the effort. ``To furnish the means of acquiring knowledge is ... the greatest benefit that can be conferred upon mankind,'' the former president wrote.

�Speak your mindDiscuss this story with other people.
[Start a Conversation]
(Requires Yahoo! Messenger) The puzzle took more than a decade to unravel. In July 1835, the American envoy in London received a copy of an astounding will, written by James Smithson. It bequeathed an estate valued at a then-staggering $500,000 to the United States.

Smithson was the illegitimate son of an English duke and a scientific researcher of some repute. He never crossed the Atlantic, had no known ties to the United States and died in Genoa, Italy, in 1829. His money came from the estate of his wealthy mother.

Smithson's will, triggered because his nephew and first heir had died childless, directed that his estate be used ``to found at Washington, under the name of the Smithsonian Institution, an Establishment for the increase and diffusion of knowledge among men.''

Rarely has a gift horse been examined so skeptically.

Congressmen argued there was nothing in the Constitution to permit taking such a gift. Some said democratic America should not be the steppingstone to immortality for any foreigner. Some called Smithson a ``whippersnapper vagabond'' acting out of ``posthumous vanity.'' Sen. John C. Calhoun of South Carolina thought it ``beneath the dignity of the United States to receive presents of this kind from anyone.''

But others said the nation should be honored that a native of a ``monarchial country'' should have made the United States the object of his benevolence.

Smithson found his champion in John Quincy Adams, who had served as the sixth president of the United States. By then a member of the House of Representatives, Adams persuaded Congress to accept Smithson's half-million dollars, a fortune in the late 1830s.

But the second set of questions proved more difficult: What on earth to do with all that money? What exactly did Smithson mean by ``increase and diffusion?'' And what kind of knowledge did he have in mind?

Smithson had not spelled it out. Lawmakers could only guess, and advance their own pet projects.

There were no lack of suggestions. Adams favored a national observatory, a ``lighthouse in the sky,'' to search out the secrets of the universe. Others wanted a national university, an agricultural school, a lecture bureau, an experimental farm, a publishing house for scientific tracts, a natural history museum, a chemical laboratory, a teachers college, a botanical garden, a library or a supply of inexpensive books for primary schools.

Adams opposed any use of the Smithson money for schools or teachers, saying American children should not be educated with ``foreign aid.''

He said he would rather see ``the whole money thrown into the Potomac'' than used in such a way.

Adams almost got his wish.
------------------------------------------
Smithson's estate had been converted into English gold coins, which were shipped to the United States in sacks, melted down and reminted into American $10 gold pieces. These were invested in bonds of two new states, Arkansas and Michigan.
------------------------------------------
It was a bad investment; the two states quickly defaulted on the bonds.

Some in Congress would have let the whole affair die at that point. Why should their constituents pay for the federal government's bad investments? they asked.

But others, including Sen. Jefferson Davis of Mississippi, said that having accepted Smithson's money, the United States now had a moral obligation to carry out his wishes.

The matter was settled by act of Congress in August 1846. The lost money was replenished by the federal Treasury. The Smithsonian Institution was established. It would include at first a museum for national collections, a library, a laboratory and an art gallery.

But the rest of its future was left open-ended. The institution itself would decide just how best to provide for the increase and diffusion of knowledge with a minimum of congressional intervention.

Adams had no doubt the Smithsonian had been set on the right path.

``To what higher or nobler object could this generous and splendid donation have been devoted?'' he asked.

USAGOLD

(05/08/2000; 14:22:48 MDT - Msg ID: 30127)

Advertising. . .

The three posts below will be removed. Advertising is strictly forbidden under the rules. Thank you for your co-operation.

I'm sure you fellows didn't mean any harm, but I get complaints almost immediately when someone puts up an ad.

ced_s

(05/08/2000; 14:28:14 MDT - Msg ID: 30128)

@Elevator Guy

So many people don't understand that Goldbugs are struggling to free PM's from their incessant manipulation. We also are acting on something out dated (principle, ethics and fair play). How many of us are furious about the lies and deceit peing pandered by "Our Government". Is this the government we voted for? Is this a measure of all of ur politicians?
I think not, we have been hoodwinked by Slick Willie, Rubin, Summers and Greenscam.
In our own way, we are protesting the guile of these persons who not only controll gold but also controll us. In lieu of a grassroots revolt at the polls we are voting for a "Free Market" in fact, not a fictitious market managed by the ESF and the megabanks with their billions and trillions of dollars. I wish to remain a citizen of the United States of America, not become a slave to the New World Order.
I am not a member of any of the Militia groups, and have no desire to be. I am simply a citizen who feels our right have a Representative Form of Government been usurped by the internationl banking sector and the wealthy. Thank God the Boy King's tenure in office is about over. Sometimes I think the only time he lies is when his lips are moving.

Elwood

(05/08/2000; 14:29:50 MDT - Msg ID: 30129)

Topaz (5/8/2000; 4:48:11MT - usagold.com msg#: 30108)

Topaz, when a currency devalues it's never a slow burn. Look at that charts of the Asian currencies against the dollar during the crisis in 1997. When it happens it's like falling off a cliff.

Trail Guide, I think it's starting to sink in at my house. The Euro is a fiat currency, but not like any other fiat currency today. The ECB doesn't deal in the sovereign debt of the EU nations. That cuts the link between the banks and the governments, rendering Fed-style inflation impossible, at least for as long as they can politically maintain that non-relationship. But many questions remain. These nations tax heavily everything that moves and much that doesn't. If a free reserve asset such as gold is allowed in such a system it will endanger that system of taxation, and result in either tighter controls or a freer system with fewer taxes. Given the socialist bent of these nations and the political base that maintains it, can it be done? Looks like their giving it a good college try.
Elwood

SAMCAM

(05/08/2000; 15:18:50 MDT - Msg ID: 30130)

question to you ORO and/or Trail Guide

ORO you once mentioned diversifying and holding some physical in other countries. FOA you more than likely have done just that already.

I have question: If you don't have a property in your name in any country US or overseas, WHERE IS THE BEST PLACE TO STORE ALL THAT PHYSICAL!

Hill Billy Mitchell

(05/08/2000; 15:33:24 MDT - Msg ID: 30131)

Official release

http://www.bog.frb.us/releases/H15/update/
Official: Federal Reserve Statistical Release

Release Date: May 8, 2000

Rates for Friday, May 5, 2000

Federal funds 5.94

Treasury constant maturities:
3-month 5.97
10-year 6.51
20-year 6.61
30-year 6.20

right-side up spread FF vs long bond = +.26%

SHIFTY

(05/08/2000; 16:47:24 MDT - Msg ID: 30132)

Ponzi

Nasdaq 3,669.38 + Dow 10669.38 = 14,273.01 didvde by 2 = 7,136.50 Ponzi

Down 60.84 Ponzi Points !

ET

(05/08/2000; 16:53:31 MDT - Msg ID: 30133)

Gasoline

http://www.wsdinc.com/cgi-local/w_return.cgi?url=www.digisys.net/futures/Anyone notice gasoline reached new contract highs today?

MarkeTalk

(05/08/2000; 17:26:38 MDT - Msg ID: 30134)

Elian Gonzalez (Reprise)

I am sure everyone has an opinion about whether Elian should stay here or go back home. But did you hear the story about the Cuban "doctors" who were detained after they flew to Washington along with four of Elian's classmates? They were found to be carrying hallucinogenic drugs which were promptly removed from their persons before they were allowed entry. (They will be returned once they leave the country for Cuba.) It doesn't take a rocket scientist to figure out why they needed them. Let me guess: They wanted to party down with some Deadheads. Or perhaps Elian does not really want to go back home but needed some "persuasion." Now, this story tells me that our government is bending over backwards to please Fidel Castro. In my opinion, Elian is a done deal. He's on his way back home to Cuba. With or without the mind-altering drugs, Fidel has won this round courtesy of the Clinton administration. Maybe Bill will get paid in Cuban cigars for his cooperation. And aren't we supposed to be fighting a war on drugs? Then why not destroy the mind-altering agents as the cops do in other raids? Double standard here.

Farfel

(05/08/2000; 17:39:57 MDT - Msg ID: 30135)

GATA in Washington: HELP THEM!

If you believe that there is one scintilla of validity to the charges that GATA is making against the bullion banks, the US Treasury, etc., then get off your butts and do something about it now.

Fire a FAX/E-MAIL to a gold producer you are invested with and demand to know what action they are taking to support GATA. LET THEM ARRIVE TO AN AVALANCHE OF PROTESTS TOMORROW MORNING. If they are not doing anything tangible, if they are not using their clout to assist or their funds to make contributions, then let them have it! Tell them it is time to step down.

Fire off a letter or phone a politician you know (Democrat or Republican or Third Party) and tell them you want them to assist in setting up appointments for GATA execs in Washington. If they are reluctant or not interested, let them have it!

Get in touch with the CFTC and let them know your feelings in no uncertain terms.

The main thing is this: DO something tangible today or forever hold your tongue.

If you are not making some kind of tangible contribution, then you best never cry again about government subversion of the markets / civil liberties or Wall Street manipulation.

GATA makes their rounds tomorrow, and if you have not contributed at least 48 hours of your time in assisting them to bring transparency to these markets, then you are most likely a slacker, a weasel, and probably a precious metals short on top of it all.

Most importantly, IF YOU ARE A GOLD LONG AND FAIL TO SUPPORT GATA IN SOME FORM OR ANOTHER, YOU DESERVE EVERY SINGLE PENNY OF LOSS YOU SUFFERED AND WILL SUFFER IN THIS MARKET!

Thanks

F*

ET

(05/08/2000; 18:05:21 MDT - Msg ID: 30136)

Farfel

Hey Farfel - I enjoy your stuff.

You wrote;

"Most importantly, IF YOU ARE A GOLD LONG AND FAIL TO SUPPORT GATA IN SOME
FORM OR ANOTHER, YOU DESERVE EVERY SINGLE PENNY OF LOSS YOU SUFFERED
AND WILL SUFFER IN THIS MARKET!"

I guess this means you think gold is going down in price. I'm not suffering any loss at all as I have as much gold as I had before.

GATA, bless their hearts, are fighting the paper battle. Many of us decided awhile back to fight this battle of wealth retention by buying up the physical. Gold's value will remain unchanged regardless of the price affixed in the paper market. Fundamentally, I view this market from the opposite side as GATA. They are worried about the price where I am concerned with the value. They are two entirely different things.

ET

JavaMan

(05/08/2000; 18:22:18 MDT - Msg ID: 30137)

ET, Farfel...

Interesting and valid positions, both of you, and I would like to mention a third. The fact of the matter is that the foxes are watching the chicken coop and GATA is screeming, to the foxes, that someone is messing with the chickens.

This country could not get a conviction in the impeachment of Clinton, not for lack of evidence, but because Congress and the people lacked the resolve to do so. Same thing applies regarding the efforts of GATA. Now, if the markets and the economy were to tank, that could change everything.

Trail Guide

(05/08/2000; 18:58:00 MDT - Msg ID: 30138)

Reply

Hello Topaz,
Thanks for reading and considering my offerings. Actually I don't expect or ask anyone to act or believe any of this. It's placed here to offer a view from another place and a future time. A way to see how some others interact with the ongoing money changes in our world today.

In your post:

---------Topaz (5/8/2000; 4:48:11MT - usagold.com msg#: 30108) On this Trail: "I'll tak the High Road and Ye'll tak the low road" and we'll both get to "Scotland" (eventually). {;>)----------

Topaz,

To comprehend Another's Thoughts is to understand that you and he are not on the same road! Indeed, most if not the majority of Western gold investors will find themselves in Scotland to only then know they lost a great deal by ending up there. Watching the current gold markets, accepting their pricing mechanisms and using today's paper vehicles to play this arena will land most traders in Scotland but unable to buy gold. The physical price will have ran far, far past
whatever leveraged gains they made.

It's easy to see the leveraged traders by reading their verbal trails. They are completely fixated on "wanting" our current arena to work for them. All of their understanding and drive is centered on using the various forms of paper gold. Yet, this entire infrastructure and most of the mine equity that's built upon it has from the beginning been just another currency the dollar governments uses to take "Western minds" away from buying real gold. You see my friend, physical gold is where the real leverage is and the dollar faction have know this all along.

The entire marketplace we call the gold market is all based on a working dollar world. Everything that's paper and called gold has it's roots deeply leveraged not in gold but the dollar return on gold. There is not a paper gold investment in the world today that has seen a gold spike like the one that is coming. Likewise no investor has ever held or seen how these paper markets can cope with just
such a move. None!

I submit to you and everyone that will consider that profits from paper in this move will pale in comparison to holding physical.

You write:
--------It is apparent you perceive the current pricing mechanism (spot- futures) will implode and the POG reduced accordingly until the "penny drops" ie: Paper and Physical will go their separate ways--- Ok so far?

------You came to this conclusion several months ago after "enlightenment" from ANOTHER source. (we all remember the fracas that erupted resulting in Sir Stranger's sin-binning) Since then, the possibility of an upside explosion in POG has been totally discounted.-----------

Topaz,
Nothing about this has been discounted in our paper or physical gold price. We stand where we did almost a year ago when we (both of us) delivered this message. I expected then and even more so now that a default is near. The WA was the concrete fact that placed us "on the road" to super gold! It is indeed coming and will arrive in our time.

The price move (spike) last Sept. was certainly not anything close to the lock up move ahead. When the season is right and motivations strong enough: oil will begin it's move for the Euro, the dollar will begin it's crisis and our paper gold markets will completely fail from lack of bullion.

Your words:
------For the benefit of those who still cling to the hope of a steady rise in the price, can you offer your thoughts on what is now a contrary alternative to your scenario? Just for the record I would like to cite the reason I consider the Status-quo will be maintained throughout this transition:- Accepting that Au is the centre of the Fiscal Universe and as such, (has/is/) will be manipulated by
opposing interests, is it not to the ultimate benefit of both sides to effect a controlled burn to the upside thus not jeopardizing the perception of Fiat currencies as a whole? (Similar to a nuclear standoff- where no-one wins if all the cards are played) I mean to say- If all holders of paper Au find themselves getting shafted, it may well have the effect that these large players/ countries etc will
even turn away from all forms of Fiat settlement and go straight to Metal which is in no-ones interests -No? Whereas, a steadily rising price (in fits and starts) can be (once again) perceived as the inflation indicator it is. The outcome would be the same in the end--Yes? I hope this sufficiently explains my thinking and look forward to your comments.-------------

Topaz,

There is no contrary alternative! The game at play has been "in play" for some time and processed through several age groups. The American dollar has reached the end of it's ability to function as a world reserve currency. It's debt load has aged it past it's useful timeline. From where I consider the world, this is obvious and has been for a number of years.

Because gold has been "the world tool" that all used to kept our dollar alive for these last days, it will be the first item to fall away from being a dollar support. This paper gold tool will fail as the dollar transition proceeds. It will fail because it's illusion will be seen through physical default. Today, it's only a matter of time. This default will break the paper gold support tool and shut down
virtually all dollar gold markets.

Once this breaks, there will be no "Western Investors" with a mindset to any longer buy paper gold. Having been badly burned and watching physical gold soar, it will be a long, long time before anyone is ever again "sold" on the idea of "gold substitute holdings". Not even gold in the ground
will bring them back. New taxes will make gold mining nothing more than what it always was, a business.

The Euro / BIS have positioned their official policy and reserve holdings to benefit strongly from a surge in value of "free gold". Contrary to your thoughts, they will welcome this change, promote it and utilize it's wealth building perception for public gain. Just as we have talked here so often: for better or worse, digital Euros and super "free gold" will set the pace in Euroland and the world.

The manipulations of gold you speak of are "old stuff" and are today a "dying process" at the hands of the BIS. I think many OLD GOLD bugs will find themselves "broken down" on the side of the road as events surge past their backward looking understanding. The road where they stall will be the one that leads to your Scotland.

The future my friend is before us and those that can see it will be on a different trail. They will be "on the road with Free Gold"! The Gold Trail we walk today starts far in our past and has become a direction to a new future. Walk it with me and see the world in a new light.


Thank you

Trail Guide

schippi

(05/08/2000; 19:20:38 MDT - Msg ID: 30139)

XAU Vs FSAGX Chart

http://www.SelectSectors.com/xaugld3mth.gifWeak hands sold today, tomorrow Gold moves Up!

Elwood

(05/08/2000; 20:22:08 MDT - Msg ID: 30140)

Trail Guide (05/08/00; 18:58:00MT - usagold.com msg#: 30138)

"The Euro / BIS have positioned their official policy and reserve holdings to benefit strongly from a surge in value of "free gold"."

This goes to timing of the surge in gold's price. I have an idea that follows from our GoldTango analysis. The Euro/BIS folks would rather not see the gold price run until they've collected all they believe they can of their outstanding gold loans. Once their gold loans have been collected or defaulted that's when, IMO, they'll "make their move."

To do so beforehand would jeopardize both the dollar reserves they hold now and those outstanding gold loans. We all know what will happen once they start trying to exchange their dollar reserves for metal. What else could they ever exchange those reserves for?

Additionally, the American administration has GOT to know they're on the rocks. Why don't they default now, and get it over with? Why do they keep delivering their (our?) gold into a dead system? Could it be the election?

SteveH

(05/08/2000; 21:02:33 MDT - Msg ID: 30141)

FOA says weeks...

"The dollar faction is having a hard time keeping paper gold under $280. Now that the world has seen how the WA is placing Swiss Euro Gold, the paper markets should start to discount physical. I think weeks are all the time the dollar faction has left before things begin to change!"

ET

(05/08/2000; 21:17:45 MDT - Msg ID: 30142)

J-Man

Hey JavaMan - I think the chickens are long gone! They're lording over a empty coop.

GATA's efforts are to be applauded but even best case will only expose what we already know - the money isn't backed by anything tangible like gold. I'm not sure that GATA convincing a public which should know better, will have much significance in the whole scheme of things. The public is a slave to debt and therefore is not in any position to argue the facts of the matter. The public does not want hard money as they are borrowed to the max. No Congress will advocate sound money.

ET

lamprey_65

(05/08/2000; 21:35:00 MDT - Msg ID: 30143)

Why GATA's Congressional Testimony is Important

Yes, I agree...the foxes watching the hen house, however...when the s*** hits the fan, they won't be able to say they didn't know of the problem.

Chris Powell

(05/08/2000; 21:44:00 MDT - Msg ID: 30144)

GATA makes its case to Congress this week

http://www.egroups.com/message/gata/451?GATA's delegation arrives in Washington
on Tuesday and has appointments with
members of Congress and their staffs
on Wednesday.


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

Elwood

(05/08/2000; 21:58:37 MDT - Msg ID: 30145)

SteveH (05/08/00; 21:02:33MT - usagold.com msg#: 30141)

Steve,
I think we're talking about 3 entities (1) Euro, (2) Dollar, (3) Market. Yes, the market will see that the Swiss metal isn't showing up so they'll pressure the price upward to meet their commitments. We're seeing that now. But the moonshot will require someone to "make their move." I see the Euro banks bringing their reserves into the game as the main engines, then the Arabs will supply the solid rocket boosters. However, it doesn't make sense for them to light the fires until they're convinced that no more metal will be delivered against those outstanding loans. As long as the Dollar forces keep fueling the tanks, why take off too soon?
Elwood

Elwood

(05/08/2000; 22:19:38 MDT - Msg ID: 30146)

Forgot to mention...

We PGAs are the cargo. I trust everyone has their moonboots strapped on. We can continue our walk from the Sea of Tranquility. (smile)

JA

(05/08/2000; 23:30:39 MDT - Msg ID: 30147)

Stranger and JavaMan

Thanks for responding to my question on Alan Greenspan's remarks. Actually my boss asked me what I thought Greenspan was trying to say and I said I didn't know but there were some fairly bright people at this gold site I occasionally frequent and I would attempt to elicit some opinions.

Stranger

Things are well with me, thanks for asking. I have actually been down in your part of the country twice in the last month. Once to attend my daughters graduation from college and once on business. I had a little time to walk around down town Salt Lake prior to my flight back, the skyline is changing at a rapid pace. I even took the opportunity to ride the UTA train in the free zone. I guess they are still preparing for the Olympics, Little America building a 1000 room hotel?

On another note in support of your inflation scenario. I attended a conference on prescription drug management. Prescription drug costs are predicted to go up 17% this year.

JavaMan

On the name change.
While I realize people from all walks of life own Harley's including many executives, I still have fixated in my mind a "Hell's Angels" type with the tattoos and long hair. In reading your contributions, I always thought your powers of discernment were much too keen for the visual image my mind presents with the Harley Davidson moniker. Your name change will relieve my mind of this incongruent dilemma.

Simply Me

(05/09/2000; 01:28:42 MDT - Msg ID: 30148)

Town Crier's Exercise; and Java Man

To Town Crier----
RE: TC's Exercise.
I can see where buying the June "puts" at approx. $240 is like saying, "There'll be a big bargain basement sale on gold in June."...thereby putting downward pressure on today's physical gold prices. Who would buy hamburger today at $3/lb when they have a reasonable expectation that it will go on sale for $1/lb next week. Indeed, if hamburger is going down to $1/lb. But since one must pay for the "puts", one loses one's money when it's rollover time, right?...and spend even more money when buying those August "puts".

There're only two reasons to throw that money away. One reason might be that you are buying bargain basement priced
physical gold with both hands while you've got the price depressed because you know that once you take the pressure
off, you will not only recoup your losses but make a huge profit.

The second reason might be that your money has an inverse value to the price of gold. The cheaper the gold, the more
valuable your money is. Therefore throwing a portion of it away to keep the price of gold down, makes the money you
have left that much more valuable.

Thanks for your time and thought.

To Java Man----
From JavaMan (05/06/00; 21:54:02MT - usagold.com msg#: 30073)
"B.F. Skinner discovered that reinforcement of a behavior "randomly" was a much more powerful form of behavioral
conditioning and, consequently, much more difficult to extinguish. So we come full circle to gambling which is random reinforcement at its finest and I give you the stock market which, today, is gambling at its finest.

This gives a whole new insight into the "buy on the dip" mentality. Based on the information above, I wouldn't be
surprised to see people buying into this market all the way to the bottom...looking, hoping, knowing, there is another
sugar pellet on the next press of the lever."

From simply me: So you see it, too! Skinner's Intermittant Reinforcement produces a learned behavior that will
keep repeating itself LONG after the reinforcement is gone. Yep, I think today's stock buyers are thoroughly trained.
It will be interesting to see how long the training lasts. What truly sets man apart from the beasts?

Do you also see the "Monkey Trap" in today's stock market? In the Monkey Trap, some tastey fruit is put in a hole in
a tree. The hole is big enough for the monkey to put his empty hand in, but not to pull his closed fist full of fruit
out. The monkey who succumbs to the temptation will not let go of the fruit, even when it can clearly see the hunter
coming up to grab it. An apt description of buy-and-hold investors who've been watching what they think of as a
savings account grow for years and won't get out even when they see the Bear market coming to wipe it out. There are
buy-and-hold investment counselors who think that all a Bear market means is that it'll take a little longer for the
DOW to hit 20000! So many people think they cannot loose if they hold their stocks long enough.

Now I ask myself: Now that I've got this shiny gold stuff in my hand, will I be smart enough to know when it's time
to let go of some? Guess I'm just as greedy as the next monkey.

simply meView Yesterday's Discussion.

Simply Me

(05/09/2000; 01:44:00 MDT - Msg ID: 30149)

TC...Unfinished sentence

Sorry. That "Indeed, if hamburger is going down to $1/lb." was a piece of a tangential thought that I meant to delete.
From any point in this discussion, it's so easy to fly off in a hundred directions!
Thanks for your sharing your knowledge. Your insights and interpretations have, more than once, helped lead me to the light when I got stuck in one of Oro's cavernous thoughts or in Greenspan's twists and turns.

simply me

TownCrier

(05/09/2000; 03:15:25 MDT - Msg ID: 30150)

Simply Me, thanks for the follow up to last week's challenge

We had asked the forum how one might go about depressing the price of gold if they had ample quantities of currency but absolutely no direct or indirect access to gold.

Let me try to "think out loud" regarding the strategy you proposed.

The way I see it, buying a large quantity of June put options at a $240 strike price would have an immediate effect of causing upward pressure the market price for these same puts.

To be sure that everyone is clear on the ins and outs of these put options being discussed, the payment of a premium to buy one such put gives the buyer the right, but not the obligation, to sell an underlying futures contract at $240.

Because these puts do not directly involve the buying or selling of futures contracts, the only way the contract price of gold will move is then if the participants in the contract market (futures, not options) are inclined to think that these put buyers know something that nobody else knows, and are thereby inspired to sell futures contracts themselves. I am skeptical that such a position would foster a "reasonable expectation" that the price of gold was truly heading lower, as you've suggested with your hamburger example. There is certainly a chance that the futures players would look at this large put option position and simply scratch their heads at the curiosity, but would not respond with futures sales.

Given your quantity of cash, wouldn't it be more of a "sure thing" to affect the gold price by aggressively taking the sell side (short) of the June futures contracts? After all, the quoted price of June gold is based upon the market forces of supply and demand among the buyers and sellers of these contracts. With your supply of cash, you can easily afford to offer two contracts to sell for every one COMEX market offer to buy. The price would surely fall from your own effort.

Having no access to gold (as stated in our premise), your requirement would be to close out these positions through the purchase of offsetting contracts at any point prior to the arrival of the June contract delivery window on the last day of May. You might be inclined to agree that since you have effectively taken the longs into losing positions through lower prices, the market sentiment would be low enough to make it relatively easy for you to buy the offsetting contracts without much fear of jacking the price back to your starting levels.

And further, at this point you agressively begin to sell August into the ground. As I suggested last week, because August would then take over as the most active month, any arbitrage activity between the expiring June month and August would be weighted toward the lower August prices.

Such determined action by "big money" shorts could ensure that the COMEX prices continue to fall, and futher, that their short positions would actually be generating currency revenue for them (assuming no broker fees).

Knowing that these prices are an abomination, and that the futures price can be driven down while giving no warning signs of concurrent physical market exhaustion as overseas physical demand for the real metal continues to rise with their strengthening economies and better prices, we here in The Tower continue to aggressively acquire real gold with our available private funds. There may simply be no advanced warning when the significant break is about to occur. And even as real gold comes under explosive demand due to foreseeable market conditions, still, there is no limit to the number of futures contracts that could continue to be sold into oblivion faster than counterparties are willing to take long postions in these dubious or discredited abundant paper contracts in the face of scarce metal supply reaching the real market and rising real gold prices.

As to WHY various entities may be inspired to engage in such activities, you have certainly identied two of several good reasons or incentives.

Bottom line: continue to take advantage of access to this world-class wealth asset at these fire-sale prices. All things considered, the slow burn could go "nuclear" at any unforseeable moment in time. Such is the nature of gold in a world of hyper-responsive cybernetic mega-currencies.

Topaz

(05/09/2000; 03:44:29 MDT - Msg ID: 30151)

Trail Guide- Elwood.

T.G:
Message received ---- Understanding some way off, but I'm getting there.
Thank you once again.

Elwood:
The glaring difference ($US / pretty well anything else) is that others are NOT the accepted form of reserve currency for the Planet.
Not only is the Dollar held in high esteem in its country of origin but all over the world. (some would say higher)
Ok- you may say it's only perception but that same perception is backed with a lot of clout. Perhaps you can identify an historical example where such a strongly "perceived" currency did the proverbial "Swan-Dive" as is predicted by the Good souls here!

(Just reading the above- sounds a bit abrasive. I assure you Sir, it's not meant to��.. Simply curious!!)

TownCrier

(05/09/2000; 04:03:30 MDT - Msg ID: 30152)

An important((?) you decide) repost...because Friday evening was probably a poor time period to submit this

(Not exactly prime-time for traffic)It seems to us here in The Tower that someone might surely want to take this commentary for a test drive, and kick the tires a time or two...especially in light of the various insightful and helpful commentaries offered over the weekend by the likes of FOA/Trail Guide, ORO, Canuck, among others. (Splendid on confirming the breakthrough in March, ORO. Thanks for your reply.)

Is anyone else gaining the sense that no single internationally identifiable entity will step such that they may be perceived as THE ONE that pulled the trigger on what looks to be an inevitable event? There seems to be very little reason to buy time for any productive purpse now that we have reached this point in time. Such things are best left to "nameless and blameless" market forces in due time.

With that, Friday's evening comments now follow...(along with this belated thanks to Sir Trail Guide/FOA for introducing us all a great many weeks ago to the suitable term "free gold", as I have made liberal use of it in this post).

TownCrier (5/5/2000; 21:00:38MT - usagold.com msg#: 30028)
Picking up on two brief comments we made yesterday from The Tower
From <>:
<+
As we suggested days ago, don't look for forex intervention from the ECB, unless it is their only "politically correct" avenue to rid themselves delicately of unwanted foreign currency assets. To this Crier's eyes, when you have gold reserves being regularly marked to market in a "free gold" climate, there is simply no reason to maintain foreign currency assets beyond what is convenient for the purpose of short-term international settlements with those specific nations.>>

Additional note that I should have stated at the time of this original post: Evidence points to these days as the infancy of a "free gold" climate, with obvious incentives in place for the ECB (among others) to see it through. Gold will truly be set free to shine when it breaks the shackles of the derivatives markets and when the metal is also made immune to the effects of artificial supply inflation at the hands of the banking sector's lending operations. Such lending seemingly puts the "funds" into two hands at once (the owner of the original deposit who is earning interest on the deal, and the borrower). This "supply inflation" depresses the value of gold in the same fundamental manner as lending also inflates the dollar (or other currency) and erodes its value over time. Evidence of the turnaround and birth of "free gold", you ask? The Washington agreement, and the IMF gold revaluations.

<>

Additional note: as stated before, the UK auctions were surely in reaction to stress in the bullion banking business...an imminent run on the banks, in all likelihood, by the owners of the multiple pockets holding claim on the same gold (as described above). Why do I suggest the Swiss gold could be "sold" (allocated) in one fell swoop? Because all euroland gold "sales" within the Washinton Agreement are very likely a disguise for "lender of last resort" operations to mollify those many nervous "pockets" who are sharing the same small gold on account. Essentially, that entire quantity of gold is already "spoken for." Alternatively, this WA supply of gold out of euroland could also in part be seen as a regulating operation...similar to when the treasury buys back in its bonds prior to maturity.
+
It is perhaps like this, in either case. The reason the same small gold is in multiple pockets is because it has been put on deposit for interest, and lent out to borrowers for the purpose of earning interest. As in normal banking operations with cash, how many times can you imagine the same gold to be put on deposit by its new owner, only to be lent out again, and again? These gold loans are the assets of the bullion banks. Back to that in a moment.
+
Under current market forces, gold today is perceived to have a low value, near 300 in either euros or dollars. Let there be no doubt that gold is held by strong hands not for its "value" today, but for its value "tomorrow". I hope by now all of you have come up to speed on the Fed's operations to add reserves to the banking system through such things as repurchase agreements or coupon passes. Through repurchase agreements, the Fed provides a loan of funds to the underlings of the banking system against the collateral of these banks' assets. Through coupon passes, the Fed provides permanent funds through the outright purchase of these banks' assets (i.e., U.S. Treasuries.) But do not worry overmuch for the "poor Fed" who "sold" (allocated) its "precious funds" (i.e. dollars) to the banking system in exchange for these assets. As these assets (interest bearing loans, bonds, etc.) reach maturity, the Fed will thereby regain these "precious funds" that it originally parted company with, plus the "extra value" of interest. And why is the Fed adding these reserves? Partly because those with funds on deposit are pulling them out.

Must I now complete the parallel to the Fed's operations in terms of the Euroland gold allocations via the Washington Agreement? I hope it is already growing clear. Wouldn't you agree that it is rather fatuous to think that the euroland central banks would be so dull-witted as to part with gold in exchange for nothing more than the dollar-equivalent as the market currently perceives? Would you be more comfortable thinking that the central banks are getting in return for this gold...a simple cash payment, or ownership of the loan asset that will theoretically upon maturity repay the gold, plus interest? Again, strong hands hold gold not for today's value, but for tomorrow's value.

Please think back to the Dutch sales. Regardless of the market price at the time or the tonnage allocated through the Bank for International Settlements, the book value reported by the ECB's weekly balance sheet was always based upon the ECB's official gold valuation for that quarter. When you are holding an asset that is a gold-denominated loan, how else would you show it's value on your books?

Quick review: Current perceptions of gold's value is low. "Free gold" is in its infancy. Strong hands hold gold for "tomorrow". Can you now imagine the central banks who are supporting the tenets of "free gold" would keep themselves in a position for the return of their gold assets at some point "tomorrow"? As the many nervous "pockets" sharing the same small gold account sees it, the central banks will have much better luck dictating the eventual repayment of these gold loans in time than they would as "lowly bullion bank depositors" at the mercy of the bullion banks' future viability as "supply deflation" sets in from the eventual phaseout of gold lending. Time is on the Central Banks side, not to mention the ability to tap into national legislative power to apply heavy mineral taxes to gold mines. And ultimately, should a number of the gold loan assets now held by the CB's in place of their physical gold assets actuall fall into default, just imagine what an enhancement that is to the currency value of "free gold". Where these gold-denominated assets may be forced to settle in cash, you can imagine what a huge return will be realized at that time, compared to the rather meagre cash value they "appear" to be getting with their "sales" today. Truly, if all gold doesn't return, it would nonetheless be as though they sold at the top. And better still for the future of "free gold", this same gold would then remain in private hands.

And lastly, here is a brief look again a part from the earlier discussion of gold market pricing where futures are involved:
<>:
<*snap* it's all over.
Enough said.>>
Indeed. Enough said.
------------------------------
Should events bear out this scenario, what would be the personal reactions/emotions at that time of the many individual thinkers who gather here; and further, what would you each expect to be the socio-political fallout on both the domestic and international scene?

Henri

(05/09/2000; 04:46:07 MDT - Msg ID: 30153)

Footsteps of paper giants /TC Exercise/Simply Me

An inexhaustable supply of currency but no direct access to gold. Hmmm.

OK the the futures markets are the obvious starting place, but you cannot sell gold that you can't deliver for very long before you lose your credibility and your accounts are closed. For the kind of volume in futures needed to pull off the depression of gold long term you need one thing. Credibility.

So first you have to have unlimited credit for the commodity you seek to sell and what better way to do that then to own a bullion bank. There on deposit you have "OPG's" (Other peoples gold) which you pay a fee to lease or borrow at the going rate (you don't really care what that rate is as long as it is in currency and not in gold...unless of course you had no intention of ever buying back the gold you leased even at lower prices...then you wouldn't care if the lease payments were in gold or not as long as they were not due "up front"). Then you have to buy the international media and spread anti-gold propaganda throughout the world. Create the illusion that there is SO much gold sloshing around out there that its price (in currency) surely should not be as high as it is today. Then you must corner the supply of new gold so that it can be made "larger than life". That is get all the future production of all mines and sell it now before the price falls further. The miners jump on your ship because you are saving them.

Then when you have credibility and the press in your pocket, you drive down the price of the futures in the way that TC has pointed out. By selling futures contracts which drive the physical price of gold down. Down down down, as the game advances you extend your leases or borrowing by continuing to pay leasing fees and keeping your "letters of credit" current. Buy back the sold positions at profit roll the profit into leasing or borrowing more gold to build the illusion of an avalaching slide in gold price (more and more gold being sold). Get the press to point out how overvalued gold is in todays world and panic big holders of gold who's eyes are focused on "investments" that create more currency in the form of "interest". They see that their gold just sits there doing nothing and falling in price toward where they "purchased" it plus holding (security) "costs" and they are convinced that they should take "profits" before it falls further in price. The profits they are told, can be used to fund more "growing investments". The foolish begin to unload real gold which you have to buy to cover the leases that won't renew.

Soon you need really big leases to maintain the reality that gold currency price is falling. You and the big players that are lending know that you are playing right into their hands. Now you know that there is not enough gold in the world to ever pay back all the leases you have and so you become even more aggressive in trying to shake loose some more gold.

One way to reduce your carrying costs in selling futures is to buy calls that "hedge" your position. This reduces your callable margin and limits your exposure to any sudden upside moves in the price of gold. So the "footsteps of the paper giants are written in the purchase of calls. You convince the miners that they can make more currency by writing calls (which you buy from them) using the proceeds to buy puts. This helps them because they see that with falling prices they get not only the "high" price you paid for future production, but also a bonus profit as the POG falls when they cash in their puts for more currency than they paid for them. The calls always expire worthless so its free money they use to buy the puts. Why not sell two calls for every put you buy and make even more money? The miers think wow who are the idiots who think the price of gold is going to go up? They tell their friends how they are making more money playing the bullion bankers game than they are mining gold. Their friends start playing the game to. What fun lots of calls on the market the price gets really cheap to buy them.

Ught Oh, the guys you are into for all the leased/borrowed gold start to get antsy about ever getting their gold back. They are using your currency now to buy the cheaper gold futures contracts and Argh!!! taking delivery!

So you paid them to let you borrow their gold they lent it to you for so long that they can now buy it with your money at the cheaper price. They have their gold back at your expense ...AND THEY STILL THINK THAT YOU OWE THEM THE GOLD!
HOW RUDE! It'll be a cold day in hell before they see any gold returned from you. Besdies there is not enough gold in the world to cover their lendings and they should have known that. It will be easy to convince any court of contract law that the day they bought their own gold back, they were obviously aware that there was not enough gold out there to cover the borrowings. They must have "colluded" to pinch the borrower. knowing full well that he could not repay. Then they raise the lease rates. Why this is extortion. The borrowers should be compensated handsomely for having been so used. Those gnomes should pay us IN GOLD for having allowed them to profit so greatly in our currency.

:-)

Canuck

(05/09/2000; 05:09:57 MDT - Msg ID: 30154)

@ T.C.

Thanks for noticing my post on Sunday (30098); I am beginning to see the picture.


Thanks to you and other 'guns' I hope to escape the wrath of the dollar through accumulation of 'VALUE' assets.

My Canadian 'loonie' has dropped a couple cents on the US$ over the last week or so. Gold has therefore shot up in terms of CDN$. It is amazing to see the currency/gold relationship when it's happening in your backyard.

I hope our friends (US & CDN) are ready for the currency war
when it arrives on our respective doorsteps. It is easy for the 'market mongers' to slander gold when the dollar is on it's way up. What will they do when the dollar is in the way down?

Canuck

Gold ....Currency hedge #1

Henri

(05/09/2000; 05:17:39 MDT - Msg ID: 30155)

Why does BIS mark the dollar price of gold at $208

The gold payments defaulted on in 1970's were valued at $42/troy. That gold is still "owed" them. $208/troy is the price they feel gold should be available to them. Hmmm..$208 +$42=$250/troy...the bottom of the dollar price discovery structure. Coincidence?

If it were marked higher than market, it would undermine the credibility of BIS. Long a pariah of the western accounting (imagine...thinking debt accounts should actually have offsetting assets to "balance" them)the BIS has often taken criticism for its gold backed "agenda".

Since its inception, BIS has now accumulated enough assets in its own account to settle the outstanding 75% gold value of its shareholders. Will it? Not likely. Will it now,at this point in time ever need to make a call out for the remaining 75% to validate its credibility. Not likely. It now seems to be making its move to assert itself. Coincidence?

Simply Me

(05/09/2000; 05:30:37 MDT - Msg ID: 30156)

Town Crier's Exercise

I wish I could put little emoticons in these posts! Thanks, TC. I see I've been confused about a very fundamental point. I thought a put was the sell side of a futures contract! I'm still fuzzy about the difference, so I'll go back and re-read your posts this morning.
Glad I stayed up late (early) enough to see your answer.
G'nite all!
Pleasant day,
simply me

Trail Guide

(05/09/2000; 05:40:58 MDT - Msg ID: 30157)

Comment

Elwood (05/08/00; 20:22:08MT - usagold.com msg#: 30140)
Trail Guide (05/08/00; 18:58:00MT - usagold.com msg#: 30138)
Elwood (05/08/00; 21:58:37MT - usagold.com msg#: 30145)
SteveH (05/08/00; 21:02:33MT - usagold.com msg#: 30141)
SteveH (05/08/00; 21:02:33MT - usagold.com msg#: 30141)


Elwood, SteveH,

Hello, both of you.

This placement of Swiss gold was the first "real obvious" indication to the markets of what the WA is all about. Because these sales are the bulk of physical entering the markets during the next 5 years, something has to give as it is diverted into BIS accounts. Remember, I touched on this point on the Trail (when?): the WA did not address any means of covering existing contracts while still endorsing and maintaining their gross level outstanding! Most everyone completely missed the fact that this places "physical coverage" squarely on the back of the US if the paper markets are to be maintained. No one saw this as an issue because they assumed the Swiss gold was for coverage.
It's not!

I know The Golden Sextant is following that line of Swiss gold filling Euro loans. The problem is that it's not. They feel comfortable letting the dollar faction figure it out themselves. Euro Zone banks know that the entire Gold arena will shut down once this US supply line is cut off. They are
not so dumb as to fill their paper with physical when the rest of the world is force settling in cash. They will not " blanket" cover all loans. Just the important ones vital to oil supply. This is the real leverage that will bring on Oil for Euros! Get the picture!

Elwood, I agree that everyone is still trying to milk whatever gold out of the system they can get. This was a driving factor for allowing the US to "save some face" by forcing oil prices down some. Onec the gold flow stops (and it may be right now) oil ril rise fast and furious!

SteveH's repost of my "weeks" timeline is on track. Untapped official gold is running out and unless someone rolls over a huge paper commitment the game begins "real soon". We watch!

Trail Guide

Black Blade

(05/09/2000; 05:41:17 MDT - Msg ID: 30158)

Morning Wakeup Call!

Source: Bridge NewsAsia Precious Metals Review: Physical buying underpins gold

Tokyo--May 9--Spot gold was underpinned by light buying from physical dealers in sluggish Asian trade Tuesday, dealers said. Platinum edged firmer from overnight late U.S. market levels while players were hesitant to open positions on lack of fresh incentives, they said. (Story .2200)

Black Blade: Not much happening overnight. The calm before the storm?

ss of nep

(05/09/2000; 05:42:25 MDT - Msg ID: 30159)

Georgia; USA : Has an interesting monument ?

http://www.radioliberty.com/stones.htm

Buying gold all the way down

Leigh

(05/09/2000; 06:04:28 MDT - Msg ID: 30160)

Trail Guide, Elwood, SteveH

Wow! Great questions, Elwood! I kept waking up last night and logging on just to see if Trail Guide had answered yet. Right now I have the weirdest feeling -- economic doomsday is right at our doorstep, yet everything is going on as usual, gold is still readily available at a cheap price, and not one person in five hundred would believe it.

Is anyone else besides me having trouble getting onto Kitco?

ss: The "Georgia Stonehedge" ain't going to be one of our vacation stops this summer, I can assure you! I always wonder, when I read about social planners who want to reduce the world's population so drastically, which of us are scheduled to live and which are scheduled to die.

Leigh

(05/09/2000; 06:11:54 MDT - Msg ID: 30161)

Black Blade

Thank you for your Morning Wakeup Calls! I really missed SteveH's early-morning spot gold postings, and you've filled the void beautifully.

SteveH

(05/09/2000; 06:13:08 MDT - Msg ID: 30162)

Convergence

Let's step back and look at the big picture for a moment, shall we?

-- Gata going to Washington with big ad ready to roll next week telling Congress..."you have been told, if you choose to do nothing, it will be there for all to see you knew but failed to act."

-- Elections arriving in November. Dems. seriously want to maintain best-case economy through election. Bush-Gore neck and neck, but Rep. have ace-in-hole to push economy into recession prior to November -- the gold-shortages and manipulation debacle.

-- J.P. Morgan assuming much of the paper-gold responsibilities. Why?

-- Suisse Gold sales through BIS.

-- XAU ready for launch with serious accumulation in major unhedged golds. Same with JGOL.

-- DOW/NASDAQ in preliminary and initial stages of serious bear market, where buying the dip will finally burn the majority who used this seemingly faultless tactic.

-- Continuing positive news quips on gold and gold stocks as an inflation hedge.

-- The highest unemployment in 30 years. 2000 minus 30 = 1970. Equivalent of being with a year of closing the dollar gold window by Nixon, which set off the gold rally in the 70's over a 10 year period.

-- Fears of inflation continue to plague the US.

-- Dollar at a stronger than normal high.

-- Trade deficit at an all-time high and mounting daily.

-- Interest rate hike fears to the tune of 50 basis points, which sets an expectation that if it is less, the markets will rally, if it is 50 basis points it will trade sideways.

-- Cisco credibility knocked yesterday by major media article discussing accounting and other peculiarities.

-- Microsoft profitability in question due to not having stock option profits in near to medium term. The longer this happens,the quicker the spiral.

-- Physical gold in its highest demand, paper gold in its lowest.

-- Record stock-market volitility with large swings making it impracticle to use margin debt for fear of margin calls.

-- Continued reliance of high tech majors as the recommendation to do well in the markets into the futures. These stocks' PE's are all out-of-line with historical standards.

-- Euro unwillingness to intervene in FOREX markets, allowing their currency to float freely.

-- Bond market acting in ways that are contrary to logic and a continuing propensity to rising yields and reverse yield curves.

Events are unfolding at an ever increasing rate, which spells trouble for the dollar and soon.

JavaMan

(05/09/2000; 06:14:57 MDT - Msg ID: 30163)

(No Subject)

ET, on your msg# 30142...my thoughts exactly!

Lamprey, your msg# 30143...good point. One would think / hope these noble efforts by GATA would close the back door. It will serve as an interesting object lesson for all of us to see what follows "when the s*** hits the fan, they won't be able to say they didn't know of the problem." I can see it now...in true Clintonese "what do you mean by s*** ?"

JA, your msg# 30147...yes, that is not an uncommon perception. The history of the company and its following is quite interesting. The company got its first boost after the war when the air force pilots, experiencing "cold turkey withdraw" from the freedom and exhilaration of combat flying found that riding the motorcycle was the next best thing. The fashion of leather clothes started with the flight jackets the pilots had. Some of these guys were "bad boys" and slowly it evolved into the perception that only gangsters rode Harleys. This image was reinforced by the movies. While it is true that there are some less savory types that ride, the current reality is that the bikes are simply too expensive for low income people, so HD has targeted and markets to the professional. Ironically, some of these professionals who have always (mostly) lived the straight and narrow life of responsibility occasionally wondering what it would have been like to "take the other road" see the HD as a means to live out their fantasy vicariously. The best of both worlds! (smile) After placing the add in the paper, I got phone calls from an oral surgeon, and a gentleman who owned a successful home inspection business.

Simply Me, your msg# 30148...you said "What truly sets man apart from the beasts?" Too often the answer is "nothing". But the Existentialist school of thought in psychology is directly opposed to Skinner and maintains that we are NOT products of our reinforcement history, i.e. man is free to choose at any time, no, MUST choose, in order to be authentic and there are documented cases of incredible success stories they have had curing very sick people to support their approach. I think the term "Authentic" applies nicely to gold and is, somehow, synonymous with it.

ss of nep

(05/09/2000; 06:27:01 MDT - Msg ID: 30164)

? which of us are scheduled to live and which are scheduled to die ?

Well, I think it depends weather your on the Green, Red or Blue list.

Leigh

(05/09/2000; 06:46:44 MDT - Msg ID: 30165)

ss of nep

What do the colors mean? How can you know which list you're on?

ss of nep

(05/09/2000; 06:58:32 MDT - Msg ID: 30166)

Color codes

Green - you can be Re-Educated, to serve in your new position as slave.

Red - you are beyond Re-education and will be done away with, but offer no current threat.

Blue - you are beyond Re-education and will be dispoded of immediately.


( I may have the Reds and the Blues backward ).

JavaMan

(05/09/2000; 06:58:35 MDT - Msg ID: 30167)

Leigh...

Perhaps Sir ss should have put a "(smile)" at the end of his last post.

ss of nep

(05/09/2000; 06:59:28 MDT - Msg ID: 30168)

dispoded should be disposed

ss of nep

(05/09/2000; 07:00:20 MDT - Msg ID: 30169)

Always keep smiling.

Henri

(05/09/2000; 08:45:52 MDT - Msg ID: 30170)

Steve H RE:Convergence

The question
-- J.P. Morgan assuming much of the paper-gold responsibilities. Why?

What I think to be the answer

They drew the short straw?

Henri

(05/09/2000; 08:51:05 MDT - Msg ID: 30171)

Which list?

I hope I'm not on the green list!

hmmm. Although being there would not be so bad as a cover if you knew you were not enslaved in fact.

How much gold did the Swiss say they had from people who believed having it in a safe place was a good idea?

In this case "Better red than dead" doesn't carry much weight.

Leigh

(05/09/2000; 08:57:03 MDT - Msg ID: 30172)

Henri, ss of nep

I actually don't care which list I'm on. Life is short, and there's a better world than this one. I'll die smiling, knowing they'll never, never find my gold!

Perplexed

(05/09/2000; 08:59:23 MDT - Msg ID: 30173)

Empire

Holtzman #29923

Thank you for the desertation on Empire. I too believe that government, as we know it,will become superfluous, beginning in the not too distant future, say 10 years or less. But the United States empire? Hardly. Most of our people had strongly opposed getting involved in another European war, and at its end could not wait to get on with our lives. From our beginning, neither our people nor our leaders have ever desired Empire. After World War II , had we been so inclined, it was ours for the taking. We were the only nation to come out of the war stronger than when we went into it. We had a finely honed manufacturing industry, an abundance of oil, every raw material needed for self
sufficiency, some of the best land and climate in the world, the strongest military machine the world had ever seen, and sole possession of a doomday weapon, yet we virtually disarmed. Had the politicians not prevailed, all our troups would have returned from Europe immediately. Not only had we lost many sons and fathers fighting a war on
foreign soil, but had furnished many weapons, much equipment, and financing in the form of loans. The American citizens, thru taxation, continued to furnish financing for the post war recovery, some in the form of additonal loans, and more in foreign aid. We paid rent on the facilities, and hired local civilians to fill many jobs, and still do. The United States soldiers, although an occupying army, while associating with the local population purported themselves with dignity and honor, the G.I was liked rather than feared, and spent millions of dollars per year in the local economy. We opened our markets to world trade, invariably on terms detrimental to our own industry and farmers. We used our economic and military might not to enslave but to free, not to keep foreign economies down, but to build them up. Did we benefit? Immensly, along with the rest of the world. Given the foregoing circumstances, in 1971, when the run was made on our gold reserves and the gold window was closed, although twenty-five 25 years had transpired, none of these European nations had paid even the interest on the debt. Many American citizens, my father included, considered this blatant profiteering the ultimate insult, and Charles De Gauls popularity plummeted. The debts were eventually written off.
I was stationed in Germany in the mid 50s, and I, like many Americans just took the freedom into which I was born for granted. An American soldier in uniform traveling on the railroads, and watching as peoples luggage was searched when we crossed from the border of one nation to the next while I was exempted, really opened my eyes. If I was a sleep I wasn't even awakened. Just like traveling in the USA
Today I still stand in awe and thanksgiving that I was privileged to have been born in the nation which has changed the course of the world for the better, in the time frame of my adult life.

webtex

USAGOLD

(05/09/2000; 09:07:28 MDT - Msg ID: 30174)

Today's Report: All Quiet Ahead of PPI Numbers and Upcoming Fed Conclave

http://www.usagold.com/Order_Form.html5/9/00 Indications
�Current
�Change
Gold June Comex
277.40
-0.20
Silver July Comex
5.10
+3.00
30 Yr TBond June CBOT
93~06
+0~10
Dollar Index June NYBOT
111.12
-0.20

Market Report (5/9/00): Gold drifted sideways in the early going after a quiet night overseas.
Asian trading was characterized by light physical buying. Trade in New York was very light
yesterday with low volumes and too little movement in either direction to inspire traders. Things
might take a more critical tone towards the end of the week when we get producer price numbers
on Thursday and speculation about the next week's Fed meeting and interest rates take center
stage.

The May News & Views is now on its way and should be hitting your mail boxes over the next
few days. We think you are going to like this issue written during the weekend after the April 14
Wall Street Meltdown.

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.

Henri

(05/09/2000; 09:19:36 MDT - Msg ID: 30175)

On sustainable development

For what its worth, I disagree that believing in a policy of sustainable development need necessarily bear a "socialist" stigma.

The reason some areas of the world get beyond their "carrying capacity" is due to the re-allocation of resources and subsequent development that causes dependence on those outside resources.

If carried by fair trade of some other good or service the development is not necessarily unsustainable. It is only when the resources are allocated without the underlying fundamental economic balance (an offsetting asset goods or service)that the development becomes unsustainable.

It is unsustainable since it is dependent on the continued "goodwill" of other economic regions or on the "forced" reallocation of global resources by some global force majeur (a necessarily "socialist" organization)

So here I see "socialist" ideas being the source of the problem. Not the progenitors of the solution.

Given time as we know it in terms of growing seasons lack-o-drought etc. The "time" it takes to transport temporary and humanitarian relief. The carrying capacity of a region can withstand temporary setbacks. When powerful people get the contracts for arranging the "temporary relief", the temporary relief may become more permanent than is justifiable. "Capitalism" then is demonized as well...but is this true capitalism when the profit obtained originates from a humanitarian motive. This is not true capitalism, it is profiting from the misfortune of others.

We must make a distinction (eventually) as in the case of somalia/ethiopia/eritrea, as to whether the fundamental nature of the region has changed from garden to desert temporarily or permanently. The sands of the sahara move ever so slowly but move they do.

We must (eventually) decide which regions have no offsetting goods or services to offer that justify their stage of development and must therefore be allowed to equilibrate (recess) to their intrinsic carrying capacity.

I am certainly not against the outpouring of temporary humanitarian aide as long as that is what it is. No one should "profit" from it. The cost should be born by those willing to give. It should not be expropriated from the unwilling. When such a circumstance is allowed to exist, then the people say...I already gave...my part is done...they are absolved of any guilt and hence lose all that is to be gained in the act of giving.

RossL

(05/09/2000; 09:27:52 MDT - Msg ID: 30176)

Henri,Steve H, RE:Convergence

The question
-- J.P. Morgan assuming much of the paper-gold responsibilities. Why?

Too big to fail?

ss of nep

(05/09/2000; 09:42:11 MDT - Msg ID: 30177)

On Land Rights

http://www.oneworld.org/news/world/landrights.html

Henri

(05/09/2000; 09:48:10 MDT - Msg ID: 30178)

This is what provoked my foray into sustainable development.

Sorry for posting out-of-context

Clipped from the "radioliberty" link referenced below in post # 30159 by ss of nep

SNIP
"...The message of the American Stonehenge also foreshadowed the current drive for Sustainable Development. Any time you hear the phrase "Sustainable Development" used, you should substitute the term "socialism" to be able to understand what is intended."
UNSNIP

elevator guy

(05/09/2000; 10:09:52 MDT - Msg ID: 30179)

Need advise

Which is better-

To take what you can get from this life as we know it, under the present dollar reign, and maintain the status quo?

Or to rock the boat, and help to collapse the dollar house of cards by exposing the paper gold foundation?

On the one hand, my life will not be interrupted.

On the other, I may have to hack out a new path in the jungle, for survival.

Or maybe the answer is not necessarily all one option or the other. Perhaps our brains have been massaged by the dollar driven media, until we think that breaking our chains of dollar fiscal slavery will result in our hanging for sure. Maybe a better life awaits those who rebel.

Your thoughts?

As a last note, I was thinking about what a funny joke being a millionaire would be, if the dollar was to become devalued. Owning a million dollars could become as worthless as owning a million grains of sand. Best to store value in gold, or see it all wash away.

ss of nep

(05/09/2000; 10:13:51 MDT - Msg ID: 30180)

my vote

I go for Rocking the Boat.



The Status Quo sucks.


Will gold be of value ?
Tuff question.

ss of nep

(05/09/2000; 10:16:32 MDT - Msg ID: 30181)

If the UN wins

http://www.americanpolicy.org/prop/sustainabledevelopment.htm


No gold will save me.

YGM

(05/09/2000; 10:33:17 MDT - Msg ID: 30182)

IF ONLY THIS "IS"TRUE.......Soros & Gold.

http://www.minesite.com/index.htmNews Link...http://www.minesite.com/news2.htm

GEORGE SOROS LAYS DOWN CHALLENGE TO BROWN BY BUYING GOLD.

Word has it that George Soros, the Hungarian genius, is buying gold. OK, Everyone knows that when such news gets around it is usually because he is poised to sell to those who think they can make money by riding on his back. In the case of gold, which has performed abysmally for a long time apart from the brief spike when the central banks made their announcement last September, such a ploy is unlikely.

Only last week Soros announced that he was withdrawing from aggressive hedge fund management because markets are now "too volatile." This could reasonably be translated as saying that the equity, bond and currency markets in which he has made so much money are now too transparent. In other words it has become ever easier for his operations to be tracked and this means, in turn, that he can no longer remain one jump ahead.

The man is no longer a hungry fighter and as his book, The Crisis of Global Capitalism" shows he is happy to give more of his time to philosophising. He has argued that the ideals of tolerant democracies can be threatened by those with an absolutist faith in the free market to the extent that market mechanism is allowed to assume a position of overriding importance.

Once a man gets wrapped up in philosophy his thoughts turn to the longer term. The dollar, as Soros knows better than most, is in a high risk area. The US economy has been pumped up on the strength of a private sector credit bubble, and the dollar depends on huge capital inflows. There is also a head of political pressure building up to persuade the Federal Reserve to raise interest rates, slow down the US economy and take the pressure off the euro.

To the new long termist Soros this must provide an ideal opportunity. He can pick up gold easily enough from politicians and central bankers who have never made a trading profit in their lives. Such buying would be difficult to detect, so he would be under no pressure. And when the moment eventually comes, as come it must, when the dollar falls he will pull off the coup of a lifetime.

Gold went up US$4 last week despite the news that the Swiss were going to put 120 tonnes on the market by September. Brown will continue with his gold sales. All Soros has to do is sign cheques and sell off loose holdings in his Quantum portfolio. Gives him plenty of time for philosophy in the long summer months.

8 May 2000

Henri

(05/09/2000; 10:45:12 MDT - Msg ID: 30183)

get you some

Gold
Get you at least your own fair share (3 sovereigns)
then buy more for your families share
then buy at least ten times more to trade in the future for what you need.

Remember, it is only a tool, not the end in itself. Much like a squirrel stores nuts for the winter to come. Get some, store it, use it when times get rough, survive, get some more when good times return.

Leland

(05/09/2000; 10:58:03 MDT - Msg ID: 30184)

Verrry Off Topic...I've Been Watching Some Excitement

There appears to be a big uranium strike, Saskachewan...
Here's a chat site comment on STOCKHOUSE:

"Of course JNN is going ballistic! You're looking at what could be the next Uranium mine there at Moore
Lake.
How do you think society is going to power the internet age? Dirty coal burning power plants? Nope. The
answer is nuclear power. It's much more effient and cleaner.
Heck, the first commercial electric car is on the market right now. Maybe you've seen the ads on TV. In
3 or 4 years there will be many electric cars driving down the roads... no need for gasoline, however,
there will be a greater demand for electric power!
Uranium is the key! Saskatchewan is the Uranium capitol of the world. It already have 3 or 4 Uranium
mines in full production up in the north. Won't be long before huge electrical demand makes another
Uranium mine viable!"

If anyone is interested, post a query, I'll give some links.

Laura

(05/09/2000; 11:00:13 MDT - Msg ID: 30185)

Interconnectedness

http://www.hubbertpeak.com/campbell/commons.htmPractically no one is aware.

The coming Global Super-Crisis is on the horizon. Full speed ahead.


Gold, Get You Some!

YGM

(05/09/2000; 11:02:01 MDT - Msg ID: 30186)

CALL TO ARMS......GATA/Washington.

No matter which discussion board you frequent........Dr. Vronsky says it all here.........



� GATA EQUIVALENT OF THE US NAVY SEALS �
(vronsky)May 09, 12:37 The GATA equivalent of the US Navy Seals will be hitting the 'beaches of Washington' soon. For their operation to be successful, GATA will need the bombardment of our 'Big-gun' support. GATA needs that all GOLD-EAGLE's readership 'bombard' Congressional Members of the US Senate and the US House of Representatives.

Not only US Citizens should voice their opinion about the Gold Cabal's Anti-Trust machinations in the manipulation of the gold price, ALL GOLD-EAGLE readers should take advantage of their right to be heard. PRICE-FIXING is materially injurious to everyone�anywhere.

Speak your piece�exercise your God-given right to be heard. Assert your opinion.

Following are the email addresses of all US Congressmen and Congresswomen.

http://www.webslingerz.com/jhoffman/congress-email.html
http://www.visi.com/juan/congress/
http://www.capweb.net/classic/Index.morph?pagename=senalpha

GATA is about to 'invade' Washington on OUR BEHALF- it needs our 'bombardment' support...NOW...Bear arms in the form of your words.

Christopher

(05/09/2000; 11:11:01 MDT - Msg ID: 30187)

Elevator Guy msg#30179

"One of my wishes is that those dark trees
So old and firm they scarcely show the breeze
Were not as 'twere the merest mask of gloom.
But stretched away unto the edge of doom.

I should not be withheld but that someday
Into their vastness I should slip away.
Fearless of ever finding open land,
Or highway where the slow wheel pours the sand.

I do not see why I should ere turn back,
Or those should not set forth upon my track
To overtake me, who should miss me here,
And long to know if still I held them dear.

They would not find me changed from him they knew,
Only more sure of all I thought was true."

Robert Frost

YGM

(05/09/2000; 11:16:38 MDT - Msg ID: 30188)

GATA NEWS........

http://www.gata.org10p EDT Monday, May 8, 2000

Dear Friend of GATA and Gold:

The Battle of Washington is about to commence.

A little more than a year ago the Gold Anti-Trust
Action Committee developed a strategy to win the day
against the manipulators of the gold market. Our
strategy was based on the "enveloping horn" tactic of
the great South African Zulu chieftain, Shaka.

That strategy is working for us as it worked for him.

To defeat his opponents, Shaka had his warriors form a
diamond formation that unfurled into a horn-like form
as both sides suddenly flared out to surround his foes.

The point of GATA's formation is our law firm,
Philadelphia's highly regarded Berger & Montague. While
we have not yet brought legal action, our law firm has
kept our adversaries off-guard.

The right flank of the "horn" has done its job well.
Our plan was to get the gold producers behind us, to
inform the investing public of the dangers of excess
hedging, and to support those companies that did not
hedge or started to reduce their forward sale
positions.

To date GATA has raised $206,498. Five major gold
companies have supported us, many juniors have chipped
in as well, and so have many individuals from around
the world. Though the price of gold has gone down, many
non-hedgers are outperforming the big hedgers like
Barrick Gold. It is such a surprising development that
The New York Times journalist just published an article
headlined , "Gold Believers Put Rationality to Test."
Randall Oliphant, president of Barrick Gold, was quoted
in the article as saying he found it difficult to
understand. "It doesn't make sense to us and I can't
explain it," Oliphant said.

The task of GATA's left flank was to get the Internet
behind us and to take our case to the politicians in
Washington to expose the manipulation and to ask them
to take action. We are making our move tomorrow.

The GATA team -- Chris Powell, Reginald Howe, Frank
Veneroso, and me -- are meeting to go over our strategy
for the next day. And on Wednesday we will be
presenting our "Gold Derivative Banking Crisis"
document to members of Congress and their staffs. Our
report is 90 pages. There is no way that any fair-
minded person can come read this document and conclude
other than that the gold market IS manipulated and that
a derivative crisis is on the horizon unless immediate
steps are taken to avoid it.

The gold price must be allowed to rise, and sharply, to
slow down gold demand.

On Thursday GATA will deliver a personalized bound copy
of our document to every Senate and House banking
committee member. Material from Frank Veneroso,
Reginald Howe, and www.LeMetropleCafe.com's
"Chronological Commentary on the Manipulation of the
Gold Market" from Sept. 9, 1998, through Feb. 15,
2000, has been included.

Next week a color center-spread open letter, addressed
to the banking committee members, will appear in Roll
Call, the weekly newspaper that covers Congress. All
Washington will know that if Congress does not
investigate this serious matter and the banking crisis
develops, they will have no one to blame but
themselves.

Early next week GATA will issue a press release on our
operation. In addition, the "Gold Derivative Banking
Crisis" document will be sent to all the gold producers
and to the press. (That includes CNBC.)

GATA will also send a copy to Gold Fields Mineral
Services and challenge it to debate us on our findings.

The manipulation crowd has power and money. We have the
truth and the Internet. We will win. Wish us well.

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

elevator guy

(05/09/2000; 11:33:02 MDT - Msg ID: 30189)

@Christopher

Very nice indeed!

Leland

(05/09/2000; 11:33:24 MDT - Msg ID: 30190)

"Oil World: 1973 Compared to 2000", Link Posted by Ted Butler

http://www.simmonsco-intl.com/web/downloads/whitepaper.pdfPlease note, Pdf, Acrobat Reader required...

YGM

(05/09/2000; 11:37:21 MDT - Msg ID: 30191)

Hey Dollar Bill...

C'mon Back & Discuss Your Point...Sorry if I was rude in my last response to you......But you got me going...(not hard to do these days)
Please read this from my old friend at GE Forum (curious)
.........................................................................

"The germ of destruction of our nation is in the power of the
judiciary, an irresponsible body -- working like gravity by night and
by day, gaining a little today and a little tomorrow, and advancing
its noiseless step like a thief over the field of jurisdiction, until
all shall render powerless the checks of one branch over the other and
will become as venal and oppressive as the government from which we
separated." --Thomas Jefferson

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

Does the US have politicians and citizens who still believe
in the truth seeing the light of day... I believe so and probably you, yourself are in that category......Join in the truth finding mission well underway here......Regards: YGM.

Topaz

(05/09/2000; 13:53:00 MDT - Msg ID: 30192)

Laura (5/9/2000; 11:00:13MT - usagold.com msg#: 30185)

First:- Neanderthal Man
Second:- cro-Magnon(sp)Man
Now:- "Hydrocarbon Man"......

That cracks me up!!

Aristotle

(05/09/2000; 13:58:16 MDT - Msg ID: 30193)

Henri, your thoughts on sustainable development are on target.

Gold. Get you some. ---Aristotle

ORO

(05/09/2000; 14:40:45 MDT - Msg ID: 30194)

Pondering productivity

Reading through some of my posts and web pages on productivity, a question hit me: what is the marginal value of gains in productivity?

I have argued before that the gains in official productivity statistics were between total falsehood to mostly fabricated. I had shown (to my satisfaction - at least) that the apparent productivity comes completely from other factors aliasing into the numbers:
1. The intentional practice by the BLS of adjusting growth in computer power relative to price rather than adjusting unit numbers to price being one major source of inflated productivity estimates.
2. I also claimed that the marginal value of new computing power was declining rapidly, perhaps more so than the price, such that the use of equal computing power for running a chemical plant and displaying "Barbie Cam" snapshots on the net are treated as having the same marginal value in the official statistics.
3. I pointed out that the major source of productivity in the global economy was the transition of people in Emerging Economies from Iron Age production to 21st century production and computer technology complete with semiconductors and internet software (see the Phillipinos who are accused of writing the "Love Bug").
4. I pointed out that a strong dollar relative to the currencies of these Emerging Economies was causing the import of their productivity into the US to appear as if US productivity is growing. I pointed out that the dollar was strong because of a series of debt traps into which the Emerging Economy corporations and governments were "cheated" into.
5. I showed that the bulk of the actual productivity improving technologies were applied between 40 and 10 years ago, and that current applications are not used to lower cost, since cost is not a valuable advantage to business. The technologies are used mostly for the purpose of changing the character of inventory - its composition - rather than its quantity. Furthermore, I claimed that the new technologies' effects in reducing retailing and distribution costs will result in increasing the volume of both service and goods demand, which would later reach the resource origin of production and service: labor and raw material. When these would be reached, pricing of both would start to climb to the point of reversing productivity savings in costs - leading to price rises following price declines. Later, corporations would start seeing their inventory as a source for capital gains and this would drive them to reverse the 20 year trend to reduce inventories. The added demand for inventory build up would undo some or all of the inventory and distribution technology improvements in costs delivered by information technology today and in the next 3 years.

The question now is whether the productivity improvements had a marginal value of any magnitude. I claim that they have, but that the bulk of the contribution is in the consumer's time savings, access to a much greater selection of products and services. Also, there is a completely new consumer-to-consumer marketplace which is threatening to remove the few remaining economies of scale that corporations enjoy, while increasing the level of compensation necessary to remove people from these profitable activities and into additional corporate work. Though living conditions may improve for a great many, none of this would impact directly on apparent official statistics.

Many corporations will see cost savings in their supply chain as they move forward to reduce idle inventory, purchasing order processing costs, distribution inefficiencies and marketing costs. However, these savings of 5% to 20% over the next 2-3 years will be more than absorbed by material and labor costs. This leads to the conclusion that the marginal value of applying these technologies were not even close to the expectations raw numbers give rise to.

Thoughts?

Hill Billy Mitchell

(05/09/2000; 16:28:56 MDT - Msg ID: 30195)

Official release

http://www.bog.frb.us/releases/H15/update/
Official: Federal Reserve Statistical Release

Release Date: May 9, 2000

Rates for Monday, May 8, 2000

Federal funds 6.01

Treasury constant maturities:
3-month 6.19
10-year 6.57
20-year 6.69
30-year 6.25

right-side up spread FF vs long bond = +.24%

YGM

(05/09/2000; 16:50:18 MDT - Msg ID: 30196)

Left Wondering.....China/WTO/Gold Reserves....

China....Deputy Director, Gold Bureau ....Comments Sept/99
What is the relationship between Clinton continually pushing for Chinas membership (WTO) and these old comments made by Cheng.....Were they a veiled threat of Gold acquisition if not favored for acceptance into WTO?.....possibly another piece of the over-all picture in the Great Gold Heist of the 20th century.......Now we have Clinton, Carter, Gore and others again trying to fast track
Chineese acceptance into the fold..........(See Drudge News) ....... Questions,questions...........YGM.


(Reference to Cheng Comments)

From Reg Howe/Goldensextant.com

September 9, 1999. Chinese Comments on Gold: Threat or Faux Pas?

Last week Ai Dang Cheng, deputy director of the Gold Bureau under the State Economic and Trade Commission, told Bridge News that China's gold reserves of 394 tons were too low relative to its foreign exchange reserves of US$146 billion and population of 1.3 billion, and that they could rise to 1000 tons. (At US$260/oz., China's gold reserves equal about $3.3 billion, or less than 2.3% of its total reserves.) The next day AFX Europe reported that the People's Bank of China had disclaimed any intention to increase its gold reserves. What was going on?

I don't know. Perhaps Mr. Ai, although his point appears well-taken, innocently misspoke. On the other hand, with critical negotiations about China's entry into the World Trade Organization at hand, perhaps the Chinese are delivering a subtle reminder of the strength with which they could enter the gold market should they choose to do so. In any event, it seems unlikely that China would announce to the world in advance plans for the imminent purchase of 600 tons of gold. Stupid traders they are not. Bank of England take note.

SHIFTY

(05/09/2000; 17:08:26 MDT - Msg ID: 30197)

Ponzi

Nasdaq 3585.01 + Dow 10 536.75 = 14121.76 divide by 2 + 7060.00 Ponzi
Down 75.62 Ponzi Points

SHIFTY

(05/09/2000; 17:12:16 MDT - Msg ID: 30198)

1999 Gold Eagle 1/10 oz.

I heard today that there were some 1999 1/10 oz gold eagle coins that have a W mint mark. Said to be rare. Does anyone how true this is.

RossL

(05/09/2000; 17:44:06 MDT - Msg ID: 30199)

Shifty

The gold bullion proof coins minted since 1994 have the W mint mark. There is a premium for the higher quality strike. The mint has not made a large quantity of them due to lack of demand. They are not rare.

Simply Me

(05/09/2000; 17:49:32 MDT - Msg ID: 30200)

1999 W Gold Eagle

The W mint mark comes from the West Point Mint. They sometimes make special edition proof coins. Whether it will be a valuable coin in the future or not (aside from the gold content) depends on the number minted.
For instance, the '95 W Proof Silver Eagle was thrown in as a freebie with Gold Eagle Sets they were selling. Not many were sold, so very few '95 W Proof Silver Eagles were minted. They're going for over $1200.00 now.

simply me

Bonedaddy

(05/09/2000; 17:54:18 MDT - Msg ID: 30201)

elevator guy

Your perception of events impresses me. You wrote, "Perhaps our brains have been massaged by the dollar driven media, until we think that breaking our chains of dollar fiscal slavery will result in our hanging for sure." Consider the following. Our children shoot each other in school. We dishonor the wise ones (elderly) publicly in TV commercials. We have a negative savings rate. We have felons in Congress. We accept a lying, drug addicted, sexual pervert as our Commander in Chief. Mothers and fathers combined work 100 hour weeks and let strangers raise the kids. We practice government financed genocide on the generation of infants that should care for us in our old age. Perhaps we are already hanging from these paper chains you speak of?

Elwood

(05/09/2000; 17:56:04 MDT - Msg ID: 30202)

Topaz (5/9/2000; 3:44:29MT - usagold.com msg#: 30151)

"Perhaps you can identify an historical example where such a strongly "perceived" currency did the proverbial "Swan-Dive" as is predicted by the Good souls here!"

Sir, I cannot. The fact that a widely-accepted paper-based reserve has never died places our time in its own historical perspective. We could say that it is just as novel that the world ever got into a condition of accepting something that is backed by nothing but perception.

The perception of a thing's trustworthiness always builds slower than the perception of panic that accompanies the unwinding of such trust. Thus, the readjustment of other's perception of the dollar vs. gold will graphically be the same image as that of those 1997 Asian currencies against the dollar.
Elwood

SALMON

(05/09/2000; 18:40:24 MDT - Msg ID: 30203)

To All interested in a fair and stable gold price

After reading the recent news on GATA and their efforts towards fair and stable gold prices, and to allow a free gold market, I realize that leasing gold at 1%, selling it, and reinvesting the proceeds is a game for the rich, privileged and powerful. It is a game created by them, for their benefit only.
Here is my question: Has anyone tried to lease, lets say 100 OZ of gold from any source?
Is it possible for a small investor to do this? If a small investor could lease small increments of gold at 1% then why isn't this option being promoted at the same level that Micron Electronics or other investments are being promoted.
JUST imagine one million investors from around the world leasing 100 OZ of gold at 1% and putting it safely away in their safety deposit box at a cost let's say of $300/year (tax deductible). Wouldn't that cause havoc. And, just imagine what that would do to your overall gold holdings!! 100 million ounces taken out of circulation would cause those speculators to run for the hills. It is the only counter defence measure. Can it be implemented? Any comments or thoughts on this?


Thanks

S+

RossL

(05/09/2000; 19:07:42 MDT - Msg ID: 30204)

Clinton: Testimony 'not legally false'

http://www.washingtonpost.com/wp-dyn/politics/A30124-2000May8.html
Matthew J. Glavin, president of the Southeastern Legal Foundation, said the disbarment case against Clinton is clear-cut because "the president lied under oath and obstructed justice," violating "the most basic rules required of those who hold law licenses."

Elwood

(05/09/2000; 19:31:12 MDT - Msg ID: 30205)

SALMON (05/09/00; 18:40:24MT - usagold.com msg#: 30203)

S,
The main problem I see in your plan is that when you lease the gold, you are agreeing to repay the loan in gold. If the price runs it is not you who reaps the reward, but the person or bank who loaned it to you(if they can collect). This is something that the "rich" are about to learn the hard way.

Given that, why lease when you can still exchange your dollars for gold today at such bargain exchange rates. Give MK a call, and you'll see what I mean. The physical owner is truly the rich one. The world has merely yet to recognize them as such.
Elwood

elevator guy

(05/09/2000; 19:38:53 MDT - Msg ID: 30206)

@ Bonedaddy, and ss of nep

Thank you for your responses.

Bonedaddy- It would seem we are at the eve of moral decay, which proceeds the disintegration of our nation. Do you ever get the feeling that the public is getting "dumbed down", unitl we are no more than worker ants, who drool at the thought of a weekend party? MTV rules, you know. Deception and public preception is the game of government and media. We the sheeple are kept in the dark, and fed BS until we cant tell the difference between truth and spin.

SS of Nep- I think gold will always have value, just like real estate.

ORO

(05/09/2000; 19:43:37 MDT - Msg ID: 30207)

Perplexed - WWII and the Empire

The items you refer to are true, but your interpretation is incorrect.

While lending to those under duress may seem like doing them a great favor, in reality, had their favor would have been greater had the US simply let them be and allowed US corporations and European corporations to compete on their own.

The purpose of the Marshal plan was exactly like that of the World Bank and the European Bank of Reconstruction and Development: Create a debt trap in which Europe would forever pay for the Italian French and German defeat (France was a property of Germany, as was Italy when the US won the war). The purpose, though it included the well being of Europe, was to put the people and governments of these countries into perpetual debt service. It was the same thing done to every distressed country on earth.

That Europe may seem ungrateful for the prolonged attempt at turning it into a perpetual vasaal of America and Britain should come as no surprise.

"Good intentions" of the generous left were joined with the profit motive of the banks and some corporations to turn a gesture of magnificense into a source of perpetual ill will.

This, like most other examples of American and transnational "help", was no more than another step towards America and Britain's empire by debt service. The New World Order is on its death bed and will soon self destruct. It will have died of old age. The debt at its heart suffering a stroke of default after many angioplasty bailouts, IMF structural impoverishment loan packages, and years of nitro pills.

The road to hell is paved with good intentions.

After Empire come chaos and servitude. Why? because only when the return on Imperial violence is gone does the Empire fall. When the return is gone, so is the benefit of Empire. When that is gone, so is the economy that built itself on distribution of the stream of goods coming into the land.

Perplexed, the undoing of our local industry is an inevitable side effect of taking the proceeds that are the benefits of our Empire, soon to be lost. If discounted goods and services from abroad are the payoff of Empire, how could you complain of the loss of the need to make the goods locally? How do you think an Anglo house became triple in size relative to the average dwelling in the West? It is because of there being no need to make the other stuff of life, the booty of Empire, that labor is available for the construction of greater and greater houses, shopping malls and two ton cars.

That the tools of empire make the people of the Empire's core subservient to the colonies to supply their needs is the price they pay. When the next generation comes after the loss of empire, it will be unprepared for the results. Watch as it unfolds. Thank your grandparents for providing you with all the liabilities generated by their benefit. Thank your parents for trying to get their own piece of the pie. Finally, slap your own shoulder for selliing out to the system that will soon eat you.

You will soon face the choice between paying them or being bankrupt.

THC

(05/09/2000; 19:47:44 MDT - Msg ID: 30208)

Powerful Thought for the Day

It is almost certain that aboveground stockpiles of gold bullion exceed those of silver bullion.......

In addition, most silver is not produced by primary silver mines. As a result, production volume is not very price elastic.

Should serious money ever begin to flow into the precious metals, silver will fly!!

However, the true shortage before our eyes is platinum......
so that is where my money is.

Open interest on the Tocom is over 1M oz for Plat......this is supported by only 10,000 oz of inventory!!!!

THC

THC

(05/09/2000; 19:59:03 MDT - Msg ID: 30209)

Good evening, ORO!

Msg. # 30207 was excellent, thank you!!!!

Now, should you have time for a few words, I would be interested in hearing about your reasons for feeling that "Tocom Plat Paper is being sold into the ground," if you seen other evidence/sings of such other than the backwardation.

As I noted below, the world's biggest Plat futures contract (Tocom) is linked to the physical world by just 10,000 ounces of inventory!!!!!!!

The potential for a squeeze is significant.

Cheers,

Canuck

(05/09/2000; 20:10:44 MDT - Msg ID: 30210)

CRB

Bridge/CRB Current Quotes
Other Futures Markets

Bridge/CRB Index


Page snapshot Tue 09 May 2000 16:37 ET
Description Last Change Percent Change
Bridge CRB Futures Price Index 217.75 +2.05 +0.95 %
Bridge CRB Index 217.13 +1.42 +0.66 %
Energies

Description Last Change Percent Change
Natural Gas 3.18 -0.003 -0.09 %
Crude Oil 28.5 -0.15 -0.52 %
Unleaded Gasoline 0.9455 -0.0051 -0.54 %
------------------------------------------------------

CRB at 217.75; Crude well over $28

Canuck

(05/09/2000; 20:13:20 MDT - Msg ID: 30211)

Debt

The Public Debt To the Penny
Current
05/08/2000 $5,662,693,356,964.51

CURRENT
MONTH AMOUNT

05/05/2000 $5,662,392,522,569.88
05/04/2000 $5,661,532,699,593.02
05/03/2000 $5,658,066,936,728.56
05/02/2000 $5,669,550,992,339.00
05/01/2000 $5,660,725,641,994.27

SHIFTY

(05/09/2000; 21:05:17 MDT - Msg ID: 30212)

RossL/Simply Me

The coins I heard about were not proof coins. From what I heard some were just found, and were overlooked because they were just a bullion coin. I don't know how long ago they were found, but I was under the impression that it was a recent discovery.

schippi

(05/09/2000; 21:27:23 MDT - Msg ID: 30213)

Select Gold Hourly Chart

http://www.SelectSectors.com/agpm70.gifFSAGX moving Up!

Black Blade

(05/09/2000; 21:54:36 MDT - Msg ID: 30214)

Leland and msg #30184

Generally have to agree about nuclear power, however, politically not likely to become a primary power source. Solar and wind power are prohibitively expensive and usually sold to wealthy tree-huggers during this transition to deregulated power. Natural gas is relatively clean, however, regulatory agencies are slow to act and building NG power generating plants take time. As far as electric vehicles becoming comon place in the near future (3 or 4 years), I wouldn't count on it. It would be a tremendous power drain. The contruction of such vehicles usually require more energy (and pollution for that matter) than the conventional internal conbustion engine. The viability of clean electric cars in the near future is truly a pipe-dream. Besides, one would have to be able to find a wall socket at every stop, or have one veeeerrryyy long extension cord ;-)

TheStranger

(05/09/2000; 22:00:06 MDT - Msg ID: 30215)

ORO #30194

ORO - thanks for reviewing your ideas on productivity. More than any other element to the inflation picture, I think a misplaced confidence in productivity growth accounts for why inflation has caught so many by surprise. Amazingly, as late as just a few months ago, I would say a majority even in this gold forum were arguing AGAINST inflation (imagine, in a GOLD forum). Your insight in this area has been helpful in exploring this question.

"What is the marginal value of gains in productivity?", you ask. Evidently, Alan Greenspan has decided that, thanks to the wealth effect, there is none. From an article on the subject in yesterday's Wall Street Journal:

"Mr. Greenspan mixed and matched statistics to discern wealth effect
patterns. His research indicated to him that, even if it were wholly rational,
the bull market was hauling the U.S. economy into warp speed by
generating greater spending.

"Indeed, the more he and his colleagues believed that the New Economy
and the stock market made sense, the more they worried that the economy
was veering out of control. At policymaking sessions through late 1999 and
early 2000, intense debates broke out as officials grappled with the ways
that changing productivity affects the economy. It was a question the
central bank hadn't confronted for four decades. Fed Vice Chairman
Roger Ferguson literally dusted off his old macroeconomics textbook from
college.

"Fed officials were concluding that, contrary to popular belief, soaring
productivity did not necessarily mean the central bank could afford to keep
interest rates low. In debates, the more aggressive anti-inflation hawks,
Fed governor Laurence Meyer and Richmond Fed President Alfred
Broaddus in particular, argued that higher productivity could actually
require higher rates. That's because the supply created by accelerating
productivity takes time to build, but a stock market soaring in anticipation
of that higher growth creates instant demand."

Black Blade

(05/09/2000; 22:07:08 MDT - Msg ID: 30216)

Bonedaddy, ss of nep, and elevator guy

You guys sure have had an interesting discussion today. It make one think. perhaps, a comparison could be made between the "Rise and Fall of the Roman Empire" and the History of the USA. Somehow, and for some reason I tend to compare Billy Clinton to Caligula. Hmmmmm................

Elwood

(05/09/2000; 22:09:57 MDT - Msg ID: 30217)

Trail Guide (5/9/2000; 5:40:58MT - usagold.com msg#: 30157)

You state:
"I know The Golden Sextant is following that line of Swiss gold filling Euro loans. The problem is that it's not. They
feel comfortable letting the dollar faction figure it out themselves. Euro Zone banks know that the entire Gold arena
will shut down once this US supply line is cut off. They are
not so dumb as to fill their paper with physical when the rest of the world is force settling in cash. They will not "
blanket" cover all loans. Just the important ones vital to oil supply. This is the real leverage that will bring on Oil
for Euros! Get the picture!"

I reply:
Ah! But at what price? If the private Euro Zone banks know this is coming wouldn't they want to cash settle at current prices? Could the Swiss sales allow them to do this? I understand they would never let their gold be used by the dollar forces to deliver against their paper, but what will the SNB say to their people when the gold price runs, and they find no one willing or able to deliver the 300+ tonnes they've loaned? Could the Swiss sales be a way for the Euro forces to allow their own banks to cash settle with the BIS/ECB system today much like the British are trying to do with their BOE physical? Doing it this way would let the private Swiss/Euro banks off the hook when the price runs while ensuring the public institutions a minimum of defaults from Euro Zone borrowers. It's a sticking point, I admit, but it's coming from a man trying to break free of his "western thinking" shackles. As such it's hard for me to understand the BIS/ECB forces will leave their respective private banks twisting in the gale of a running gold price.

You continue:
Elwood, I agree that everyone is still trying to milk whatever gold out of the system they can get. This was a driving factor for allowing the US to "save some face" by forcing oil prices down some. Onec the gold flow stops (and it may be right now) oil ril rise fast and furious!

I reply:
Very intriguing statement! This makes me wonder what a graph of oil imports plotted against gold exports would look like. Hmmm. I am at the mercy of this government data which, unfortunately, is not very timely.
Elwood

ORO

(05/09/2000; 22:12:13 MDT - Msg ID: 30218)

THC - TOCOM Plat Paper

You are pointing out that TOCOM has not significant Pt to deliver.

You point out the backwardation.

Surely no one seeking delivery of physical platinum will find reason to buy a TOCOM futures contract.

That leaves futures buyers of only two varieties: The uninformed speculator, and the short squeeze engineer. The latter would be naive to think that there there is a chance that TOCOM would allow the price to spike so high that the stranded TOCOM principals would suffer substancial losses. TOCOM would suspend delivery rights that much more quickly than it did with Pd, before the major price spike can fully develop.

If a major holder of current month futures asks for delivery he will be coaxed and threatened out of the position, else the exchange will suspend delivery before the music stops.

As TC has indicated before, the trick is to prevent profitable excercise of options and futures of the deliverable month by making it appear better to buy a future month. This is done by selling futures agressively, below market, and selling underpriced futures call options for the non-deliverable month. So long as there is any Pt store available for lending, it will be used to arbitrage the contract price from the current month to the spot month.

Under these circumstances, it is not the supply and demand balance on current and future Pt for delivery that dictates price, it is the availability of Pt inventory for borrowing.

Any future month can be more aggressively sold than the one being bought when a financial firm with unlimited credit is trading. The price will be arbitraged into the spot month so long as SOME interest rate (payable in currency) is more attractive to Pt holders than the holding of the Pt itself.

TheStranger

(05/09/2000; 22:41:13 MDT - Msg ID: 30219)

Newmont and The Dead Cat

I don't usually comment on day to day market activity because I know there is no quicker way to make a fool of myself. Still, it should not go unnoticed that Newmont closed near 27 today. It is now up fully 100% from its 1998 low. This is the first time, since that low, the stock has done so unassisted by such bullish events as last September's Washington Agreement. To get an idea of what an achievement that is, consider that bullion will not achieve the same benchmark until it closes above $500. I believe the whole XAU would have better reflected the strength in Newmont had it not been for the short-sighted hedging policies so prevalent in the gold mining industry. And were the XAU higher, so, undoubtedly, would be the price of bullion itself.

Also - I think it is clear now that the dead cat bounce in the Nasdaq is over. This is, after all, a bear market. Volume on the OTC is now running at less than half of what it was just a month or so ago. The low volume is one clear indication that the average Joe has decided not to capitulate but rather to grit his teeth and bear it out. This is a naive decision many may regret for years to come. Rising volume would indicate the kind of wholesale surrender which is common at important bottoms. As volumes diminish day by day, what we have instead is merely a bear market-variety buyer's strike. As inflation further establishes itself, I am afraid, so will interest rates continue to rise. As interest rates continue to rise, so will demand for high PE stocks continue to wane. Thus spake a Stranger.

THC

(05/09/2000; 22:51:07 MDT - Msg ID: 30220)

Oro - Continued Discussion re Tocom Plat

Oro,

Thank you for the quick response.

I feel a bit like the "three blind men each touching part of the elephant, and trying to describe it." We see the same phenomenon, yet our interpretations are significantly different.

Let me respond to a few of your thoughts:

1. "Surely no one seeking delivery of physical platinum will find reason to buy a TOCOM futures contract. That leaves futures buyers of only two varieties: The uninformed speculator, and the short squeeze engineer."

I think we need to keep in mind that probably 98% of those who buy/sell futures have no intention of taking/making delivery. The futures market allows them to control risk, lock in prices, speculate, and make/take delivery, depending on their situation.

The delivery mechanism is not of *immediate* importance to most futures users, but it is essential to insure the pricing tie with the physical markets, and to allow for delivery when deemed necessary.

And to date it has been possible to take delivery of Pt. 70 contracts were delivered at the expiry of the last contract.

BUT � should a big player try to take delivery, the game is over. This is exactly as you and TG, TC, etc. have pointed out.

2. "As TC has indicated before, the trick is to prevent profitable excercise of options and futures of the deliverable month by making it appear better to buy a future month. This is done by selling futures agressively, below market, and selling underpriced futures call options for the non-deliverable month."

Oro, I would like to request that you reconsider the above statement in light of the open interest in each contract (http://www.tocom.or.jp/kan_toku/kan_toku_pt_e.html). The open interest of the December 2000 contract is about 6 times that of the June 2000 contract. Shorting futures would have a diluted effect due to the high volume/OI, but trying to buy back would have a strong upward effect on prices due to the low volume/OI.

In this sort of market, anyone trying to short the far out months and buy back (they MUST either buy back or deliver) the close months would suffer massive losses.

Is this a likely strategy of a major player? If you think it is likely, could you show me a specific example of how one could do it with Tocom plat without incurring massive losses and exposing oneself to a destructive squeeze?

Thanks again for sharing your thoughts.

THC

THC

(05/09/2000; 22:58:31 MDT - Msg ID: 30221)

Oro - Tocom Reference Info

Oro, for your reference here are the latest plat prices for each Tocom contract.

http://www.tocom.or.jp/souba/souba_e.html

I would imagine that anyone shorting the far out futures and buying back the near futures would incur serious losses due to the backwardation (just like those going long far out and selling near futures for gold/silver on the Comex have lost money for most of this decade, due to the contango).

Thanks,

Elwood

(05/09/2000; 23:01:57 MDT - Msg ID: 30222)

Trail Guide

I think it just hit me. I've been assuming that the gold price will run in both Euros and Dollars. I forgot what I read in the archives that both the gold price and the Euro price will run against the dollar. That's where I missed it. The private Euro Zone banks must be converting their dollar gold loans to Euro gold loans as we speak. When they cash settle, the private banks won't be ruined, maybe just roughed up a little. That still leaves the national banks out their gold. Will they just write it off?

ORO

(05/09/2000; 23:42:09 MDT - Msg ID: 30223)

THC - profit motive and outstanding positions

I will say that OTC contracts normally outdo exchange contracts by a 10:1 ratio in financial instruments. Furthermore, a precious metal of any liquidity would have a banking system behind it. This would mean that the trading on the exchanges by large players may be protective in nature. When possible, it is nice to have a profit from exchange trading, but the purpose of participation is to protect the natural short position inherent in the nature of bullion banking from exposure to price risk - and more importantly, loss of confidence in the bank.

By their nature, bullion banks are leveraged and illiquid. If enough of their customers ask for physical delivery of metal in their accounts the bank simply goes under and is liquidated. If their bullion borrowers are insolvent because of a price move against them, then the bank will have suffered a default and not have a metal debt owed it to balance out the metal it owes. The bank would be insolvent in terms of the particular metal. Thus all assets of the bank would be at risk to be traded for metal to satisfy withdrawing clients.

So, the purpose of the action we speak of here is not to make a profit on the exchange from the price swing itself, though that is a nice kicker. The purpose is to prevent a bank run through the insolvency of particular borrowers, particularly the bank's trading subsidiaries and large leveraged clients that are short.

Whatever payment can be made in currency or financial instruments is something the bank can cover through interbank loans or from its CB. PMs are not supplied in quantity by any CB, and the interbank PM lending system seems nearly tapped out after decades of operating in a supply deficit. Thus fear of delivery requests far outweighs direct profit motives.

In a way it can be called the survival motive.

THC

(05/09/2000; 23:55:34 MDT - Msg ID: 30224)

Oro - How much longer?

Ahh, yes. Oro, you've "got the right stuff"!

It is true that OTC transactions are probably much larger than those in the open markets. And while the OTC market is completely opaque for those outside of the loop, I would imagine that the situation must parallel that in the open markets (deep backwardation, high lease rates).

Now, to be completely honest, it is clear from the Tocom prices that those who have been rolling short positions (Engelhard short 5000 contracts for past year) are bleeding heavily, with their money being transferred into the accounts of the longs (GRIN***).

BUT, Engelhard is slowly buying back it's shorts, and I would imagine others are getting tired of this.......

How much longer can it go on?

As far as I am concerned, they can continue it forever, because it is easy to play.........but will it last??? I can't imagine this free money machine will stay in existence forever.

Perhaps I should take delivery of a few bars and hold the warehouse receipts (ala Ted Butler)?

Thanks again,

THC

Leland

(05/10/2000; 00:14:35 MDT - Msg ID: 30225)

Black Blade, to Your #30214, I say "Kudos"!!

And those that favor atomic energy sources have their points
too. Here are a few...and I listen...they may be right...
I. THE COMMODITY: URANIUM

FACT:
Uranium is the fuel used by nuclear reactors to generate 17% of the world'
electricity.

FACT:
Uranium is an extremely concentrated and efficient fuel, much more so than
oil or coal. The following table shows the extent to which this true:

-------------------------------------------
Energy Source Electricity Produced
-------------------------------------------
1 kg of firewood 1 kwh
1 kg of coal 3 kwh
1 kg of oil 4 kwh
1 kg of uranium 50,000 kwh
-------------------------------------------

FACT:
The 1997 Kyoto Protocol called for significant reductions in worldwide
carbon dioxide emissions. Currently coal, gas and oil account for 63% of
the world's energy demands. Since nuclear power is the cleanest form of
energy available, it can be expected to play a growing role in helping
nations achieve their emission reduction targets.

FACT:
World production of electricity from nuclear power is increasing, with much
of this increase coming from Asia. Reuters has reported projections that
Asian electricity usage will grow five times faster than the developed
industrial world. There are currently 119 nuclear reactors operating in
ten countries in Asia, and 37 more under construction. This latter figure
represents 75% of total worldwide nuclear plant construction. Nuclear
power is clearly the preferred power source in this part of the world as it
is growing faster than alternative sources of electrical power generation.
Plans are in place to build many more nuclear power plants in the future.

FACT:
World nuclear reactors currently consume about 170 million pounds of
uranium oxide annually. Production supplies less than half of that total.
World consumption of uranium has exceeded production for several years.
The shortfall has been made up from existing inventories held by utilities,
producers, governments and others. This draw down can only continue for so
long. Over and above current annual demand, excess western world
inventories are now estimated to be less than one year of worldwide
consumption.

FACT:
In 1999 world uranium production decreased by 7% to 82 million pounds,
while western world production fell by 10% to 65 million pounds. Over the
next ten years, production from existing western mines is expected to
decline as reserves are depleted. On the other hand, consumption is
projected to increase.

FACT:
Uranium fuel accounts for only 2% to 5% of the operating costs associated
with generating nuclear power. A price increase in uranium would therefore
have little impact on production costs.

FACT:
It normally takes several years for new uranium discoveries to be developed
into producing mines. Due to the lead time required for new uranium mine
development, a significant increase in the market price of uranium will not
result in an immediate comparable increase in production.

FACT:
The uranium market has been in the doldrums for several years due to over
supply conditions and an end to the "cold war". The last big boom in the
late 1970's drove prices to US$40.00 per lb. Several experts believe that
the stage is being set for another major upside price move. The current
price for uranium has been fluctuating in the area of US$9.00 per lb.

FACT:
Nuclear energy has many advantages. It has received a bad rap from some
misinformed press and others with their own political agenda. Make no
mistake about it - nuclear energy is actually the cleanest, safest, and
most efficient energy (electricity) source there is. The facts prove this.
If you are concerned about nuclear power plants, then ask for the "SECOND
OPINION" article on this subject.

QUOTE:
"The simple facts remain that the industry [uranium] continues to produce
half of what utilities consume, that almost no new mines are being
developed, and that inventories continue to be drawn down at high
rates.......... The potential for a uranium price increase is excellent and
not very dependent on economic cycles."
View Yesterday's Discussion.

SHIFTY

(05/10/2000; 00:53:46 MDT - Msg ID: 30226)

China

I am afraid China will get most favored nation trading status, now known as NORMAL trading status. When you have Carter, Ford , Bush , Clinton, Gore, and little George Bush all pushing it.
They all have a China First agenda. With both Bush and Gore in love with one world government , China, and free trade, I fear that the average citizen thinks there is a difference in these two men. There's NOT A DIMES WORTH!!The sheep are asleep as wolves slowly CREEP! I will no longer vote Republican/Democrat if this is the best they can do. I love my country and think too much of it to vote for these #*&@%$&@$^*. I told a friend it looks like I will vote for Pat Buchanan. He told me that if I did we would get Al Gore! Is that worse that Bush? Lets see .....I can have a rootcanal with a corkscrew! or a rootcanal with a corkscrew! or Pat Buchanan ? I think Pat the goldbug Buchanan is looking like it for me.
That's been on my mind all day and I needed to vent.

Black Blade

(05/10/2000; 00:57:53 MDT - Msg ID: 30227)

Leland, a little more on Nuke Power

You may be right about the decrease in available Uranium. Permitting for any mine in the US is extremely difficult. Some known sources in the southwest are off limits as they are now part of national monuments, parks, military reserves, etc. One area is now the Escalante Staircase National Monument, southern Utah, recently created by Bill Clinton by dictatorial decree. This area also holds the largest known low-sulfur coal deposit in the western hemisphere (should also be noted that in the state of Utah Billy Clinton came in third behind Ross Perot in the 1991 election, possible revenge motive?). The only other large low-sulfur coal deposit is in Indonesia and owned by Lippo Bank (Contributors of illegal campaign funds to Billy Clinton through John Huang). One source of Uranium is the reprocessing of old fuel rods. Old Uranium fuel rods are reprocessed at some DOE sites such as the Idaho National Engineering Laboratories (INEL) in south central Idaho. Most old Uranium mines are either shut down or are becoming depleted of ore. Some recent sources of Uranium have been from the former Soviet Union stockpiles, however, these too are likely to be depleted in short order. The old-style graphite nuclear power plants in the old Soviet Union (such as Chernobyl) are of poor design and are extremely hazardous. These power plants are not likely to continue operations for many more years, unless of course the world is ready to stand by and let another disaster occur. The west is currently working with the North Koreans trying to build new nuclear power plants so that they conform to modern standards, while at the same time decommissioning their old Soviet era graphite power plants. The Japanese have done quite well with nuclear power over the last few years, as have the French. In short, it does not look as if the political powers in the US are about to allow any new resumption of nuclear power generation anytime soon. There is a movement to reduce and eliminate coal-fired power plants. Therefore it would seem logical that Natural Gas power plants will become the major source of power in the near term unless attitudes about nuclear power change.

Leland

(05/10/2000; 01:40:10 MDT - Msg ID: 30228)

Black Blade, You and I Agree!! Your Response is a Great One!!

To keep up with oil and gas developments, do you read the
HOUSTON CHRONICLE? Here's one of their latest on natural
gas price...
http://www.chron.com/cs/CDA/story.hts/business/546441

Leland

(05/10/2000; 01:44:34 MDT - Msg ID: 30229)

Please excuse, let me paste that link properly...

http://www.chron.com/cs/CDA/story.hts/business/546441We can all watch this TOGETHER

ORO

(05/10/2000; 02:05:05 MDT - Msg ID: 30230)

THC - The Money Pump

A long time ago I was discussing with FOA the possibility of using cash settled call options options being sold endlessly by the large Bullion Banks with the Fed being ready to lend the Bullion banks any amount of dollars to cover the obligation. That was an alternative to the Fed selling these calls to the Bullion banks itself.

I pointed out that if such a system were being applied and was challanged by purchases of physical gold beyond the ability of the bankers to coax gold out of current holders, then the calls would turn into a money pump - creating more and more dollars in call holder's accounts, thereby turning the calls into a mechanism for pumping dollars. As the POG progresses, it would force the bankers to borrow ever more in order to satisfy the calls and avoid further purchases of physical. As more dollars are created, the ratio of dollars available per oz gold would ever grow. When the dollar size of this market reaches major proportions, the additional dollars would cascade into an acceleration of the global dollar supply growth - both relative to the gold supply and the global economy.

These contracts (if they were there), while diverting gold investor's flow away from physical, would still pose the same problem of causing exponential explosion in the gold (or other PM) price - by supplying dollars (i.e. fuel) to people who want gold. If this cascading effect gets started, the physical price will rise between the close of an option sale and settlement.

Rhody

(05/10/2000; 04:18:59 MDT - Msg ID: 30231)

@ TRAIL GUIDE

The only gold mining company that I know has the capacity
to fabricate both gold jewelry products and bullion wafers
is Harmony Gold Mines. It would appear to me, that this
gold equity (paper gold investment vehicle) would have the
potential to shift its product sales into EUROs should the
buying power of USDs implode. Do you know of any other
such companies?
Please note, that I still do not believe such a vehicle is
safe should there be a total implosion in value of the USD,
but HGMCY may be a safer vehicle to weather the initial
stages of the coming storm.
If there is a massive inflation of gold "value" in USDs,
I do agree that the threat of profit confiscation by
gov't surtax on mines is real. In the long run, such surtaxes would curtail production of gold leading to an
upward price spiral that would also undermine the EURO in
time as well. After all, the EURO is still a fiat currency.
What am I missing here?

HI - HAT

(05/10/2000; 04:47:55 MDT - Msg ID: 30232)

ss of nep Psyche

True wealth crises, the impoverishment of the psyche. Most do not see this.

They may have to starve as the price of re-admission. Hidden Truth not found in self deceit.

Can any of us really have inner respite amidst a sea of violent vomit that drouns the universal mind of all dignity.

In the end-game, nobody is right if everybody is wrong. This the dis-embodied talking heads cannot say.

ss of nep

(05/10/2000; 04:51:01 MDT - Msg ID: 30233)

Alternate energy

http://www.mega.nu:8080/tesla.html
Some of this sounds quite similar to what is
in Atlas Shrugged( although its been so long
I don't really remember ).

HI - HAT

(05/10/2000; 04:54:35 MDT - Msg ID: 30234)

Everybody

You are only important for a little while.

ss of nep

(05/10/2000; 04:56:53 MDT - Msg ID: 30235)

Weird Scenes Inside the Gold Mine

The End

ss of nep

(05/10/2000; 05:28:47 MDT - Msg ID: 30236)

HI - HAT (05/10/00; 04:47:55MT - usagold.com msg#: 30232)

HH - True wealth crises, the impoverishment of the psyche. Most do not see this.
SS � Most males spend their free time watching Monday night football, basketball, baseball,
Golf, �� Most women spend their free time shopping for another pair of shoes, these
Things are promoted by the mass media �.


HH - They may have to starve as the price of re-admission. Hidden Truth not found in self deceit.
SS � They don't know where the truth is to be found( if it exists at all ) all around the people are
Continuously lied to, from the time they begin to interact with others �. They concede and
Revert to the mind numbing sport watching and shopping sprees

HH - Can any of us really have inner respite amidst a sea of violent vomit that drouns the universal mind of all dignity.
SS � To find what is needed one must � eliminate the ongoing unrelenting distractions offered by the so called
Western capitalistic society � turn off the internal dialogue

HH - In the end-game, nobody is right if everybody is wrong. This the dis-embodied talking heads cannot say
SS � Does correctness exist, I certainly don't have the answer, however the "dis-embodied talking head"
( ie Clint-pig-ula ) will do nothing but lie.


HI � HAT: your post was too cryptic for me.

ss of nep

(05/10/2000; 05:33:39 MDT - Msg ID: 30237)

Leigh (5/9/2000; 8:57:03MT - usagold.com msg#: 30172)

You stated - "there's a better world than this one"


So, pray tell, just where is it.

ss of nep

(05/10/2000; 05:40:57 MDT - Msg ID: 30238)

SHIFTY (5/10/2000; 0:53:46MT - usagold.com msg#: 30226)

You, I believe, are quite correct.

Those on your scum list "Carter, Ford , Bush , Clinton, Gore, and little George Bush" as well as the others,
are, hand picked then groomed for thier life near to top
of the food chain, they have no good intentions for the commoners.

SteveH

(05/10/2000; 05:48:16 MDT - Msg ID: 30239)

Article stating gold may be next NASDAQ...

http://www.kitcomm.com/comments/gold/2000q2/2000_05/1000510.070302.gwyzeeeee.htmORO,

So, is that what is happening? Is the ratio of dollar to gold increasing exponentially?

Is there an option expiry in conjunction with the next Bank of England Gold auction in a few weeks? (this may be the catalyst that launches the XAU and gold too) After all it did the second auction (if memory serves me correctly).

Gold (futures) up $1.7.
EURO up at 91.47.
Dollar down $.47 at 110.23.
S&P Future (premium) and DJIA in the red.
EBAY now below its all-time support level!
CISCO being investigated in a stock irregularity with a bought company's stock.
BRE-X was three years ago.
Soros buying gold? (http://www.minesite.com/news2.htm)

Leigh

(05/10/2000; 06:09:15 MDT - Msg ID: 30240)

ss of nep

Hi, ss. I was referring to Heaven, where the Creator of all life reigns and the streets are paved with gold. Who wouldn't die smiling, knowing they would soon be there? However, this isn't a religious site, so I can't say more.

ss of nep

(05/10/2000; 06:17:04 MDT - Msg ID: 30241)

ORO

You Stated - "The New World Order is on its death bed and will soon self destruct".

Now, if you are correct then I submit that TPTB will take the rest of the world down with them, as they don't like it when they don't get to win.

We will see.

Welfare States do certainly apppear to be in decline.

Then it will be Chaos( my dog's name ).

Gold may do for awhile.

Food and shelter will become more important.

IM( not so )HO.

Cheers.

ss of nep

(05/10/2000; 06:19:14 MDT - Msg ID: 30242)

Leigh (05/10/00; 06:09:15MT - usagold.com msg#: 30240)

Polycarp.

SteveH

(05/10/2000; 06:20:42 MDT - Msg ID: 30243)

All eyes on the Fed, in the meantime

think about this.

Why is the Fed given such focus in the markets? It is as though the Fed is the only factor that can move a market? I think not, yet every pundit forces us to watch their next move yet the real market movering work in the shadows setting a trap until one day folks turn and say, "Now, where in the heck did that come from?"

Yep, divert attention from the root causes and blame the Fed. What poppycock.

SteveH

(05/10/2000; 06:21:54 MDT - Msg ID: 30244)

All eyes on the Fed, in the meantime

http://dailynews.yahoo.com/h/nm/20000429/bs/stocks_leadall_2789.htmleom

Black Blade

(05/10/2000; 06:27:09 MDT - Msg ID: 30245)

Morning Wakeup Call! and Re Leigh msg#30240

Source: Bridge NewsAsia Precious Metals Review: Spot gold at US $277-278 per ounce By Polly Yam, Bridge News

Hong Kong--May 10--Spot gold moved between U.S. $277 and $278 in Asia on Wednesday in sluggish trading due to unclear price direction, dealers said. Short-covering buying from Japan supported spot platinum, they said, adding trading of silver and palladium was sluggish.

Dealers reported that physical buying was minimal on Wednesday, as many participants expected massive selling to emerge above $280. They noted that trading from Australia also was thin. "Many players couldn't decide price direction. And, gold remains weak in the middle term," one dealer commented, referring to the planned Swiss and U.K. gold sales. The U.K. Treasury plans to auction 25 tonnes of gold on May 23, while the Swiss National Bank plans to sell a maximum of 120 tonnes of the metal on the market between May and September. In the near term, dealers see gold remaining to move in a narrow range below 280. Short-covering from Japan underpinned spot platinum prices, but the buying did not extend to the palladium market, dealers noted. "Even Japanese have had little interest to trade palladium," another dealer said, adding without Japanese players, the Asian palladium market remains dull. In Japan, gold, silver, platinum and palladium contracts on the Tokyo Commodity Exchange (TOCOM) rose on Wednesday in response to an increase in the COMEX and NYMEX in the United States, TOCOM dealers said. They noted that Wednesday's weaker yen against the U.S. dollar triggered buying on TOCOM, particularly on gold and platinum contracts. Trading in the four metals was relatively sluggish, they added. "Many individual investors have focused on the currency market and reduced investment in precious metals markets," one TOCOM dealer said.

Black Blade: So slow overnight even Bridge, This is about all Bridge can come up with. It seems that everyone is just waiting on the sidelines for something to happen or maybe for the markets to make a move. Meanwhile the Nikkei dropped over 140 points again. But why play on the TOCOM? They keep a changin� the rules of the game, and if you don't like it, they pick up their marbles and go home! Free Market my A**.

Black Blade: Hey Leigh! If the streets are really paved with gold beyond the pearly gates - I'm takin� me a Jack Hammer! ;-)

ORO

(05/10/2000; 06:51:55 MDT - Msg ID: 30246)

SS of nep

I dare say they would not take the world down with them because then they would have nowhere to go.

Christopher

(05/10/2000; 06:54:28 MDT - Msg ID: 30247)

Leigh msg#30240, Black Blade msg#30245

Ah Leigh, I often look forward to that day, when I tread upon those Golden streets.

Black Blade, Why would you want to pack around pavement?
If they make it, the gold shorts will be happy in Heaven.

ORO

(05/10/2000; 06:57:26 MDT - Msg ID: 30248)

SteveH - gold pump

Point is that the degree to which the Fed will help the BBs is still in question. Furthermore, these call options are "theoretical" in that they are not listed seperately in any public report.

Their existence is implied from market behavior, not from the reports available.

Leigh

(05/10/2000; 07:25:13 MDT - Msg ID: 30249)

Gold Shorts in Heaven?

I don't know, Christopher.

Black Blade, no need for a jackhammer. You'll hardly even notice the gold streets as you gaze upon the shining jewels, listen to the angelic music, and partake of the luscious fruits growing along the riverbank.

JavaMan

(05/10/2000; 07:33:08 MDT - Msg ID: 30250)

Hi All...

http://servant.gentle.org/encouragement/polycarp.htm
There was an interesting spectacle on television last night, "The Smartest Kid in America". It looked to me like more entertainment for and from the "Millionaire" crowd. Fifty of the top brains in the country all age 12 or less. A sample of the talent included, a girl who was expecting to graduate from college by age 16. Another who had read 600 books by age 7. And the list goes on, one with perfect SAT scores, mathematics geniuses, music geniuses, etc., etc.

The elimination began with questions put to all 50 contestants and they would record their answers electronically. Immediately after each question, the percentages were displayed on the tv screen indicating how many answered a question correctly and how many answered it incorrectly. I don't recall the nature of many of the questions but they were doing quite well with the percentage of correct answers being anywhere from approximately 55% to 90%. Then came the question, "What is the following part of the US Constitution called: We the people of the United States...". The first and perhaps only question where the majority of the whiz kids (55%) answered incorrectly.

Then, on to the direct, "face off" competition, one on one where the first to know the answer presses the buzzer gets to answer the question. These kids were answering questions like "What is the first number that is both a perfect square and a perfect cube?", what is the sum of the first 10 prime numbers, (no pencil and paper allowed) in just a couple of seconds.

But then, another (impossible) question, "What document is the following from: When in the Course of human events, it becomes necessary for one people to dissolve the political bands...", no one got the answer right.

These kids could tell you what planet has the moons Phobos and Deimos, but they didn't know which two countries share Tierra del Fuego. Nobody could say who wrote the Iliad and the Odyssey.

I got up and left when the one rocket scientist said the person he most wanted to meet was Bill Gates.

Leigh, no gold shorts in heaven...I think that is the unpardonable sin, isn't it?.

Sir ss, Polycarp may not have had a smile on his face, but if you check out the link above (nice music too), I think you'll see he had a smile in his heart...

ORO

(05/10/2000; 07:40:06 MDT - Msg ID: 30251)

Indicators of gold derivative changes

The gold derivatives reports continue to indicate a shift from European obligations to US obligations, chief among them those gold obligations of Morgan Guarantee.

Throughout the last 3 years, there has been a transition of gold games from the London arena and UK and EU institutions to US institutions. From a market share of 20% of gold derivatives and 3000 tonnes in 1995-6, US banks have grown their notional contracts to nearly 10000 tonnes and a more than 50% share of the gold derivative marketplace. regression of the derivatives position from 1995 to 1999 Q3 indicates that at least 75% of outstanding obligations stemming from these are short positions.

Morgan, after absorbing the BT/Deutsche position during the 99 dip in Q2, has likely taken on the Republic/HSBC position as well.

As Reg Howe has noted, there is a distinct trend of rolling over the derivatives towards far off maturities. This puts down the near term supply deficit pressure on the POG.

I would guess that UK has been spared the embarassment of its main financial houses going under during a gold squeeze and that US banks have been picking up the positions upchucked by UK and EU banks in order to prevent the gold price spiking too early - before the UK is delivered into the EU.

The UK bailout by both the US and the EU is a sure sign that some deal was cut to allow London's survival as a financial center in the future.

Henri

(05/10/2000; 08:05:36 MDT - Msg ID: 30252)

Uranium/Natural gas

I read some time ago (2 years) that the stockpiled uranium (already mined) in the Ex Soviet states and elsewhere (south African area/australia) is sufficient to run the existing nuclear infrastructure for the next 20 years. That is why the existing production supply was curtailed to the extent it was. The curtailed mining still in place is merely to maintain the "mothballed status" of the ops in the event of cheap supply disruption. A platinum style Russian supply cutoff is not in the cards because there is not a significant draw on the russian stockpiles (yet).
Anything else you hear is hype.

Natural Gas prices spiked mainly because of the unusual spring heat wave that caught most electric utilities with their shorts down. During the spring and fall in traditionally low power draw months (no heating or AC)many generating facilities shut down for their yearly maintenance activities. The suprise heat wave caused a tremendous draw on the grid and gas turbines were fired up and ran flat out during the weather "transient" Those suckers use a LOT of natural gas to run.

ss of nep

(05/10/2000; 08:16:09 MDT - Msg ID: 30253)

JavaMan

http://www.crossroad.to/text/christian_persecution/polycarp.html

JavaMan

(05/10/2000; 08:24:41 MDT - Msg ID: 30254)

ss of nep...

Thankyou.

Leland

(05/10/2000; 08:44:29 MDT - Msg ID: 30255)

"Internet Security"...Words From Bill Gates...I Like it!

http://www.stockhouse.com/shfn/may00/051000com_micro.aspGates stressed that the greatest obstacle to the continued development
of the Internet as the foundation for the new economy is a sense of
security. At the moment, corporate data is notoriously insecure.
Passwords are a weak link made weaker by poor administration and a
lack of understanding of their significance. Gates derided the ease with
which a malicious individual can often gain access to mission critical
systems by placing a call to a support center and saying that they had
forgotten their password. Users also fail to grasp the significance of their passwords--"people are writing
them down," and reusing them on other systems Gates noted. "We need to move away from
passwords."

...Click for more

USAGOLD

(05/10/2000; 09:03:56 MDT - Msg ID: 30256)

Today's Report: Currency Wars Pushing Investors to Gold

http://www.usagold.com/Order_Form.htmlMarket Report (5/10/00): Gold firmed slightly on a weaker dollar and some anticipation over
tomorrow's producer price report. The euro is in a recovery mode the past two days on hints
within the European Union that the central bank might move to support the ailing currency. French
finance minister Laurent Fabius was quoted as saying currency intervention was a "weapon" in
Europe's arsenal and that the euro "could rise in coming weeks." French Prime Minister Jospin
also voiced his dissatisfaction with the euro's performance. This served as warning to speculators
who began squaring positions in case the ECB made a sudden move to defend the currency. In the
past two days, the euro has risen by one and a half cents. Illustrating the sort of problems the
Europeans are having in co-ordinating currency policy, a member of the German Bundesbank
board took a tack opposite the French proclaiming yesterday morning that there was no point in
defending the euro unless the United States and Japan went along with it.

Euro weakness has been a key factor in sustaining the gold price in recent weeks as European
demand picked up among portfolio hedgers who don't trust either the euro or the dollar, and it
could continue to figure into the financial scheme as long as currency policy confusion persists on
the European continent. Strong physical demand continues in Asia where investors, still smarting
from the contagion that deprived them of a good part of their savings in the late 1990s, hedge
against any further onslaught along the same lines. In addition, the formation of a currency
defense bloc among key Asian nations reported last Sunday not only served as warning against
currency speculators, it signaled future battles in the currency wars that can be remedied most
simply with a personal gold diversification. A quick visit to a gold chart in any one of the
currencies damaged by the contagion provides more than inducement to the ordinary investor.

On the negative side of the ledger, weak currencies in two key gold producing states -- Australia
and South Africa -- have prompted some producer forward selling, according to Reuters' reports,
but one wonders who would sacrifice their production at these prices given the currency problems
around the world and the latent gold demand building as a result. Our guess is that this hedging is
minor though it makes for good press among those gold shorts given to talking their books.

We continue to advise the purchase of gold at these bargain basement prices in anticipation of a
spike upward at some point in the future, not to speak of the high degree of comfort attained when
one knows they have taken the currency question in their own hands (and their fate out of the
hands of the bureaucrats and politicians) by a simple diversification. There are more positives than
negatives for gold at this point and a judicious purchase or two stored nearby might turn out to be
the great equalizer, not just in Europe and Asia but the United States as well. Central bankers do
not embark upon .5% interest rate increases unless they see inflation building underneath the
veneer of a healthy economy.

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

The May News & Views is now on its way and should be hitting your mail boxes over the next
few days. We think you are going to like this issue written during the weekend after the April 14
Wall Street Meltdown.

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 link above and make the appropriate entries.

Henri

(05/10/2000; 09:35:35 MDT - Msg ID: 30257)

Salmon Post# 30203

The borrowers of this SDB gold would not be playing the same game as the "paper giants" unless they used the brick as collateral for a currency loan with which to buy interest bearing securities. When the "investments" go sour, the loaner of the currency gets the gold, and the borrower, still owes a gold brick. It has the same effect as increasing the available gold supply 2X giving the appearence that there is an abundance of gold, when there is really only one brick

schippi

(05/10/2000; 09:36:50 MDT - Msg ID: 30258)

Select Gold Hourly Chart

http://www.SelectSectors.com/agpm70.gif FSAGX moving Up!

Henri

(05/10/2000; 10:02:54 MDT - Msg ID: 30259)

Salmon #30203

If the borrowers of the gold bricks just put it inside the SDB and could resist the temptation to recover some of their carrying costs 1%/month x100 oz x $285/oz=$3420 + box rental $80 or a cool $3500 each year(I would rather buy the 12 oz's free and clear). I am assuming that the 1% is a monthly not annual charge. If it is not monthly then the charge for holding in the SBD is close to where you set it $285+$70=$355/yr. Then just sit on it til the price of gold goes up and then give it back to the owner.
You would be giving up the cost of 1 oz/year each brick and...

YES, that might work it could drive the price up. But then there would be a sudden supply when everybody sends their brick back in and the price would fall back again. 100 million oz's hitting the street.

RossL

(05/10/2000; 10:39:03 MDT - Msg ID: 30260)

SDR chart

http://users.erinet.com/3354/gold2400.htm
I updated my SDR chart this morning.

Gandalf the White

(05/10/2000; 10:56:52 MDT - Msg ID: 30261)

RossL's SDR chart !!

Please RossL, the Hobbits need you to expound on what you see in this chart and the conclusions that you draw. Tks
<;-)

TownCrier

(05/10/2000; 11:28:33 MDT - Msg ID: 30262)

Sir RossL (and Gandalf the White)

Nice Chart! Might it be more appropriate to label the veritical axes as "SDR currency equivalents" rather than "SDR/currency" as you have them? Meaning specifically, the values on your chart are equivalent are the prices of a single Special Drawing Right as represented by the four basket currencies...whereas your labels would lead us to think that the lines are tracing out the "amount" of SDR's per each currency unit. Follow me?

Again, this is a great graph! It really shows how the situation with the dollar has become an abomination.

Gandalf, since you are looking at this, too, and wanting more information, just keep in mind that the dollar is the official "king of the world" if that green line can climb to 0.58 (meaning the SDR is equal to $0.58) at any point within the next year. (We aren't exactly holding our breath here in The Tower waiting for that to happen.) If the yen is truly a subsidiary of the dollar franchise (and if it is held in the neighborhood of 100 yen per dollar), then the the green dollar line would only have to climb to 0.85 within the next year to represent the dollar becoming "king of the world."
Again, we aren't holding our breath.

TheStranger

(05/10/2000; 11:28:44 MDT - Msg ID: 30263)

AP: Gold A Bad Investment Because It's Low In Price

Stranger's Note: I would have linked this, but I got it through email. Anyway, I hereby publicly declare the writer an idiot!!!

>Fund Surge Could Be Fools Gold
>
>By DUNSTAN PRIAL
>The Associated Press
>
> NEW YORK (AP) - A recent surge in the performance of mutual funds that focus
>on gold and other precious metals offers investors a clear example of why
>short-term gains and losses should be ignored.
>
>Twelve of the top 20 performing mutual funds for the week ended May 4 were
>gold funds, or funds that invest in the stocks of gold mining companies,
>according to Lipper Inc., a New York firm that tracks fund performance. As a
>sector, gold funds rose 8.3 percent for the week, more than any other
>category.
>
>The sudden and unexpected boost follows a 10-year period during which gold
>funds were arguably one of the most unpopular sectors for mutual fund
>investors.
>
>A quick look at some longer-term statistics shows why: gold funds are down
>12.8 percent since Jan. 1; down 20.8 percent from a year ago; and off 13
>percent over the past five years.
>
>Mutual fund analysts say investors should be wary of sharp increases in fund
>performance figures. Indeed, many industry professionals have decried an
>apparent shift by investors away from long-term investment strategies in
>favor of a short-term mentality that seeks quick gains by jumping in and out
>of hot sectors. The financial media has been criticized by some for
>contributing to that mentality by putting too much emphasis on funds that
>have experienced explosive short-term gains.
>
>The recent selloff in the technology sector and subsequent meltdown of many
>formerly high-flying technology funds has been held up as an example what can
>happen if investors fail to compile a diverse portfolio. The same thing could
>happen to investors who are seduced by the recent performance of gold funds.
>
>Market analysts cite several factors in explaining why gold funds have
>improved so quickly.
>
>The main reason is that the prices of gold stocks were undervalued for months
>and are now returning to a more realistic level, said Todd Hinrichs, an
>analyst at ABN Amro, a Chicago investment banking firm.
>
>Newmont Mining Corp., the largest holding in the Gabelli Gold Fund, which led
>all gold funds last week with a 12.1 percent gain, is a good example of a
>gold mining company whose stock has struggled in recent months but is now on
>the rise. After hovering for months in the high teens and low $20 range, the
>stock rose about $5 in the first week of May.
>
>Hinrichs said the price of gold stocks fluctuate in accordance with the value
>of gold. And since gold has been extremely cheap in recent years, gold stocks
>have suffered accordingly.
>
>While there is no indication that the price of gold is poised to take off,
>some investors are apparently speculating that gold will return to favor if
>inflation accelerates, triggering a slowdown in the U.S. economy and a
>possible end to the 12-year-old bull market on Wall Street.
>
>Recent stock market volatility is another factor that has contributed to the
>jump in the price of gold stocks. The huge decline in the technology-focused
>Nasdaq composite index during the past six weeks has undoubtedly led some
>investors to seek out stability in precious metals.
>
>The threat of additional interest rates hikes, which could slow U.S. growth,
>has likely served as additional motivation for some investors to channel
>money into gold stocks.
>
>``Gold is the ultimate safe haven when all else fails. For people who think
>the world is going to hell in a handbasket, these funds offer a sanctuary,''
>said Burt Greenwald, a Philadelphia-based mutual fund analyst.
>
>But Greenwald warned against mistaking a week's worth of gains as a
>resurgence of an extremely beaten down sector. It's unlikely that money
>flowing into gold funds has increased, despite the recent boost in
>performance numbers, he said.
>
>``I don't think there's been a mad rush on gold funds because it's not as if
>they've been a reasonable investment. In fact, they've been a terrible
>investment for the past 10 years,'' Greenwald said.

ss of nep

(05/10/2000; 11:31:54 MDT - Msg ID: 30264)

@STEVEH :re: The Small Arms Disarmament Agenda

http://www.mega.nu:8080/ampp/genocide.html

TownCrier

(05/10/2000; 11:49:20 MDT - Msg ID: 30265)

Sir Stranger...RE: the AP reporter

Follow up to your assessment. Do you think his friends call him Dunce for short?

SteveH

(05/10/2000; 12:08:59 MDT - Msg ID: 30266)

ORO, you said...

"Their existence is implied from market behavior, not from the reports available."


What other cause could there be for such market behavior?

ced_s

(05/10/2000; 13:25:06 MDT - Msg ID: 30267)

We all need to help GATA

Hi all, I have just talked with the offices of all of the members of the Senate Banking Committee, and expressed my concerns that they carefully consider what GATA is
telling them. With the exception of Evan Bayh's offic., no answer there.
I have borrowed this listing from Don's posting at Gold Eagle Forum, I hope Don doesn't mind due to the importance of a massive Pro-GATA campaign

The Senate Banking Committee

Phil Graham chrmn. (R) TX..................202-224-2934
Richard Shelby (R) AL......................202-224-5744
Connie Mack (R) FL.........................202-224-5274
Robert Bennett (R) UT......................202-224-5444
Rod Grams (R) MN...........................202-224-3244
Wayne Allard (R) CO........................202-224-5941
Micheal Enzi (R) WY........................202-224-3424
Chuck Hagel (R) NE.........................202-224-4224
Micheal Crapo (R) ID.......................202-224-6142
Rick Santorum (R) PA.......................202-224-6324
Jim Bunning (R) KY.........................202-224-4343

Paul Sarbanes (D) MD.......................202-224-4524
Chris Dodd (D) CT..........................202-224-2823
John Kerry (D) MA..........................202-224-2742
Richard Bryan (D) NV.......................202-224-6244
Tim Johnson (D) SD.........................202-224-5842
Jack Reed (D) RI...........................202-224-4642
Charles Schumer (D) NY.....................202-224-6542
Evan Bayh (D) IN...........................202-228-5623
John Edwards (D) NC........................202-224-3154

YGM

(05/10/2000; 13:27:06 MDT - Msg ID: 30268)

Noteworthy.............

??? May 10-MAR--

[B]


Credit Suisse First Boston to take seat on London gold fix

By BridgeNews
New York--May 10--Credit Suisse First Boston said that it will become
a member of the London Gold Market Fixing Ltd. and take a seat on the
London gold fixing in June. It will take up the fixing seat that was made
available as a result of the merger of HSBC and Republic National Bank of
NY. Under the rules, each member is only permitted to own one fixing seat.
* * *
The London gold fix takes place twice daily in the UK at 1030 and 1500
BST and is the universally accepted daily benchmark price for gold,
adopted around the world by bullion market participants in the pricing of
a wide variety of transactions, said the London Gold Market Fixing.
Clive Turner, chairman of the London gold fixing said that the arrival
of such a strong committed gold market participant would only serve to
underline the strength and purpose of the London gold fixing and confirm
London's position as the center of the international bullion market.
Simon Ford, a managing director at CSFB said, "CSFB is pleased to have
the opportunity to become a member of the 80 year old London fix." He went
on to add that the company views the London gold fix as a core function
for the market and one of the most "accessible and transparent benchmarks
in the financial markets." Taking a seat on the London fix is an
expression of CSFB's "firm commitment to the gold market and to all
aspects of the international bullion business," he said.

Credit Suisse has a long history of involvement in the gold market and
is involved in all aspects of the bullion business with gold trading
activities in
Sydney, Singapore, Hong Kong, Zurich, London and New York.
CSFB owns one of the world's largest gold refineries, Valcambi S.A.,
Switzerland and is a major supplier of physical gold around the world.
CSFB is the only bank that clears and operates precious metals vaulting
facilities in both the London and Zurich markets.
From June, 2000 the five fixing members will be: Credit Suisse First
Boston, through its subsidiary Credit Suisse First Boston International;
Deutsche Bank; HSBC USA; NM Rothschild and Sons; and Scotia Mocatta.
Fully owned by the Credit Suisse Group, Credit Suisse First Boston
International was established in July 1990. It was formerly known as
Credit Suisse Financial Products. End

Copyright 2000 Bridge Information Systems Inc. All rights reserved.
[symbols:US;CTM:CH;CSG]

The Bridge ID for this story is BGFTFDD


(c) Copyright 2000 FWN


�

YGM

(05/10/2000; 13:47:35 MDT - Msg ID: 30269)

Noteworthy.....How do we remember "KEVIN CRISP"

http://www.equity.csfb.com
What do you know!.... Londons own Kevin Crisp is head of
"Global Market Strategy" for Credit Suisse First Boston.

See who's who in their Derivatives Section at CSFB site...
http://www.equity.csfb.com/fixed_income/html/fid_preciousmetals.shtml

Was Crisp not a badguy in the GATA efforts?.......
Anyone remember his role (media) of late?

YGM.

ORO

(05/10/2000; 13:52:30 MDT - Msg ID: 30270)

SteveH - let me contradict myself

There are the open interest reports, and they do show large numbers of calls, which raises the question "who sold them".

As to the market behavior, I see what looks like "dumps" where the seller is not concerned with liquidation but with "breaking the bid", to supply a sufficient number of contracts to cover all the outstanding bids up to a price point and then continue selling into the market to avoid a rebound that may activate buy stops. Selling of underpriced OTC call options allows the buyer to short the underlying futures contract without risk. The gold market tends to show odd spikes that look like a spring escaping from under pressure, then caught suddenly a short while later. Because of the lag between the sharp upswing and the initiation of contradicrory action, it seems likely that call options are sold but it takes a few minutes for the offer to be made and for the arbitrageur to arrange financing to bridge the spread.

With many tech stocks, particularly Fidelity and Janus favorites, there is a tendency for them to suddenly materialize large bids set well above the current ask during market tumbles. Some descriptions of the 1927-9 stock markets point out simillar shenanigans.

The point here is that the behaviors are not motivated by profit from the transaction but motivated by the need to protect certain price points, and in so doing prevent a loss from appearing on the books.

YGM

(05/10/2000; 14:06:11 MDT - Msg ID: 30271)

AH YES!!............KEVIN CRISP............(Gold Basher Extreme)

http://www.egroups.com/messagesearch/gata?query=Kevin%Crisp Here's a good selection of GATA messages (above link) from Bill concerning "Crisp".....see insert from one such commentary........" I like "Crisp Toast" Myself......YGM


Knowing what was going on, one of the Leader of the
Pack, JP Morgan, came out singing at exactly the right
time. Their precious metals analyst, Kevin Crisp,
released a report today in London predicting gold
prices would fall in early 1999 as the "market focused
on supply and demand issues, deflation in Southeast
Asia and the drop in inflation in Europe and the United
States."

Reuters, London, Jan. 12 -- "Even though significant
event risk remain in global markets -- economic,
political, and financial -- we see no reason to believe
that gold will respond any differently than it has in
the recent past," Crisp said. "We forecast the gold
price will average $280 in 1999, but will trade as low
as $265 per troy ounce before the end of March."

YGM

(05/10/2000; 14:24:35 MDT - Msg ID: 30272)

Kevin Crisp....."Gold Basher"

Mabe GATA Can...........get you a little publicity for your new found position........
BTW...do you still work for JP morgan as well? I'm sure a gold basher/talking head from the Hannible camp will fit right in on the "FIX".........you pricks get more transparent every click of the page..............YGM.

GO GATA .......Four Spokesmen Extrordinare go to Washington, and with all the emails to Reps they will be heard, again and again.

RossL

(05/10/2000; 14:57:39 MDT - Msg ID: 30273)

SDR chart

http://users.erinet.com/3354/gold2400.htm
TC: you are correct, I had it backwards. I updated the chart with today's info also. Sorry to take so long to get back to you, but I had some real work to do ths afternoon.

Gandalf: There is an article in this morning's WSJ on the International page in the first section. The article discusses the fall of the Euro vs. the Yen. The article is not very informative, but I found the chart curious. It plotted the both the Yen and Euro vs. the $US, giving somewhat a distorted picture.

Also, I found the curious the chart on page 1 of the WSJ third section that showed the $US JP Morgan Index flatlining for the last 3 days. SO I decided to dig up some data and do my own chart.

Besides what Sir TC mentioned earlier, it's interesting that the plots of the Euro and Yen appear to be mirror images up until the last week or so. Looking at some long term charts, this behavior started about last September. I wonder if anyone can offer some analysis on that observation?

BTD

(05/10/2000; 15:10:29 MDT - Msg ID: 30274)

What is the significance of the SDR?

http://www.imf.org/external/map.htmRossL has given us a nice chart of the relationship of the SDR to the main currencies. Could someone briefly review the theories surrounding the SDR? I know it has been discussed on the forum before, but I've only picked up bits and pieces. What is the relationship of SDR to currencies showing us? Is there supposed to be a fixed ratio with the dollar? TownCrier, what is the significance of the 0.58 level you mentioned in your message #30262? What are special drawing rights, anyway? What relationship does the SDR have to the price of gold? What impact does its movements have on the price of gold?

By the way, if you click on the link above and go to the Fund Rates heading, you can find the links to the raw data RossL used for his chart.

Leland

(05/10/2000; 15:56:03 MDT - Msg ID: 30275)

Michael, Better Increase the Band Width, This Forum is Going to be VERY POPULAR..

Name
Last
Change
Dow Jones Industrials Index
10367.78
-168.970
AMEX Composite Index
912.7
-11.520
NASDAQ Composite Index
3384.7
-200.300
S&P 500 Index
1383.05
-29.090

Canadian Markets
Name
Last
Change
Toronto Stock Exchange 300 Index
9097.1
-197.300
Canadian Venture Exchange
3366.2
-83.500

International Markets
Name
Last
Change
Hong Kong (Hang Seng)
14,492.92
-283.98
London (FTSE)
6,100.60
-23.2
Australian All Ordinaries (XAO)
3,022.100
n/a

Felix the Cat

(05/10/2000; 15:59:49 MDT - Msg ID: 30276)

SHIFTY

After I noticed your post(5/10/2000; 0:53:46MT - usagold.com msg#: 30226), I still don't know---What's the exactly reason of your worries of China?
<:-)

schippi

(05/10/2000; 16:09:15 MDT - Msg ID: 30277)

Select Gold Hourly Chart

http://www.SelectSectors.com/agpm70.gif FSAGX continues Up!

YGM

(05/10/2000; 16:32:08 MDT - Msg ID: 30278)

UK..Treasury Gold Auctions....Losses thus far...World Gold Council

http://www.minesite.com/feature4.htm$39 Million lost and as we all know, this will be substanually increased when Gold soars... charts and further commentary at link......YGM.


The World Gold Council has kindly given Minews its calculations on the losses incurred so far by the Chancellor on his sales of UK gold. The figure is US$39 million, or �25 million, which in itself is enough to build a small hospital. However this figure could pale into insignificance if the mighty US dollar shows signs of weakness and gold starts to come into its own. Mr. Brown may then wish he had not listened so closely to his merchant banking friend Mr. Davies.

fox

(05/10/2000; 16:49:36 MDT - Msg ID: 30279)

goldprice in Sydney

up up and away ?

TheStranger

(05/10/2000; 17:18:26 MDT - Msg ID: 30280)

Perhaps The Most Important News Of The Day

http://cbs.marketwatch.com/archive/20000510/news/current/sec.htx?dist=hdlnbug&source=htx/http2_mw"[Securities and Exchange Commission Chairman Arthur]
Levitt has repeatedly used his office's bully pulpit to
turn up scrutiny on accountants, auditors and
corporate financial officers, expressing concern -- if
not outrage -- at signs of a "culture of
gamesmanship" when it comes to earnings numbers.
Such a culture has resulted in companies playing
fast and loose with earnings figures so as to not
disappoint Wall Street expectations, in the
regulator's view."

Stranger's Note: Every period of Wall Street excess somehow manages to end in revelations of systemic abuse. When the history of the current period is written, the story behind the article linked above will no doubt figure prominently. While earnings statements across the technology sector in particular were artfully prepared, accountants simply went along. So, for that matter, did the analytic community. As a result of this, I suspect there will be a lot of earnings restatements in the period ahead. Ouch!

TownCrier

(05/10/2000; 17:30:16 MDT - Msg ID: 30281)

Revisiting an old Golden Chalkboard

http://www.usagold.com/goldenchalkboard/gc_turkey.htmlThe page has been updated to include the pertinent commentary that acted as the germ for the graphic.

In time, I hope to establish a series of such lessons, and create a directory index for these similar to the Gilded Opinion index.

Sir RossL, seeing your SDR chart (nice modifications, by the way) and the discussion surrounding it made me remember that I had this unfinished business in regard to this Golden Chalkboard. If the discussion of your chart (and SDR's in general) shapes up to have lasting educational merit (as opposed to being a one-off event to satisfy immediate curiosities, then perhaps you might be willing to let me use your chart in conjuction with a similar Golden Chalkboard page?

Hill Billy Mitchell

(05/10/2000; 17:33:58 MDT - Msg ID: 30282)

Official release

http://www.bog.frb.us/releases/H15/update/Official: Federal Reserve Statistical Release

Release Date: May 10, 2000

Rates For Tuesday, May 9, 2000

Federal funds 5.92

Treasury constant maturities:
3-month 6.14
10-year 6.53
20-year 6.64
30-year 6.22

right-side up spread FF vs long bond = +.30%

ThaiGold

(05/10/2000; 18:40:33 MDT - Msg ID: 30283)

Amazing News Item: BLACK-GOLD BLUES

http://www.worldnetdaily.com/bluesky_smith_news/20000509_xnsof_clinton_ap.shtml....
...
..
This is an incredible news item and revelation.!.

http://www.worldnetdaily.com/bluesky_smith_news/20000509_xnsof_clinton_ap.shtml

BLACK-GOLD BLUES
Clinton approves
oil-price hikes

Official: Administration backs increases
to help Russia, Indonesia, Mexico, Iran

By Charles Smith
� 2000 WorldNetDaily.com
Oil ministers from OPEC nations have quietly told national security
advisors on Capitol Hill that the oil production cutbacks -- and resulting
price increases -- are being implemented at the request of the Clinton
administration on behalf of Russia, Indonesia, Mexico and Iran.

Russia, Mexico and Indonesia are reported to be directing their
increased oil profits toward paying back overdue Western loans.
According to one government defense advisor, the windfall profits are
part of a larger scheme to use the American public to pay off failed and
corrupt investment schemes in the three countries.

"The American public is paying off bad loans to bad countries made by
bad bankers," stated the national security advisor.
According to Vice President Al Gore, the recent hike in gas prices is
due not to a shortage of oil, but rather to the Clinton administration's
deliberate move to encourage an oil price increase.

"I think the reason is because we more or less asked the organization
of petroleum producing countries to raise oil prices in helping Russia
develop its economy," stated Gore on March 1 in response to a
question about rising gas prices.

The largest Middle Eastern oil producers reportedly agreed on the
cutback of oil production in order to increase income for weapons
purchases. Several oil states have announced major weapons buys
from the West, including a recent multi-billion-dollar purchase of
Lockheed/Martin F-16 fighter jets.

"Iran is also trading oil to China in exchange for missile technology,"
stated the national security advisor.

The gas hike has raised several concerns about the Clinton energy
policy and U.S. national security.

In recent years, OPEC has flooded the market with oil, lowering
prices worldwide. The lower prices, according to Denise Bode, a
commissioner on the Oklahoma Corporation Commission, were
designed to discourage investors in U.S. domestic oil production,
maintaining a world monopoly for OPEC.

"The OPEC cartel clearly understands that the Clinton energy policy is
based on instant gratification," stated Bode, "seeking low gasoline
prices and ignoring future consequences with a foreign cartel in charge
of our national energy resources.

"In 1997, OPEC acted to consolidate the American market by sending
much cheaper oil, dumping it at historically low prices. The most
significant energy policy initiated by the Clinton administration is a 4.3
cent increase in the gasoline tax," said Bode.

"Another 30,000 Americans have lost their jobs. Domestic oil
production has moved from holding steady to a 5.4 percent decline.
Even though OPEC has recently cut back production and raised the
price of oil to $30 a barrel, there has been no increase in domestic
production."

"It's very clear what OPEC should do if they want to retain control,"
stated Donald Hodel, former secretary of energy and secretary of
interior during the Reagan administration.

"Periodically, they should announce they are going to produce excess
volumes of crude oil. The announcement itself will scare away some
capital investment from new production. Secondarily, if that doesn't
work, and from time to time to prove their point, they would have to
overproduce, drive the price down dramatically, so that marginal wells
in the United States will be shut down and new investment will be
shut down worldwide."

According to Hodel, the "green" movement has combined with OPEC
to "erect straw arguments" against the U.S. energy industry.
"I've never met anyone who said I want to breathe dirty air or drink
polluted water," noted Hodel. "Yet, the green movement has
succeeded in using clean air, clean water and garbage control as a
means to seek de-industrialization in the U.S."

"The problem is that the schools have been captured by the flaming
environmentalists," noted Hodel. "We are not doing a decent job of
getting the educational establishment to acknowledge the facts about
the importance of energy production to our economy.

"If we were rational about our energy policy, we would have a
growing component in our society of nuclear power. The people who
fought nuclear power have successfully stopped coal. They are now
turning toward natural gas and oil. We made the point over and over
that offshore drilling is less of an environmental hazard than
transporting imported oil by tanker."

Hodel concluded, "Our dependency on foreign oil affects our national
security and our environment."

Charles Smith is a national security and defense
reporter for WorldNetDaily.
�
� 2000 WorldNetDaily.com, Inc.

RossL

(05/10/2000; 18:41:37 MDT - Msg ID: 30284)

Sir TownCrier

Feel free to use the chart. I created it to use as a tool for the discussion!

lamprey_65

(05/10/2000; 18:53:41 MDT - Msg ID: 30285)

My thoughts on China entering the WTO

On the surface it would appear that the Chinese worker has become a slave to the American consumer. That's only
what's apparent. Behind the curtain, it's really America becoming a slave to the Chinese government.

We're toast...sold out for cheap labor many years ago.

SHIFTY

(05/10/2000; 19:48:18 MDT - Msg ID: 30286)

Ponzi

Nasdaq 3,384.73 + Dow 10,367.78 = 13,752.51 divide by 2 = 6876.25 Ponzi
Down 184.63 Ponzi points

White Hills

(05/10/2000; 19:53:34 MDT - Msg ID: 30287)

Currency War

We know the EU's objective ,thanks to Trail Guide and others, and some of the strategy to reach their objective. But there is more to warfare than that, they must have tactics that will implement their strategy. As stated by Trail Guide the WA was a shot across the bow that gave warning of what there was to come. Did anybody listen or are we to busy with politics, the economy and other domestic concerns to realize that we are in a currency war? I know GATA is trying to warn the Congress of the coming problems that will be created in the months ahead as the Euro gets stronger and stronger. I feel the last Battle Tactic used by the EU will be the repacement of the US$ as the currency in oil settlements. Is there anybody in our Government that realizes the impact of that? White Hills

USAGOLD

(05/10/2000; 20:06:06 MDT - Msg ID: 30288)

Responses:

Leland: On bandwidth -- no problem here. Just post what you wish. State of the art technology at your service.

ThaiGold: How many tips can an iceberg have? This is a new one on me. Triple the oil price; gouge the American consumer; pay-off the multinational banks. Nice business plan.

HillBilly Mitchell: Thanks for the daily updates. As the yield curve inverts, so does the nature of government finance. I heard some apologist for the Keynsian World Order tell Rush Limbaugh today that the national debt didn't matter because "rate" of dollar turnover exceeded the "rate" of debt growth, hence more taxes flow into the government, etc. nonsense, etc. Rush nods his head. He tries but he doesn't really get it when it comes to the whole economic thing.

The fact of the matter is that though this fellow was good at regurgitating what his statist economic professors told him somewhere along the line, he still hasn't learned how to read a balance sheet, particularly the government's balance sheet.

Here's the facts:

No matter what is said about the "rates" of growth of one thing over the other, when you freeze government finance in time (which is the essence of a balance sheet), the government in fiscal 99 still borrowed roughly $70 billion (according to the most Treasury Bulletin) from the social security fund to balance the budget and in reality actually did run a deficit no matter what the apologists from both political parties tell us. That's in a good year and that's buying the government's statistics. So what does it matter what the "rates" of tax revenue vs. rate of debt growth have to do with anything? If I start running faster but the tank running up my backside is moving faster what have I gained? It's not the rate of tax collections that have grown proportionately, but the scope of the lie.

Now, reasonable financial people from around the world are saying (secretly, not publicly) "How long can this be sustained?" and answering "Not long, certainly not forever." As a result, our creditors understand the wisdom of the shorter fuse and we appreciate your reports in this regard. When our central bank raises rates .5% next week, those in the Treasury Department will come to understand all too well the effect. With short term notes rolling over as we speak, they will push that interest rate component of the debt ever higher.

When people say to me that this nonsense could go on forever, I point to this expansion of the debt and the interest rate component of the national budget, simply because at some point 100% of the taxes collected would go to service the debt. Then what? The final and ultimate rationalization from the new paradigm crowd?

It can't go on forever, and anybody who has ever taken a serious look at the government's balance sheet knows it can't go on forever. Bankruptcy is a distinct possibility. The essential question is "What can be done about it?" With both political parties buying into the fiction of a budget surplus, the answer is nothing. At least we had a chance when there was a Reaganite wing to the Republican party asking tough questions, but that wing is gone. We are headed down a one way street to default and only those holding gold will come out the other side -- that goes for nation states as well individuals.

As for our well prepared Keynsian friend on the Rush Limbaugh program today, I would caution that you can blow smoke in Rush's direction because he hasn't gotten over the Republicans vs. Demcocrats scenario, but it's hard to blow smoke the way of a goldmeister.

Stranger: With respect to your post about earnings: Is this part of that Amazon .bomb scenario making the rounds?

Farfel

(05/10/2000; 20:06:49 MDT - Msg ID: 30289)

I Called This One Perfectly, I AM BACK!! YES!!!

Farfel (4/26/2000; 10:19:49MT - usagold.com msg#: 29372)
TWO trading days left until Nasdaq Lockup Expiration!
According to the Wall Street Journal, beginning in May, approximately $150 billion of locked-up
Nasdaq stock will be allowed to be sold. Incredible!

That compares to only $45 billion in April (and look what market disasters occurred this past month).

MAY is shaping up to be a huge crisis in the stock markets as funds inflows do not begin to compare
to expected stock sales by insiders this coming month.

Thanks

F*

-------

To all my USAGOLD friends:

I am happy to accept this year's APH GURU AWARD, having called the month of May to perfection so far.

Net result: owing to an extremely aggressive bear strategy, I am now down only 30% from when I first began a strong contrarian market strategy some time ago. What a comeback, a recovery of over half my total losses to date!! Talk about the dark clouds lifting.

Now comes the interesting part: expiring lock-ups this month of May have only cleared a mere 25% of total inventory so far!!!!! Another $100 billion of lock-up stock will hit the market over the next three weeks at three key critical times. Position yourself accordingly, there will be at least three major rallies in advance of each expiration date as market insiders try and ramp up the market in order to dump expiring lock up stock. Each rally will be followed by huge dumps as the tech stock swamps the market. The Fed should stand aside and let this one play out, I personally believe there is a rift between the Fed and the Treasury, not to mention the Fed and the government.

Meanwhile, the bear funds are simply raking in the bucks. They are making huge gains, especially the ones utilizing strong put strategies.

I spoke with one of the managers and he tells me they are adopting a fairly standard strategy of shorting tech stocks, collecting the profits, then rolling them into both new short positions and market on close purchases of gold and gold stocks. SO pay no attention to gold stock weakness during the day as most bear funds are buying heavily in the final 15-30 minutes of trading. If you're smart, you'll beat them to the punch and force their slow accumulation to ramp up even faster.

Any day now, gold and gold stocks will simply zoom into the stratosphere as upside momentum is firmly established.

Remember: a good slice of increasing profits in bear funds will always make their way into gold stocks and rising gold stocks will lift the gold price. In fact, pretty soon I think gold will ignore ALL bad news just as it is doing with the current Swiss gold sale. Then we know a gold bull is finally established.

The bear funds are taking all the money from the bull funds in this zero sum game highlighted by contracting monetary liquidity and they are using a good deal of it to wage war against the gold shorts. Throw into the picture several angry hedge funds and billionaires who are taking aggressive contrarian investment approaches and I think the bullion banks are in for hell.

Will gold go limit up? I think so but don't ask me when. If it's this month, then we could get worse market mayhem than that which I predicted accurately in April.


Thanks

F*

USAGOLD

(05/10/2000; 20:19:36 MDT - Msg ID: 30290)

I should have mentioned in my previous post that. . .

of the $288.8 billion collected by the government in taxes in fiscal 99, $118.3 billion went to pay interest on the national debt -- or 41% of revenue collected. It was the largest single item on the balance sheet followed by defense at $72.4 billion and human services at $61.8 billion. The deficit was $69.6 billion.

Farfel

(05/10/2000; 20:26:05 MDT - Msg ID: 30291)

Last word of advice: ignore all stock market rallies in MAY!

The market rallies this month will all be set-ups for dumping enormous amounts of lock-up stock.

No matter how strong those rallies appear, they are suckers rallies. Don't get fooled!

Forget the CPI, PPI, Fed meeting or any other such crap.

The bottom line is this: this month, there's far too much stock out there looking to get sold, much more than any conceivable demand for that stock. On top of that, monetary expansion decreased dramatically in January and the four month lag effect rule is now transpiring.

Of course, I am excluding gold stocks, where the demand shift for a new momentum sector will lift these companies to inconceiveable heights (the 1.00 stock becoming the 40.00 stock, etc), and the rising gold stocks will lift the price of gold itself.

This momentum shift might take place slowly over several months or it could surprise us all and take place within a matter of weeks. Who knows, just position yourself.

Thanks

F*

lamprey_65

(05/10/2000; 20:27:23 MDT - Msg ID: 30292)

Tola! Tola!

http://www.goldline.co.uk/goldline/SilverStream/Pages/GLHomeFrame.htmlHope the link works. Nice looking bar - anyone know how many grams in a troy ounce? Cost is 699 Pounds (about $1055)

I think Harmony is on to something with this...I've pitched it to another miner with no success so far.

What do you think about carrying these, MK?

RossL

(05/10/2000; 20:32:08 MDT - Msg ID: 30293)

Yield Curve

The yield curve looks like a mountain road these days with the 6-month higher than the 1-year, and with the 2-year at the top over the 5, 10, and 30-year. What kind of pressures build up to make these mountains?

lamprey_65

(05/10/2000; 20:32:50 MDT - Msg ID: 30294)

(No Subject)

http://www.goldline.co.uk/goldline/SilverStream/Objectstore/Images/tt_3_bars.jpgTry this link...had to cheat to get it out of the frame!

TownCrier

(05/10/2000; 20:33:45 MDT - Msg ID: 30295)

"The Week in Gold" has been updated!

http://www.usagold.com/wgc.htmlNotable from this weeks' market commentary provided by the WGC:

"Reflecting the growing gold consumption in the Middle East, a new gold market is being constructed in Muscat in Oman, which ranks fourth in terms of Gulf gold consumption after Saudi Arabia, Dubai and Kuwait. This will bring all the existing local gold retailers under one roof and is expected to become a major tourist attraction. The World Gold Council is acting as consultants to the project."

Leland

(05/10/2000; 20:35:46 MDT - Msg ID: 30296)

Something to Watch...Yikes!

Japan
Nikkei 225
^N225
10:03PM
17067.63
-633.84
-3.58%
Chart , News

Farfel

(05/10/2000; 20:37:54 MDT - Msg ID: 30297)

Bond market the only obstacle so far to soaring gold price

I spoke with a friend on the phone who scoffed at how weakly gold is performing as the stock markets fall.

He is a young pup so I tried to explain carefully how the gold bull is contingent upon simultaneous weakness in the stock markets, the bond markets, and the US dollar.

So far, a pretty strong bond market is soaking up liquidity escaping from the stock markets.

However, once the US dollar starts to head south, then foreigners will be less inclined to hold bonds since their gains in bonds during any stock market weakness will be completely eradicated by US currency loss.

We are talking about an impending vicious circle that will take investors' breath away and leave gold as the most favored beneficiary of a full financial market bear.

Thanks

F*

USAGOLD

(05/10/2000; 20:40:50 MDT - Msg ID: 30298)

Lamprey. . .

They look really neat. Always been partial to elephants. Don't know what 10 tolas represents?? Opening my ABCs of Gold Investing to the V is for Vital Statistics chapter, I see that one troy ounce equals 31.1034 grams.

If you want Tola Tola, Tola Tola we'll get (assuming they are available to the public).

USAGOLD

(05/10/2000; 20:45:47 MDT - Msg ID: 30299)

Ross L. . . Forces causing rate inversion. .

Two immediately come to mind:

1. Overall lack of confidence, uncertainty

2. Rate hike anticipation, not just on Tuesday next week, but over the medium to long term.

TC. . . Do you know what a Tola might be? A "tael" is 1.2 ounces troy. Is a Tola a Tael in disguise?

TownCrier

(05/10/2000; 20:46:05 MDT - Msg ID: 30300)

10 tolas is about 3-3/4 troy ounces

Gotta love that golden metal...real money, no matter what physical shape it's in or what entity made the coin/bar.

USAGOLD

(05/10/2000; 20:49:07 MDT - Msg ID: 30301)

Towncrier. . .

Remarkable. . . I always knew all I had to do is ask, but that was . . . well. . . .remarkable (smile)

lamprey_65

(05/10/2000; 20:50:10 MDT - Msg ID: 30302)

Tola

Thanks for the conversion, MK. I just found they have the Tola on the order page as 3.7463 ounces (hefty sucker!)

lamprey_65

(05/10/2000; 20:55:21 MDT - Msg ID: 30303)

MK

Yes, it would be appreciated if you could look into the Tola. Baird requires Sterling drawn on a British Bank...not too convenient for us "Colonists"!

Farfel

(05/10/2000; 20:58:53 MDT - Msg ID: 30304)

When gold goes, it wil go!

Forget investment bank projections of 320 by end of the year or Barrick's 340 number. These are figures intended to discourage, not inspire.

This gold thing is a real powder keg and such a preposterously low capitalized sector that momentum funds inflows will send it stratospheric.

For most gold investors, there will be incredible temptation to get out around 300 or 320 and at most 340. You will hear stories of impending government interference to take down the gold market. You will hear stories of huge hedges created by various gold producers somewhere in the 300's. IMHO ignore them!

Yes, I know, how much patience can any person have, especially those poor souls who have held this stuff since 1981?

But summon up the courage, and summon up the last vestiges of your infinitely overtaxed patience, and hold on because it is a vertical ride in the making.

Remember, just as Greenspan has fought for a year to stall the vertical stock market mania, conversely he and his Treasury associates will not be able to tame a raging gold bull overnight.

Resist the temptation to dump the next time around. Believe me, you will want to dump with every fiber of your being, especially since you have been so badly fooled by previous false rallies.

But the real thing appears to be around the corner.

Thanks

F*

USAGOLD

(05/10/2000; 21:08:18 MDT - Msg ID: 30305)

Tola, Tola, Tola. . .

Just a future downpayment on that ranch you always wanted, Lamprey...

Hefty but merchandisable. . .Imagine such a thing for just over $1000. As I've said before, sometimes I hold a handful of 10 one ounce gold coins and marvel that it still runs less than $3000 these days.

TownCrier

(05/10/2000; 21:09:30 MDT - Msg ID: 30306)

U.S. Treasuries' rates

http://www.bloomberg.com/markets/C13.htmlThe question isn't "Why are 2-year Notes so high with the shorter Bills looking like a steep uphill climb?", but rather, "Who are the dim-bulbs holding the 5-year Notes and the longer term Bonds, and why aren't they dumping these losers?"

Perhaps they don't want to take the "in-your-face" paper loss of the principle investment, choosing instead to take their losses in the form of inflation (lost purchasing power) upon maturity. Perhaps the more clever bond holders dumped their positions during the previous selloff (which lifted the effective yield near 7%). And following the brief recovery in the face of the Treasury Dept's "reverse auction" buyback coupled with stock market volatility, perhaps the only ones holding the long Treasuries positions now are simply and hopelessly asleep at the wheel.

USAGOLD

(05/10/2000; 21:10:35 MDT - Msg ID: 30307)

Gandalf. . . my wizardrous friend. . . Here's one for you and the Hobbits to Mull Over

Janus Funds (just across the street from us) announced today that they were closing down two of their most popular investment funds because they simply could no longer be managed. This theme seems to running rampant in the investment business. The operators of the funds said they could not longer manage them because it was difficult to get out of their positions when they wanted to sell. Didn't Soros say essentially the same thing? What does this mean? 'Tis strange indeed. Are the markets now paralyzed because the mutual funds have become so bloated with inflated currency that the managers can't manage them? How does that make the people feel who happen to own these funds? Buried in this same story was the fact that these funds had gained about one percent since the turn of the year.

aunuggets

(05/10/2000; 21:31:36 MDT - Msg ID: 30308)

TOLA Bars

If memory serves me correctly, the "tola" bars were the staples of the Indian smugglers from the late 60s on, the tola being an indian weight measurement. Remember seeing these bars sewn into "undercoats" that the smugglers used to carry via airline flights along the golden triangle. They are hefty little bars, and never really made a big splash in the states because of the odd weight standard in relation to the Krand and later troy ouncers. Timothy Green had a full chapter on these little bars and the smugglers in one of his early works, either "The World of Gold" or "The New World of Gold". National Geographic also had several pictures in an issue back in the 70s, showing the smuggler's undercoats and packages of the 10 tola bars. These were very abundant and readily available at one time, especially in India and the Mid-Eastern countries. Would be interested in them myself M.K. if you can find a good source for them. Other than Harmony, I believe Credit Suisse or "Swiss Credit Bank" bars were produced, among others (all cast rather than extruded).

oldgold

(05/10/2000; 21:45:29 MDT - Msg ID: 30309)

Farfel

I would like nothing better than to see the bullion banks get their just rewards. But do not count on the bear funds to do them in.

The fact is that the total assets of the bear funds are exceedingly small -- probably even smaller than the gold funds.

But if the bear funds were to be joined by smart hedge fund operators like Soros with BIG BUCKS at their disposal -- the bullion banks would finally face an adversary capable of bringing them down for the count.

Soon hopefully!

I for one will not be satisfied until a few bullion bankers take a fatal plunge out the window a la 1929 and this miserable industry of blood sucking parasites becomes as extinct as the dodo.

SHIFTY

(05/10/2000; 21:50:17 MDT - Msg ID: 30310)

Felix The Cat / China

Felix I will pass on a few words from a recent Reform Party Petition :
"The Communist Chinese regime attempted to corrupt the 1996 United States presidential election , and; The Communist Chinese regime has engaged in industrial espionage against the United States ,and; The Communist Chinese regime has nuclear missiles targeted on American cities, and; The Communist Chinese regime routinely dumps its goods into the United States and refuses to engage in fair trade with the United States, and; The Communist Chinese regime continues to force abortions on its citizens and stifle all democratic dissent."
These things are not good for the United States, and when I go to the store and most things are MADE IN CHINA it makes me mad. I think of all that money going to china to build up its military so they can blow off the legs of our young service men.They have done it before.( KOREA)
I get pissed off when the people that are supposed to represent us are bought and sold by foreign governments. The American workers now compete for Mc Jobs. We have lost many factories and the U.S. military buys parts from foreign sources.
I hope the sheep wake up soon and take the for sale sign off the White House and clean out the barn!

Gandalf the White

(05/10/2000; 22:01:49 MDT - Msg ID: 30311)

Early retirement for Fund Managers ! (for MK)

The Hobbits were wondering just when that would begin to happen !! When Mr. Soros implys that things are so abnormal that the standard investment techniques no longer work and the top three of his funds managers give up on the gogo day trader mania markets, it means that only the unqualified will be left to try to expend all those 401K funds into something that is possible to at least hold a portion of its value. -- OF COURSE all the RoundTable members know the answer to THAT question, but the Sheeple have been watching CNBC toooooo long and really believe the misleading line of (as Farful would say) "MaleCowpucky" !!
<;-)

Gandalf the White

(05/10/2000; 22:03:35 MDT - Msg ID: 30312)

OOPS -- Sorry Farfel for the error in spelling !

<;-(

Al Fulchino

(05/10/2000; 22:06:51 MDT - Msg ID: 30313)

OldGold...Permit me if you will

You wrote:
oldgold (5/10/2000; 21:45:29MT - usagold.com msg#: 30309)
Farfel
I would like nothing better than to see the bullion banks get their just rewards. But do not count on the bear funds to do them in.

AF: I agree.

you wrote later:

I for one will not be satisfied until a few bullion bankers take a fatal plunge out the window a la 1929 and this miserable industry of blood sucking parasites becomes as extinct as the dodo.

AF: If they became extinct as you say, what would ever remind us of what can be? Certainly not a stale history book. Without being overly religious, bad must exist in order to strengthen those who would be courageous. And those who cheat, steal or otherwise manipulate markets and monies are necessary for this world. I do not hope that they jump out windows, and its likely you don't either, other than to express a passion. I have learned that I cannot be strong unless I am being strong in response to some form of weight. In the seeds of the manipulators transgression is a test for many. Some will see what is happening as you do and prepare and be strong for it. Others will choose to be blind and be rolled on. It will be painful, but perhaps those in pain will scratch their heads and say "how did I get in this mess?" Let those who manipulate enjoy their ride, it will be short lived in terms of history. But the great lesson is what they remind us of. Those ones, like you, who have clear vision, will speak up and sound a call to others who might sympathize with you and prompt an army of sympathetics to arise. All good causes are born out of inequities or injustices if you will. This is just another one.

So if they jump, give them some pillows to land on and put them in jail, so you can take your offspring to see what a thief looks like when behind bars. It will also give the thief a chance to reconcile his life, without doing us all harm.

Best to you. Good night.

ThaiGold

(05/10/2000; 22:25:47 MDT - Msg ID: 30314)

World StockMarkets Tumbling

http://finance.yahoo.com/m2?u===========================================
...
..
.
Seems the World's StockMarkets are in a big
tumble tonight. They must have read Farfel's
posts earlier.

Link: http://finance.yahoo.com/m2?u

ThaiGold
==============================================

TownCrier

(05/10/2000; 22:30:55 MDT - Msg ID: 30315)

Tonight's mission for the likes of Gandalf the White, Aragorn III, and Sir Holtzman, among others...

http://www.lordoftherings.net/True goldhearts know how to live life "right", and part of that is knowing how to balance work with play. You will definately enjoy this...I know I did.

I'm sure you are well aware that Professor Tolkien's classic epic, The Lord of the Rings, (as if I had to name it for you) is being filmed in New Zealand by New Line Cinema. Gentleman, they are doing this one right! I have recently watched the promotional movie trailer (1 min, 44 sec.) and am as awestruck as if they threw open the very doors of Ft. Knox and said, "Go ahead...help yourself!"

To see for yourself, and to revel in the majesty of this incredible effort (it will be presented in total in three movies to each be released in turn at Christmas 2001, 2002, and 2003) simply go to the official website for the production and click on the link for the movie preview.

Depending on the size of the picture you select, the download will take anywhere from a long time to a very long time. It is worth the effort. Have a beer and read a chapter to your children while you wait.

You need QuickTime Ver. 4 or greater to view the movie after it downloads. And depending upon the download settings of your browser, the movie file will either be automatically saved to your computer, or else if it downloads within your browser window, be sure to select the browser's "Save" menu item so that you can watch it again and again at a later time as you wish.

Here is a press release on it that you might enjoy:
---BEGIN------
From MacCentral, Thursday, April 20, 2000.

Akamai Enables High-Quality Delivery of New Line Cinemas' "The Lord of the Rings" Preview Footage for Record Internet Audience
Akamai Technologies, Inc. (NASDAQ: AKAM - news), the leading provider of global, high performance services for the delivery of Internet content, streaming media, and applications, today announced that New Line Cinemas' release of "The Lord of the Rings" Internet movie 'behind-the-scenes' footage has become one of the Internet's largest entertainment events ever. As measured by Akamai's advanced real-time Internet monitoring tools, "The Lord of the Rings" preview footage achieved a historic one-week total of more than 6.6 million downloads since becoming available on Friday, April 7.

"The Lord of the Rings" movie preview can be seen at www.lordoftherings.net. One of the most celebrated novels of the 20th Century, The Lord of the Rings is a groundbreaking epic of good versus evil, extraordinary heroes, wondrous creatures and dark armies of terror. Generations of more than 50 million people around the globe, in 25 different languages have grown up with this epic history. The legend has inspired an entire genre of movies, fiction, and has influenced some of the greatest artists of our time. It has made dreamers out of children and adults, and has recently been named the number one most popular book of the century.
---END-------
So there you have it, people. The fuse is running low. If you or your children are inclined to read classic literature, (The Hobbit was first published in 1937, The Lord of the Rings in 1954) you have a year and a half in which to let your imagination fully bask in the grandeur of the written tale as your all-important first exposure to this story. (Don't worry, the movie preview will only whet your appetites to further feed your imagination.)

To get yourself started, read The Hobbit to your children (if you have any). The Hobbit is a good way to introduce your children to the wonders of gold, and it is the important introduction for your own reading of the "grown-up" sequel, The LotR. The Hobbit was written by Tolkien for his own children, and it is FULL of gold, beginning to end. Be careful, though. Your children will surely want some gold coins of their very own by the end of the tale.

The Lord of the Rings then is Tolkien's nearly indescribable epic tale of the classic struggle between good and evil in which the principle characters also struggle against their own free will to either carry on in the difficult pursuit of "good", to turn aside for grey areas, or to turn back for an easier immediate existence in the hope that the darkness will not overtake them, but perhaps their decendents instead.

A timeless lesson, to be sure.

ThaiGold

(05/10/2000; 22:42:21 MDT - Msg ID: 30316)

Who Needs VIRUS's.?. Intel Ships 1-Million Bad Motherboards.

http://ap.tbo.com/ap/breaking/MGIOXL4538C.html=============================================
...
..
.
NASDAQ companies may crash, just on their own "merits".
Seems INTEL has shipped, and is unable to recall
all of some 1-million defective motherboards.!.

These can crash, or corrupt data files. Like a VIRUS.
VIRUS's are free. INTEL isn't. How ironic.

Link: http://ap.tbo.com/ap/breaking/MGIOXL4538C.html

ThaiGold
======================================================

SHIFTY

(05/10/2000; 23:05:32 MDT - Msg ID: 30317)

A SEA OF RED INK

http://finance.yahoo.com/m2?ucheck it out

ThaiGold

(05/10/2000; 23:18:23 MDT - Msg ID: 30318)

Progress Report from GATA -- Just received..

Subject: [GATA] Congress gets interested in gold manipulation...
..
.
Date: Thu, 11 May 2000 01:11:07 EDT
Subject: [GATA] Congress gets interested in gold manipulation

1a EDT Thursday, May 10, 2000

Dear Friend of GATA and Gold:

On Wednesday the GATA delegation to Washington met
with high officials of Congress and their staffs to present
evidence that the price of gold is being manipulated and
that gold loans have reached levels that threaten the U.S.
and world banking systems. We presented GATA's new
report, "Gold Derivative Banking Crisis," and asked that
Congress inquire officially into the gold market.

We had three meetings at the Capitol and were well
received at each. We were asked to provide certain
additional information and particularly potential questions
for various government officials and financial institutions,
and to return to Washington soon for additional meetings
with some of the people we met Wednesday.

We will have a few more meetings today.

You'll have to forgive my being a little vague here; it
wouldn't be right to identify yet those who met with us
and who are considering getting involved with the gold
issue. Besides, it might expose them to premature
intervention or retaliation from gold's enemies. But I
hope it will suffice to say that today couldn't have
gone better, that we couldn't have met with more
important people with more appropriate jurisdiction
over the gold issue, that GATA now has brought and
will continue to bring the gold issue to the highest
levels of the U.S. government, and that we are hopeful
and even confident now that much will come from this
in the next few months and that our support from the
gold industry will grow with our success.

Please post this as seems useful.

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

ThaiGold

(05/10/2000; 23:28:09 MDT - Msg ID: 30319)

Attn: SHIFTY (5/10/2000; 23:05:32MT - usagold.com msg#: 30317)

http://finance.yahoo.com/m2?u...
..
.
Hello SHIFTY:

Link: http://finance.yahoo.com/m2?u

Very significan't in the link, is the TAIWAN Index.
They have a normally massive and publicly acknowledged
"PPT" operation to prop up their market. It isn't working
very well tonight:

Taiwan Taiwan Weighted ^TWII 12:32AM 8349.91 -209.96 -2.45%

One usually always sees TAIWAN's index in the black, when
other Asian markets are crashing all around them. But
tonight, they're going south as well. Out of control.?.

A harbinger of NASDAQ when it opens.?. Where's Farfel.!.

ThaiGold
==========================================================

Gandalf the White

(05/10/2000; 23:34:22 MDT - Msg ID: 30320)

Thanks, TC for the "Mission" challenge !

TownCrier (5/10/2000; 22:30:55MT - usagold.com msg#: 30315)
Tonight's mission for the likes of Gandalf the White, Aragorn III, and Sir Holtzman, among others...
-- First step of the Mission was successfully completed and the software downloaded and installed !! -- That was soooo challenging that I now am headed to bed to dream of the "precious" and will have the Hobbits attempt to download the trailer and watch it tomorrow !! The Hobbits thank you and ask, "Have you seen Aragorn III lately ?"
<;-)

SHIFTY

(05/10/2000; 23:53:38 MDT - Msg ID: 30321)

thaigold

mail call

Chris Powell

(05/11/2000; 00:07:47 MDT - Msg ID: 30322)

Congress gets interested in gold manipulation

http://www.egroups.com/message/gata/452?A report on the GATA delegation's visit to
Washington on Wednesday.


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
View Yesterday's Discussion.

YGM

(05/11/2000; 00:29:55 MDT - Msg ID: 30323)

Blood in the streets of Tokyo

Nikki DOWN -----909.45 pts5.14 % loss in one session........Sooner or later Gold Stocks are going to the upper reaches.......GO Gold & GATA!

Short Goldman Sachs, Banks, JP Morgan, NasDuck & Dow....."Many Others Are" and getting rich......YGM.

ThaiGold

(05/11/2000; 01:46:10 MDT - Msg ID: 30324)

World StockMarkets -- The Carnage Continues

http://finance.yahoo.com/m2?u==========================================
...
..
.
At this LINK: http://finance.yahoo.com/m2?u
At this time: 00:45 Am PDT

All the ASIAN markets are totally in the red.
And most of the European markets are too.

Does this mean Gold will go UP today.?.
Gimmee a Break.

ThaiGold
==============================================

ThaiGold

(05/11/2000; 02:22:02 MDT - Msg ID: 30325)

Does the PPT Have A Magic Off-On Switch.?.

That Freezes the K*tco Charts Whenever There's Significant + Action.?.=====================================
...
..
.
Time-and-again, whenever there's a big
downturn in overseas StockMarkets, or
some kind of event that "should" significantly
impact worldwide gold trading/prices, the K*tco
PM's POG POS charts go dead. Frozen. LockedUp.

I'm beginning to think the PPT has a master switch
that shuts them off, to keep us in the dark.

Links: (all dead tonight)
http://www.kitco.com/charts/livegold.html
http://www.kitco.com/charts/livesilver.html
http://www.kitco.com/market/

ThaiGold
====================================================

SteveH

(05/11/2000; 02:25:11 MDT - Msg ID: 30326)

Chapman

http://www.gold-eagle.com/gold_digest_00/chapman051100.htmlsnippet:

Red Buttons used to sing, strange things are happening. Strange things are happening at Morgan Bank. This central bankers bank, gold bullion bank and banker for European royalty and other elitists, is skeletonizing its presence in New York. Stranger still is that on July 1, 1999, its derivative contract position was $18.363 billion and on January 1, 2000 it was $38.086 billion. That is $16 billion larger than Chase Bank's position. That is $60 billion in gold derivative contracts just between these two banks. On July 1, 2000, due to FASB changes, we are going to see what Goldman Sachs' position is. We'll get to see the other side of all three's trades if congressional committees deem it advisable. We will also then discover where all that gold came from. Over the first six months of 1999, official U.S. gold exports averaged 220 tons per month. September figures rose to 976 tons, October 400 tons, November 1008 tons, December 783 tons, January 727 tons and February 921 tons. Why these sudden exports? This gold supposedly is non-monetary gold, but it is coming from the N.Y. Federal Reserve Bank. That is possible as they hold gold for other nations and may hold gold for private institutions. This gold that left the Fed went to Germany and Britain, but most ended up in Switzerland.

***

Sound familiar?

SteveH

(05/11/2000; 02:43:29 MDT - Msg ID: 30327)

Thursday may be a bad day for Wall Street...

Most analysts would agree that the masses haven't bailed (yet) from the Duck or the Dow. Volume is low. People are holding. If they are like I am in penny stocks, they will hold till their is water around their eyeballs and sell at the bottom.

Europe and Asia appear in the red and the Nikkei is having a rough go.

Gold is steady, but the Dow Futures are down over 200 points. But the dollar, she is up .28 at 111.00. All other currencies are down against the dollar.

Crude continues to make that slippery climb, now up slightly at over 28.00 per bbl.

S&P futures are in the green suddenly. Hmmm?!

It was a bad day for Intel and Motorola and Cisco. My buddy told me when I goated him about Cisco, "I am a long term investor."

"Yeah, as though you won't sell when it is at its low, just like me." -- and so will the rest of the Duck dipsters.

ThaiGold

(05/11/2000; 03:19:20 MDT - Msg ID: 30328)

SOS: Sea Change Occuring

Attn: SteveH (5/11/2000; 2:43:29MT - usagold.com msg#: 30327)=============================================
...
..
.
To: SteveH

It appears that a significant Sea Change is
now occuring in those DOW/NASDAQ markets.
Perhaps not apparent to the average trader,
and certainly not mentioned in the typical media:

The Bubble Mania PONZI market has been replaced
by a PPT-vs-Speculator-Shorts war.

It's a new Ball Game. And the outcome is going
to be slow and painful for alot of the hapless
hangers-on, like your goaded friend. They will
indeed, hold onto their losers, no matter what.
It's human nature, I think.

Will we begin to hear a new phrase from the CNBC
and media analysts.?. ... "SOS".
A "Significant Opportunity to Sell".

Probably not. Because they'd need to have something
to "recommend" instead. And "G-O-L-D" is not in their
vocabulary. Yet.

ThaiGold
======================================================

ThaiGold

(05/11/2000; 04:29:31 MDT - Msg ID: 30329)

...Continuing the Metaphor

The Titanic never had it so good.!.======================================================
...
..
.
I tend to visualize the markets (NASDAQ-DOW) like this:

The Clinton-Gore Cruise Lines have over too many years,
sucessfully navigated their Cruise Ship, SS Lollipop,
into what seemed to be an Eden-like tepid tropical
bay. Abundant with fruit and wonderous magical paper
gains. Everyone was ecstatic. And plunged evermore
into the inviting waters to frolic in their newfound
wealth.

But waitaminute. Unbeknownst to those happy swimmers,
a school of sharks ... speculator-shorts ... have silently
moved in beneath the sparkling waters. And they have
smelled blood in the water. Real blood. Microsoft blood.
Intel blood. AT&T blood. And now even Cisco blood.

The swimmers are told to ignore the blood, by the media
and Cruise Line's pundits and purveyors. And nearly every
swimmer believes them. If you cannot believe Clinton, who
can you believe. The party swimming continues by most. Dot
Com blood will soon be coloring those waters deep red.

Yet the Cruise Line is not ignorant. No indeed. They know
the sharks have arrived. But cannot panic the swimmers, lest
it trigger a feeding frenzy. Or worse, cost the election.
It is, after all, always, "The Economy Stupid".

What to do.?. Try to distract the sharks. Throw red herrings
and other bait into the water. Attract the sharks to those
daily morsels of PPT peaking and propping. Maybe some of
the swimmers will grow weary of treading water and climb up
onto the ship. Announce a Bond Party, and a Utility Party,
and a Old Economy Party. Anything but a Gold Party.

Meanwhile, the actions of the PPT simply worsen the disaster
impending. Their incessant throwing of bait just attracts
more sharks. Who thrive on it. Knowing the swimmers will be
their entre'. The PPT bait is just the caviar to them.

In such situations, any dummy can tell you: The sharks will
win. Many hapless swimmers will get gobbled. And there may
even be some survivors. But for sure, there will be alot of
unhappy cruisee's who will complain later, ashore, about the
shoddy treatment they received from Clinton-Gore Lines.

If sufficient, the Captain may be forced to go down with his
ship. And the First Mate too. It depends on the media spin
and who they deflect the blame upon. Anyone but themselves.

Perhaps next-vacation, they will look into that "other" ship
denounced by all media, as a decrepit Relic of the Past.
Bound for the cold arctic waters. Scenic and splendid in
it's own way. No swimming allowed. No freeloading allowed.
You pays your money, and takes your seat. Leave your worrys
behind, when you board the SS GoldenVoyager.

Tell all your friends now, while the tickets are available
and oh-so inexpensive.!. For those with limited funds, they
have the alternative of less expensive accomodations: In
the Silver Lifeboats. But the scenery will be just as great.

ThaiGold
ThaiRanch@OperaMail.Com
===========================================================

Rhody

(05/11/2000; 04:42:20 MDT - Msg ID: 30330)

Steve H

Your article re gold "exports" from the NY Fed is highly
significant. Elwood's article on earmarked gold implied
that gold was leaving the Fed at a rate of 400 tonnes per
YEAR. In February 2000, there were 7200 tonnes of gold
remaining in the NY Fed. Over the past 14 months, your
figures imply that foreign earmarked gold (monetary gold)
has been bleeding out of the NY Fed at an average rate of
550 tonnes per MONTH. That's well over 10 times the rate
stated by Elwood in his excellent article. This IS a
run on the bank!
More to the point, at the present rate of withdrawl,
all foreign-owned (monetary) gold will be withdrawn from
the Fed in 7 to 14 months from Feb. 2000 (7 months would
be correct if the run turned into a stampede and future
months bled gold at 1000 tonnes). This means the ECB
members plus Switzerland will have all their monetary gold
safely out of the United States by September 2000 to April
2001. This may give us a timeline when the ECB springs the
debt trap, and the wraps come off gold. The paper market
in London is projected to cease at present rates of decline
(yes I know linear extrapolations are suspect) some time in
early 2002, and the EURO will issue paper currency and coin
in Jan 2002. So it looks to me that gold will remain
"under control" until after September of this year, but
will certainly be liberated by early 2002.

ThaiGold

(05/11/2000; 05:15:01 MDT - Msg ID: 30331)

NY Fed Gold... Huh.?. What Gold.?.

Attn: Rhody (5/11/2000; 4:42:20MT - usagold.com msg#: 30330)=================================================
...
..
.
Rhody:

Wouldn't it be ironic, if -say- about July of 2000 it was discovered
that much of the NY Fed's 7200 tonnes of Gold has been (somehow)
lent out to -say- Goldman Sachs and cohorts as part and parcel of
their alledged Gold Price Manipulations.

I wonder who would be the loser, in that case. Can a Federal Reserve
Bank Branch (a private corporate entiy) declare bankruptcy.?. Or
would they call in all their loans. And bankrupt fall-guy Goldman.?.

Interesting times that we live in.

ThaiGold
======================================================

Topaz

(05/11/2000; 05:22:39 MDT - Msg ID: 30332)

TownCrier (5/9/2000; 4:03:30MT - usagold.com msg#: 30152)

Hi Townie:
First & foremost let me state- I'm no "mechanic"- and this "tyre kicking exercise" will be just that.
The component parts that together make up the "whole vehicle" as it were, are as alien to me as the myriad parts of the Global Financial landscape. Like most others I go by appearance and rely on those "specialists" (greasers, spraypainters, tyre changers, auto/electricians) to provide expert advise as necessary.
We are certainly blessed in that regard here.

Agree wholeheartedly with the "hands-off" approach you presented in above post --ref: Topaz (03/30/00; 00:56:24MDT - Msg ID:27758) Bubble-0-Bill gets ANOTHER reprieve)
The Euro faction seem even now loath to mention the "G" word and I'm expecting this to continue for some time. In: Topaz (05/02/00; 06:49:08MT - usagold.com msg#: 29742), I put forward a short term scenario that is on track and indicates an important "Sea Change" event has taken place. It's as if the Euro faction have their hands on the "steering wheel" now and are determined to effect a gradual increase in POG/ Euro's and let the Devil take the Hindmost.
I feel, despite Trail Guides recent tutelage (sp) the Market function, (particularly the London Fix) will remain in place throughout the transition to another Global Fiat Reserve. (the Currency Wars concept doesn't sit too well with me, kinda like AWESOME- vs- OR-some.)
The Euros mover's and shaker's will "reluctantly" accept the Mantle of Mischief as it becomes evident the $US is unable to function as such.
THEN we'll be made aware of all the shortcomings of the current system and Au will indeed be set free.

No doubt sparks will fly between now and then and I think, based on little more than perception the stress will be felt big-time around US$/Euro320. Euro issuance in 02 will mark the end of the Rout IMVHO.
As an Ozzie, I've borne witness to the endless pillaging and plundering of our natural resources over many decades, firstly the Poms, then the Yanks and Japs. The situation doesn't bode well at all. With most Oz Au miners hedged, many will no doubt fall prey to the BB's who will be on the ropes themselves as the price ramps (first) slowly upward then more quickly in $'s than in Euros, as the $ begins it's death spiral. The $A will, I feel recover somewhat against $US (being a resource based currency) but will falter when Mine production is seen to be going into long held o/seas coffers. The "downdraft default" scenario would be better from Aust's point of view, so my heart's in ANOTHER camp vis-a vis the future.
So do we have an engineering flaw or a design fault?����Who knows���..I sure don't!
Just for the record I've never held shares/equities and am a 100% physical kinda guy.

Black Blade

(05/11/2000; 05:58:54 MDT - Msg ID: 30333)

Morning Wakeup Call!

Source: Bridge NewsSWISS GOLD:SNB revalues gold reserves upwards by 27.6 bln Sfr

Zurich--May 11--The Swiss National Bank Thursday announced the revaluation of its 2,600 tonnes of gold reserves upwards by 27.6 billion Swiss francs. The revaluation on May 1 was done using the April 28 market rate of 15,291 francs per kilo. The SNB said it will revalue its gold on a quarterly basis, with the next calculation June 30. Since May 1, the SNB may legally sell part of its gold reserves but the bank did not reveal how much had been sold so far. (Story .13674)

Black Blade: This is interesting. Hmmmm���..

Private jewelers up in arms as Vietnam reverses liberalization

London--May 10--Thousands of small-scale private jewelers face being driven out of business by a new government directive reversing the liberalization of Vietnam's gold trade, industry officials said Wednesday. New central bank regulations which go into effect from Saturday set minimum levels of capital for jewelry firms. Private traders say the new policy is a ploy to put their businesses back in the hands of a few large state firms. (Story .14610)

Black Blade: Hey, its not who you know, it who you **** (you fill in the blank). BTW, who really lost that war anyway?

Asia Precious Metals Review: Gold edges weaker in sluggish trade

Tokyo--May 11--Spot gold edged weaker on a lack of buying interests in Asia Thursday, dealers said. Prices dipped below U.S. $277 per ounce here after failing to break over $278 in sluggish trade, they said. Platinum was stable during Asian trading hours though speculative buying was seen following overnight stronger NYMEX, the dealers said. (Story .2200)

Black Blade: Boring PM action overnight, but the Nikkei sure took a dump! Down over 800 pts. And down for the fourth day in a row! Hey, those US FRN's are going to come home to Mama! Then PMs will shine!

SteveH

(05/11/2000; 06:03:47 MDT - Msg ID: 30334)

Rhody

Just so credit goes where credit is due. Chapman said it all, not I.

Funny how, the stock market futures went green about 5:00 am when CNBC, ahead of the curve, and all come on...very curious.

ss of nep

(05/11/2000; 06:03:48 MDT - Msg ID: 30335)

AUnuggets 30308

http://www.aryjly.com/html/bars.htm
Tola bars, From Dubai.

ss of nep

(05/11/2000; 06:04:11 MDT - Msg ID: 30336)

AUnuggets 30308

http://www.aryjly.com/html/bars.htm
Tola bars, From Dubai.

Black Blade

(05/11/2000; 06:09:54 MDT - Msg ID: 30337)

Morning Wakeup Call! a brief follow up

http://www.futuresource.com/cgi-bin/art?000511/024918A lack of fresh incentives prevented players from opening fresh buying positions in the current price range between $275 and $280, the dealers said. Some said inflation fears in the U.S. might support gold, while others said selling pressure from central banks and producers is likely to prevent players from being optimistic about gold. Trading volume remained in a thin level as Hong Kong market was closed for holiday. Meanwhile, the dealers noted players were also hesitant to predict gold's price direction ahead of the release of economic figures in Switzerland that could show how much gold was sold by Swiss National Bank
over the past couple of weeks. Speculators on the Tokyo Commodity Exchange (TOCOM) were encouraged to buy platinum futures contracts on Thursday in the morning due to the steady U.S. dollar/yen and the overnight firmer NYMEX, the dealers said. However, a lack of follow-through buying prevented platinum from rallying further, they said. Some players became cautious to maintain buying positions following the recent slide in the lease rate, the dealers said. TOCOM platinum eventually trimmed morning gains towards the close on profit-taking, they said. Meanwhile, the dealers said spot platinum prices are unlikely to tumble sharply below the key $500 on expectations of stronger demand.

Black Blade: Everyone is just sitting on the sidelines waiting for someone to make the first move. As far as TOCOM PGM contracts, I think after being burned by the recent TOCOM Pd default, no one wants to be stung again. "Fool me once!-shame on you, Fool me twice!-shame on me!"

Black Blade

(05/11/2000; 06:27:56 MDT - Msg ID: 30338)

GATA and Washington lobby effort.

I applaud Murphy and GATA for following up on the gold market manipulation issue and their current lobby effort on Capitol Hill. But, call me a cynic or just jaded. I don't trust any scumbag demopublican/repulicrat (whatever). I would think that GATA would make more headway by greasing a few palms with that $200,000+. It is sad when a citizen has so little faith in the government, but hell, even the currency (FRN) is only based on faith. My thought is that Politicians are on the low-end of the evolutionary ladder, scaped up from the bottom of the gene-pool. Hey, who knows? Maybe Murphy and friends will surprise by exposing and honest one out of the bunch - as long as he can get their snout out of the public trough long enough to seriously listen to the message. Anyway, a double thumbs up to GATA!

BTD

(05/11/2000; 07:00:34 MDT - Msg ID: 30339)

(No Subject)

Could someone please explain the SDR?What is the significance of the SDR?
http://www.imf.org/external/map.htm
RossL has given us a nice chart of the relationship of the SDR to the main currencies. Could someone briefly review the theories surrounding the SDR? I know it has been discussed on the forum before, but I've only picked up bits and pieces. What is the relationship of SDR to currencies showing us? Is there supposed to be a fixed ratio with the dollar? TownCrier, what is the significance of the 0.58 level you mentioned in your message #30262? What are special drawing rights, anyway? What relationship does the SDR have to the price of gold? What impact does its movements have on the price of gold?

ss of nep

(05/11/2000; 08:16:33 MDT - Msg ID: 30340)

sdr

http://www.cal-neva.com/money/runsusa.htmAfter the passage of Public Law 90-269, on March 18, 1968, the
United States declared it no longer guaranteed the uniform value of the
coins and currency of the United States. This act REMOVED the remaining
reserve requirements on circulating notes and obligations. Approximately
$1.3 BILLION in gold was 'pledged' against 'gold certificates' and held as
reserves against the Federal Reserve's circulating notes and obligations
at this time.

Under this Act, the gold certificates were WITHDRAWN and RETIRED,
the gold then considered as 'free gold' was paid out to foreign interests
at $35 per ounce at a time when the world price of gold was nearly $120
per ounce. The monetary system of gold was then replaced by a mechanism of
'Special Drawing Rights' (SDR's) within the framework of the IMF.

Now here is the rub: (1) The operations of the Exchange
Stabilization Fund...and now the SDR's...are under the 'exclusive control
of the Secretary of Treasury' and 'are NOT REVIEWABLE by any other officer
of the United States'; (2) anything in the Exchange Stabilization Fund
remains in the Fund, for the use of the Fund; (3) the new program is
subject to the Articles of Agreement of the IMF in accordance with Section
3 of the SDR Act of 1968; and the Secretary of Treasury is the 'Governor'
of the IMF, (4) and is NOT an officer of the United States.

The Secretary (Governor-IMF) issues an international letter of
credit called a 'Special Drawing Rights certificate' to the Federal
Reserve banks 'in such form and in such determination as HE may
determine'. The SDR is then deposited in the Federal Reserve banks, which
in turn credits the account of the Exchange Stabilization Fund with
Federal Reserve Notes in an amount equal to the value of the SDR
certificate. SDR's became the 'collateral security for Federal Reserve
Notes'.

The term 'dollar' was thereafter valued in direct and inseparable
proportion to Special Drawing Rights, NOT TO 'DOLLARS,' gold and silver
Coin. The 'dollar' became mere 'book entries in special accounts of the
International Monetary Fund.' (See: Senate Report 1164).

Elwood

(05/11/2000; 08:24:18 MDT - Msg ID: 30341)

Rhody (5/11/2000; 4:42:20MT - usagold.com msg#: 30330)

Hey, Rhody. Chapman's numbers are millions of dollars. Not tonnes. We went through this with Murphy once already.
Elwood

Leland

(05/11/2000; 08:48:08 MDT - Msg ID: 30342)

Stockhouse Has Been Flooded...

Dear StockHouse Users,

We would like to sincerely apologize to those users who, over the past week, have experienced
interruptions or slow downs in service while using our site.

The number of people who visit the StockHouse site is increasing dramatically every day. Our technical
support team is constantly working to ensure that our servers can handle the growing number of users
accessing our site. The latest upgrade project, which is currently underway, will make StockHouse run
much smoother and faster than ever before.

As always, we appreciate your feedback. Please continue to send any comments you may have to
feedback@stockhouse.com. Thank you for your support and understanding.

Faithfully,

The StockHouse Site Support Team

(And from my personal experience...here's the e-mail address
to use for excellent "fixes"...SLatti@stockhouse.com)

USAGOLD

(05/11/2000; 08:59:38 MDT - Msg ID: 30343)

Today's Report: Swiss Sales Tick Like Swiss Watch -- One Ton per Day

http://www.usagold.com/Order_Form.html5/11/00 Indications
�Current
�Change
Gold June Comex
277.50
-1.20
Silver July Comex
5.05
-0.03
30 Yr TBond June CBOT
94~02
nc
Dollar Index June NYBOT
110.95
+0.23

Market Report (5/11/00): Gold weakened in the early going in advance of tomorrow's producer
price numbers. Analysts expect a .2% decline according to a Reuters report this morning. Next
week we have the Fed Open Market Committee meeting on Tuesday. The consensus opinion holds
a .5% interest rate increase. The European Central Bank governing council meets on Thursday and
some think that the first signs of European policy on the euro might emerge from that meeting. A
round of jawboning to push the euro higher seems to have run out of gas with the currency trading
lower in today's early going.

As for gold specifically, the yellow was slightly weaker in both Asia and Europe overnight in thin
trading. Switzerland revalued its gold reserve upward to market rates on May 1 and will do so the
first of the month from here on out. The Swiss National Bank and declined comment on the
amount of gold sold thus far as part of its annual allotment via the Washington Agreement by
central bankers to limit sales and leases of the yellow metal. Rhona O'Connell of T. Hoare
Cannacord, according to a FWN report, suggested a reduction of 13 tonnes since May 1 -- about
one ton per day. "[I]t must be borne in mind that this includes lending activity, and therefore will
not be a true reflection of the changes," she said. "It does, however, suggest the market is correct
in its belief that the rate of disposal, so far at least, is roughly equivalent to one tonne per day, i.e.
the sales rate equivalent to that that would pertain if the whole 120-tonne tranche were evenly
distributed over the period to end-September," she added.

In other gold news, Credit Suisse First Boston will assume the seat at the London Gold Market fix
made available by the merger of HSBC and Republic National of New York. The next Bank of
England gold auction is scheduled for May 23. FWN reports gold option expiration for the June
contract on Friday and predicts that the metal will trade $275 - $280 until those trades are cleared.
They also say gold could get a boost on inflation concerns and if equities markets continue to
weaken. Most of the markets appear to be on hold though in advance of the big central bank
meetings next week.

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

The May News & Views is now on its way and should be hitting your mail boxes over the next
few days. We think you are going to like this issue written during the weekend after the April 14
Wall Street Meltdown.

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 link above and make the appropriate entries.

TownCrier

(05/11/2000; 09:18:38 MDT - Msg ID: 30344)

Sir BTD and the SDR

Sorry I didn't get back to you yesterday in regard to your question. I hope to answer more thoroughly later in the day, but for the moment am trying to wrap up a certain project for MK regarding those gold German marks I mentioned earlier.

The "significance" of the $0.58 equivalence for the SDR is that that level would represent every other currency falling to zero against the dollar. This is the lowest theoretical price the SDR could reach when priced in dollars. This value of dollar-weighting within the SDR gets reevaluated this year, with the new weighting to take effect next year to "fix" the formula for the next 5-year span of time.

The last formula was established in 1995 to be effective 1996 - 2000, and effectively created the SDR as the sum total of 0.3519 euros (through a combination of German marks and French francs), 27.2 yen, 0.105 pound sterling, and $0.5821 of the U.S. currency, all based upon factors of the top five countries value of trade exports (goods and services) along with the IMF member countries' reserve balances denominated in these currencies.

The SDR was established to serve as a form of "paper gold" benchmark, although it may itself devalue against gold in the real market...as you can see that its value is derived from forex rates among the four currencies as mentioned above. It was originally fixed to gold at a rate of 35 special drawing rights against each ounce...the equivalent to the dollar while we yet remained on the international gold standard prior to August, 1971. Because its creation was stricltly controlled by the IMF, they felt that creating these SDRs would serve as a reasonable reserve asset during the time when the gold standard, coupled with the lending practices of banks, revealed there to be not enough gold to go around for the swelling account numbers. The last new allocation of SDRs among Fund members occurred in 1981, at which point the outstanding total of SDRs became 21.43 billion.

Although the international gold standard became unglued, the IMF maintained its SDR-gold link in this fashion: they chose to keep their gold fixed on their books at that same SDR 35 value per ounce, however they let the SDR itself "float" in the sea of paper, marking it to market values based on the 5-year changing formula and the daily forex market changes among the basket currencies. Essentially, the amendments to the IMF Articles that were arranged in Jamaica in 1976 ended any IMF sanctioned tie between gold and the now floating exchange rates among currencies which are what provide for the basis of the SDR.

And as you know if you have been following this forum, the IMF has recently found it to be expedient to end their fiction of low gold book values (SDR 35 is about $46 per ounce these days), and to remark some of their gold to market values via a complex operation that also involves an account at the BIS.

I hope this is helpful.

Elwood

(05/11/2000; 09:22:25 MDT - Msg ID: 30345)

Hey, USAGOLD

I revalue my gold every now and then, too. How come it never goes up as much as the Swiss? ;-) That one-ton-per-day stuff has got to be a smokescreen. What they're saying is, "If you try to find where it's been sold in the market, you won't find it because IT ISN'T THERE!"

On another front, I keep thinking about the ECB's annual operating loss. Doesn't it seem strange that a central bank can have an operating loss? Why isn't anyone picking up on this, and the reason it makes the ECB different from all other central banks?
Elwood

Farfel

(05/11/2000; 10:44:57 MDT - Msg ID: 30346)

@STEVE H, the next key date is Monday

Seven major lockups expiring on that date. Repeat. SEVEN!!

So just as I expected, today is a strong market day and look for tomorrow to be strong as well.

But Monday....KABOOM! Massacre.

Then Tuesday, FOMC will deliver good news, since no matter what rate action is effected, Wall Street will spin it positively.

If the hike is 1/4%, they will cheer and claim they expected 1/2%.

If the hike is 1/2%, they will cheer and claim that it is already priced into the market.

Just remember one thing, Steve: every fundamental positive this month is designed solely to allow some $100 billion of lockup stock to exit the market into strength.

Every single rally this month is a sucker's rally.

And every dip in the gold price is a blessing for the bear funds and these guys (like David Tice) will use each gold dip to accumulate their gold positions, directing a good portion of their Nasdaq and Dow short profits into the gold sector. The bear funds are gaining ammunition at the expense of the bull funds which are seeing funds inflow reverse completely and become funds outflow, thanks to expiring lockups.

The bear funds will be joined in the the big gold accumulation party by some of the big hedge funds that have turned bearish on this market. They are laying the foundation for a an amazing gold bear trap.

Thanks

F*

Knallgold

(05/11/2000; 10:53:55 MDT - Msg ID: 30347)

?

"..weeks.." (TG/FOA).

Did he mean June?

TownCrier

(05/11/2000; 11:02:12 MDT - Msg ID: 30348)

U.S. 30-yr mortgage rate highest in over 5 yrs

http://biz.yahoo.com/rf/000511/in.htmlFreddie Mac announced that weekly mortgage-rate averages reached the highest level since the week ending on March 10, 1995 last week as thirty-year mortgage rates increased to an average 8.52 percent for the week.

Cavan Man

(05/11/2000; 11:03:20 MDT - Msg ID: 30349)

Farfel

Excellent analysis. Thanks for your presence here.

MarkeTalk

(05/11/2000; 11:06:07 MDT - Msg ID: 30350)

Stock Market Recovery

After yesterday's drubbing and Dow close below 10,400, many pundits were saying that today would be a huge down day. Well, PPT is in there propping things up taking advantage of the unexpected decline in retail sales. Then tomorrow there is the PPI number which the spinmeisters are saying will be benign. From a technical point of view and the Bradley indicator, the Dow should be bottoming about now before a brief rally and then the final downwave.

Leland

(05/11/2000; 11:07:38 MDT - Msg ID: 30351)

Credit CRYSTAL BALL on Kitco...Author Unknown

THE CHAIRMAN

with apologies to Edgar Allan Poe

Once upon a weekday dreary, I viewed my quote-screen, my eyes all bleary,
Pondering Dodd and Graham and other forgotten lore,
While I nodded, nearly napping, suddenly there came a tapping,
As of some one gently rapping, rapping at my chamber door.
"'Tis some visitor," I muttered, "tapping at my chamber door- Only this, and nothing
more."

Ah, distinctly I remember it was in the bleak damp spring,
And each separate dying dot.com wrought its ghost upon my security. Eagerly I wished
the morrow;- vainly I had sought to borrow
From my credit cards an injection of cash flow- sorrow for my lost equity-
For the rare and radiant monnaie that the analysts value not- Nameless here for
evermore.

And the sodden sad uncertain churning of each leaden stock
Thrilled me- filled me with fantastic terrors never felt before;
So that now, to still the beating of my heart, I stood repeating,
"'Tis some visitor entreating entrance at my chamber door-
Some late visitor entreating entrance at my chamber door;-
This it is, and nothing more."

Presently my spirit grew stronger; hesitating then no longer,
"Sir," said I, "or Madam, truly your forgiveness I implore;
But the fact is I was napping, and so gently you came rapping,
And so faintly you came tapping, tapping at my chamber door,
That I scarce was sure I heard you"- here I opened wide the door;- Darkness there, an
evil noisome breeze, and nothing more.

Deep into that darkness peering, long I stood there wondering, fearing, Doubting,
dreaming dreams no mortals ever dared to dream before;
But the silence was unbroken, and the stillness gave no hint
And the only word there spoken were the whispered words, "Raise rates more."
This I whispered, and an echo murmured back the words, "Raise rates more."-
Merely this, and nothing more.

Back into the chamber turning, all my soul within me burning,
Soon again I heard a tapping somewhat louder than before.
"Surely," said I, "surely that is someone at my chamber door:
Let me see, then, what thereat is, and this mystery explore-
Let my heart be still a moment and this mystery explore;-
'Tis the wind and nothing more."

Open here I flung the door, when, with many a straightening of his tie, In there stepped
a stately Chairman of the saintly days of yore;
Not the least obeisance made he; not a minute stopped or stayed he; But, with carriage
of lord and master, stood proudly at my chamber door- Resting his hand on the bust of
Pallas by my chamber door-
Stood and stared, and nothing more.

Then this august personage beguiling my sad fancy into smiling,
By the grave and stern decorum of the countenance he wore.
"Though thy mien be careworn and aggrieved," I said, "art sure no craven,
Ghastly grim and ancient economist wandering from the Nightly shore- Tell me what
thy lordly name is on the dismal science's Plutonian shore!"
Quoth the Chairman, "Raise rates more."

Much I marvelled this distinguished visitor to hear discourse so plainly,
Though its answer little meaning- little light upon the subject bore; For we cannot help
agreeing that no living human being
Ever yet was blest with seeing such eminence at his chamber door-
Ghost or shade by the sculptured bust near his chamber door,
With such speech as "Raise rates more."

But the Chairman, standing lonely by the placid bust, spoke only
These few words, as if his soul in these words he did outpour.
Nothing further then he uttered- not a sleeve then he fluttered-
Till I scarcely more than muttered, "other friends have flown before- On the morrow he
will leave me, as my hopes have flown before."
Then the Vision said, "Raise rates more."

Startled at the stillness broken by reply so aptly spoken, "Doubtless," said I, "what it
utters is its only cryptic store,
Caught from some unhappy master whom unmerciful Disaster
Followed fast and followed faster till his songs one burden bore-
Till the dirges of his Hope that melancholy burden bore
Of 'Raise-Raise rates more'."

But the Chairman still beguiling all my fancy into smiling,
Straight I wheeled a cushioned seat in front of him, and bust and door; Then upon the
velvet sinking, I betook myself to linking
Fancy unto fancy, thinking what this ominous apparition of yore-
What this grim, ungainly, ghastly, gaunt and ominous phantasm of yore Meant in
croaking "Raise rates more."

This I sat engaged in guessing, but no syllable expressing
To the wraith whose fiery eyes now burned into my bosom's core;
This and more I sat divining, with my head at ease reclining
On the bond market quotes that the lamplight gloated o'er,
But whose red shining with the lamplight gloating o'er,
She shall press, ah, lower evermore!

Then methought the air grew denser, perfumed from an unseen censer Swung by
Seraphim whose footfalls tinkled on the tufted floor.
"Wretch," I cried, "thy God hath lent thee- by these angels he hath sent thee
Respite- respite and nepenthe, from thy memories d'or!
Quaff, oh quaff this kind nepenthe and forget this lost golden ore!" Quoth the
Chairman, "Raise rates more."

"Prophet!" said I, "thing of evil!- prophet still, if demon or devil!- Whether Tempter
sent, or whether tempest tossed thee here ashore, Desolate yet all undaunted, on this
desert land enchanted-
On this home by horror haunted- tell me truly, I implore-
Is there- is there balm in Wall Street?- tell me- tell me, I implore!" Quoth the Chairman,
"Raise rates more."

"Prophet!" said I, "thing of evil- prophet still, if demon or devil!
By that Heaven that bends above us- by that God we both adore-
Tell this soul with sorrow laden if, within the jungle of steel,
It shall clasp a radiant monnaie that the analysts value not-
Clasp a rare and radiant monnaie that the analysts value not"
Quoth the Chairman, "Raise rates more."

"Be that word our sign in parting, demon or fiend," I shrieked, upstarting-
"Get thee back into the tempest and the dismal science's Plutonian shore!Leave no
black plume as a token of that lie thy soul hath spoken!
Leave my loneliness unbroken!- quit thy post by my door!
Take thy Poignard from out my heart, and take thy form from by my door!"
Quoth the Chairman, "Raise rates more."

And the Chairman, never flitting, still is standing, still is standing
By the pallid bust of Pallas by my chamber door;
And his eyes have all the seeming of a demon's that is dreaming,
And the lamplight o'er him streaming throws his shadow on the floor;
And my soul from out that shadow that lies floating on the floor
Shall be lifted- nevermore!

-- THE END --

Gandalf the White

(05/11/2000; 11:33:19 MDT - Msg ID: 30352)

Did anyone notice ?

Oil is back up over $29. again !
What did FOA\TG tell us ?
Do you think that the USA will jawbone down the price again?
Here comes the $2 gasoline again and the uproar of the spoiled Americans, while the rest of the world looks at $5 gasoline as a normal fact of life. Get out the bicycles, you Hobbits!
<;-)

Leland

(05/11/2000; 11:56:46 MDT - Msg ID: 30353)

John Hathaway...

http://www.tocqueville.com/brainstorms/brainstorm0064.shtml"The flood of new paper appears to have played a role in
snuffing out the short squeeze that began with the
announcement of the Washington Agreement. This rally
caused extreme discomfort among the bullion dealers. A
brief article from the 9/30/99 Financial Times suggests that
the bullion dealers sensed great peril."

(Click for more...)

oldgold

(05/11/2000; 12:49:15 MDT - Msg ID: 30354)

Farfel

Why are you so sure the market will rally tomorrow?

With the bullion dealers having greatly increased their already huge short positions since last fall according to John Hathaway, a titanic battle is shaping up.

Gold's upside will be strictly limited until and unless they lose contol.

The way I see it there is no way gold will rally to $350 or $400. If the bullion dealers maintain contol I cannot see POG rallying above $320 under any circumstances. But if this group of parasites loses control, POG will go far $400 in very short order.

Usul

(05/11/2000; 13:58:48 MDT - Msg ID: 30355)

Expiring Lockups (see Farfel earlier)

http://www.unlockdates.com/15 are listed for Monday (don't know which ones are the
7 majors, but you can look them up if you have fast enough net access (which I don't))

SPNW VMDC VSTY WGRD MSLV USIX WGRD IMAN SPNW WEBS ALSK MSLV CCRT RETK A

Forbes: $118 billion Lockups expire in May
http://biz.yahoo.com/fo/000403/mu2517.html

Felix the Cat

(05/11/2000; 14:19:09 MDT - Msg ID: 30356)

RE: SHIFTY (5/10/2000; 21:50:17MT - usagold.com msg#: 30310)

Thanks for you to let me know the some thinkings of American. I live in Hong Kong. But I still couldn't totally agree the regimes of the Communist Chinese Gov..(because of their conservatism)
I just want to be fair. Let me tell you somethings what I knew and what I see.

You linked up with five points:
1. The Communist Chinese regime attempted to corrupt the 1996 United States presidential election --- Honestly, till now, I still don't know its truth or not! IF it is truth, we have to think of: it is the "plot" of Chinese Gov. or just is some of the Chinese Business Men wanted to get their own benefits from political? And why didn't that American refuse it?
2. The Communist Chinese regime has engaged in industrial espionage against the United States --- Actually, that kind of "activity" is quit often happened in the lay of Business. Unfortunately, "Chinese" is a big nation. I don't think its the issueof Chinese Gov. order. More possible is about the benefits of Business Men.
3. The Communist Chinese regime has nuclear missiles targeted on American cities --- I don't know about it, it's a Top Secret of Gov.. But I want to know: How about US? Has any has nuclear missile targeted on China?
4. The Communist Chinese regime routinely dumps its goods into the United States and refuses to engage in fair trade with the United States --- I don't think American are silly people who didn't think of the "profits" of themselves!
5. The Communist Chinese regime continues to force abortions on its citizens and stifle all democratic dissent --- I can agree with it. But IF the "speech" is too fast, most of the citizens of China couldn't "follow-up". Because they don't have enought Education for it.

And also, the situation of Chinese citizens is alike as American. Lot of people lost their job because of the Economic changing of China.
At last about the military, I think US still is the pilot of it! So, sometime, I could see from newspaper: Taiwan or China bought some of it from US --- Did they pay enought money?
<:-)

P.S --- Sorry for I'm not good in English. But I'm learning.

Elwood

(05/11/2000; 14:28:56 MDT - Msg ID: 30357)

Here's an interesting picture

http://www.geocities.com/goldtango/ESF1-95.jpg
The ESF number is the net change in their SDR position. Export and Fed numbers were converted to quarterly to match those of the ESF. While hardly conclusive, it is consistent with leasing of gold by the ESF during the WA panic which began at the end of the third quarter 99.
Elwood

ORO

(05/11/2000; 14:45:02 MDT - Msg ID: 30358)

Central bank interventions - The main principle

http://www.clev.frb.org/research/workpaper/1996/wp9608.pdfCentral banks act counter to the markets. Whenever the market participants are acting in their interest towards one direction, a central bank would find itself moving against their actions.

If a price is rising, the bank will (try to) supply the item the market is seeking.

If a price is falling, the bank will buy the item falling.

In this way, a central bank, as a matter of the guiding principle for its operations is constantly acting to prevent price discovery through the markets by market members with a profit motive. Instead, it will either supply or withdraw the item undergoing change so as to satisfy the needs of one side at a price other than the price the market needs in order to do so.

When the central bank can not affect the supply side of the supply and demand levels determining the change in price, it would try to affect demand.

An interesting example is given in this working paper by the Cleveland Fed regarding currency intervention. The heart of the paper is in the charts on pages 35 and 36 at the URL above.

The currency charts show the effects of the US having the lowest interest rate among the G7 at the time, and a record trade deficit - a declining dollar.

The Fed had to raise rates from that 6% level to 9% before prices stabilized, and the Germans and Japanese could lower interest rates: US in early 1990, Japan at late 1990, from 8.5%; Germany in late 1991-early 1992, from 10%. (Germany had to retain high rates due to the inflation of the Mark during reunification when the German monetary base expanded by nearly 25% in 1 year)

The chart on page 37 shows Fed funds over the same period.

The situation in 1986-7 was remarkably similar to that of today. It was just in the aftermath of the elimination of the passive loss tax provisions on real estate and the elimination of the interest tax deduction on non-home debt. This brought borrowing to an abrupt halt and started the deflationary contraction of the time, which Greenspan fought with lower interest rates. M1 was growing at a record 17% rate, MZM at 15%, M3 at 8% (the low end of the range of 8% to 14% that prevailed since 1970, after 1986 ranges were 0-1% to 8-10%) the period 1984-1986 was also a period of "Asian contagion" where emerging economies were ground to dust. Just as now, Americans were buying anything the exporters had to sell and moving into new and bigger houses. Furthermore, today we can see the replacement of the credit card and personal loan tax deduction with the rollover of these into tax deductable home equity loans.

Furthermore, we are back into a similar interest game now that tax rates (since 1992) are back at over 40% total (state local and Federal), where the tax deduction on mortgage interest and IRA/401k investment makes it possible to play an interest rate arbitrage that was not possible in the 1986 - 1992 period. For many dual income households, the funding of an IRA or 401k is a bit of a stretch when considering that chiild-care expenses eat up so much, however, one can make some use of the interest rate deduction and IRA/401k tax deduction to do something that is increasingly profitable (and is more profitable as interest rates and tax rates rise*); refinance the mortgage or take a home equity loan and take the funds and spend them while putting an equivalent amount into the 401k or IRA. 40% of the ammount is received from the reduction in the year's taxes, without reducing cash income. Within the 401k, one can invest the funds in a mortgage fund or just buy a AAA bond to be held to maturity. As loan processing costs have receded, one can get nearly the same rate on their IRA/401k (and in some cases better) investment as they pay on mortgage interest. Because the contribution to the 401k and IRA are deducted from taxable income and the interest accrues tax free while the tax liability is reduced by the mortgage interest.

If the extra payments for the bigger mortgage and the 401k plan reduce running income because the employer is behind in raising pay, then the funds are available within the retirement plan for paying down the loans. As income increases and pushes the household into higher brackets, the play is more and more attractive.

* Marginal tax rates grow because of the slow rate at which tax brackets rise relative to pay.
Total compensation has been rising at some 10% annually on a total basis, and 8% on a per worker basis.

Leland

(05/11/2000; 15:04:53 MDT - Msg ID: 30359)

A Momemt of Silence, Please....

http://www.star-telegram.com/news/doc/1047/1:TOPSTORY/1:TOPSTORY0511100.htmlPray for the residents of Los Alamos.

Hill Billy Mitchell

(05/11/2000; 15:13:38 MDT - Msg ID: 30360)

Official release

http://www.bog.frb.us/releases/H15/update/

Hill Billy Mitchell (5/10/2000; 17:33:58MT - usagold.com msg#: 30282)
Official release
http://www.bog.frb.us/releases/H15/update/
Official: Federal Reserve Statistical Release

Release Date: May 11, 2000

Rates For Wednesday, May 10, 2000

Federal funds 5.95

Treasury constant maturities:
3-month 6.14
10-year 6.47
20-year 6.56
30-year 6.18

right-side up spread FF vs long bond = +.23%

Leland

(05/11/2000; 15:33:12 MDT - Msg ID: 30361)

And at Charles Schwab...Investors Are Getting Burned...

Top Financial News
Thu, 11 May 2000, 5:29pm EDT

Schwab Clients Endured $56 Bln in April Market
Losses (Update3)
By Randy Whitestone

San Francisco, May 11 (Bloomberg) -- Charles Schwab Corp.'s
clients sustained $56.2 billion in market losses in April, as
declining stocks shaved the value of their holdings at the biggest
discount brokerage by 7 percent.

The decline in account values for Schwab's 6.9 million
customers came as the company reported the lowest level of monthly
asset inflows since last October.

The decline in assets along with a 9 percent monthly slide in
daily stock trades underscore how April's 15.5 percent plunge in
the Nasdaq Composite Index hammered the broad cross-section of
investors who constitute Schwab's customer base.
``Schwab's customer base can serve as a proxy for the entire
retail brokerage industry,'' said Greg Smith, analyst at Chase
Hambrecht & Quist . ``Volumes continue to weaken here. I think
they will get worse before they get better.''

San Francisco-based Schwab said it ended April with $774.9
billion in client assets, down 6 percent from March 31, even
though clients added $7.9 billion in new money in the month. The
inflow figure was down 56 percent from March, but up 52 percent
from the previous year.
``Maybe the retail investor felt burnt,'' said Andrew
Collins, analyst at ING Barings LLC, who put a ``hold'' on the
stock when it reached 57 in early April.

Schwab shares, down 5/8 to 39 11/16 at 4 p.m. New York time,
have declined 39 percent since their March high.

The company said ``customer tax-related disbursements'' led
to the decline in asset inflows.

`Seasonal'

At Schwab, average daily commission trades fell 9 percent to
317,300 in April 2000, from 346,900 in March, though they rose 53
percent from 207,700 in April 1999. Commission-free daily trades
through the Mutual Fund OneSource service were 69,500 in April
2000, down from 73,200 in March and up from 52,900 in April 1999.
``After starting this year with four very active months,
overall market volumes have declined recently and we are once
again experiencing the seasonal pattern that we've seen in the
past two years -- our customers' trading activity thus far in May
is down from April levels,'' David Pottruck, co-chief executive,
said in a release.

Collins said trading volumes have yet to show signs of a
recovery.
``If we see a complete capitulation -- a market bottom --then
you'll see volumes recover,'' he said.

Schwab is the third firm to report an April volume slide.
Datek Online Holdings Corp., the sixth-biggest Web broker, said
trading fell 10 percent in April, while Knight/Trimark Group Inc.,
the biggest Nasdaq market maker, reported a 12 percent drop.

The decline in assets wasn't a record on a percentage basis.
Schwab assets fell 11 percent in August 1998.
``It isn't like Schwab suffered a major pitfall,'' said Henry
McVey, analyst with Morgan Stanley Dean Witter & Co. ``I look more
closely at asset inflows and they seem to have maintained their
normal seasonal pattern.''

(Fair Use For Educational/Research Purposes Only.)

YGM

(05/11/2000; 18:11:23 MDT - Msg ID: 30362)

Is Swiss Gold or BOE Gold (Sales)..........."Earmarked Gold"?????

We'll probably never know......WHAT IS EARMARKED GOLD?

Earmarking is a courtesy function performed by one central bank for another central bank. It entails the delivery of gold owned by one central bank into the safekeeping of another central bank. The Bank of England's historian R.S. Sayers has suggested that the modern practice of earmarking began in the 1920s, when England was temporarily off the gold standard and the Bank of England decided to allow its central bank clients to store gold in its vaults to allow them to use such gold as security on advances made to them by the Bank (R.S. Sayers, The Bank of England 1891-1944, Vol.I, London, 1976, p.333). Earmarking soon acquired other purposes: providing off-shore cover for commercial transactions, providing a holding facility for purchases of newly-minted gold and in times of international tension allowing the dispersing of national gold to foreign safehavens. Once a sufficient number of central banks had established earmark accounts abroad, the possibilty existed that they could simply swap amounts of earmarked gold by legal transfer on paper rather than actual physical exchange.

Host banks did not pay interest on earmark deposits, usually only levying a small handling charge to cover the cost of physically handling the gold on its arrival and departure from the host bank. The host bank assumed no legal control over the earmarked gold in its keeping. The arrangement was much like that enjoyed by a commercial bank client renting a safety deposit box. On instruction by the client the bank was obliged to open the box and deliver the contents into the client's hands without question.

When the Bank of Canada opened an earmark gold account of its own at the Federal Reserve in New York in 1935, the deputy-governor of the Fed described the earmark function with succinctness: "We will earmark gold which is your property and will hold it subject solely to your instructions, giving to any such gold which is left in our custody the same care which we give to our own similar property but beyond that assuming no responsibility" ( J.E. Crane to Towers, January 26, 1935, BOC file A19-12A). A year later, Harry Siepmann of the Bank of England put it more simply in a letter to the deputy-governor of the Bank of Canada: "Earmarking is a routine activity of any full grown Central Bank and one of the normal forms of co-operation for mutual advantage" (H.A. Siepmann to J.A.C. Osborne, July 31, 1936, BOC file A18-17).

YGM

(05/11/2000; 18:27:16 MDT - Msg ID: 30363)

Link..Earmarked Gold.

http://www.bank-banque-canada.ca/english/gold/gold97-4.htmDiscover a bit about how Gold has long been used to control Fiat Paper and its problems, starting back in the 1920's...I'm just getting started myself......YGM

RossL

(05/11/2000; 18:31:12 MDT - Msg ID: 30364)

Elwood

Interesting chart. Where did the ESF data come from? Is it public knowledge?

YGM

(05/11/2000; 18:37:45 MDT - Msg ID: 30365)

Last Sentence in Excerpt......Bank Canada site......

Same Old Stuff Today......Except the Times aren't "Dismal"
(Canada)

In 1937, another federal act prohibited the use of "gold clauses" in financial arrangements, thereby ending the right of a creditor to claim settlement of a claim in gold. Such obligations were now to be settled only in the legal tender of the country.

Thus, gold production was brought under tight federal control and as such was used as a powerful point of leverage on national economic performance in a decade of generally dismal economic times.

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

***Not dismal unless you're a Gold Miner.....A pox on the Gnomes of Zurich and their Minions......YGM

Bonedaddy

(05/11/2000; 18:38:35 MDT - Msg ID: 30366)

Leland

Hello, Leland! I enjoyed your latest post immensely. Say, were those some of Schwab's "smarter investors" that got burned? (I've never seen them advertise about having any "not so smart" investors).

SHIFTY

(05/11/2000; 18:52:45 MDT - Msg ID: 30367)

Ponzi

Nasdaq 3,499.58 + Dow 10,545.97 = 14,045.55 divide by 2 + 7022.77 Ponzi

Up 146.52 ponzi points!

Leland

(05/11/2000; 19:12:18 MDT - Msg ID: 30368)

Thanks Bonedaddy!

On the subject of Charles Schwab & Co., we've got to give
them high marks for honesty. They said it like it is.
Plain and simple in the report.

Elwood

(05/11/2000; 19:24:50 MDT - Msg ID: 30369)

RossL, Treasury Bulletin

http://www.fms.treas.gov/bulletin/
Funny, eh?

Goldfly

(05/11/2000; 19:53:08 MDT - Msg ID: 30370)

Gee Bill, how are you going to get out of this nuke-spy scandal?

http://www.washingtonpost.com/wp-srv/aponline/20000511/aponline194850_000.htm
Hey Janet! It worked for Waco......I'll just have them burn the place down!

I sorry to say it, but I wouldn't put it past them at all.
When I first mentioned the idea to my wife, I thought I was joking. But when it came out of my mouth, it just kind of went into dead air. Then I realized that it REALLY IS POSSIBLE.

I believe there is no low which these people might stop themselves from sinking to.

Have a nice day.

gf

Chris Powell

(05/11/2000; 21:07:23 MDT - Msg ID: 30371)

Tocqueville's Hathaway examines Morgan's gold shorts

http://www.egroups.com/message/gata/453?The Tocqueville Gold Fund's John Hathaway
analyzes J.P. Morgan's gold derivative
position, and reaches conclusions similar
to those of Reginald H. Howe of
www.GoldenSextant.com:

http://www.egroups.com/message/gata/453?


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

Cassius

(05/11/2000; 21:34:54 MDT - Msg ID: 30372)

@Farfel re: Your post msg#30304 of 5/10

As a long time follower of this discussion forum, I must tell you that I really enjoy your point of view and the spirit in which you are willing to share your wisdom. While other participants may have an abundance of knowledge, I do appreciate your facility with words and your ability to spell them correctly.

It's not my nature to comment openly on the postings of the individuals on this forum, but the sincerity of your advice and the obvious intent behind what you said caught my attention, and I just want you to know that after three years of having sand kicked in my face (the old Charles Atlas ads), that I don't intend to cut and run with some small incremental gain. After all, if I can sit for three years holding the gold related equities I have, then staying the course to gain the just rewards of my previous decisions seems the proper alternative.

I agree with you that once this "gold thing" goes, it will move with depth and breath.

We both can recover from taking our positions too early, but the reward will come from the fact that we identified the trend and will be afloat when the tide begins to rise.

Thanks for your concern for someone other than yourself. This is a personal characteristic all too rare in this Clintonista era.

Good luck to you as this Global melodrama unfolds..

With warmest regards,

Cassius

SHIFTY

(05/11/2000; 21:49:47 MDT - Msg ID: 30373)

Felix The Cat

I think everyone should have pride in there homeland. A Frenchman should have pride in France, an American should have pride in America, as should a man from China ,Russia ,Canada, and so on should love his homeland and take pride in it. The problem is not with the citizens of the world, it is the corrupt politicians, drunk with power, and greed. If you think about it they don't fight wars, they start them. The little guys get sent off to do the dirty work and kill each other.
I don't like the fact that I can't buy a VCR, TV, or even an AM radio made in the USA.With luck you may find a TV assembled here from foreign components. Every time I go to the store I have to hunt for "MADE IN USA" and most of the time I am forced to buy goods that were imported from places where the workers are treated like slaves.
If I buy the slave labor product, then I let the cycle continue and cheat a fellow american out of a good paying job. It's a race to the bottom for the little guys all around the world. Remember, Politicians are like pond scum , they float to the top.

elevator guy

(05/11/2000; 22:30:06 MDT - Msg ID: 30374)

@Farfel

You know what makes you shine? No? OK, I'll tell you.

You share your thoughts with others.

I mean to say, that some people think similar thoughts, but hide them under a basket, for fear of being wrong, or lack of communicative skills, or for whatever reason.

But someone who can verbalize, and speaks,.... who can write, and does, and someone who has been through a lot, and shares, man, now theres a gem.

Now be careful when you walk through the door, lest my accolades cause you to scrape your ears on the door jamb!

(Smile)

ThaiGold

(05/11/2000; 22:48:53 MDT - Msg ID: 30375)

Sacagawea (REAL) Gold Coins at US Mint

http://www.fms.treas.gov/gold/00-03.html=============================================
...
..
.
Here's an interesting link:

http://www.fms.treas.gov/gold/00-03.html

It's an Official US Govt Table/Report
updated monthly, showing ALL Gold holdings
of the US Treasury. (March 1999 Gold Report)

Included are Gold Bullion and Gold Coins
held at:

US Mint Headquarters
Fort Knox
US Mint West Point NY
US Mint San Francisco
US Mint Denver
US Mint Philadelphia
Federal Reserve Bank Branch NY

I was surprised to see (listed) that they
have apparently minted some real Gold
Sacagawea coins. Probably 3ea, 1 oz each.

Imagine the collector-value of such a coin.!.

Note that the US$ valuations shown for each
gold asset is calculated at US$42.222 / oz
which is explained on their previous link:

http://www.fms.treas.gov/gold/index.html

Hope you enjoy this little tidbit for tonight.

ThaiGold
ThaiRanch@OperaMail.Com
===========================================

ThaiGold

(05/11/2000; 22:55:11 MDT - Msg ID: 30376)

Oooops.!. That's March 2000 report, not March 1999

http://www.fms.treas.gov/gold/00-03.html...
..
.
Minor correction: That should have read March 2000
report, not March 1999.

Enjoy.!.

Hipplebeck

(05/11/2000; 22:56:48 MDT - Msg ID: 30377)

(No Subject)

As hard as it is to accept, The world's only superpower is being run by people who are in way over their heads,
Summers?
Allbright?
How did that happen?

ET

(05/11/2000; 23:04:06 MDT - Msg ID: 30378)

Stranger

Hey buddy - a great post! You quoted;

"At policymaking sessions through late 1999 and
early 2000, intense debates broke out as officials grappled with the ways
that changing productivity affects the economy. It was a question the
central bank hadn't confronted for four decades. Fed Vice Chairman
Roger Ferguson literally dusted off his old macroeconomics textbook from
college".

If we only knew which text.

"Productivity gains" seems to be an excuse for every kind of financial mischief these days.

ET

ORO

(05/12/2000; 00:04:15 MDT - Msg ID: 30379)

Fed prepares for currency intervention

http://www.federalreserve.gov/fomc/MINUTES/20000202.HTM
Treasury and the Fed seem somewhat at odds. "Short term" Treasury goals regarding the dollar exchange rates are implied to be for a stronger dollar.

The minutes of the Jan meeting contain an authorization for the Fed Open Market Committee to work the currency markets through the services of the NY Fed on behalf of the Exchange Stabilization fund.

From the Authorization:


"AUTHORIZATION FOR FOREIGN CURRENCY OPERATIONS


The Federal Open Market Committee authorizes and directs the Federal Reserve Bank of New York, for System Open Market Account, to the extent necessary to carry out the Committee's foreign currency directive and express authorizations by the Committee pursuant thereto, and in conformity with such procedural instructions as the Committee may issue from time to time:

A. To purchase and sell the following foreign currencies in the form of cable transfers through spot or forward transactions on the open market at home and abroad, including transactions with the U.S. Treasury, with the U.S. Exchange Stabilization Fund established by Section 10 of the Gold Reserve Act of 1934, with foreign monetary authorities, with the Bank for International Settlements, and with other international financial institutions: "

Note that the ESF is treated as a separate entity and the BIS is named specifically.

The order of magnitude of operations:

"D. To maintain an overall open position in all foreign currencies not exceeding $25.0 billion. For this purpose, the overall open position in all foreign currencies is defined as the sum (disregarding signs) of net positions in individual currencies. The net position in a single foreign currency is defined as holdings of balances in that currency, plus outstanding contracts for future receipt, minus outstanding contracts for future delivery of that currency, i.e., as the sum of these elements with due regard to sign."


Attitude towards price:

"3. All transactions in foreign currencies undertaken under paragraph 1A. above shall, unless otherwise expressly authorized by the Committee, be at prevailing market rates. For the purpose of providing an investment return on System holdings of foreign currencies, or for the purpose of adjusting interest rates paid or received in connection with swap drawings, transactions with foreign central banks may be undertaken at non-market exchange rates. "

Particularly of note is: "transactions with foreign central banks may be undertaken at non-market exchange rates. "


The committee also put out a directive enumerating the particular purposes for which the Federal Reserve System may trade in currencies:

First item is compliance with the IMF:

"FOREIGN CURRENCY DIRECTIVE

System operations in foreign currencies shall generally be directed at countering disorderly market conditions, provided that market exchange rates for the U.S. dollar reflect actions and behavior consistent with the IMF Article IV, Section 1. "

"B. To provide means for meeting System and Treasury commitments in particular currencies and to facilitate operations of the Exchange Stabilization Fund. "

"A. In close and continuous consultation and cooperation with the United States Treasury; "


Most significant was the vote against the Authorization by Broaddus:

"Mr. Broaddus dissented in the votes on the Authorization and the Directive because they provide the foundation for foreign exchange market intervention. He continued to believe that the Federal Reserve's participation in foreign exchange market intervention compromises its ability to conduct monetary policy effectively. Because sterilized intervention cannot have sustained effects in the absence of conforming monetary policy actions, Federal Reserve participation in foreign exchange operations in his view risks one of two undesirable outcomes. First, the independence of monetary policy is jeopardized if the System adjusts its policy actions to support short-term foreign exchange objectives set by the U.S. Treasury. Alternatively, the credibility of monetary policy is damaged if the System does not follow interventions with compatible policy actions, the interventions consequently fail to achieve their objectives, and the System is associated in the mind of the public with the failed operations. "


In the period prior to this, there was no activity by the Fed in foreign currencies, therefore this was in preparation for "disorderly markets":

"The Manager of the System Open Market Account reported on recent developments in foreign exchange markets. There were no open market operations in foreign currencies for the System's account in the period since the previous meeting, and thus no vote was required of the Committee. "


View Yesterday's Discussion.

ET

(05/12/2000; 00:09:45 MDT - Msg ID: 30380)

USAGOLD

Hey MK - how's the handicap? You wrote;

"I heard some apologist for the Keynsian World Order tell Rush
Limbaugh today that the national debt didn't matter because "rate" of dollar turnover
exceeded the "rate" of debt growth, hence more taxes flow into the government, etc. nonsense,
etc. Rush nods his head. He tries but he doesn't really get it when it comes to the whole
economic thing".

Yes - I happened to hear the broadcast. You're right, Limbaugh is clueless when it comes to economics. If anyone, he could do the most good for the average guy in America by learning something about money. He's always claimed the best way to find out what is really happening is to follow the money. It's a shame he hasn't made the effort to learn just what that money is he's trying to follow.

First time I heard this guy I was driving through Truth or Consequences listening to an El Paso station when I heard him do a "caller abortion". It was one of the best pieces of radio I had ever heard, even to this day. The sound of a vacuum - the imagery of the caller just disappearing - it was so real, and unique. It made him famous.

You never know, he may come around, but he's now rich and famous (I have this theory that once you've acquired a private jet, you've so insulated yourself from the market as to render your opinion worthless). Life is good at the top, ask anyone. Even Keynes is a Republican hero.

ET

SteveH

(05/12/2000; 00:29:20 MDT - Msg ID: 30381)

repost from kitco and cool chart

http://www.sharelynx.net/temp/DJ1929comp.gifDate: Fri May 12 2000 01:20
africanminer (the 600 lbs Gorilla...........) ID#200295:
Copyright � 2000 africanminer/Kitco Inc. All rights reserved

Gold is being manipulated. The bullion houses and the central banks are so huge and becouse of this have figured out if they could lease gold ( they don't even own ) they could make huge profits. If the price were to rise to high it would kill their easy money. so the they collude to keep cap the POG so they can keep the game going forward. Sell forward contracts at $300 basically capping the price, then sell into the market which is like ( shorting ) and everyone else just follows by doing the same. The price doesnt rise the cabal keeps the money from the forward contract then they allow the price to rise making money on the way back up. Now sometimes it gets a little out of control but it doesnt take long for them to push it back down.


***

This chart shows a comparison of 1929 to now. Awefully similar.

for chart see above link. Sharefin explains:

Date: Fri May 12 2000 01:16
sharefin (Erle gosh) ID#284255:
-
Not a problem - easily done.

---
Earl
Not so sure on that.
Looking at these two charts makes me think that we could have two stages which would compare with the two phases of the 1929 crash.
The initial plunge which wipes out the last 8 months of excesses.
http://www.sharelynx.net/temp/GlobalSentimentDaily.gif
This action could well be the same as the initial crash of 1929.

Then next comes the long slow grinding bear like from 1930 to 1933 to reach the target levels on this chart.
http://www.sharelynx.net/temp/GlobalSentimentWeekly.gif

The two charts above only give clues to the extent of the falls not the formation.

But a crash & a bear would fit in with 1929's deflationary crash.
And the levels on the two charts above sort of fit in returning these markets to saner levels.

First correction wipes out the speculative blow-off we've had.
The second correction removes the massive rise we've had since 1996.
So if these projections were to come about then the markets would have returned back to levels seen in 1996 which was before these markets started to go insane.
The markets would be back at levels of fair value when compared to the longer term picture.

Now you say that it doesn't look like the picture fits?
Well cast your eyes over this chart.
It's the comparrision of the buildup prior to 1929 and the recent rises we've seen.
http://www.sharelynx.net/temp/DJ1929comp.gif

The top chart is of the DJI and the bottom chart is my compilation of 14 global indices.
Seven US indices & seven of the biggest global indices.
If you were to smooth out the Asian dramas of 1997 & 1998 then they would have a very tight fit.

They resemble each other too closely and you can see from the earlier charts where we are on the picture.

I feel that the Global Indexes Sentiment chart fits far better than just taking a single chart & trying to correlate it.
After all we're now in a new globalised world and all markets are having effects on each other.

Just looking at the way the markets are moving in lockstep with each other ( especially these last few days ) makes me feel that they are aligning themselves up.


btw
The global index charts are forming two nice head & shoulder patterns.
On daily & weekly - one set upon another

Ominous perhaps
Time will tell soon enough.

Simply Me

(05/12/2000; 00:36:26 MDT - Msg ID: 30382)

Shifty: RE 1999-W Gold Bullion Coins

Don't know if anyone's come up with an update on this, but I read yesterday that some of the regular (not Proof) gold bullion coins were minted at West Point and were accidently released with the W mint mark. Don't remember offhand if they were the 10th or quarter oz. coins. But, so far, no one seems to know how many W mints got out. Collector value will depend on how many turn up.

Do you happen to remember the big fuss over the '99 double-die cents? When first discovered they were going for $50 each! In a few months, thousands of them started turning up sending the price into the dumper.

simply me

Simply Me

(05/12/2000; 00:44:23 MDT - Msg ID: 30383)

Shifty: RE 1999-W Gold Bullion Coins

Don't know if anyone's come up with an update on this, but I read yesterday that some of the regular (not Proof) gold bullion coins were minted at West Point and were accidently released with the W mint mark. Don't remember offhand if they were the 10th or quarter oz. coins. But, so far, no one seems to know how many W mints got out. Collector value will depend on how many turn up.

Do you happen to remember the big fuss over the '99 (or was it '95) double-die cents? When first discovered they were going for $50 each! In a few months, thousands of them started turning up sending the price into the dumper.

simply me

Leland

(05/12/2000; 03:40:37 MDT - Msg ID: 30384)

Just so You Don't Say I Didn't Report This....

Scientist claims cabbages are gold mine
5: 23 PM AEST May 12







A New Zealand scientist claims to have found a way of extracting gold from old mine workings...
using cabbages.

Chris Anderson says the ability of plants like cabbages, cauliflowers and turnips, to extract metal
particles from the ground has been known for many years but the process did not seem to work
with gold.

He says he has now found a chemical that when added to the soil, makes the gold soluble and
allows the plants to absorb it.

The plants are then burned and the gold is extracted.

Mr Anderson says he believes his discovery could be commmercially viable, and hopes to
experiment further to see if cabbages will extract other valuable metals, like platinum.

(Thanks to the AUSTRALIAN BROADCASTING CORPORATION, and Fair
Use for Educational/Research Purposes Only.)

Canuck

(05/12/2000; 04:39:52 MDT - Msg ID: 30385)

CRB

Bridge/CRB Current Quotes
Other Futures Markets

Bridge/CRB Index


Page snapshot Fri 12 May 2000 06:37 ET
Description Last Change Percent Change
Bridge CRB Futures Price Index 221 +2 +0.91 %
Bridge CRB Index 220.57 0 0 %
Energies

Description Last Change Percent Change
Crude Oil 29.48 +0.37 +1.27
-----------------------------------------

CRB 221; crude over $29/bbl.

ss of nep

(05/12/2000; 06:17:12 MDT - Msg ID: 30386)

SHIFTY (05/11/00; 21:49:47MT - usagold.com msg#: 30373)

You said - "The problem is not with the citizens of the world, it is the corrupt politicians, drunk with power, and greed. If you think about it they don't fight wars, they start them. The little guys get sent off to do the dirty work and kill each other."


The ones that decide to engage in war should be on point.

Black Blade

(05/12/2000; 06:32:10 MDT - Msg ID: 30387)

Morning Wakeup Call!

Source: Bridge NewsBy Hiroyuki Fujiwara, Bridge News

Tokyo--May 12--Spot gold was underpinned due to a lack of follow-through selling on Friday in Asia, after the U.S. market's overnight slip, dealers said. Short-covering on the Tokyo Commodity Exchange (TOCOM) supported spot platinum but the absence of fresh buying prevented prices from rallying, they said. Gold was underpinned just above the key support line of U.S. $ 275 per ounce, while trading volume remained in the thin level ahead of the weekend and COMEX option expiration later Friday, the dealers said. Players were hesitant to decide certain price directions while weaker market sentiment is expected to weigh on the gold market. Expectations of further selling by investment funds and producers could depress prices amid scheduled sales from central banks, while the dealers noted that no fresh weakening factors have been seen. They said short-covering might trigger gold's price recovery in the near term. The U.S. dollar/yen's slip from Thursday's Asia trading hours depressed yen-denominated TOCOM platinum futures in early morning, while short-covering by speculators ahead of the weekend supported prices, the dealers said. Players were hesitant to open fresh platinum and palladium positions on Friday as major market participants are expected to be absent next week due to the industry meeting in London, they said.

Black Blade: Yawn! Why buy on TOCOM, they just default anyway. Anyway, slow action ahead of the Fed! PPI release this morning, and s&p futures up +6.00. Gold comatose, up $0.050 to $276.00. At least Au is on sale. Hey, those Harmony Tolas look really cool! MK, are they available in the States yet?

Black Blade

(05/12/2000; 06:56:53 MDT - Msg ID: 30388)

PPI as expected! But oil is on the rise again, Hmmmm..........

NEW YORK (CNNfn) - U.S. wholesale prices fell slightly in April, the government said Friday -- a decline in line with expectations and reflecting a retreat in energy prices that had run up earlier this year.

The Department of Labor said its Producer Price Index fell 0.3 percent Friday, in line with the consensus estimate of analysts surveyed by Briefing.com. PPI rose 1.0 percent in March.

Core PPI data, which excludes sometimes volatile food and energy prices, rose 0.1 percent, also in line with estimates and matching the March data.

Stock futures moved up after the report, pointing to a higher open on Wall Street, as investors saw the report as raising hopes of a moderation in inflation and reducing the likelihood of sharply higher interest rates when the U.S. Federal Reserve meets next Tuesday.

The PPI is a key indicator of inflation. A further hint will come when Consumer Price Index numbers are released Tuesday morning. Later that day, Fed chairman Alan Greenspan is expected to unveil a rise in interest rates aimed at choking off rising inflation. Analysts are split between whether rates will rise by a quarter percentage point or a half point

SHIFTY

(05/12/2000; 08:07:30 MDT - Msg ID: 30389)

ss of nep

You are correct, 100%

Henri

(05/12/2000; 08:18:43 MDT - Msg ID: 30390)

Felix the Cat Post #30356

I think your english is outstanding. You have communicated very effectively...something I know I could not even begin to do in your native language. It is an interesting thing to come word to word with those from another culture. I think of it as a miraculous gift of perspective and personal effort on your part. Your input here is certainly welcome. I look forward to a developing discussion around the topics you have mentioned. Thank you for posting.

SHIFTY

(05/12/2000; 08:23:09 MDT - Msg ID: 30391)

Simply Me

I still need to check my coins to see if I have one. I don't know if I would sell it or hold on to it.I would have to see just how much I could get for it. Good chance I won't have to worry about it. Im not a lucky guy. If I got out of gold you all would be rich the next day. Sorry Im in for the long run.
ha ha ha $hifty

oldgold

(05/12/2000; 08:44:24 MDT - Msg ID: 30392)

Farfel

Nice call on today's stock market!

Interesting that the dollar is down and gold is up despite the rally.

Henri

(05/12/2000; 08:45:12 MDT - Msg ID: 30393)

Shifty & ss of nep

ss, you said:
"The ones that decide to engage in war should be on point."

I think the ones that decide to engage in war should be impaled upon a point. In the town square (how barbaric of me)

ss of nep

(05/12/2000; 08:51:10 MDT - Msg ID: 30394)

henri

Fine, or how about

life in front of a firing squad,

that uses BB guns, at 10 feet.

YGM

(05/12/2000; 08:56:59 MDT - Msg ID: 30395)

New Spin on Gold Lending......

Rand Refinery launches gold lending



Johannesburg �
Rand Refinery, the world's largest gold refinery, announced on Friday a new gold loan service for the South African jewellery industry.

For the first time, jewellery manufacturers who buy their gold from Rand Refinery, would be able to purchase gold on loan at well below the rate that was previously available through banks, the company said in a statement.

Jewellers can now use their finished pieces as collateral on gold borrowed from Rand Refinery at a fee linked to the international gold lease rates.

The scheme is available to those manufacturers who can demonstrate that they are currently purchasing their gold requirements from Rand Refinery.

Approved customers are required to sign an agreement and can borrow 95% of the gold content of their finished products ceded to the Rand Refinery as collateral.

"This ceded stock will be vaulted in Rand Refinery's very high security area and covered by their insurance."

Sapa

�

Henri

(05/12/2000; 08:58:31 MDT - Msg ID: 30396)

Our gold (US citizens gold held in trust by the US treasury)

The link provided earlier by ThaiGold Post #30375 shows only 147,341,858 Troy oz of gold in Ft Knox. At a conversion rate of 32,150 Troy/tonne, that is only 4,582 tonnes. I thought we had 8000 tonnes there! If you use the total at all facilities (261,596,357 Troy), we have 8,136 tonnes, but some 5% of that is in the hands of the NY Fed (13,455,433 Troy)and presumably subject to use by the ESF. Hmmm, if this is our gold and our congressmen do not have any idea or control over how it is being dispositioned by the NY fed, I'd say its time for an investigation

YGM

(05/12/2000; 09:09:27 MDT - Msg ID: 30397)

Haven't Seen This Posted Anywhere......

Capital Gains and Bullion...Legislation Aims To Level Playing Field For Precious Metals Investors



------------------------------------------------------------------------
(Washington, D.C. - April 10, 2000) -- Three leading Members of Congress last week introduced H.R. 4170, which would provide capital gains treatment for gold, silver and platinum bullion investment products, in coin and bar form. Congressman J.D. Hayworth (R-Arizona), a member of the House Ways and Means Committee, Congressman Jim Gibbons (R-Nevada), Chairman of the House Mining Caucus, and Congressman Don Young (R-Alaska), Chairman of the Committee on Resources, jointly introduced the bill. Similar legislation is expected to be introduced in the United States Senate in the very near future.

"This legislation would give precious metals investors the same advantages now given to investors in stocks and bonds. This legislation is good news for the precious metals investor. We plan on working hard to ensure its passage in Congress," said Paul Bateman, President of the Gold Institute.

H.R. 4170 provides capital gains treatment for precious metal bullion investment products, including bullion coins and bars. Bullion coins are legal tender coins, issued by government mints, and are distinct from numismatic coins prized by collectors. Bullion coins bear a face value that is largely symbolic; its true value depends on the metal content and the day-to-day changing price for the metal. Bullion coins provide the investor with an economical way to make precious metals investments for diversification and portfolio protection purposes. Bullion coins are manufactured in large quantities and in a standardized uniform manner, making them fungible, or interchangeable with each other.

Some popular bullion coins include the American Eagle, the Australian Kangaroo Nugget, the Canadian Maple Leaf, the South African Krugerrand and the Austrian Philharmonic. Congressionally authorized by the Bullion Coin Act of 1985, American Eagle bullion coins have become one of the world's leading bullion investment coins.

Bullion bars are also covered under H.R. 4170. Bullion bars come in a wide range of sizes, and their weight is measured in troy ounces or grams. Bullion bars are typically sold at a low premium above the bullion price and can be purchased from select commercial banks, brokerage houses and precious metals dealers. Bullion products are liquid investments, with a global 24-hour market.

A copy of the H.R. 4170 can be obtained by contacting the Gold Institute at (202) 835-0185.

*********************************************

# The advancers/advocates, of this legislation would be ideal candidates for GATA E-Mails....IMO....YGM.

Henri

(05/12/2000; 09:11:40 MDT - Msg ID: 30398)

Buchanon in a nutshell.

Given the choices of G. Bush Jr, Gore, or Mr. Buchanon, I have heard some say they might vote for Buchanon. I am posting a speech he made in 1998. I am posting it because he has not done anything to change this, my image of him, lately. I will post a rebuttal to his position in my next post. Anyone else feel free to jump in the fray

Speech:
SNIP
Pat Buchanon before the Council on Foreign Relations of Chicago
Chicago, November 18, 1998

This is a prestigious forum; and I appreciate the opportunity
to address it. As my subject, I have chosen what I believe is the
coming and irrepressible conflict between the claims of a new
American nationalism and the commands of the Global Economy.

As you may have heard in my last campaign, I am called by
many names. "Protectionist" is one of the nicer ones; but it is
inexact. I am an economic nationalist. To me, the country comes
before the economy; and the economy exists for the people. I
believe in free markets, but I do not worship them. In the proper
hierarchy of things, it is the market that must be harnessed to work
for man - and not the other way around.

As for the Global Economy, like the unicorn, it is a mythical
beast that exists only in the imagination. In the real world, there
are only national economies -- Japan's that has lost its animal
spirits, South Korea's that is deep in recession, China's which is
headed for trouble, Brazil's which is falling, Indonesia and Russia's
which are in collapse.

In these unique national economies, critical decisions are
based on what is best for the nation. Only in America do leaders
sacrifice the interests of their own country on the altar of that
golden calf, the Global Economy.

What is Economic Nationalism? Is it some right-wing or
radical idea? By no means. Economic nationalism was the idea
and cause that brought Washington, Hamilton and Madison to
Philadelphia. These men dreamed of creating here in America the
greatest free market on earth, by elimination all internal barriers
to trade among the 13 states, and taxing imports to finance the
turnpikes and canals of the new nation and end America's
dependence on Europe. It was called the American System.

The ideology of free trade is the alien import, an invention of
European academics and scribblers, not one of whom ever built a
great nation, and all of whom were repudiated by America's
greatest statesmen, including all four presidents on Mount
Rushmore.

The second bill that Washington signed into law was the
Tariff Act of 1789. Madison saved the nation's infant industries from
being buried by the dumping of British manufactures, with the first
truly protective tariff, the Tariff Act of 1816. "Give me a tariff and I
will give you the greatest nation on earth," said Lincoln. "I thank
God I am not a free trader," Theodore Roosevelt wrote to Henry
Cabot Lodge.

Under economic nationalism, there was no income tax in the
United States, except during the Civil War and Reconstruction.
Tariffs produced fifty to ninety percent of federal revenue. And how
did America prosper? From 1865 to 1913, U.S. growth averaged
4% a year. We began the era with half Britain's production, but
ended with twice Britain's production.

Yet, this era is now disparaged in history books and public
schools as the time of the Robber Barons, a Gilded Age best
forgotten.

Not only did America rise to greatness through the economic
nationalism so did every other first-rank power in history - from
Britain in the 18th century, to Bismark's Germany in the 19th, to
post-war Japan. Economic nationalism has been the policy of
rising nations, free trade the practice of nations that have
commenced their historic decline. Today, this idea may be
mocked by the talking heads, but it is going to prevail again in
America, for it alone comports with the national interests of the
United States. And this is the subject of my remarks.

Let us, up front, concede the undeniable: These are good
times in America. We have full employment; interest rates are low;
prices are stable; the stock marker is on a tear. The bulls are
riding high; the bears have retreated into the recesses of their
respective caves.

Is this our reward for free trade? My answer is no. Though
these are good times in America, our growth today is anemic,
compared to what it was in the Protectionist Era, and the Roaring
Twenties, when growth rates hit seven percent. Free trade does
not explain our prosperity; free trade explains the economic
insecurity that is the worm in the apple of our prosperity.

The great free-market economist Milton Friedman, is credited
with the line, "there is no free lunch." Let me amend to Friedman's
Law with Buchanan's Corollary: Free trade is no free lunch.

And it is time its costs were calculated.

Back in 1848, another economist wrote that if free trade were
ever adopted, societies would be torn apart. His name was Karl
Marx, and he wrote: "...the Free Trade system works destructively.
It breaks up old nationalities and carries antagonism of proletariat
and bourgeoisie to the uttermost point...the Free trade system
hastens the Social Revolution. In this revolutionary sense alone...I
am in favor of Free Trade."

Marx was right. Here, then, is the first cost of open-borders
free trade. It exacerbates the divisions between capital and labor.
It separates societies into contending classes, and deepens the
division between rich and poor. Under free trade, economic and
social elites, whose jobs and incomes are not adversely impacted
by imports or immigration, do well. For them, these have been the
best of times. Since 1990, the stock market has tripled in value;
corporate profits have doubled since 1992; there has been a
population explosion among millionaires. America's richest one
percent controlled 21 percent of the national wealth in 1949; in
1997 it was 40 percent. Top CEO salaries were 44 times the
average wage of their workers in 1965; by 1996 they were 212
times an average worker's pay.

How has Middle America fared? Between 1972 and 1994, the
real wages of working Americans fell 19 percent. In 1970, the price
of a new house was twice a young couple's income; it is now four
times. In 1960, 18 percent of women with children under six were
in the work force; by 1995 it had risen 63 percent. The U.S. has a
larger percentage of women in its work force than any industrial
nation, yet median family income fell 6 percent in the first six
years of the 1990s.

Something is wrong when wage earners work harder and longer
just to stay in the same place. Under the free trade regime,
economic insecurity has become a preexisting condition of life.

A second cost of global free trade is a loss of independence
and national sovereignty. America was once a self-reliant nation;
trade amounted to only 10 percent of GNP; imports only 4 percent.
Now, trade is equal to 25% of GNP; and the trade surpluses we
ran every year from 1900-1970 have turned into trade deficits for all
of the last 27 years.

Since 1980 our total merchandise trade deficit adds up to $2
trillion. This year's trade deficit is approaching $300 billion. Year in
and year out, we consume more than we produce. This cannot last.

Look at what this is doing to an industrial plant that once
produced 40 percent of all that the world produced. In 1965, 31
percent of the U.S. labor force had manufacturing equivalent jobs.
By 1997, it was down to 15 percent, smallest share in 100 years.

More Americans now work in government than in
manufacturing. We Americans no longer make our own cameras,
shoes, radios, TV's, toys. A fourth of our steel, a third of our
autos, half our machine tools, two-thirds f our textiles are foreign

made. We used to be the world's greatest creditor nation; now, we
are its greatest debtor.

Friends, this is the read-out of the electrocardiogram of a nation
in decline. Writes author-economist Pat Choate, "a peek behind
the glitter of record stock prices and high corporate profits reveals a
deepening economic dry rot - a nation that is eating its seed corn
and squandering its economic leadership position, here and
abroad."

And American sovereignty is being eroded. In 1994, for the
first time, the U.S. joined a global institution, the World Trade
Organization, where America has no veto power and the one-
nation, one-vote rule applies. Where are we headed? Look at the
nations of Europe that are today surrendering control of their
money, their immigration policy, their environmental policy, even
defense policy - to a giant socialist superstate called the EU.

For America to continue down this road of global
interdependence is a betrayal of our history and our heritage of
liberty. What does it profit a man if he gain the whole world, and
suffer the loss of his own country?

A third cost of the Global Economy is America's vulnerability
to a financial collapse caused by events beyond our control. Never
has this country been so exposed. When Mexico, with an
economy no larger than Illinois', threatened a default in 1994, the
U.S. cobbled together a $50 billion bailout, lest Mexico's default
bring on what Michel Camdessus of the IMF called "global financial
catastrophe."

When tiny Asian dominoes began to fall last year, the IMF had
to put together $117 billion in bailouts of Thailand, Indonesia, South
Korea, lest the Asian crisis bring down all of Latin America and the
rest of the world with it.

In the Global Economy, the world is always just one default
away from disaster. What in heaven's name does the vaunted
Global Economy give us - besides all that made-in-China junk
down at the mall - to justify having the U.S. financial system at
permanent risk of collapse - if some incompetent foreign regime
decides to walk on its debts?

A fourth cost of this Global Economy is the de-industrialization
of America and the de-Americanization of our industries. Many of
our Fortune 500 corporations have already shed their American
identity.

When Gilbert Williamson, then president of NCR, was asked
about U.S. workers being unable to compete in a global economy,
he dismissed the question with this remark: "I was asked the other
day about U.S. competitiveness, and I replied that I don't think
about it at all. We at NCR think of ourselves as a globally
competitive company that happens to be headquartered in the
United States."

Many companies still carry fine old American names, but their
work forces are becoming less and less American. In 1985, GE
employed 243,000 Americans; ten years later, it was down to
150,000. IBM has lopped off half of its U.S. workers in the past
decade. Here is author William Greider:

"By 1995, Big Blue had become a truly global firm - with more
employees abroad than at home...Intel...shrank U.S. employment
last year from 22,000 to 17,000. Motorola's...work force is now
only 56 percent American. ...Ma Bell once made all its home
telephones in the U.S. and now makes none here."

Boeing's Philip Condit says he would be happy if, twenty years
from now, no one thought of Boeing as an American company.

Here is Carl A. Gerstacker of Dow Chemical: "I have long
dreamed of buying an island owned by no nation and of
establishing the World Headquarters of the Dow Company on the
truly neutral ground of such an island, beholden to no nation or
society." A Union Carbide spokesman agreed: "It is not proper for
an international corporation to put the welfare of any country in
which it does business above that of any other."

To this new corporate elite, putting America first betrays a lack
of loyalty to the company. Some among our political elite share
this view. Here is Strobe Talbott, Clinton's roommate at Oxford and
architect of his Russian policy: "All countries," said Talbott in
1991, "are basically social arrangements...No matter how
permanent and even sacred they may seem at any one time, in
fact they are all artificial and temporary...within the next hundred
years...nationhood as we know it will be obsolete; all states will
recognize a single, global authority."

This is the transnational elite, our new Masters of the
Universe.

The Cold War has been succeeded by a new struggle. "The
real divisions of our time," writes scholar Christisan Kopff, "are not
between left and right, but between nations and the globalist
delusion."" That struggle will shape the politics of the new century;

and a familiar question is being asked again across America:
When the commands of the Global Economy conflict with call of
patriotism, whose side are you on?

If you would see the consequences of free trade ideology, go to
Detroit. In the 1950s this was the forge and furnace of the Arsenal
of Democracy, with 2 million of the most productive people on
earth. Compare Detroit then to Detroit now. Free trade is not free.

Forty years ago, Japan exported 6000 cars. Today, Japan has
as large a share of the U.S. auto and truck market as GM.

How did Japan do it? Yes, they built fine cars; but the
Japanese did not leave the outcome of this struggle for dominance
in the world's first industry to the vagaries of the market place. The
Japanese fixed the game.

Japan virtually sealed off its marker to U.S. auto imports,
subsidized its auto industry and exports, and paid its workers 15%
of U.S. wages in factories that would have had to be shut down in
the United States. Tokyo's political and industrial elite did not let
Adam Smith dictate how they would play the game.

In short, Tokyo in the 1970s and 1980s looked on our auto
market the way their grandfathers looked on China in the 1920s
and 30s - as an inviting target for conquest. They did not read
Richard Cobden on free trade; they read Alexander Hamilton, who
would never have allowed Japan to overrun our auto industry, our
radio industry, or our television industry.

Remember NAFTA. This treaty was going to open Mexico to
U.S. auto exports. Well, in 1996, we shipped 46,000 cars to
Mexico; and Mexico sent 550,000 cars back to us. Where did
Mexico get its booming auto industry? From Michigan, Ohio, and
Missouri.

In the 1950s, "Engine Charlie" Wilson immortalized himself
with the remark, "What's good for America is good for General
Motors, and vice versa." What Engine Charlie said was true, when
he said it. We see that now as we watch GM closing factories
here and opening up abroad. GM's four newest plants are going up
in Argentina, Poland, China, and Thailand. "GM's days of building
new plants in North America may be over," says the Wall Street
Journal.

GM used to be the largest employer in the United States;
today, it is the largest employer in Mexico where it has built 50
plants in 20 years. In Juarez alone, there are 18 plants of Delphi
Automotive, a GM subsidiary. Across from Juarez, El Paso is
becoming a glorified truck stop, as Texans watch their
manufacturing jobs go south.

Volkswagen has closed its U.S. plant in the Mon Valley and
moved production of its new Beetle into Mexico, where it will
produce 450,000 vehicles this year. Wages at Volkswagen's plant
in Puebla average $1.69 an hour, one-third of the U.S. minimum
wage.

Let me make a simple point here. If you remove all trade
barriers between a Third World economy like Mexico and a First
World country like the United States, First World manufacturers
will head south, to the advantage of the lower wages, and the Third
World workers will head north, to the advantage of the higher
wages. Economics 101.

Since the free-trade era began, 4000 new factories have been
built in northern Mexico, and 35 million immigrants, most of them
poor, have come into the United States - among them five million
illegal aliens, mostly from Mexico. Free trade is not free.

But the free traders respond: Who cares who makes what,
where? What's important is that consumers get the best buy at
the cheapest price. But this is Grasshopper Economics.
Americans are not only consumers; we are producers and citizens.
We have obligations to one another and to our country; and one of
those obligations is not to behave like wastrel children squandering
a family estate built up over generations. A family estate is
something you can sell off - only once.

What is the wealth of nations? Is it stocks, bonds, derivatives -
the pieces of paper traded on Wall Street that can be gone with in
the wind? No, the true wealth of a nation lies in its factories ,
farms, fisheries, and mines, in the genius and capacities of its
people. Industrial power is at the heart of economic power, and
economic power is at the heart of strategic power. America won
two world wars and the Cold War because our industrial power and
technology proved beyond the ability of our enemies to match.

Is this steady attrition of America's independence in
sovereignty irreversible? My answer is no. For the balance of
power in America has begun to shift. In 1997, on the vote to give
the president a blank check to negotiate trade treaties without
Congressional amendment - so-called Fast Track authority, it went
down to defeat. When Newt brought up "fast track" this year, it
was crushed again, by 63 votes.

A majority of Americans no longer believe these trade deals
are good for America, and a majority of the House now agrees with
them. The force is with us. Neither NAFTA nor GATT would pass
today.

The day is not too distant when economic nationalism will
triumph. Several events will hasten that day. The first is the tidal
wave of imports from Asia about to hit these shores. When all
those manufactured goods pour in, taking down industries and
killing jobs, there will arise a clamor from industry and labor for
protection. If that cry goes unheeded, those who turn a stone face
to the American workers will be turned out of power.

In the Democratic Party or the Republican Party or the Reform
Party or some new party, economic nationalism will find its vehicle
and its voice. Rely upon it.

It is already happening - with the crisis in the steel
industry.

Here is a perfect example of the folly of free trade. Since
the mid-1980s, fifty billion dollars was invested in modernization; a
steel worker today is three times as productive as his father; and
the industry has only a third as many workers as twenty-five years
ago.

Yet, Russia, Japan, South Korea, Brazil and Indonesia - four
of them being bailed out with our tax dollars - are dumping steel into
our market, taking down our steel industry to save their own. Why
do we allow subsidized foreign steel to be dumped into the U.S. to
destroy the greatest private steel industry on earth?

Well, says the free trader: If we can get it cheaper, let our
industry go, just as we let our televisions go, our textiles go, radios
go, and the shoe industry go. Besides, these countries need to
sell steel here to get the dollars to pay back their IMF loans. Thus,
the United Steelworkers of America are being sacrificed - to make
the world safe for Goldman Sachs.

There is another reason the free trade era is coming to a close.
One day soon, Americans will wake up and discover that other
nations do not believe in free trade, and do not practice our
particular faith. China and Japan each run $60 billion in annual
trade surpluses at America's expense, but each cordons off its own
market to U.S. goods.

We must start looking out for America first. As Andrew
Jackson once declared: "We have been too long subject to the
policy of [foreign] merchants. We need to become more
Americanized, and instead of feeding the paupers and laborers of
Europe...feed our own, or in a short time...we shall all be rendered
paupers ourselves."

America First, and not only first, but second and third as
well.

Henri

(05/12/2000; 09:13:00 MDT - Msg ID: 30399)

Rebuttal to Buchanon

I have to admit the man has made some good points. As I read, I felt that Mr. Buchanon perceives that patriotism is now somehow inextricably linked to protectionism, and to believe in free-trade is the moral equivalent of being a traitor. I usually reserve my opinion on very strong pieces such as this until the emotionalism they stir up passes. Now that the emotionalism has passed, I feel compelled to come to grips with the ideas presented in this piece and reconcile them with my current perceptions and observations of the ever changing reality that is the very small planet where we live. Forgive me for thinking out loud (so to speak) and using this global forum as a sounding board for my own reality testing exercises. Feel free to supply feedback either publicly to the forum or personally by e-mail.

I'm sure this piece plays well in downtown Detroit/Pittsburgh and other cities which were propelled to greatness in the industrial age. While these cities grew it has yet to be determined whether they actually prospered. Prosperity is actualized when a geographic area (be it a city state or country) takes advantage of great fortune in the short term reality of a particular time and place to assure its participation in the next evolution/revolution of economic reality. An area that has apparently been successful at this endeavor is modern day USA.

Let's not forget that the objective of our grandfathers toil was to provide a better life for us the seeds of their loins. That they have succeeded in this noble endeavor is an understatement. They endured the inequities of Carnegie's vertical integration theory for the simple reason that they shared his vision of better times that would come of industry and innovative technological advance. Their success, victory and achievement should not be cheapened, by the incendiary vocalization of a loser for short term political gain.

The industrial age cities saw some of the best and worse effects of labor/management interaction and for better or worse gave us labor unions and collective bargaining, the results of which may now be perceived to be labor intensive jobs moving out of America. [I only wish I could export the jobs of my local high school staff to Canada or Mexico. Home schooling using the resources of the internet is looking quite appealing. If all in our district had access, I think a large chunk of local taxes could be done away with. Sadly I know access could be provided for all at the cost of a single years budget.] I choose to perceive it (for now) in a different manner. The pursuit of freedom for all peoples to choose their own destiny. This admittedly becomes complicated as the shackles of oppression when lifted reveal the underlying local hatreds and ethnic strife that existed long before the oppression are given air. That these regions choose to reopen old wounds that have long since passed the attention of the world moving forward, is unfortunate. That these groups will do almost anything to draw the worlds attention to their plight is pathetic. The greatest tragedy is the actions of these desparate people jeapordize the freedom of all people everywhere in way not easily dealt with. I for one have a difficult time understanding just what they would like us to do about it all. One can see the result of what happens when something is done in the example of the creation of the state of Israel. No offense intended to any of those with passionate feelings on this subject, but the forced displacement of one group of people in favor of another does not seem to solve anything and often makes matters worse. What the European settlers did to the indigenous natives of North, Central, and South American was brutal and culturally insensitive. It is also history. Call me naive, but it is my sincere wish that people everywhere recognize that history is history and the present is the key to the future.

Those areas that accepted change efficiently and assimilated new ideas and technology quickest fared the best in advances in the quality of local life. Those areas that locked onto short term realities as if they would never fall assunder suffered the worst. Our country is riddled with the scars of the industrial age, our rivers are only now recovering. The last group to give up to a changed reality is organized labor. The cities that flourished in the industrial age but were left behind when the world moved on should remember that before the industrial revolution they were just backwater towns with a manageable population. These areas look for someone else to blame for their failure to recognize changing economic realities. They cry foul and instigate feelings of guilt for the downtrodden worker that lost his job to a foreign labor force. They beg for handouts and subsidies from the govt (US taxpayers) who have turned their collective backs on them. In their worst days, the US labor force endured economic conditions similar to those now found in other countries. This circumstance is endured in these foreign lands because they share the vision of our grandfathers...to make a better life for their grandchildren. They now have something that our grandfathers did not. That something is the example that is the success of America. It is in fact an ongoing example of sucess albeit a somewhat lopsided example of too few people making all too free use of the rest of the worlds resources for the promise of payment in the future enscribed on every dollar bill. These are quite possibly empty promises made in an atmosphere of uncertain financial standing and leveraged investment turmoil.

Are we resting on our laurels and using the rest of the world while we kick back and consume our forefathers wealth like a bunch of spoiled children? NO, this I heartily disagree with. We as a nation have moved on to greter endeavors. What is a nobler endeavor than to enable an ever smaller planet with the knowhow to pull themselves up by their sandlestraps. (I understand that bootstraps are quite inappropriate for equatorial climes...ain't I globally conscious?)

In my personal reality there was no forefathers wealth to squander. Although the Moons set sail with William Penn under the terms of a rather generous land grant from the King of England, they were soon by one means or another disposessed of the entire holding . Legend has it that there was a large swindle, and an heir apparent that was so desparate to recapture the holdings that he gambled away the entire remainder in an attempt to raise the cash to buy back the family birthright. The holdings encompassed a large portion of eastern Pennsylvania north of Philadelphia in the provincial district known as Fallsington. The Moon homestead is still there and there is an island in the Delaware river south of Trenton, NJ bearing the family name. Do I think the holdings should be returned to their rightful owners? Be serious. That is ancient history. The rightful owners of that territory were in fact native Americans. Oddly enough I find I have a one eighth portion of native American blood. Which of the numerous tribes that fought and died for the right to use the local resource for that brief moment in time does it truly belong to? Give me a break! And so it is with all areas of the world. One only has claim to property until someone or something occurs that takes it away. Be it war, travesty or natural disaster. I am proud that my forebears overcame this major setback and eaked out a living however humble and survived long enough to have progenerated me. What happens now is solely up to me.

We must recognize that for better or worse we are all here on this planet together struggling to make the most efficient use of its dwindling resources. The greatest dream of mankind is to effectively harness the power of the atomic nucleus. The power within the hydrogen nucleus is prodigious. We move closer each decade to unlocking its power for peaceful use. The knowlege that such a triumph brings unfortunately also brings a terrible and awesome responsibility. That we cannot continue on a course of sustainable global development without a new and plentiful source of energy now seems apparent to all but the most casual observer. I'm afraid I am going to have to lump Mr Buchanon within this group. The key to a prosperous future is cooperation and understanding that our common goal is to survive, not as a family, race, religion, or ethnicity but as humanity.

Our struggle in this area is now fought on two fronts. The struggle to tap the power of the atom which we know for a fact is there and in an abundance that spans the observed universe and the search in outer space for more room to grow. It is a paradox that the greatest obstacle to our common survival is not the sabre-toothed tiger or rain ice and snow (although these are or have been formidable challenges) but our own selfish pursuit of prosperity at the expense of others. Should we tacitly and passively seek a common denominator where everyone prospers at the same level. The high reduced to the low, the low elevated to the common level? NO. Even the most lowly of life forms on this planet survives by utilizing diversity of form and function to store the fruits of momentary advantage against the inevitable temporal disadvantage. When successful, its offspring live to meet the challenges of a new and oft times quite different reality. Who are we to question the wisdom embodied in so primitive a form. The trappings of intellectual advantage over such lifeforms should not blind us to the simple reality that the ultimate goal is to survive. Preserve our diversity. Cherish it... for it is the force of life itself. And life, by definition, is a struggle.

Leigh

(05/12/2000; 09:17:53 MDT - Msg ID: 30400)

YGM

Capital gains on precious metals? Since when is anyone making a profit by selling them? I wonder if Congress knows something we don't.

Remember what Trail Guide said about how most politicians and billionaires already have their secret stashes of gold?

USAGOLD

(05/12/2000; 09:19:00 MDT - Msg ID: 30401)

Today's Report: Mountains, Molehills, Shortfalls of Gold

http://www.usagold.com/Order_Form.html5/12/00 Indications
�Current
�Change
Gold June Comex
277.60
+1.10
Silver July Comex
5.07
+0.01
30 Yr TBond June CBOT
94~03
-0~05
Dollar Index June NYBOT
110.65
-0.75

Market Report (5/12/00): Gold firmed in early New York trade despite a respectable producer
price number (down .3%). The gold market seemed more interested in rising oil (up another 65�
this morning),overall dollar weakness against the euro (up .8�), and today's Comex option
expiration, an event that often signals a price recovery. Beyond today's activity, we still have the
Fed Open Market Committee meeting on Tuesday and all that it portends. Europe and Asia were
quiet and sideways again last night waiting to take their cue from New York.

The hand wringing over the Swiss sales strategy -- whether they sold 6 tons or 13 tons thus far in
May -- so prominent in yesterday's gold news seems to have run its course. It never ceases to
amaze me how the anti-gold crowd can find a mountain of negativity in a molehill of fact, but they
do and often and the financial press is never wont to put a lid on their public lamentations no
matter how silly or petty. Yesterday's anxiety over the amount of Swiss gold reaching the market
were a little much to handle. One bullion trader London did manage to hit the nail squarely on the
head however when he said: "They've got 120 tons to sell by the end of September so what
they've sold in the first ten days is irrelevant. If we get to nearer to September and they've sold
only 50 tonnes then you might see some action." Oh so refreshing, the cool and bracing breeze of
reason.

If there were only one side to the supply - demand equation, then we would worry about the 120
tons. However, it is 120 tonnes over a five month period in a market that will demand roughly
3500 to 4000 tonnes over the course of this year and faces the prospect of 300 to 700 tonne
shortfall between mine and scrap production and international demand. Even that shortfall assumes
of course that mine production doesn't falter under these less than attractive circumstances for the
sector, and demand doesn't increase under the very real threat of international monetary inflation.
The Washington Agreement will breach about 400 tonnes of that gap, but if it stretches to the
upper end the question becomes: "Where will that gold come from?"

European Central Bank President Wim Duisenberg alluded to potential monetary problems
yesterday in stating that the continuing weakening of the euro, albeit out of step with economic
fundamentals, posed "inflationary risks." We have mentioned the grwoth of gold demand in
Europe in recent weeks. We expect that demand to build as the citizenry takes to heart what is
happening on the continent. Add to that the fact that here in the United States the Fed will not be
raising interest rates .5% (if that indeed becomes the magic number) because all is fine and dandy,
and you have some pretty good demand factors to place on the other side of the ledger from a 120
ton Swiss gold liquidation over nearly a one-half year period. Then of course you have the ever
present threat of a stock market melt down and the latent gold demand it represents.

We still think that buying gold in Year 2000 under $300 is akin to buying it at $42 in 1971, and
would recommend a judicious purchase or two to those who agree with the foregoing analysis. It
will be interesting to see what the anti-gold press comes up with next, as the persistent, negative
reporting increasingly appears to be grasping at straws.

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

The May News & Views is now on its way and should be hitting your mail boxes over the next
few days. We think you are going to like this issue written during the weekend after the April 14
Wall Street Meltdown.

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.

WAC (Wide Awake Club)

(05/12/2000; 10:03:19 MDT - Msg ID: 30402)

No inflation - PPI says so

http://biz.yahoo.com/rf/000512/gu.htmlFriday May 12, 11:55 am Eastern Time
Continental Air says raises fares
CHICAGO, May 12 (Reuters) - Continental Airlines Inc. (NYSE:CAL - news), the nation's fifth largest airline, said on Friday it has raised fares by $5 to $15 one way on domestic routes because of rising fuel costs.

``We've raised fares to offset the high cost of fuel,'' Continental spokeswoman Sarah Anthony said.

Anthony said the increase, instituted Thursday night, increased fares by $5, $10, or $15 on a one-way fare, depending on the length of the trip.

No other airlines appeared to have matched the increase as of Friday morning, Anthony said. Typically, a fare increase will not stick unless most or all major carriers match it, although carriers can take several days to increase them.

NYMEX June crude oil futures hit $30 a barrel Friday for the first time since March 20, with oil prices rising on expectations of strong summer demand in the United States. Fuel is an airline's second biggest expense, after labour.

Cavan Man

(05/12/2000; 10:23:26 MDT - Msg ID: 30403)

Historical Reasons To Own Gold Plus 1

For Leigh (FWIW)Eight Historical Reasons

1. Inflation or fear of inflation
2. Decline in the US Dollar
3. Volatile and/or declining stock markets
4. Rising interest rates
5. Rising oil and commodity prices
6. Banking/Currency crises
7. International loan defaults and other monetary crises
8. International tensions

Plus 1: TG/FOA/Another et al scenario

While private,informed, monied interests will probably move to gold and not the dollar, the POG is reflected in the transactions of the masses of people like you and me. Until the dollar begins to weaken, the "markets" will run to the dollar and not to gold. That is, for me, what is so intriguing about TG/FOA. While he may just be a "regular guy", compared to me, he seems to walk with entities who are much wiser in the ways of the world than the average bear. He's right about time proving all things and we shall see indeed. In the meantime, I am perceiving (hopefully correctly) his "insider's heads up" to be a nod in the right direction.

Henri

(05/12/2000; 10:33:59 MDT - Msg ID: 30404)

YGM Capital gains treatment for gold?

So much for free gold in the USA. If selling gold even for a profit, why would it be anyones business other than the buyer and seller. This act brings gold into a status of a financial asset. Like a stock or bond. Once the bill is passed, all gold sales and transfers will have to be registered. If you have unregistered gold youy will have to sell it privately in the US or outside the US if publicly. No doubt there will be a restriction of gold for export for sale transactions. The only option left would be to loan or lease it. Just what the cabal ordered. This bill is just another way for the govt to dip into your pocket and take your property without your permission. Perhaps all sales agreements should include the words.
All rights reserved, without prejudice USC... etc.

Leland

(05/12/2000; 10:35:18 MDT - Msg ID: 30405)

Very Seldom is There Something on MOTLEY FOOL Worth Reading...This One is...

http://biz.yahoo.com/mf/000511/hill_000511.htmlTa Da..Da Dum..!

RossL

(05/12/2000; 11:11:34 MDT - Msg ID: 30406)

YGM - Henri - Capital gains treatment for gold?

The politicians want to register gold for the same reason they want to register firearms. It makes confiscation easier!

Hill Billy Mitchell

(05/12/2000; 12:09:25 MDT - Msg ID: 30407)

Taxability of Gold and Silver transactions

Dollar gains on sale of gold and silver holdings has been considered taxable for quite some time by the Unconstitutional IRS income tax code. What is interesting is that legislation to tighten up the screws is apparently being placed on the table. If so we can be sure that congress anticipates an upward movement in the price of physical gold and are chomping at the bit to extract as much revenue as possible from the development. You can be sure that those writing the bill will have their personal ducks in a row in order to avoid their paying of a tax on the increase in the value of their gold.

Yes, also the registration of gold is identical to registration of guns. They cannot confiscate what they cannot locate. You should consider the taxation of gold and silver transactions as a partial confisction of your assets.

When the time comes they will do as they please. What they want is your wealth no matter what form it is in. Best be on your guard. I say register your gold and silver and food and clothing if your patriotism extends to the point that "If my country needs it", by all means I must do my part.

hbm

YGM

(05/12/2000; 12:32:54 MDT - Msg ID: 30408)

IMPORTANT GATA NEWS....

http://lemetropolecafe.comMidas du Metropole
"The Gold Market and Precious Metals Commentary"


Q. Little Bear is in the 'doghouse'. Which table do you think he'd be under ?
A. Gold, of course. But he is hopeful.




GATA Delegation Makes Significant Progress in Washington

On Wednesday at 11:30, the Gold Anti-Trust Action Committee consisting of Chris Powell, Reginald Howe, Frank Veneroso, a State Senator and myself met with one of the most powerful politicians in Washington. It was only going to be a 15 minute meeting. It lasted 45 minutes.

At the end of the meeting, we were excused from the room for several minutes. When the people we met with returned, we were told that they were going to try and set up a meeting with another influential politician at 2 o'clock, but that we would have to call at 1:30 to confirm.

We were stunned to learn at 1:30 that this politician had said, "I am aware of the issue," and that he wanted to meet with the GATA delegation. The meeting took place and 6 members of his staff also attended. What was most remarkable is that this politician left the floor of Congress to attend our hastily arranged, unscheduled meeting.

This politician asked many questions and was very focused on what we had to say. So much so, that he was annoyed when a staff member left to deal with some other pending, saying that this was more important. He told us he had read our biographies before coming to the meeting and was a bit taken aback when he was handed the "Gold Derivative Banking Crisis" document to him with his name and state on it.

This knowledgeable politician said that he and his staff would look into our contentions and suggested that we might meet again. After this very intense one hour meeting, he returned to Congress which was in session.

From there, we went on to meet with Dr. John Silvia, the Chief Economist of the Senate Banking Committee. I could tell he had spent some time on our presentation because he had highlighted material that I had sent to him. Frank, Reg and John did a terrific job (as they did in all the meetings) explaining what we have learned through our extensive research. That meeting also lasted an hour and Dr. Silvia took copious notes.

Yesterday, I passed out 88 of the documents to the staff of all the Senators and Representatives on the banking committees. They were told to look for an open letter to all of them in Monday's Roll Call.

That was some schlep. For the Senate I went to the Dirksen, Russell and Hart buildings. For the House I went to the Rayburn, Longworth and Cannon buildings. It took me the entire day, but was well worth it. Congressman Lee Terry of Nebraska could not have been nicer and said he would read the document on his way back to his native state this weekend.

I was struck by how different all the buildings were. AND HOW BIG. Most were about 100 yards long and were circular for traffic flow. I made the mistake of buying new shoes for the trip. Now, my feet are all blistered. Big booboo.

My last stop was the Rayburn Building and I smiled as I went by The Gold Room.

It was the opinion of the entire Gold Anti-Trust Action Committee delegation that the trip was far more fruitful than any one of us dreamed possible. However, as we all know, that was just our first salvo. There is much to be done to win the day and we are already planning our next course of action.

When our adversaries realize how far we have come, we know that they will go all out to discredit us. If yesterday's meetings were any indication of making a serious impact on those who count in Washington, the other side has their work cut out for them!



Bill Murphy ( Midas )

YGM

(05/12/2000; 12:39:54 MDT - Msg ID: 30409)

TODAY THIS YGM guy....

Feels EXTRA Proud.........of being a GATA supporter, and believer in our cause.....

MANY THANKS to Bill, Reg, Frank and John are due them by comment here and e-mail....IMO.....Ken (YGM)

GO GATA & GOLD.

DaveC

(05/12/2000; 12:41:37 MDT - Msg ID: 30410)

Leland (05/12/00; 10:35:18MT - usagold.com msg#: 30405)

Great link to The Fool. There is always a way to rationalize everything.

Kudos to the pop gun army at GATA!!!!!

Dave

Hill Billy Mitchell

(05/12/2000; 12:51:16 MDT - Msg ID: 30411)

Rush Limbaugh

ET (5/12/2000; 0:09:45MT - usagold.com msg#: 30380)

Sir ET

About Rush:

I began listening to Rush Limbaugh in the early years. He is enjoying himself and he is in it for the money. I heard him say so much "live" several years ago.

I enjoyed him for two reasons. He was entertaining and he stimulated my thinking. The problem with Rush is that he is taken by some to be something more than he is, an entertainer. His value to me and all in this respect is enormous; however, the downside is that too many take what he says as authoritative.

I have come to the conclusion that he will not shy away from offering an "authoritative" opinion about any thing no matter how truly ignorant he is on the subject. This stems from the type of "animal" he is. Lets face it he is a political "animal" and as such follows only the rules of politics. The truth does not matter. Only political survival matters.

USA gold and you are absolutely correct. Rush does not have a clue when it comes to economics. Let's face it, he is ignorant in this area when the discussion moves outside the realm of political rhetoric. Rush is a lot like Clinton. He sends up trial balloons. When he finds the direction of the wind he uses it to his advantage. He can skillfully change direction without the slightest notice that he has done so. His mouth is "smoother than oil"

If one is kept in ignorance he does not pose a threat. Rush is not a threat to TPTB, but has become a tool of those who would foster the ignorance of economic and monetary issues. We have a responsibility. As I understand the sacred word, God does not afford us an excuse for ignorance.

I probably should have kept silent in this regard but could not help myself.

hbm

YGM

(05/12/2000; 12:55:33 MDT - Msg ID: 30412)

Leigh, Henri & RossL

I concurr w/ your comments re: Bullion & Cap Gains thing...

Let me take their (Gov't) grab one step further at the risk of sounding paranoid (cause I'm a Miner) "I fully believe" that thru environmental issues and bureaucratic intervention, the US and Canada will at some point in the next few years attempt to Nationalize (commie-ize) the Gold Mining industry in some sneaky/ slimy underhanded way.

The hurdles to be a small independent Gold miner in Alaska & Yukon are driving many long time residents to quit.....Paper, paper and more paper. Permits and fees til you see red, white and blue. I believe there is more than just a money grab here by Gov't for all this permitting etc. If $$ grabing were the case here in Canada all they have to do is increase the royalty on a ounce of Gold from $2.00 (that's all you pay beyond income tax) to something more modern...This $2.00 Royalty has not changed for 100 years.....YGM.

YGM

(05/12/2000; 13:21:35 MDT - Msg ID: 30413)

"Gold Derivative Banking Crisis"......GATA Report!

I just have to wonder aloud here...How many politicians and their staff upon reading the GATA report will soon be buying PM stocks and or Gold itself......Greed knows no bounds even among percieved honest men......Many will view this report as their own crystal ball for Gold and future events....Like a horrific short squeeze coming someday soon.......The squeeze on Gold will come..."From Many Fronts" ....YGM.

Leland

(05/12/2000; 13:25:54 MDT - Msg ID: 30414)

DaveC, Let's Bow Our Heads in prayer...

http://www.star-telegram.com/news/doc/1047/1:TOPSTORY/1:TOPSTORY0512100.htmlAnd pray again, TOGETHER...

gidsek

(05/12/2000; 13:34:10 MDT - Msg ID: 30415)

More Credit

Fannie Mae pledges $50 billion for mortgages in Michigan
The Associated Press
5/12/00 10:31 AM


GRAND RAPIDS, Mich. (AP) -- Mortgage agency Fannie Mae says it will invest $50 billion over seven years to make home loans more available in Michigan.

Fannie Mae, U.S. Sen. Spencer Abraham and U.S. Rep. Vernon Ehlers called a news conference for this afternoon to announce the company's "largest investment plan in the country and the single largest housing investment in the history of Michigan."

The "HouseMichigan" program would invest $50 billion over seven years and could benefit 500,000 state families, according to a statement released today. The program is part of a larger plan to invest $2 trillion and help finance more than 18 million homes for families most in need through the end of the decade.

"Homeownership represents the easiest way for America's families to create personal wealth and develop home equity, and serves as the cornerstone of economic security," said Ehlers, R-Mich.

Michigan has a 76.5 percent home ownership rate, compared with 67.5 percent for the nation as a whole.

Last month, Fannie Mae committed $1 billion over seven years for home loans in Detroit.

"This announcement is extraordinary," said Gregg McDuffee, director of real estate for SmithGroup Consulting, an architectural and engineering company in Detroit.

"One of the core requirements of urban revival is home ownership, and this will go a long way toward improving neighborhoods and attracting new businesses," he told The Detroit News.

"Michigan has a rich history of home ownership," said David Dworkin, who will manage Fannie Mae's statewide effort.

"Over 76 percent of Michigan families live in their own homes," Dworkin said. "But there are many groups and many areas that are badly underserved, and we want to work together with our lender partners to make the opportunity for home ownership more available and more accessible."

Fannie Mae does not lend directly to consumers.

The company buys mortgages from traditional lenders with money that it borrows on Wall Street. Because Fannie Mae assumes the risk, banks are able to lend to higher-risk applicants and those without traditional credit histories.

David Littmann, senior economist at Comerica Bank, said Fannie Mae's investment in Michigan is a phenomenal amount of money. But he questioned its effect on distressed neighborhoods.

"The continuity of the economic expansion and low inflation, which in turn maintains affordable mortgage rates, will do more than any quasi-government program to bring a restoration of urban living," Littmann told the Detroit Free Press.
---------

gidsek

ss of nep

(05/12/2000; 13:53:58 MDT - Msg ID: 30416)

This is a good one

http://www.kitcomm.com/comments/gold/2000q2/2000%5F05/1000512.150832.aynrandee.htm

Leland

(05/12/2000; 13:56:02 MDT - Msg ID: 30417)

Happy Stories are Better. Here's one I Posted this Morning...

chispas (ID#: 6556)
Success Story (I Love 'em)
5/12/00 11:15
1474673
� Previous Message
Next Message �

Canadian Natural another
Edwards success story
Calgary financier prefers cash to flash,
Mathew Ingram says

Mathew Ingram

Thursday, May 11, 2000

Calgary -- The Canadian oil patch is well
known for its larger-than-life characters, with
their sprawling cattle ranches and monster
homes in Mount Royal, the ones who fly
around in corporate jets or have trouble
deciding which one of their 15 cars to drive.
Murray Edwards is about as far away from
that kind of lifestyle as you can get -- despite
the fact that he is probably worth about half a
billion dollars and has created more corporate
value than a dozen CEOs put together over the
past 10 years or so.

A case in point is Canadian Natural
Resources, the company he and several
partners -- including current chairman Allan
Markin -- took control of when it was a penny
stock in 1989. After buying about $1-billion
worth of BP Amoco's oil and gas assets last
fall in a lightning-fast deal that took the entire
industry by surprise, Canadian Natural now has
annual revenue of $1.3-billion and a market
value of more than $4.7-billion.

In typical Murray Edwards style, the takeover
bid for BP Amoco's assets that one analyst
called "strategically brilliant" came on a Friday
during the Calgary Stampede, while most oil
patch executives were relaxing at beer tents
and rodeo parties. With his $1.6-billion bid (the
assets were split with Edwards-controlled Penn
West Petroleum), Mr. Edwards acquired some
of the most desirable properties in Western
Canada before they were even for sale. Then
he celebrated with a hamburger at Wendy's.

In its first-quarter results reported yesterday,
Canadian Natural's profit climbed by a
staggering 1,265 per cent to $142-million, and
the company's cash flow leaped by over 240
per cent to $343-million. Oil production
increased by more than 100 per cent. Last
year, the company's cash flow grew 63 per
cent to $723-million and its earnings rose about
240 per cent to more than $200-million. Oil
production increased 52 per cent.

Canadian Natural's profit has grown by more
than 34 per cent a year for the past 10 years in
a row -- a record of consistent growth that for
the Canadian oil and gas industry is so rare as
to be almost an aberration. A $5,000
investment in Canadian Natural shares in 1989,
when they were worth about 74 cents each,
would now be worth $3-million. And the
company continues to grow, with plans to form
a partnership and spend about $6.5-billion over
the next few years developing its heavy oil
properties.

Ensign Resource Services is another
success story. Although its growth has been
eclipsed recently by competitor Precision
Drilling, Ensign has grown from a handful of
drilling rigs in 1990 to the second-largest driller
in the country, with annual revenue of
$370-million and a market value of more than
$1-billion. When Mr. Edwards first bought a
stake in the company, other industry players
told him he was crazy, that the oil well drilling
business was a mature industry with not much
room for growth.

Like several other oil patch players, Mr.
Edwards is a former corporate lawyer who
went into business for himself in 1988. But few
of his peers can boast a track record like his --
the $100,000 investment he started with has
become a veritable empire worth about
$400-million. In addition to his stake in
Canadian Natural and Penn West, he owns
part of Rio Alto Explorations, a large chunk of
Ensign, a stake in Magellan Aerospace, and
about 10 per cent of leading oil patch
brokerage firm FirstEnergy Capital.

Mr. Edwards also has some other less
profitable investments, mind you. For example,
he controls a mining company called Imperial
Metals, which he acquired in 1994. The market
for copper and gold hasn't exactly been on fire
for the past few years, however, and neither
has Imperial. The company lost $41.5-million in
1998 (including writedowns) and $6-million last
year, and the stock is now 35 cents -- down
from $2.50 in 1997.

Mr. Edwards also owns about 15 per cent of
the Calgary Flames, another investment that
has been a major money loser, and one that the
financier has said he made more out of a sense
of civic duty than for financial reasons. Even
civic duty has its limits, though: After losing
$12-million a year and facing even more losses,
the owners said recently that if they don't sell
enough tickets and get a more favourable
break on the Saddledome, they will be forced
to sell the team to the highest bidder.

Leaving aside those particular deals, if you had
bought a basket of Edwards-controlled stocks
from 1989 to 1996, you would have made quite
a large pile of money. With just five
investments in the early 1990s, in companies
that had either failed or were failing --
Canadian Natural, Ensign, Rio Alto, Penn West
and Magellan -- Mr. Edwards and his partners
have managed to create more than $10-billion
in market value.

(Thanks to the TORONTO GLOBE AND MAIL, And Fair
Use for Educational/Research Purposes Only.)

ss of nep

(05/12/2000; 14:05:29 MDT - Msg ID: 30418)

ss of nep (5/12/2000; 13:53:58MT - usagold.com msg#: 30416)

It sort of goes along with what I said about the Roman Empire last Friday ( or so ).

But it is more informative.

ced_s

(05/12/2000; 15:14:09 MDT - Msg ID: 30419)

@YGM

I hope you are right about those Congressmen and aids etc: buying into the PM market. It's for darn sure we would have a house cleaning in the Commodity Market. Maybe a few people would even get to meet BUBBA (in prison)!! Now at least Slick Willie the Boy King will have someone to blame when the proverbial brown stuff hits the fan.
I am very proud of Bill Murpy, Chris Powell etc: for the job the have done so far. And a heart felt WELL DONE to those that supported GATA with money, E-Mails and phone calls to the Congressional offices. Let's hope we can continue to work as a cohesive unit to support GATA.
Ed Stuart

TownCrier

(05/12/2000; 15:23:24 MDT - Msg ID: 30420)

Hear ye! Hear ye! A special offer that will not likely last long

http://www.usagold.com/onlinestore/special.htmlAs word leaked out that we had secured a nice cache of these special (and popular!) German 20 mark gold coins, we've already had some sizeable orders taking a significant bite out of our available supply. At only $77 each during the current price-range for gold, these coins are priced to move, and they will! ...out of the weak hands and into the strong. Here's your chance to "get a grip", and seize a special piece of history! MK says the initial size of the cache was 2,500 coins. That explains the glow we've been seeing eminating from the Castle in the distance. (You can be sure The Tower has already secured its personal share out here!) If you run the numbers, you'll see that it won't take much interest in this offer to completely exhaust our supply. (MK said he is already on the look-out for any others caches that might be found to extend this offer.)

Feel free to use our new secure on-line ordering system to pass your encrypted purchase data directly to Michael and Co. at the Castle...24 hours a day, and all weekend too!

We've tested the secure server system here in The Tower, and you can always be sure that your browser succeeded in submitting your data when you receive the automatically generated e-mail confirmation of your purchase order.

For those of you not interested in ordering at this time, you will still want to check out this informative page. Enjoy!

HI - HAT

(05/12/2000; 15:25:46 MDT - Msg ID: 30421)

ss of nep For Sale

British Nationals are largest foreign ouners of American assets, than any other country.

Vatican, aside from Huge tax free real estate holdings, in America, are also major stockholders in Bank Of America, and who knows what else.

YGM

(05/12/2000; 15:43:00 MDT - Msg ID: 30422)

ced_s

GATA News.....Ed.......You said.....

I am very proud of Bill Murphy, Chris Powell etc: for the job the have done so far. And a heart felt WELL DONE to those that supported GATA with money, E-Mails and phone calls to the Congressional offices. Let's hope we can continue to work as a cohesive unit to support GATA
.
Ed Stuart-------

Ed your comments also make any Gata supporter feel good, especially your last line..."A cohesive unit to support Gata".........YGM.

Lets get some GATA momentum and even a little praise for the Knights of the GATA Table happening! Where are all the Pontificating Gold Advocates to help out here? GATA just keeps on forging ahead and gathering high profile advocates as well as evidence and this site seems almost blase` about it,.. except for a few like minded folk...

YGM

(05/12/2000; 16:06:48 MDT - Msg ID: 30423)

Leigh.......

You see thru the fog very well Leigh!

Leigh (05/12/00; 09:17:53MT - usagold.com msg#: 30400)

YGM

Capital gains on precious metals? Since when is anyone making a profit by selling them? I wonder if Congress "knows" something we don't.
......................................................................................
(comment).....They probably do or at least some do...those others not in the know are right now getting a GATA Education and you can bet it will have widespread ramifications...IMHO.....Ken
......................................................................................
Remember what Trail Guide said about how most politicians and billionaires already have their secret stashes of gold?

.......................................................................................
(comment).....you bet and I firmly believed it before I ever
came to the net to get in on the Gold Wars....Best Regards: Ken.

USAGOLD

(05/12/2000; 16:51:56 MDT - Msg ID: 30424)

The German 20 Mark On-Line Offer: Some Comments

http://www.usagold.com/onlinestore/special.htmlI just posted this to my Daily Market Report page:

This Special On-line Offer of pre-1933 German 20 Mark gold coins is a landmark event for
USAGOLD/Centennial Precious Metals. Over the past five or six years, since we first broke
ground on the concept of privacy-based gold investing, we have sold several hundred thousand
small European gold coins to investors all over the United States in tranches from 30 coins on up
to several thousand in single purchases. Never though has a sale of gold coins meant more to us
than the one, Randy Strauss, our noble TownCrier at the Forum page, has assembled for the firm
over the past week and unveiled today via the link provided above. I approach this offer of
German 20 mark gold coins with the same anticipation, enthusiasm and hope that I did when I first
launched Centennial Precious Metals some 27 years ago (My how time flies!)

We feel fortunate that this web site -- which started as a simple attempt to get the news out on gold
on a daily basis free of the mainstream press anti-gold bias -- has grown to the magnificent
proportion it has over the past few years. We feel doubly blessed with your loyal and consistent
patronage through normal business channels over this period. Now we launch this attempt to place
investment class gold on the internet and hope it meets with your satisfaction, and that it becomes
the first of many similar offers.

So many of you have you called over the past three years to say how important this web site has
become to you, and too, how much you appreciate the extraordinary contributions of the posters
on a daily basis who don't get paid a thing for their determined, scholarly, and at times all too
human efforts. I would like to take this opportunity to salute and thank that fine group who've
given us all so much -- myself included. We have become a community of sorts -- a culture
gathered around a simple yellow colored metal that somehow encompasses the foundation of our
beliefs. Who would have guessed it? Yes, we feel fortunate to be at the center of all this for so
many like-minded goldmeisters. We would also like to take this special moment to offer our
thanks and best wishes to all our clientele for a golden future. MK

HI - HAT

(05/12/2000; 17:16:18 MDT - Msg ID: 30425)

USAGOLD

I only buy 1 oz. bullion coins. I hope you can offer the major ones in a daily format. Thanks.

HI - HAT

(05/12/2000; 17:26:00 MDT - Msg ID: 30426)

USAGOLD

I should add, I'll be buying 1 oz. bullion coins until the price really explodes, then I might be going to the 1/10 oz. or grams !!!. :- )

Hill Billy Mitchell

(05/12/2000; 17:30:24 MDT - Msg ID: 30427)

Official Release

http://www.bog.frb.us/releases/H15/update/
Official: Federal Reserve Statistical Release

Release Date: May 12, 2000

Rates For Thursday, May 11, 2000

Federal funds 6.05

Treasury constant maturities:
3-month 6.14
10-year 6.47
20-year 6.54
30-year 6.16

right-side up spread FF vs long bond = +.11%

SHIFTY

(05/12/2000; 17:38:44 MDT - Msg ID: 30428)

Ponzi

Nasdaq 3,529.06 + Dow 10,609.37 = 14,138.43 divide by 2 = 7069.21 Ponzi
Up 46.44 ponzi points

Leland

(05/12/2000; 17:53:09 MDT - Msg ID: 30429)

Michael, No. The Credit is Yours Entirely...

"We would also like to take this special moment to offer our
thanks and best wishes to all our clientele for a golden future. MK"

Leland

(05/12/2000; 18:33:31 MDT - Msg ID: 30430)

And There's Bill "Fleck"...Kudos to him too...

His smartest move of all. . . In other news, Bob Rubin was on the tape
saying he sees substantial risk to the U.S. economy because of stuff like
the current account deficits, low savings rate, the stock market, etc. I
continue to find this particularly interesting, since he was one of the
architects of the present bubble (via the Mexico and LTCM bailouts). You
have to give him some credit, though: He is way smarter than Summers and
Greenspan. Just look how he had the great sense to get the hell out of town
while the getting was good. He'll have a lot more distance between himself
and the bursting bubble than Larry or Al will.

JavaMan

(05/12/2000; 18:59:46 MDT - Msg ID: 30431)

HI - HAT, all...

In addition to some numismatics, I too only buy 1 oz bullion coins (economies of scale and all that) however, I would like to ask you to look at this from a different angle. I want to remind you of another forum where the posts are bordered with advertisements, some of them animated and totally distracting. That is not my cup of tea and I would be extremely disappointed to see USAGold deteriorate to such a state.

I, rather, appreciate "a clean, well-lighted place for gold investors to share news and opinions; visited by thousands as THE definitive gold economics forum--with all due credit going to our valued family of posters. There is no dress code, but a civil attitude is required." and I submit this warrants that each of us "rethink" our purchasing decisions/habits and consider that "It is your purchase of gold from Centennial Precious Metals that nourishes these pages."

Hosting an interactive web site is not an inexpensive endeavor and the cost comes directly out of the bottom line. Personally, I would be willing to pay a membership fee for the right to have access to the information available here. Why not get some gold at the same time?

JavaMan

(05/12/2000; 19:29:06 MDT - Msg ID: 30432)

Henri (Shifty & ss of nep), re: your msg# 30393

How about a compromise...put the bastards on point an let the "friendly fire" take 'em out.

Now I'm going to settle in and check out your posts re: Buchanon. Hopefully, I'll be back to you tonight.

JavaMan

(05/12/2000; 20:33:43 MDT - Msg ID: 30433)

Henre, re: Buchanon...

I have to say, while Buchanon, seems to be a controversial figure as of late, and I haven't considered him as a viable alternative to the disappointing front runners (partly because of the bizarre press he has been getting) I ask this question. Who, of all of the candidates more typifies the early founding fathers in terms of ideals? I know how I would answer, and it ain't Gore or Bush.

I read your msg#: 30398 (Buchanon speech) and, quite honestly, I found nothing offensive in it. I wonder who wrote it for him. (smile)

I have become disillusioned with politics as it seems to be a money game. Not just who raises the most money for the campaign, but who demonstrates to the "big money" that their "big money" will continue to direct and control.

While its not a consensus yet, it looks like China will get permanent world trade status. Give me a break. Who is driving that? Here is a country that farms and harvests human organs for sale, commits other untold atrocities, is belligerent with Taiwan and now Japan, is threatening to nuke us, and yet, our congress will most likely give them exactly what they want. For what? So corporate US can make a buck there? As Al Pachino said in In Justice for All, "something very funny is going on here."

Buchanon may or may not be the best person for the job but what I feel for sure is that if we, as a nation, stay the present course, our future is bleak. You said, "The key to a prosperous future is cooperation and understanding that our common goal is to survive, not as a family, race, religion, or ethnicity but as humanity." I submit that the best way to do that is through a strong America yet we're selling out at the speed of light. And not just a strong America in terms of military might but, more so, in terms of national integrity, morality, and spirituality. Do these attributes describe Clinton, I don't think so. And I don't think the Chinese or Russian governments are truly interested in cooperation and understanding or any humanity other than their own. Do you?

TownCrier

(05/12/2000; 20:36:20 MDT - Msg ID: 30434)

HI-HAT, Good Sir, Michael's Castles is well-stocked with bullion...oh yes it is!

http://www.usagold.com/products/bullion.htmlJust not available for one line acquisition. You have to get it the fun way...by picking up the phone and giving that man a call, that's all.

Sir JavaMan, I appreciate your fresh perspective. I'm glad to see that someone, such as you have done, has noticed that we keep our advertisements to a minimum for the sole purpose of making this site as visitor-friendly, and as "clean and well lighted" as possible. While an individual is certainly free to come and go as he chooses, and to conduct his business with whomever he chooses, it is our hope that our visitors will--when the time is right for them to make a purchase of gold--to please consider using Centennial Precious Metals as their source of gold. Unlike the high brokerage fees and commissions for many other financial transactions and services found in the wide world, the margin on gold is so thin that this truly is a fine and friendly market for buyers (customers). We are certainly eager to help with their "enjoyment" and participation in this unique market because it comes down to reaching ever-more people with the message of sound money to generate the volume needed to keep the fire burning.

Ultimately, and this is the part I like best, such a relationship between a good and honest broker and the wise and thoughtful client is mutually beneficial...symbiosis at its best in the real, all-too-often savage, world of business. I will leave it to Michael to speak for himself, but as for me, personally, I sit out here in The Tower on the far edges of the wilderness writing about gold, thinking about economics, and coding web pages for gold because frankly, there is nothing else I would RATHER do...although some might suggest my choice is leaving me well short of my potential. However, to that I say that the more I have come to understand gold over the years, the more that everything else seems to fall into place.
The Bottom Line from The Tower is this: while I remain quite willing to do this USAGOLD webwork all quite literally for a song, it is the people like you who nonetheless keep soup in my bowl. So as long as I have the sweet song of gold in my heart, you can expect to always find me here in The Tower until the reaper comes to gather me in, whether it be from old age (still a LONG way off), lack of soup, or most likely...an armed assault on The Tower by those who failed to heed our cautionary commentaries counseling them to take advantage of gold at these prices through physical acquisition. While the value of contract-denominated "wealth" of all financial shapes and financial forms can fall away due to counterparty risk, with gold, you always have the universal hard asset of savings which is itself built upon the liablities of nobody...it represents Payment In Full.

sourdough

(05/12/2000; 21:42:55 MDT - Msg ID: 30435)

ON THE ROAD TO AN ASIAN CURRENCY?

http://business-times.asia1.com.sg/6/views/views01.htmlInteresting editorial about ASIAN MONETARY FUND and the possible use of their $750 billion U.S. RESERVES

Marius

(05/12/2000; 21:45:16 MDT - Msg ID: 30436)

ET #30380, & Leigh #30400

ET:

"we're all Keynesians now"
Richard M. Nixon


Leigh:

Maybe they made $ by marking $35 (or $42)/oz gold to market??

All: this "evil trader" is out of the gold derivative business for the moment, and concentrating on more profitable areas like crude and unleaded gas!

Happy motoring!

M
M

Goldfly

(05/12/2000; 21:53:41 MDT - Msg ID: 30437)

Elevator Guy......

You out there?

I have something for you......

Chris Powell

(05/12/2000; 22:19:51 MDT - Msg ID: 30438)

GATA Chairman Murphy reports on Washington trip

http://www.egroups.com/message/gata/454?GATA Chairman Bill Murphy reports on
GATA's trip to Washington to call
attention to manipulation of the price
of gold.


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

AREM

(05/12/2000; 22:27:55 MDT - Msg ID: 30439)

Alternative to Pat Buchanon

@ Henri (05/12/00; 09:11:40MT - usagold.com msg#: 30398) Pat Buchanon's speech
The Great Libertarian Offer
by Harry Browne
On February 14, 2000, I formally announced my candidacy for President as a Libertarian.

I am running for President because it's obvious that no Democrat or Republican is going to stop the relentless growth of the federal government. No one but a Libertarian will reduce your taxes dramatically, allow you to live your life as a free American, and restrict the federal government to its Constitutional limits.

I am running for President because the Republican and Democratic candidates argue only about which of them can best run your life. I believe you know best how to run your life.

Today (according to the U.S. Census Bureau) federal, state, and local taxes take 47% of the national income. The Republican and Democratic candidates are discussing whether that figure should be raised to 48% or lowered to 46%. I want to cut it in half at the very least and do the same to your overall tax burden.

I am running for President because the federal government has stuck its nose into virtually every area of your life, with no Constitutional authority. It has made a mess of our health care system, of education, of welfare, and of law enforcement.

If we get the federal government out of all these activities, not only will they work much better, but we will no longer need a federal income tax -- and we won't need to replace it with a new tax. The money collected today from tariffs and excise taxes is enough to finance a strong national defense, the federal judiciary, and the other functions the Constitution actually authorizes -- just as those taxes did for America's first 124 years.

I am running for President because you shouldn't be forced to put 15% of your income into a bankrupt Social Security system. I believe you are better able than any politician to plan for your future -- and you certainly care more about it. I want to sell off unneeded federal land and other assets to finance secure, fully paid-up, private retirement accounts for today's Social Security recipients -- and free you immediately from the 15% tax.

I am running for President because I want to bring peace to your city and your neighborhood by ending the nightmare of drug Prohibition. The insane War on Drugs has caused the worst crime wave since alcohol Prohibition of the 1920s. It has filled our prisons with non-violent people who are no threat to anyone --requiring that murderers, rapists, and thugs be freed on early release to terrorize our communities.

I am running for President because no Republican or Democratic politician will end the dangerous foreign policy that makes America the world's policeman, the arbiter of everyone's dispute, the bully inciting terrorism, and the enemy of half the world. I want you to be able to sleep securely -- knowing your children will never fight and die in a foreign war and terrorists will never attack your city.

There is no way to put a price on liberty -- the liberty you've lost to politicians who want to run your life. But here's one way to look at it: If yours is a typical middle-class family, when we repeal the income tax your take-home pay will increase by at least $10,000 a year. When that happens, what will you do with the money?


Will you put your children in a private or religious school, where you can get exactly the kind of education and values you want for them?

Will you support your church or your favorite cause or charity in a way you've never been able to do before?

Will you buy a new home, or take your family on that vacation you've always dreamed of but could never afford?
Whatever it is you want, that's what you should have. Not what the politicians think is best -- or what I think is best. Every dollar you earn should be yours to spend, to save, to give away as you see fit.

Can we have an impact on the political process? No one can predict or guarantee the future, but we have assembled the largest campaign organization in Libertarian history, and we're raising money faster than any previous Libertarian campaign. We have an excellent chance to make a breakthrough, to change the terms of debate in American politics, to pave the way for Libertarian victories in 2002 and 2004.

Are the American people ready for the dramatic changes I'm proposing? I believe so. We Libertarians are the only party offering Americans the freedom to live their lives as they think best, not as the politicians think best.

I am running for President because I want to propose to every American the Great Libertarian Offer:


Would you give up your favorite federal programs if it meant you'd never have to pay income tax again?
I hope you say "yes" to this offer because -- most of all -- I want you to be free.

AREM

Black Blade

(05/13/2000; 00:17:33 MDT - Msg ID: 30440)

Marketing has a lot to do with it!

http://196.36.119.130/422567CB004DBB8F/Current?OpenViewCompetitors are making big inroads into your market and the price of your product has stagnated for years. What should you do?

Believe it or not, daft members of the gold mining industry have slashed marketing to ludicrous levels.

Anglogold and a few others were the exception in this flirtation with lunacy. But the majority of thirty eight producer members of the World Gold Council insisted that supply (i.e. lobbying of central banks) was
more important than demand. These producers, which account for about a third of global output and fund the Council, cut its budget by two thirds to around $30 million. The Council was obviously top heavy and
bureaucratic and with African producers and others did play a role in encouraging central banks to reduce sales.

But in their collective act of madness, Council members and executives decimated the division which sells their product. They closed offices in major jewelry consuming countries Italy, Switzerland and else where.
Marketing staffers were sacked. The total budget for promotion of gold jewelry and other physical gold sales is down to a paltry $14 million and by far the greatest proportion of this money is being spent in India and other developing nations. It is less than 10 percent of De Beers' budget and compares with global Western production of $22.5 billion.

In an excellent speech at the Council's AGM, Bryan Parker, the WGC's expert on gold marketing, spelled out the bleak results of this extraordinary policy. Since the reduction or withdrawal of the Council in key markets, gold jewelry has lost ground. Italy's annual domestic consumption in 1999 dropped by 16% to under 100 metric tons for the first time in the decade. In Japan, gold jewelry demand is one-third of its peak and about equal to platinum. Gold demand growth "has flattened" in the buoyant US economy and is now outpaced in popularity by platinum, silver and diamonds.

"The larger jewelry promotion budgets of De Beers, the Platinum Guild and the watch industry have induced the jewelry trade to put more marketing resources behind diamonds, platinum and watches. In other words, gold jewelry has been losing the battle for the hearts and minds of consumers and the jewelry trade," said Parker.

To rectify the downtrend, the Council is promoting new gold jewelry designs and a new Millennium Gold collection was introduced at the Vicenza jewelry Fair. The budget amounted to princely $1.5 million and sponsors AngloGold and Vicenza contributed two thirds.

By: Neil Behrmann


Ever wondered why the platinum price has been so much stronger than gold? One of the reasons might be the marketing effort from stablemates Amplats and Anglogold - the world's biggest producers of platinum and gold respectively. In the annual report released this week, Amplats says in the financial year to end December 2000, it will invest R156 million in what it calls market development. Anglogold's investment is well behind at R102 million. With the Amplats attributable profit edging above that of Anglogold for the first time last year, the platinum leader now invests the equivalent of 6% of its bottom line on marketing. This compares with 4% by Anglogold.

The difference in the investment is reflected in the results as well. Amplats is has obviously cracked the huge but notoriously difficult Chinese market. At 850 000 ounces a year, a figure which grew strongly in 1999. China is now the second largest market for platinum jewelry (after Japan) with its jewelry
offtake now accounting for 15% of the total global demand for platinum. Considering half of all platinum produced is turned into jewelry, the significance of this foothold in the world's most populous country can hardly be overstated. Anglogold, on the other hand, was only able to report that "dialogue continued with banks and Government agencies in China where the gold market remains heavily regulated."


By: Alec Hogg

Black Blade: Several posters have brought up this issue before. Why don't the producers support and market their product more efficiently. Why not become vertically integrated like the big oil companies from production to refining to creating products to marketing and sales? So far Harmony Gold and Anglogold are the only ones that I am aware of. Of course there are small operations such as the "sixteen to one" mine, but that is specialty specimen gold and nugget jewelry, and of course there is De Beers with the diamond trade. One has to wonder why the WGC doesn't promote gold as insurance for everyone's investment portfolio. Instead, they give us one lame pre-y2k commercial.
View Yesterday's Discussion.

Black Blade

(05/13/2000; 00:42:06 MDT - Msg ID: 30441)

WOW! a lot of interesting posts overnight!

Leland msg.30405: My consolation with the current low POG is that it allows me to continue my purchases at bargain prices. I have always seen myself as a value/contrarian investor. However, even I have been caught up in the dot.com and High-Tech mania. I have removed a lot of my chips from that table, and have paid off debt and purchased physical PMs and picked up a few shares of some profitable mining companies (unbelievably there are some in this current market). MK's new online store sure has caught my eye though! I'm shall have to evaluate my cash flow situation and seriously consider those gold German Marks.

YGM msg.30408: Seriously, who pay taxes on PMs? Of course if the IRS has surveilance on the site - Oh, sure I do (wink, wink). I have to agree with other posters that this is all in order for the USG to exercise more control. Before you know it - they will install cameras in your home (for the children ya know), and salt packaged foods with sodium pentathol (truth serum?) in hopes to police your thoughts! Hey, that Orwell dude nailed this story down pretty good, wouldn't you say? Those politicians are only crooks hiding behind color of authority and they won't be happy until they squeeze the last drop of blood out of our whithered corpses ;-)

Townie or MK: Is this online store going to be a continuing feature? If so will other PM products become available through this site? I'm lickin' my chops just thinking about it!

Peter Asher

(05/13/2000; 00:54:26 MDT - Msg ID: 30442)

Caven Man, Leigh, and All

To: Steve Long ,

This is great, Steve, and I'll pass it on to Peter who writes on the Forum of USA Gold.

http://www.usagold.com/cpmforum/

This is the kind of quote they love.

When Minister Joe Wright was asked to open the new session of the Kansas Senate, everyone
was expecting the usual generalities, but this is what they heard:

THE PRAYER

Heavenly Father, we come before you today to ask Your forgiveness and to seek Your
direction and guidance. We know Your Word says, "Woe on those who call evil good;" but
that is exactly what we have done. We have lost our spiritual equilibrium and reversed our
values. We confess that:

We have ridiculed the absolute truth of Your Word and called it pluralism.

We have worshiped other gods and called it multiculturalism.

We have endorsed perversion and called it alternative lifestyle.

We have exploited the poor and called it the lottery.

We have rewarded laziness and called it welfare.

We have killed our unborn and called it choice.

We have shot abortionists and called it justifiable.

We have neglected to discipline our children and called it building self--esteem.

We have abused power and called it politics.

We have coveted our neighbors possessions and called it ambition.

We have polluted the air with profanity and pornography and called it freedom of expression.

We have ridiculed the time-honored values of our forefathers and called it enlightenment.

Search us, Oh God, and know our hearts today; cleanse us from every sin and set us free.
Guide and bless these men and women; who have been sent to direct us to the center of Your
will. I ask it in the name of Your Son, the living Savior, Jesus Christ, Amen.

The response was immediate. A number of legislators walked out during the prayer in protest.
In six short weeks, Central Christian Church, where Reverend Wright is pastor, logged more
than 5,000 phone calls with only 47 of those calls responding negatively. The church is now
receiving International requests for copies of the prayer from India, Africa and Korea.
Commentator Paul Harvey aired the prayer on The Rest of The Story on the radio and
received a larger response to this program than any other he has ever aired. With the Lord's
help, may this prayer sweep over our nation and wholeheartedly become our desire so that we
again can be called one nation under God.

Leland

(05/13/2000; 00:55:43 MDT - Msg ID: 30443)

Doug Noland quoting Dr. Kaufman...

http://www.prudentbear.com/credit.htm"�I can never forget the powerful lesson from childhood about how the
debasement of money and the credit structure can wreak havoc on the
social and economic structure. All of this led me to conclude: Money
matters, but credit matters more. This is especially true in our dynamic
financial world, where the linkage between money and credit is looser than
economic theory suggests."

Leland

(05/13/2000; 01:24:05 MDT - Msg ID: 30444)

Donald A. Smith with a Brilliant Story...Show this one to your Children...

http://www.gold-eagle.com/editorials_00/dsmith051400.html"Well," the wise mouse explains," you can't do anything about it. But
you see that tunnel over there in the corner of the laboratory? Take your
family and head for that tunnel. Pay off your debts, and when you get
on the outside, work as hard as you can to store up things that will
sustain you, just like our friend the squirrel stores up nuts for the winter.
Only mice like us need things like gold and raw land to sustain us when
the scientists turn off the lights."

Leland

(05/13/2000; 02:04:42 MDT - Msg ID: 30445)

How the Financial World is Turning Into a "Bookie Joint"

http://nypostonline.com/business/3873.htm
By BETH PISKORA

Leland

(05/13/2000; 02:43:45 MDT - Msg ID: 30446)

From Flambeur at Gold-Eagle...

"Dissent and dissenters
(Flambeur)
May 13, 04:28

Sometimes, well, there is dissension in any group.
@Goldfishin has expressed his views. Fine. Perhaps, I
would like to recall some of the reasons why so many
knowledgeable and accomplished individuals post here.

This forum serves as a gathering place for individuals
who view the world with slightly different eyes to that
of most of their fellow travellers. They have spotted an
inherent discrepancy in the way the world works. In
fact, they think it is not working all that well. The
parable of a "house built on a rock, is better than one
built on sand" is a good metaphor for this world view.
In short, they don't think the fiat paper system is a
rock-solid foundation for a durable "prosperity". In
fact, they think the only solid base of value is gold
(and to a lesser extent silver). This is because of
gold's natural qualities, including its purity, scarcity
and beauty. Moreover, because gold has served a monetary
role since time immemorial -- most recently as the
"foot" of the dollar:gold exchange standard, which was
ended in 1972 -- it is still perceived as a rival to the
modern paradigm of a "properly managed" paper money
system.

What I mean by a "properly managed" paper money system
is that inflation does not occur. The reason, why the
system may not be properly managed is simple. Inflation
does occur. Most notably, inflation in asset values has
become a serious problem, in so far as it threatens to
destabilie the global economy via either (a) its effect
on demand for goods and services, raising their prices
and unleashing goods price inflation, or (b) by having
led to an asset price bubble that can burst and either
unleash depression or be managed with an infusion of a
huge amount of central bank paper money liquidity, which
then creates goods price inflation. In short, the low
grade goods price inflation, threatens to break out into
accelerating inflation, due to a ponzi scheme in
financial markets.

Finally, there is the view that the price of gold is
STILL being managed by the central banks -- in
co-operation with bullion banks, and by co-opting mining
companies, which can either tag along and sell forward
at a profit, or stake their fortunes on ever lower costs
of production -- in the hope that the gold price rockets
and their earnings with it. I say, "still being
managed", because the gold price in its formal role as a
monetary asset was managed. It remained at $35/oz for
decades. It is now likely managed with an eye to not
giving "classic" signs that paper money is not "trusted"
by investors or consumers. In fact, what holders of
paper money have is simply a claim on real consumable or
productive resources. This claim can only be eroded by
inflation. To the monetary authorities, during this
historic period of transition from gold to paper, this
element of trust can not be allowed to be eroded in
investor minds, through a significant rise in the gold
price. It would give out the wrong signal.

Only if the bankers deem gold has been successfully
"commodified" -- which means that its status as a
monetary asset has been eroded, such that it is only
perceived as a commodity -- may they begin to loosen
their grip on its price. Perhaps this is now happening,
with the controlled gold sales and the reduction in
leasing inherent in the Washington Agreement. However, a
huge amount of gold is still brought to market in this
form and it is still weighing heavily on the gold price.
Despite that, for years to come, central bank sales
threaten to weigh on the gold price, unless further cuts
occur in mining output. If a stock market crisis
develops all this will change and not only will official
supply to market dwindle, but demand skyrocket. This
would send the price of gold to the moon. There is no
doubt about that.

Finally, will the central bankers pull it off? Will they
manage paper money properly, and keep inflation at bay?
This relates back to the stock markets. Is the present
10 fold valuation of share prices, compared to their
early 1980s (Dow) or early 1990s (Nasdaq) levels,
corrrect? In other words, are investors properly
imputing the 'net present value of the future income
stream' associated with these companies -- or the
returns to their harnessing new technologies and
exploiting new markets? George Soros and Julian
Robertson don't think so. They think something else is
going on in the stock market, and Soros has adopted a
much more conservative investment strategy.

This suggests that the 10 fold share price level is a
case of momentum investing propelling the prices well
above their "equilibrium" value. In other words, the
current prices are now well about the value derived from
imputing the gains from exploiting these new
technologies and expanding market catchment. In short,
the exorbitant Price/Earnings ratios are simply way too
high (or the inverse, the earnings yield, is too low).
Posters on this forum clearly agree with Soros, and
think this is the case.

In short, posters here are simply saying, the fiat paper
system has not been properly managed. In fact, they are
saying it cannot be properly managed. One reason being
that capitalism itself is not a stable socio-economic
entity, because it requires ever greater profits.
However, there comes a time when the accumulation drive
stagnates. This happens for any number of reasons,
including the case of rising interest rates this year.
So, a financial crisis can ensue, with the very same
investors that rushed into the market, all trying to
rush out, after they observe the market struggling to
keep its level. The risk of it tilting into a full-blown
correction can then only rise. Will they then do as
@Goldfishin suggests, hop on the next profitable
invesmtent vehicle? If history is any guide, in a
falling market, only a 'reversion to quality' is a safe
store of value. The rest suffer. So, having rejected
gold, @Goldfishin will be out of luck.

In todays world, a reversion to quality can either mean
going into government bonds or gold. If the asset markte
correction is not inflationary, then bonds may do
(assuming the government doesn't go bankrupt). If
inflation rises, however, only gold will do.

In short, gold investments are being considered by
posters here, because they sense that this bull market
may soon end, and that they want first and foremost to
be safe. Some of the more adventurous are betting on
marginal mining companies with large ore reserves which
can be exploited as the price moves up. This is a good
leveraged bet. However, there is a huge downside risk
that money loosers now, will simply fold, if the central
bankers manage to keep the bull alive in the ICU for
another year. My preference, is therefore for low-cost
producers with a solid profit record, even in the
current environment of a struggling gold price.

This forum has been a great place to evaluate these
different precious metals investment startegies, given
this view of the markets. To dissent with that is fine.
But anyone doing so would do the forum a great service
to keep this perspective in mind. Because, if they still
choose to dissent, their contributions would be food for
thought, indeed."

Leland

(05/13/2000; 03:35:37 MDT - Msg ID: 30447)

Let's Keep Los Alamos in our Prayers

http://www.star-telegram.com/news/doc/1047/1:TOPSTORY/1:TOPSTORY0513100.htmlTragic!

HI - HAT

(05/13/2000; 05:19:40 MDT - Msg ID: 30448)

JavaMan Cream Of Crop

I agree with you and do not want to see the site change very much from the current state. As I do not understand computers or internet business protocals, I leave comments on that end of it to those like you, who do.

Black Blade

(05/13/2000; 05:42:14 MDT - Msg ID: 30449)

A light read on the Head Fed., or "Cheeta goes to Washinton", maybe "Will the real AG please stand up!"

Greenspan -- The Chairman...through the years
Brian Trumbore
President/Editor, StocksandNews.com

"With the reappointment of Alan Greenspan as chairman of the Federal Reserve, it only seemed right to spend a few paragraphs reviewing some things about the man. Nothing bad. After all, he is the father of the bull market, or so the ignorant would have you believe.

Did you know what Greenspan and Bill Clinton have in common? Alan originally wanted to be a professional musician and he was a saxophone player, just like the President. As a matter of fact, Greenspan attended New York's prestigious Juilliard School. He even had a stint in the Henry Jerome swing band. For you Nixon trivia buffs, one of the other members of that band was Leonard Garment, later a key aide to the Dickster. Greenspan, however, didn't see a big career in music so he ended up in economic consulting. In the 1960s, Greenspan made the following statement in a piece, which later found its way into one of Ayn Rand's books. The subject was gold. "The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the hidden confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights."

So you see, old Alan has had a shinin' for the precious metal for quite some time. In a different vein, you would also have thought that the fact that gold hasn't done anything over the last 3+ years would have told him something about inflation.

Greenspan later became head of Gerald Ford's Council of Economic Advisers. At this point he took up tennis and developed into quite the player. Author, and bond expert, Martin Fridson writes that Greenspan once commented on his tennis play. "As economists are prone to do, I've been extrapolating, and I've concluded that I'll join the professional tennis tour at 104." Yes, Alan's a veritable Shecky Green.

In the early 1980s, Greenspan found himself involved in a rather embarrassing matter, that of Charles Keating and the Lincoln Savings & Loan. As we were to find out later, Lincoln wasn't your ordinary S&L. And somehow Greenspan found himself on Keating's payroll as Keating paid him $40,000 for 2 letters that Alan wrote to California bank regulators, testifying that Lincoln had "transformed itself into a financially strong institution that presents no foreseeable risk to the government." Oops, sorry. It seems that Lincoln did represent one heck of a risk to all of us taxpayers. By the summer of '89, Keating's assets had soared to $5.8 billion but only 2% were in home mortgages. The eventual cost of closing Lincoln down was well over $1 billion.


*And of course there was the "Keating Five," U.S. senators Cranston, McCain, Glenn, deConcini and Riegle, who constantly intervened repeatedly to block regulatory actions against Keating. Only Glenn and McCain escaped this fiasco basically unscathed It is also interesting that as I write this, McCain (who I like)is having a little trouble with another conflict of interest situation, that being the issue of Paxson Broadcasting's acquisition of a Pittsburgh television station. McCain used his influence to force the FCC to make a decision (though by all accounts he did nothing improper). You'd just think he would have learned a little lesson from his Keating days. But back to Alan�

In the early 80s, Greenspan was also a director of J.P. Morgan where he was instrumental in penning an essay "Rethinking Glass Steagall" which made a case for repeal of the existing banking laws back in 1984. Nothing wrong here, I just bring it up for the record. I mean, after all, who will profit most from the new Financial Services Reform legislation? Robert Rubin. But I digress�

So in 1987, the heroic Paul Volcker retired as Fed chairman and was replaced by Greenspan. Volcker had been in the process of raising rates, while the equity market continued to soar (someone say 2000?!), and Greenspan obliged by hiking rates one more time before the market crashed in October of that year. The day after Black Monday, October 20th, Greenspan, and the Fed, flooded the Street with money and the market recovered as liquidity was restored when most needed. The Crash was an experience that haunts him to this day.

As Fed chairman, Greenspan quickly became known for his own special brand of Fedspeak. "If I seem unduly clear to you, you must have misunderstood what I said."

Author John Rothchild likes to say that Greenspan's testimony to Congress and his incidental speeches are "scrutinized like a coded message intercepted across enemy lines. What was he saying? What was he Really saying? Did he mean it? Is this a trick? Will there be a preemptive strike? Not even the Pope or a psychiatrist in the paranoia ward has to choose words more carefully than the Fed chairman does."

In 1994, the chairman caught investors off guard by raising interest rates for the first time in 5 years. He saw the specter of inflation on the horizon and he resolved to crush, nay obliterate, it. The day was February 4th and the Dow Jones lost some 2.4%. Over the course of 1994 and into February of '95, the Fed boosted rates some 2%. The yield on the 30-year Treasury rose from 6.35 to 7.88%, making '94 the worst year for bonds since 1967. In the long run this was probably a good thing because it wrung out some incredible speculation that had emerged in the markets. For this was the time of derivatives. But there were some giant losers, including Orange County, California, which eventually became the largest municipality in history to file for bankruptcy, and David Askin, whose clients were (unfortunately) emasculated to the tune of $600 million.

Over the course of 1994, the crisis in Mexico was unfolding. By December it became apparent that some sort of bailout may be necessary to stave off a total collapse of the Mexican economy. Greenspan was persuaded to help Clinton and Rubin win congressional support for the Mexican aid package, despite his reservations on "moral hazard" grounds. [If Mexico is too big to fail, then what about Bank of America or Citicorp? If they had problems, why shouldn't they be bailed out?] Alan's lobbying on Capitol Hill also raised concerns over the Fed's independence.

On February 1st, 1995, Greenspan raised interest rates for the last time. By February 23rd he was telling Congress that he saw no need for further increases in rates and that, in fact, the Fed was prepared to lower rates, if necessary, in order to prevent a recession. The Dow climbed over 4000 that day for the first time ever.

In November of '94, Greenspan made a curious comment with regards to risk. "The willingness to take risk is essential to the growth of a free market economy. If all savers and their financial intermediaries invested only in risk-free assets, the potential for business growth would never be realized."

So then 2 years later, December, 1996, he says the following which is now etched in lore. "How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?" As John Rothchild said, it was as if the chairman had torched Old Glory. To which I would add, if we are supposed to take risk, whose ultimate responsibility is this? The risk taker or the Fed? But really, you can't argue the success of the past decade. What you can argue about is who deserves the credit. Economist Larry Kudlow likes to say its the entrepreneurial spirit of Americans that is most responsible. No argument here. But regardless of who is most worthy, just don't give all of the credit to Alan Greenspan.

Sources:
"It Was a Very Good Year," by Martin Fridson
"Money, Greed, and Risk," by Charles Morris
"Wall Street / A History," by Charles Geisst
"The Bear Book," by John Rothchild
"Devil Take the Hindmost," by Edward Chancellor

"Brian Trumbore"

HI - HAT

(05/13/2000; 06:04:24 MDT - Msg ID: 30450)

TownCrier # 30434 Soul

I hear and appreciate what you have written in 30434. My belief is that everything works out for the best. I trust that it will for you, and all of us.

I think most here look upon you, as I do, as being the soul of this Forum.

HI - HAT

(05/13/2000; 07:03:29 MDT - Msg ID: 30451)

Black Blade #30449 Lords Of Fear

While we are out here toiling in the vineyards, the Government Pigs are lapping it up at the trough, taking a cut every step of the way.

I hate the fear-mongering apparatus that has grown to the present proportions in order to exact the tax tribute from the Nation, to sustaian this treasonous, Circus Maximus.

A tax revolt is the only solution.

Black Blade

(05/13/2000; 07:22:30 MDT - Msg ID: 30452)

Took em' a year but still no physical Pt seen, hmmmm......

Norilsk says to satisfy world demand for platinum

Moscow--May 12--Russia's Norilsk Nickel, a world top platinum group metals(PGMs) producer, is able to satisfy the current demand for platinum on the world market, First Deputy General Director Yury Kotlyar said Friday. Norilsk resumed exports of the metal in mid-April after almost a year-long pause. (Story .14766)

Black Blade: funny, the Pt isn't showing up in the market place and lease rates are in the stratosphere. "Oh where oh where has my Pt gone..., oh where oh where can it beeee...." BTW, no influx of nickel supply either, hmmmm...

Black Blade

(05/13/2000; 07:36:04 MDT - Msg ID: 30453)

Cheeta and the Baboons, the Big Dog and Pony Show!

Maybe I shouldn't get down on Cheeta, but all I see is a chimp in a suit wearing glasses just chattering away and saying nothing intelligible or substantial. If he knew what the hell he was talking about, then maybe he would answer questions plainly and concisely. Instead he just babbles and chatters away, sometimes talking in circles. Meanwhile we have these Dog and Pony Shows where the senators and representatives on these various oversight committees gather together to worship this monkey, but they don't have a clue as to what he is saying either. These Baboons that are elected by the people just listen with eyes glazed over and mouths agape, then they heap praise on the chimp even though they didn't understand a word he said, much less glean any meaningful information. What a disgraceful spectacle!

Leland

(05/13/2000; 09:05:46 MDT - Msg ID: 30454)

Sounds Like a Few Billion Has Gone Missing

China forex chief commits suicide
By James Kynge in Shanghai
Published: May 12 2000 19:30GMT | Last Updated: May 12 2000 19:44GMT

The official in charge of China's $156.8bn in foreign exchange
reserves committed suicide this week by jumping from the
seventh storey of a hospital in Beijing, official sources said on
Friday.

The death of Li Fuxiang, a reformist proteg� of Zhu Rongji, the
prime minister, fuelled speculation in financial circles as to what
prompted him to take his own life.

He had checked into hospital number 304, an elite military facility,
on Monday seeking treatment for diabetes. He leapt to his death on Wednesday and was
taken into the hospital morgue said the official, who declined to be identified.

People who met him recently said that Mr Li, 47, a former currency dealer who worked at
the Bank of China's branch in New York and spoke rapid-fire English with a slight Brooklyn
accent, did not appear unwell.

Chinese language Hong Kong newspapers cited speculation that Mr Li's suicide may have
been related to "inappropriate activities" at his office or stress at work. This could not be
independently confirmed.

Nevertheless, his mysterious death has focused attention on some of the unanswered
questions that have swirled around the management of China's foreign reserves, entrusted
to the State Administration of Foreign Exchange (SAFE) - the body that Mr Li had headed
since November 1998.

The most glaring question has been why the growth of China's reserves has failed to keep
pace with healthy inflows of foreign investment and large trade surpluses.

In 1999, foreign reserves climbed by just under $10bn, while the combined total of foreign
investment and the trade surplus was $76bn.

Officials have put some of the discrepancies down to capital flight from the country, an
abuse which SAFE has launched a public campaign to halt.

Financial officials said that in fact municipal and provincial offices of SAFE have been
approving letters of credit to facilitate imports by rings of government-backed smugglers
mainly in south-eastern China.

"The local offices of SAFE have actually been aiding illegal activities that have exacerbated
capital flight," said one Chinese official.

There have also been questions over the deployment of China's reserves, the details of
which are kept as a state secret. Chinese bankers and officials have, however, confirmed
that SAFE has extended funds from the reserves as policy loans to troubled Chinese
institutions.

Mr Li insisted last year that SAFE maintained stringent internal controls and keeps its foreign
exchange investments on international markets in high quality and high liquidity portfolios.

But foreign observers noted that the suicide of Mr Li, who was personally acquainted with
the managers of some US hedge funds, comes shortly after significant corrections on US
equity markets.

Some financial industry officials in Beijing linked Mr Li's demise to another high profile but
unresolved case; that of Zhu Xiaohua, Mr Li's boss at SAFE in the mid-1990s who resigned
his post as the head of China Everbright Bank last year without giving any reasons.

(Thanks to the FINANCIAL TIMES, And Fair Use For Educational/Research Purposes Only.)

jinx44

(05/13/2000; 09:29:13 MDT - Msg ID: 30455)

Another step on the road to serfdom

I have been unduly disturbed by the postings on our ruling class royalists in Washington, DC and their intent to legislate some kind of regulatory fiat over all PM transactions. If they are going to control and monitor gold like they do stocks and bonds, then they won’t have to confiscate our gold when the time comes, they will merely tax it away from us. I can see the time where any private trade or sale of gold will require a SS#, name, address, govt approved ID and a form to submit to the USGovt. As Greenspan said,
“The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists' tirades against gold.”
If anyone can post any additional info on this latest assault on privacy, I would appreciate it. It maybe time to move assets offshore ahead of the war on gold. These people that rule from inside the beltway seem to have a passion for turning this country into a massive prison. It's amazing how we have all, collectively, let them do it.

Leland

(05/13/2000; 11:23:07 MDT - Msg ID: 30456)

National Debt Clock to be Unpluged, and Other News

http://www.users.dircon.co.uk/~netking/finan.htm#t_latestThanks to Colin Seymour.

YGM

(05/13/2000; 11:47:39 MDT - Msg ID: 30457)

Roll Call Magazine......GATA two page ad.....

Have a prevue look at what the politicos will be seeing...I've emailed the clip (acrobat reader needed) to a few here of which I had addresses....(Peter, Randy) as well as many others (120) thru last nite.......If you would like a glimpse just drop me an email and I'll send it by days end...............
"Please Forward it all around"...........Send it to "Goldman Sucks"... "JP Morgan"....here's a good one...Send it to "Kevin Crisp" of Credit Suisse First Boston, (the new helper on the London Fix)........Use your imagination......YGM.

yukongold@yknet.yk.ca

PS: I can't even read it myself as I haven't the Acrobat Reader......

YGM

(05/13/2000; 11:55:27 MDT - Msg ID: 30458)

Important Enough to Repost.......

http://www.gata.orgYGM (5/12/2000; 12:32:54MT - usagold.com msg#: 30408)
IMPORTANT GATA NEWS....
http://lemetropolecafe.com
Midas du Metropole
"The Gold Market and Precious Metals Commentary"

GATA Delegation Makes Significant Progress in Washington

On Wednesday at 11:30, the Gold Anti-Trust Action Committee consisting of Chris Powell, Reginald Howe, Frank Veneroso, a State Senator and myself met with one of the most powerful politicians in Washington. It was only going to be a 15 minute meeting. It lasted 45 minutes.

At the end of the meeting, we were excused from the room for several minutes. When the people we met with returned, we were told that they were going to try and set up a meeting with another influential politician at 2 o'clock, but that we would have to call at 1:30 to confirm.

We were stunned to learn at 1:30 that this politician had said, "I am aware of the issue," and that he wanted to meet with the GATA delegation. The meeting took place and 6 members of his staff also attended. What was most remarkable is that this politician left the floor of Congress to attend our hastily arranged, unscheduled meeting.

This politician asked many questions and was very focused on what we had to say. So much so, that he was annoyed when a staff member left to deal with some other pending, saying that this was more important. He told us he had read our biographies before coming to the meeting and was a bit taken aback when he was handed the "Gold Derivative Banking Crisis" document to him with his name and state on it.

This knowledgeable politician said that he and his staff would look into our contentions and suggested that we might meet again. After this very intense one hour meeting, he returned to Congress which was in session.

From there, we went on to meet with Dr. John Silvia, the Chief Economist of the Senate Banking Committee. I could tell he had spent some time on our presentation because he had highlighted material that I had sent to him. Frank, Reg and John did a terrific job (as they did in all the meetings) explaining what we have learned through our extensive research. That meeting also lasted an hour and Dr. Silvia took copious notes.

Yesterday, I passed out 88 of the documents to the staff of all the Senators and Representatives on the banking committees. They were told to look for an open letter to all of them in Monday's Roll Call.

That was some schlep. For the Senate I went to the Dirksen, Russell and Hart buildings. For the House I went to the Rayburn, Longworth and Cannon buildings. It took me the entire day, but was well worth it. Congressman Lee Terry of Nebraska could not have been nicer and said he would read the document on his way back to his native state this weekend.

I was struck by how different all the buildings were. AND HOW BIG. Most were about 100 yards long and were circular for traffic flow. I made the mistake of buying new shoes for the trip. Now, my feet are all blistered. Big booboo.

My last stop was the Rayburn Building and I smiled as I went by The Gold Room.

It was the opinion of the entire Gold Anti-Trust Action Committee delegation that the trip was far more fruitful than any one of us dreamed possible. However, as we all know, that was just our first salvo. There is much to be done to win the day and we are already planning our next course of action.

When our adversaries realize how far we have come, we know that they will go all out to discredit us. If yesterday's meetings were any indication of making a serious impact on those who count in Washington, the other side has their work cut out for them!



Bill Murphy ( Midas )

PH in LA

(05/13/2000; 12:51:02 MDT - Msg ID: 30459)

Confiscation: then and now

Hi, Jinx 44!

I find it hard to understand why that proposed legislation has so impressed you. Profits in dollars obtained from the sale of anything (equities, bonds, real estate, collectables, you-name-it) are already taxable, and have been since the introduction of the income tax. Furthermore, any attempt to circumvent the paying of an appropriate tax on a capital gain through the use of barter is merely an attempt to slip through the cracks of the IRS's control of each and every citizen's income. In theory, any barter transaction must be equated to a dollar transaction on both sides and taxes paid on profits (or deducted on losses).

You're absolutely right to conclude that there will never be anything as heavy-handed as a general confiscation of gold when the mechanisms for the taxation of gains already exist. In fact, there is a big overlooked difference between now and 1934. At that time, gold was circulated and used as money. It had to be collected before the new (fiat) system could be implemented. That was done. There is no need to do it again now.

Therefore, there is no "latest assault on privacy". The assault was carried out long ago. The results of that assault are still very much in effect today. New legislation is just for the publicity effect. The teeth behind government's subjugation of the citizenry have been there for a very long time now.

Never forget that they did not prosecute Al Capone for a single one of the many murders he directed and/or carried out. Rather, he was convicted on income tax evasion...

Cavan Man

(05/13/2000; 13:39:29 MDT - Msg ID: 30460)

Hello Trail Guide

USAGOLD 30397 (courtesy of YGM)This new House Bill pending now.....just a coincidence??

ss of nep

(05/13/2000; 15:25:22 MDT - Msg ID: 30461)

A tax revolt is the only solution.

It is very diffucult to have a tax revolt when
most poeple have tax deducted from their pay
before they even see it .

jinx44

(05/13/2000; 16:01:45 MDT - Msg ID: 30462)

PH in LA--pending legislation

I have not read any text on the gold legislation. I am only assuming that it will include some type of registration on gold held and sold. Perhaps they will require us to sell only through licensed dealers or somesuch, as with stocks and bonds. I am aware that any sale is already subject to VOLUNTARY reporting for tax purposes, so why would there be any need for additional laws unless the state expects the citizens to squander their soon-to-be-had gold gains and not share with the PTB. If people choose to share their declining inflation-eaten wealth with the State, that is entirely their choice. I see this as similar to the gun registration agenda that we hear about. The state doesn't trust the citizen AT ALL so they must police us into ever tighter traps.

Personally, it doesn't make me feel warm and fuzzy the way things are headed. My idea of a "free country" doesn't involve the armed criminal tax extortion from productive members and the redistribution of that stolen wealth to political, corporate and welfare recipients. Maybe I just don't understand what this great country is all about these days. Silly me.

HI - HAT

(05/13/2000; 16:37:55 MDT - Msg ID: 30463)

ss of nep #30461 Revolting Situation

Admittedly the pay-roll deduction automatically places the gun to the head. It seems further that the populace remains good natured toward this scheme. That this is so attests to the re-inforcement through time and manner the brazen strongarming tactics of a parasitical political class that serves ever larger organized entities that jockey amongst themselves in the game of Masters Of The Universe.

As soon as I posted the tax revolt solution, I knew it was in the nature of a rant. I don't know what it is going to take to undue what is to me, oppressive, unaccountable statists. And that includes County and State levels.

I myself operate through an S-Corporation. To be or not to be an outlaw is optional in this case.

I have stated this before, I want to see the STATISTS brought down. Chaos is often the price of Clarity.

AREM

(05/13/2000; 16:42:06 MDT - Msg ID: 30464)

Lots of Complaining about Government oppressiveness

How about this alternative (Repost)The Great Libertarian Offer
by Harry Browne
On February 14, 2000, I formally announced my candidacy for President as a Libertarian.

I am running for President because it's obvious that no Democrat or Republican is going to stop the relentless growth of the federal government. No one but a Libertarian will reduce your taxes dramatically, allow you to live your life as a free American, and restrict the federal government to its Constitutional limits.

I am running for President because the Republican and Democratic candidates argue only about which of them can best run your life. I believe you know best how to run your life.

Today (according to the U.S. Census Bureau) federal, state, and local taxes take 47% of the national income. The Republican and Democratic candidates are discussing whether that figure should be raised to 48% or lowered to 46%. I want to cut it in half at the very least and do the same to your overall tax burden.

I am running for President because the federal government has stuck its nose into virtually every area of your life, with no Constitutional authority. It has made a mess of our health care system, of education, of welfare, and of law enforcement.

If we get the federal government out of all these activities, not only will they work much better, but we will no longer need a federal income tax -- and we won't need to replace it with a new tax. The money collected today from tariffs and excise taxes is enough to finance a strong national defense, the federal judiciary, and the other functions the Constitution actually authorizes -- just as those taxes did for America's first 124 years.

I am running for President because you shouldn't be forced to put 15% of your income into a bankrupt Social Security system. I believe you are better able than any politician to plan for your future -- and you certainly care more about it. I want to sell off unneeded federal land and other assets to finance secure, fully paid-up, private retirement accounts for today's Social Security recipients -- and free you immediately from the 15% tax.

I am running for President because I want to bring peace to your city and your neighborhood by ending the nightmare of drug Prohibition. The insane War on Drugs has caused the worst crime wave since alcohol Prohibition of the 1920s. It has filled our prisons with non-violent people who are no threat to anyone --requiring that murderers, rapists, and thugs be freed on early release to terrorize our communities.

I am running for President because no Republican or Democratic politician will end the dangerous foreign policy that makes America the world's policeman, the arbiter of everyone's dispute, the bully inciting terrorism, and the enemy of half the world. I want you to be able to sleep securely -- knowing your children will never fight and die in a foreign war and terrorists will never attack your city.

There is no way to put a price on liberty -- the liberty you've lost to politicians who want to run your life. But here's one way to look at it: If yours is a typical middle-class family, when we repeal the income tax your take-home pay will increase by at least $10,000 a year. When that happens, what will you do with the money?


Will you put your children in a private or religious school, where you can get exactly the kind of education and values you want for them?

Will you support your church or your favorite cause or charity in a way you've never been able to do before?

Will you buy a new home, or take your family on that vacation you've always dreamed of but could never afford?
Whatever it is you want, that's what you should have. Not what the politicians think is best -- or what I think is best. Every dollar you earn should be yours to spend, to save, to give away as you see fit.

Can we have an impact on the political process? No one can predict or guarantee the future, but we have assembled the largest campaign organization in Libertarian history, and we're raising money faster than any previous Libertarian campaign. We have an excellent chance to make a breakthrough, to change the terms of debate in American politics, to pave the way for Libertarian victories in 2002 and 2004.

Are the American people ready for the dramatic changes I'm proposing? I believe so. We Libertarians are the only party offering Americans the freedom to live their lives as they think best, not as the politicians think best.

I am running for President because I want to propose to every American the Great Libertarian Offer:


Would you give up your favorite federal programs if it meant you'd never have to pay income tax again?
I hope you say "yes" to this offer because -- most of all -- I want you to be free.

Harry Browne

AREM

HI - HAT

(05/13/2000; 17:19:35 MDT - Msg ID: 30465)

AREM Browne

I voted for Browne the last time around, and of course will this time. I highly recommend his classic book, "How I Found Freedom In An Unfree World".

That there be only 2 viable opposing political forces goes back to ancient Greek Philosophers. Way back I had mis-givings about the Libertarian Party because of Ayn Rand being against it. I think what she failed to see, was that the Libertarian Party was going to overtake and eventually absorb the Republican Party. Thereby the pure Protagonist-Antagonist dynamic is maintained.

YGM

(05/13/2000; 17:33:58 MDT - Msg ID: 30466)

Gratifying Number of Requests for Gata Roll-Call Ad...

Very Pleasing Response & Thanks to AllI was pleasantly overwhelmed by the response and consequently better get moving to the flower shop as it's Mothers Day tomorrow. Here's hoping the GATA/RollCall Ad is seen far and wide......Help make a Gold-Bashers day a little less smug!!.....send them a glimpse of the future.......
Thanks.....Ken.

GO SILVER, GOLD & GATA.

TownCrier

(05/13/2000; 18:11:47 MDT - Msg ID: 30467)

Free gold?

http://www.usagold.com/onlinestore/special.htmlIf you have an appreciation for tangible history and an eye for value, you will want to see the new link we added yesterday. Priced at only $77 (currently) each, you are getting these German 20 mark gold coins (minted 1890 - 1913) by paying less than ninety cents for each year of their age...and it's like their near quarter-ounce gold content is being thrown into the bargain for free. How can you go wrong with these beauties? And for those of you with a mind toward carrying around a gold coin for educational purposes, nothing will get the job done better than these, together with the German hyperinflation history that raised the equivalent value of these 20 gold marks to fourteen-and-a-half trillion paper marks. (Hypothetically, I wonder what a German with his wealth all invested in mining shares would have been thinking at the time, contrasted with a German who had his wealth all held in the form of these gold coins, in hand?)

Sir Black Blade asked:
"Townie or MK: Is this online store going to be a continuing feature? If so will other PM products become available through this site? I'm lickin' my chops just thinking about it!"

That decision is MK's, but my hunch is that there will be a rotation of the various coins featured as an on-line special, as caches of them become available. MK is always on the lookout for them.

Sir HI-HAT, in your msg# 30450 you have given me a mantle that my shoulders cannot possible begin to bear, but the thought has warmed me to the core of my being nonetheless. Thank you.

ET

(05/13/2000; 18:13:21 MDT - Msg ID: 30468)

HI-HAT

Hey HI-HAT - are you a drummer? I used to do keyboards back in the 60's. Long live rock and roll.

You wrote;

"As soon as I posted the tax revolt solution, I knew it was in the nature of a rant. I don't know what it
is going to take to undue what is to me, oppressive, unaccountable statists. And that includes County
and State levels."

My guess is a collapse of the US currency. That's what happened in Russia. They only have power because they control the money. When they lose that control, it's all over for the statists, at least here in the US. Other places they can survive because they grabbed all the weapons.

If you haven't read Davidson & Rees-Mogg's books, I can highly recommend them. Their basic premise is that governments or similar entities will soon start to compete to attract productive people rather than continue to attempt to extort them. They think that is what the information revolution is all about. I think they're right.

ET

Leland

(05/13/2000; 19:27:10 MDT - Msg ID: 30469)

Confirm on Something Michael Posted

http://www.publicdebt.treas.gov/opd/opdint.htmIt has been bothering me....the annual interest on U.S.
Government debt....and NOBODY seems to CARE!

Bonedaddy

(05/13/2000; 19:56:29 MDT - Msg ID: 30470)

On confiscation, taxation, et al.

Try to see it my way. The legislation that would tax gold transfers is just an option. If a person chooses to travel in circles that keep track of such things, so be it. But understand this, if I want to trade a few 20 mark Wilhelms for an H&K MP5, I'm gonna do it. And pi$$ on Slick Willy, the IRS, thE ATF, and anybody else that wants to stick their nose in my business. The news today says that gun sales are shut down nationwide because the FBI instant backgroud system is down. (Nicely co-incides with the hundred mom march.) I know of three sales that took place today.

Aristotle

(05/13/2000; 20:17:18 MDT - Msg ID: 30471)

Widely assorted comments

On Black Blade's first post of the day on miners cutting funding to their PR arm, the World Gold Council, resulting in "Council members and executives decimated the division which sells their product. They closed offices in major jewelry consuming countries Italy, Switzerland and else where. Marketing staffers were sacked. The total budget for promotion of gold jewelry and other physical gold sales is down to a paltry $14 million and by far the greatest proportion of this money is being spent in India and other developing nations. ... Since the reduction or withdrawal of the Council in key markets, gold jewelry has lost ground. Italy's annual domestic consumption in 1999 dropped by 16% to under 100 metric tons for the first time in the decade. In Japan, gold jewelry demand is one-third of its peak and about equal to platinum."

I don't mourn overmuch for the changes as described to the WGC and its operations. If the true future of Gold rested on the jewelry market, then we are all sorely misguided and helpless in the financial scene. Focusing on gold marketing as a luxury item is simply a big fat waste of their time and mine. Notice that the article specified the effect of the WGC's retreat with the examples of jewelry demand in Japan, Italy, and Switzerland. Sicnificantly, however, the WGC is focusing the bulk of its budget in the developing nations--places where the jewelry trade is not to serve the purpose of luxury, but rather that of wealth preservation.

As pure money, Gold is at the heart of the currency universe, and the mining industry is best served having the WGC continue to refocus its budget and personnel talents toward monetary education. Gold held in a financial capacity worldwide as a hard asset (not as a purely decorative luxury) is the future. Without the prompt return of Gold to its ancient (pre-banking) role as pure property held as a wealth asset, the effective operation of our modern economic structure is threatened by the potential for a crash so severe I shudder to think of the consequences, and dare not post them here. Fortunately, it would appear that some of the principle architects of the Maastricht treaty were well aware of this, and hence we have the framework for a fundamentally different currency system on the cusp of a new millennium. The euro-system of central banks will continue to do well to recognize and remember that their long-term fate is dependent upon the absoute preservation of Gold as pure wealth property--with no lending and no deriviates. Essentially, a complete separation from Gold and all that passes for modern currency. As such, the ultimate demonstration of a national currency's mettle, and the basis for comparing one currency to another, would be in the amount of Gold that can be purchased outright with any given amount of each kind of currency.

Leland, thanks for sharing that Flambeur post with us. He (she?) had some good observations, although I would submit that the pre-1971 gold standard with a fixed $35 price was not so much an attempt to manage Gold as it was an attempt to give real meaning to the concept of "thirty-five dollars." Modern experience shows that such a concept of fixed value is absolutely incompatible with the realities of banking, like it or not. (Hence my February post on "the perfect monetary system for an imperfect world.")

And in his concluding remarks, he says "Some of the more adventurous [investors] are betting on marginal mining companies with large ore reserves which can be exploited as the price moves up. This is a good leveraged bet. However, there is a huge downside risk that money losers now, will simply fold, if the central bankers manage to keep the bull alive in the ICU for another year. My preference, is therefore for low-cost producers with a solid profit record, even in the current environment of a struggling gold price."

In offering my contrasting view, I think the situation was summed up nicely in Townie's comments on the German hyperinflation where 20 marks in Gold soared to over 14 trillion marks, "Hypothetically, I wonder what a German with his wealth all invested in mining shares would have been thinking at the time, contrasted with a German who had his wealth all held in the form of these gold coins." (As an aside, as I once told Tomcat half a year ago, those marks are excellent coins, and I give them my highest endorsement.)

While on the subject of mines, and seeing that there have been several posts on taxes today, what would be the various opinions by everyone here about the thought that all domestic Gold mines would be effectively "nationalized" through taxes, with the currency mining company becoming essentially an independent contractor for the federal and state governments? Obviously, ownership of such corporations through company stock would become little better than owning shares in any of another host of similar companies. And before you pass judgement, imagine one other thing into the bargain--that perhaps personal income taxes and sales taxes could/would be significantly reduced or eliminated as a result.

Just something offered as a little food for thought to go with your Saturday evening beers and philosophizing.

Gold. Get you some. ---Aristotle

Cavan Man

(05/13/2000; 20:27:46 MDT - Msg ID: 30472)

Hello Aristotle

How are you doing my friend? I see your crystal ball is luminous as usual. All the best....CM

Aristotle

(05/13/2000; 20:31:50 MDT - Msg ID: 30473)

What a GREAT freudian slip!

"...the **currency mining company** becoming essentially an independent contractor for the federal and state governments" SHOULD have said "the current mining companies" etc.

Sheeeesh. Time for my own beer break, apparently.

Gold. Worth more with each passing year, whether you see it reflected in the current price or not. Get you some. ---Aristotle

Aristotle

(05/13/2000; 20:37:12 MDT - Msg ID: 30474)

Been doing great, Cavan Man, thanks for asking.

My back's been killing me, though. I've either got to stop carrying it with me, or recruit several of Gandalf's hobbits to follow me around, each one bearing a share of my burden.
You've gotta love these prices!!

Cavan Man

(05/13/2000; 20:42:39 MDT - Msg ID: 30475)

Aristotle

I was right with you on that! The government is in all kinds of businesses vis a vis taxes. Why not overweight in the (gold) mining sector. Mining gold is good business after all.

Gold boards are slow tonight. I perceive you might be someone with an academic backgound. What are your top five books on the subjects we discuss here? I'd like to improve myself. Thanks.

VanRip

(05/13/2000; 20:43:03 MDT - Msg ID: 30476)

ORO

http://www.federalreserve.gov/fomc/MINUTES/20000202.HTMORO, Thank you for posting the above link. What is your take on this? Does it mean that the Fed can now control the descent of the dollar to allow time for the economy to adjust? Does it mean they can keep the dollar from crashing? Will they have enough dollars to do this? Will it affect the POG? What? Be interested in your thoughts, as well as those of others. Some info from your post is repeated below:

<
Treasury and the Fed seem somewhat at odds. "Short term" Treasury goals regarding the dollar exchange rates are implied to be for a stronger dollar.

The minutes of the Jan meeting contain an authorization for the Fed Open Market Committee to work the currency markets through the services of the NY Fed on behalf of the Exchange Stabilization fund.

From the Authorization:

"AUTHORIZATION FOR FOREIGN CURRENCY OPERATIONS

The Federal Open Market Committee authorizes and directs the Federal Reserve Bank of New York, for System Open Market Account, to the extent necessary to carry out the Committee's foreign currency directive and express authorizations by the Committee pursuant thereto, and in conformity with such procedural instructions as the Committee may issue from time to time:

A. To purchase and sell the following foreign currencies in the form of cable transfers through spot or forward transactions on the open market at home and abroad, including transactions with the U.S. Treasury, with the
U.S. Exchange Stabilization Fund established by Section 10 of the Gold Reserve Act of 1934, with foreign monetary authorities, with the Bank for International Settlements, and with other international financial institutions: "

Note that the ESF is treated as a separate entity and the BIS is named specifically.>>>

Cavan Man

(05/13/2000; 20:52:58 MDT - Msg ID: 30477)

Aristotle 30474

Yes, I love these prices so much that I am trying to restrain myself from buying more! You know, if only 10% of everything I've learned here over the past year is true, POG should be double. Why is it static? Entities acting in their best interests and not caring a whit for free gold have carried the day so far. The good news you ask? Gold always finds a way to break free; sooner or later. I have learned to become a patient man (it wasn't easy, believe me).

Unless GATA prevails, I believe POG will continue to be managed even if upwards a tad from $300. It will take a "left field event" to break the shackles. That's why I find FOA's commentary so compelling (in addition to the brilliant, logical exposition).

What has become of Professor Mundell these days?

Cavan Man

(05/13/2000; 21:02:24 MDT - Msg ID: 30478)

CM 30477

The "key" is oil. Oil must move towards the Euro (vehicle to propel POG) in a non-threatening and non-confrontational maneuevor (spelling too lazy for F & W sorry). Here in the US we think low gasoline prices are our birhtright. A "basket" settlement preference would definitely get everyone's attention. Then, there's the US equity markets....

Aristotle

(05/13/2000; 21:20:38 MDT - Msg ID: 30479)

Cavan Man's question--

"I perceive you might be someone with an academic backgound. What are your top five books on the subjects we discuss here? I'd like to improve myself."

Woof. Having seen your "academic" comment, my first reaction to your question was to automatically assume you wanted recommendations on economics books of particular merit. Then as I read your final comment, I concluded my deliberaton on the matter with the notion that life is too short to spend it reading economics books, and they certainly won't help you improve much of anything, except your personal understanding of the author's individual perception of the world.

As far as books in general, several of us including the likes of ET and Peter Asher had a brief discussion on books about a year ago on the forum, and "The Sovereign Individual" (Davidson, Rees-Mogg) and "Atlas Shrugged" (Rand) seemed to get general approval by those participating. Personally, I'd read the former, but not yet the latter. As for my recommendations, that's difficult. Each of us responds differently to different presentations of information and concepts. As for the book that has brought me more satisfaction than any other, I join the millions of satisfied customers who have read and named "The Lord of the Rings" (J.R.R. Tolkien) to be the best of the millennium. And as for the book that has most significantly altered my perception of how the world works--from the indiviual level up to the leadership level--the nod goes to "War and Peace" (Tolstoy). That one really surprised me, though it didn't fully impress its message upon me until my own understanding of Gold underwent an evolution.

Seeing that the few books I've mentioned are several thousand pages in lenth, I hope you'll forgive me if I don't press myself to produce your requested quota of five. If you can tackle Tolkien and Tolstoy before the year is over, you are a better man than I!

Gold. Read you some. ---Aristotle

Peter Asher

(05/13/2000; 21:43:13 MDT - Msg ID: 30480)

Aristotle #: 30471)

Aristotle (05/13/00; 20:17:18MT - usagold.com msg#: 30471)

Extracting this from your post, I find an elegant "Mission statement" for "The Cause."

>>>> The absolute preservation of Gold as pure wealth property--with no lending and no derivatives. Essentially, a complete separation from Gold and all that passes for modern currency. As such, the ultimate demonstration of a national currency's mettle, and the basis for comparing one currency to another, would be in the amount of Gold that can be purchased outright with any given amount of each kind of currency.

Aristotle

(05/13/2000; 21:45:12 MDT - Msg ID: 30481)

Cavan Man's other question--

"You know, if only 10% of everything I've learned here over the past year is true, POG should be double. Why is it static?"

OK, this one is easy. Of everthing you've learned hereabouts, no doubt the vast majority is true. Regarding your 10% figure, that is the only fraction of the truth you need to concentrate on, as everything else is just pleasant trivia and good for conversation.

Two concepts: "price-discovery" and "satisfaction."

New York can easily keep a lid on the apparent value of Gold (which fortunately dictates the price we pay for our REAL METAL) through the offer and sale of Gold derivative contracts at whatever level is deemed advantageous. Such is the nature of our method of price-discovery here in The States.

Equally important, however, is the satisfaction of the physical market. New York style price discovery goes to hell in a flaming ball of failure the minute that someone tries to buy Gold that isn't available at the theoretically-derived spot price. We can thank the standard banking mechanism of lending (in this case, the lending of Gold) to provide adequate supplies for market satisfaction. Those days are numbered, to be sure, as alluded to by my first post today. More support to that is offered by any quick look at the fourth element of the Washington Agreement as seen with the perspective in which Tolstoy would surely have seen it.

Gold. Get you some. ---Aristotle

Aristotle

(05/13/2000; 21:58:13 MDT - Msg ID: 30482)

Peter, that is truly the only thing that matters.

http://www.usagold.com/halldiscussion.htmlWould that Tolstoy were here to eloquently state the impending effect of the obvious and undeniable movement of the Force called Human Will.

The essence of the "mission statement" you point out is more fully explained in my original post that can be easily found in the discussion thread Townie put together at the given link. While I don't think it was too well received at the time, hopefully there has been an incremental change in perspectives on the nature of money, Gold, and currency, which will allow people to see the necessary (and brighter) future such a separation implies for all of mankind. Our Gold will be clearly seen as far more valuable once the fogging fiction of derivatives have been removed.

Gotta step away for now.

Gold. Get you some. ---Aristotle

Gandalf the White

(05/13/2000; 22:00:50 MDT - Msg ID: 30483)

Ari's wish is fulfilled !

Up to a THOUSAND Hobbits have volunteered to help carry your little yellow shinny pieces ! They will be at your door first thing Monday morning.
<;-)
PS: have you heard from the lost Aragorn III resently?

Black Blade

(05/13/2000; 22:06:18 MDT - Msg ID: 30484)

Jinx44 and offshore accounts msg.30455 and 30462

My good man (or woman?), offshore accounts can be quite useful. I myself don't have any substantial amount offshore though I have several acquaintances who do. Personally I use Singapore Bank, but I have friends who have accounts in HK, Singapore, Antigua, Bahamas, Caymans, and Isle of Mann. Some even have investment accounts offshore. The IRS tends to get a bit testy about this if they find out about it. What they don't know won't hurt them though. The real problem arises when a spouse decides to make an issue out of it should there be a divorce, or a financial advisor who is privy to such information. Another interesting way to protect assets from the lecherous pedophile Uncle Sammy is to use Nevada corporations (I'm not an expert in this field however). I have an account in Singapore, however, for convenience you may wish to use a bank closer to home such as credit Suisse Bank in the Caymans, keep it close to your vest, and give the account info to your hiers as the inevitable approaches. You can also set up investment accounts, and get deposit boxes as well. I would imagine that the Swiss accounts are similar. But I would never suggest that anyone hide anything fromour benevolent Uncle Sammy (Wink Wink).

Black Blade

(05/13/2000; 22:20:49 MDT - Msg ID: 30485)

PH in LA msg. 30459

Just a bit of triviaYou last reference to Al Capone is quite true. I might add though, that had Al or his attorneys brought to the judges' attention that the charges were well past the statute of limitations, good old Al would have been set free. I believe that the syphillus would have made him crazy enough that Frank Nitti would have had no choice but to whack him and take over though. These Mafia types weren't exactly rocket scientists ya know :-)

Black Blade

(05/13/2000; 22:32:07 MDT - Msg ID: 30486)

Bonedaddy msg. 30470

Right on! I also know of one transaction for a nice Glock earlier today. No registration, no sales tax, no computer check, no USG interference of any kind. Just a freemarket transaction between two consenting adults. The America used to be before the Barbarians took over.

Journeyman

(05/13/2000; 22:44:16 MDT - Msg ID: 30487)

A tax "revolt" that just could work

http://www.webleyweb.com/tle/le9609a03.html
With all the posts on unhappiness over Uncle Sammy's tax robbery, the above link proposes a novel approach to opting out of the IRS (Internal Robbery System). What do you think?

Regards, J.

Leland

(05/13/2000; 22:46:39 MDT - Msg ID: 30488)

Aristotle, a Twist to Your Msg. #30471 (Snipped from the link below)

http://jitterbuzz.com/costs.htmlRevaluation of Gold: In 1933, by executive order, President Roosevelt raised
the price of gold from about $16 per ounce to about $25.00. Thus in 1933,
every ounce of gold in Fort Knox could support 1.56 (=25/16) times the
number of dollars that it could in 1927. Guess what? Uncle Sam, being on the
Gold Standard, printed these extra dollars and put them into circulation. This
was good news for everyone except those who held gold-backed bonds, since
they made their investment in dollars expecting to get a certain number of
ounces of gold in the future; with one stroke of the pen, they got 64% of what
they thought they were going to get. But, as the saying went at the time, that
was a small number of Plutocrats who probably caused the depression
anyway. Whatever they were or did, they were no fools; by 1933 you needed
$1.56 to buy what $1.00 had purchased in 1927.

Black Blade

(05/13/2000; 22:54:12 MDT - Msg ID: 30489)

Aristotle msg. 30471 and forward....

The nationalization of mines? hmmm.... This would require a substantial effort from the international forces of the world banking community. Most if not all mining companies are global entities. Some would likely fall to the Banker (for lack of a better term). Some prime examples of course are Ashanti, Barrick, Cambior, etc. should the POG rise substantially, and others would fall into bankruptcy with the falling POG as have Pegasus and Alta Gold. However, there are some unhedged and without debt that exist in other countries (though some of these carry political risks). It does make for an interesting discussion though. I'm sure Stranger and Farfel could make a spirited discussion out of this.

"Gold Get You Some", yes indeed. Been buying at these fire sale prices - "Sale of the Century"

As far as your "Beer Break", I'm ahead of ya buddy! I nice virtual "Negra Modelo" to ya!

Peter Asher

(05/13/2000; 23:41:22 MDT - Msg ID: 30490)

Black Blade msg#: 30489)

Nationalization of Global corporations: No problem!

As Ari said, "Nationalization through taxes." Way back in the original Gold standard debate, with A-III and PH, I took the position that the "Value/dollar price of gold would have to be artificially high in order for the planetary supply of gold to offset the outstanding "Currency- rights" afloat. In such a situation the mines would have an incredible windfall if they were allowed to receive the "going rate" of value for their ore. The only scenario I can see put in place would be a "Windfall profits tax" which would leave a decent profit for the mining corporations under some kind of (Decreed) gold mining licensing agreement.

Any Gold Standard at this point in history would have to be planet wide, IMO. The taxation control would simply be rendered domestically on each national entity under some sort of international treaty.

Black Blade

(05/14/2000; 00:18:16 MDT - Msg ID: 30491)

Peter Asher msg 30490

I understand how this would have to occur, however, the problem of this scenario is that the mining companies are for the most part, international global enterprises. Wouldn't this require global collusion among all existing governments? In some parts of the world, S. Africa for example there are very high corporate taxes, yet the producers expand production and still do well. In other parts of the world the taxes are relatively minor. It is next to impossible to get nations to work together under the best of circumstances, so I am not sure how this would/could play out. Perhaps under the WTO? You do suggest under some international treaty. It would seem that it would be difficult for some nations to agree to "play ball". Especially for raw resource producing nations. I don't know - this is certainly something to think about. Speaking of thinking, I think I'll have another beer ;-) View Yesterday's Discussion.

Peter Asher

(05/14/2000; 00:27:45 MDT - Msg ID: 30492)

Hey, Black Blade

You did say"collusion", not "co-operation." While it may be "next to impossible to get nations to work together under the best of circumstances", Maybe they do work together when cicumstances are "worse."

Peter Asher

(05/14/2000; 00:54:43 MDT - Msg ID: 30493)

Gun Control

http://www.worldnetdaily.com/bluesky_dougherty/20000513_xnjdo_methodists.shtmlPardon the word pun but this situation is getting out of hand!

Peter Asher

(05/14/2000; 01:02:40 MDT - Msg ID: 30494)

Furthermore

http://politicslive.com/article2.asp?ID=141Same ole yellow politicking in the schools

Golden Calf

(05/14/2000; 02:12:35 MDT - Msg ID: 30495)

SPIKES ???

Some things to look out for-

It appears to me, what with the potential 1/2% interest rate hike
about to be announced in just a couple of days, and the way
the gold and the US$ are looking on the charts, we may be
at the crossroad of a final *SPIKE* --shakeout.

This would give the shorts their last opportunity to square
some positions, give the accumulaters a last chance of some
really good bargains, and be the final spike in the recent $
runup.

On the other channel, a writer by the handle of APH, who's
been quite accurate in his short term trading calls, just recently
gave a price of $258 for gold, which would be a test of the bottom,
and before that he had mentioned a price of $248 would be where
it could go, which would be a new low, since 1980.

Taking all of the above into account and watching the indexes, and
the world markets and their volatility, I see this scenario as a real
possibility, and wish all to be on the lookout.

RossL

(05/14/2000; 06:07:43 MDT - Msg ID: 30496)

glitch

Once gold sales are registered, all they have to do is have a "glitch" to stop all sales...

Computer Glitch Halts Gun Sales
May 14, 2000 7:15 am EST

System Stopped Working Thursday Afternoon

WASHINGTON (CBS News) - All gun sales have been halted nationwide since Thursday afternoon because an internal software problem in the FBI criminal history database has temporarily halted instant background checks of gun buyers, the FBI said Friday.

The FBI's Interstate Identification Index, a database that has the criminal histories of 36 million people, stopped working late Thursday afternoon. FBI and contractor employees expected to have it working again by Saturday evening or Sunday morning, FBI spokesman Paul Bresson said.
---snipped---

Henri

(05/14/2000; 06:18:55 MDT - Msg ID: 30497)

Java Man, AREM Buchanon/Browne

Liked the speech given by Harry Browne and I did not dislike Buchanon's speech. I found Buchanon's arguments to be compelling but far too dependent on bashing of "free" trade and global involvement as the root of our problems. I think our own overindulgence is the root of our problem. Qoute Walt Kelly in his "Pogo" cartoon strip-"...We have seen the enemy, and he is us."

I really don't see what difference it makes anymore who is in the White House. As seen by recent experience, anyone can fill that spot. I would like to see someone in there with some backbone and some ideas (like Browne's) that will set us back on the course that was lain out by the forefathers and return to a constitutional republic.

As Buchanon pointed out, more people work directly or indirectly for "the Government" than any other line of work.
I include within this the employees of our school systems and community "welfare" organizationsas well as bureaucrats.

I am considering a write-in vote for Jesse Ventura. This man has the courage and conviction of his beliefs that supply something missing from politics since before I can remember. Engagement of the issues.

Leland

(05/14/2000; 06:38:25 MDT - Msg ID: 30498)

A Broad Perspective on World Currencies

http://www.afr.com.au/perspective/20000512/A57803-2000May12.htmlFrom AUSTRALIAN FINANCIAL REVIEW, and published May 12

Henri

(05/14/2000; 06:48:58 MDT - Msg ID: 30499)

There is an alternative.

Well yes OK we have incurred this large national debt for better or worse. I hereby nominate the overextended timelime of the US dollar on life support for one of the great wonders of the modern world. Certainly on a par with the Colossus of Rhodes.

Taxation is becoming more and more engrained as something acceptable in the collective psyche. Surely this is the result of government control of our schools with the objective of training new tax payers.

Here's a plan I just made up. Let's retire the govt debt.
If Congress could possibly curtail its appetite for new taxpayer money and even give up some it already gets, this might actually work.

1) Allow taxpayers to retire their own personal part of the existing debt. Starting now, give future tax credits to individuals who contribute to the drying up of the federal red ink. If I owe say $10,000 for myself and another $10,000 for my wife, then if I pay $2,500 extra to Uncle Sam this year and he earmarks those funds to retire $2,500 of federal debt, Then next year my portion of the tax burden should be reduced as a tax credit. My two children are not taxpayers yet and we support them despite the govt's interference.

2)The tax credit should extend beyond the life of the actual loan and be given as credit as far into the future as the original retired debt would have been carried. If I paid my entire portion, then the only tax burden I should bear is the portion for the collective defense (not offense or police action in foreign countries) and the salary (not the retirement) of members of congress or the president. Also some $ for maintaining public buildings,parks and local infrastructure like fire hydrants and sewerage treatment.

Public service is a priviledge, not a job. The benefits of having served should be a substantial wealth of contacts and knowlege not taxpayer dollars. Pay only expenses and a salary equivalent to the national average. Normalize all federal payrolls to the national average. We have the fortune of their services while they are serving that should be the end of their compensation.

3) As the federal debt is reduced, only those with tax credits should benefit, not those who have not paid. Across the board cuts at the expense of those who contributed would not be acceptable. If we pay more than our fair share in the interest of those who cannot afford to pay ahead,we should get their share of the tax credits as well.


Hmmm, there seem to be a few bugs in this idea. Perhaps the forum could grab hold and fix it so it makes more sense.

Black Blade

(05/14/2000; 06:52:48 MDT - Msg ID: 30500)

A light sunday read, Who is todays Irving Fisher?, Abby Jo? Larry Kudlow? Hmmm......

History to Repeat? We Shall See.Irving Fisher and the Crash of 1929
Brian Trumbore
President/Editor, StocksandNews.com

Irving Fisher was a leading economist of his time who had authored books with the titles "The Purchasing Power of Money," "The Rate of Interest," and "The Theory of Interest." It's easy to view him as the Abby Cohen, Harry Dent, or Jim Glassman of his day. [Yeah, maybe that's not fair but it's my site!] He was also a member of AAPA, the Association Against the Prohibition Amendment. One of his own main new era arguments rested on the benefits he saw flowing from prohibition, which had begun in 1920. He cited the work of a Columbia professor, Paul Nystrom, who concluded that a "dry" nation would increase the efficiency of workers and switch demand from liquor to "home furnishings, automobiles, musical instruments, radio, travel, amusements, insurance, education, books and magazines."

Edward Chancellor attributes John Templeton with the saying, "The four most expensive words in the English language are 'This time it's different.'" Does this statement have anything to do with today's market environment? Well gather 'round and here what Fisher and other pundits were saying back in 1929.

In the fall of '29, as the market was beginning to hiccup, Fisher continued to believe in the bull's cause. He declared at one juncture, "Stock prices have reached what looks like a permanently high plateau." A few weeks later the market crashed. Chancellor writes that "Fisher fell for the decade's most alluring idea, that America had entered a new era of limitless prosperity." In 1913, the Federal Reserve was established. By the 1920s the Fed was hailed as "the remedy to the whole problem of booms, slumps, and panics." Bankers and speculators were lulled into a false sense of security. True, as for the economy, better management brought improvements in productivity and lower levels of inventory (mismanagement of which had been a leading cause of boom /busts in the past). Fisher argued that modern production "is managed by 'captains of industry.' These men are specially fitted at once to forecast and to mould the future, within the realms in which they operate. The industries of transportation and manufacturers, particularly, are under the lead of an educated and trained speculative class."

Fisher was also optimistic because of the relaxation of the antitrust laws during Calvin Coolidge's presidency which allowed for a series of mergers in banking, railroad and utility companies that promised greater economies of scale and more efficient production. The gains in productivity, which rose by over 50% between 1919 and 1927, were ascribed to increasing investment in research and development. [For example, back then AT&T was building up to a staff of 4,000 scientists, unheard of until this time]. So the widespread use of technology, the restructuring of corporate America and the Fed's ability to control inflation were the cornerstones of the new era philosophy of Irving Fisher's day.

Fisher was also a big proponent of investment trusts (the precursor to today's mutual funds), a recent innovation and wildly popular by the fall of 1929. "The influence of investment trusts�is largely toward cutting the speculative fluctuations at top and bottom, thus acting as a force to stabilize the market. Investment trusts buy when there is a real anticipation of a rise, due to underlying causes, and sell when there is a real anticipation of a fall," thus ensuring that stocks could move nearly to their true value. The high turnover of shares in the investment trust portfolios was hailed as sound management. It was even argued that investment trusts purchases were providing stocks with a new "scarcity value." In reality, the trusts invested heavily in blue chip stocks and borrowed heavily against their assets in order to leverage profits, thereby, increasing volatility.

Fisher denied the likelihood of a crash by September 3rd, the peak, even while others like Roger Babson forecasted an imminent debacle (Babson said this Sept. 4th). The market began to weaken sharply. Rumors of bear pools, led by Jesse Livermore, which were preparing to drive the market down with short sales, were rampant. [Don't worry, we'll cover Jesse someday].

Fisher was spending his evenings giving speeches to banks and business groups, touting his theories of permanent prosperity. The sharp decline of 10/14-10/19 in the market didn't cause a panic. Fisher thought the ongoing collapse was the "shaking out of the lunatic fringe."

Finally, on Wednesday, October 23rd, the investment trusts began to collapse and real fears of a crash were developing. That night Fisher told a banking group that "any fears that the price level of stocks might go down to where it was in 1923 or earlier are not justified by present economic conditions."

Later, Fisher attempted to explain his errors but he was generally ignored. Who today will suffer the same fate? Who will be "Fishered?" The Shadow knows.

The End

One interesting sidelight to the Fisher story. Back in 1914, Fisher thought the European War would cause the belligerents to sell their American securities to gain funds for munitions; that Europeans would no longer be able to finance American companies, that blockades would cut America from her markets and so destroy the economy. None of this happened. Instead, European gold came to America for safekeeping and Europeans purchased American securities as the safest investment to be had. As a result, share prices rose.

*Here are some random, important dates which give you a sense of the volatility in 1929 and how folks were undoubtedly suckered in after the Crash, only to see their life savings wiped out by July 8, 1932.

The "Roaring 20s" really didn't get off to a spectacular start, at least as far as the Dow was concerned.

1/2/20 Dow Jones - 108.76
12/31/20 - 71.95 [market meandered up then...]
5/20/24 - 88.33 [the low until long after the Crash]
12/31/27 - 202.40 [high close for the year]
12/31/28 - 300.00 [high close for the year, now we're really cranking]
9/3/29 - 381.17 [high for bull market]
9/30/29 - 343.45
10/23/29 - 305.85
10/24/29 - 299.47
10/25/29 - 301.22
10/26/29 - 298.97
10/28/29 - 260.64 [market closed the 27th]
10/29/29 - 230.07 [HELP!!!]
10/30/29 - 258.47 [Buy the dip! Buy the dip! C'mon!!]
10/31/29 - 273.51 [See, I told you to Buy the dip!]
11/13/29 - 198.69 [Homer Simpson: Dohh!!]
11/21/29 - 248.49 [Just your basic 25% one week rally]
12/31/29 -248.48
3/31/30 - 286.10 [Yup, no sweat. I got this market thing all figured out]
4/17/30 - 294.07 [the peak]
12/31/30 - 164.58
7/8/32 - 41.22 [90% decline from 9/3/29...and also the lowest level for the next 67 years]

Sources:
"Wall Street: A History," Charles Geisst
"Devil Take the Hindmost," Edward Chancellor
"Mania, Panics, and Crashes," Charles P. Kindleberger
"The Bear Book," John Rothchild
"The Great Bull Market: Wall Street in the 1920s," Robert Sobel

Brian Trumbore

JavaMan

(05/14/2000; 07:07:41 MDT - Msg ID: 30501)

Good morning Henri,

I watched quite a few debates several months ago and was very disappointed with the design of the debate format as well as the caliber of the contenders. They weren't true debates but, rather, choreographed discussions. Most of the "contestants" even had queue cards displayed out of camera range to prompt them with their responses. I think they were more like individual infomercials than debates.

And as for the candidates, perhaps I'm growing cynical in my old age, but none of those that debated should be in the white house, save one, Alan Keyes. He didn't side step the questions in typical politician style but took them head on and gave excellent, eloquent responses (often based on the U.S. Constitution / Bill of Rights) that communicated to me that the man is a genuine thinker.

Since a Bush / Gore presidency will simply be more of the same old same old, and even though Keyes' chances are as the proverbial "snow ball", I'll vote my conscience in November, that is, if he is still running. It seems that the media has not provided much coverage of the man lately.

HI - HAT

(05/14/2000; 07:32:00 MDT - Msg ID: 30502)

ET Sovereign Individual

ET, Hello. No, the HI-HAT monicker is not drum related, although in the 60's my head sometimes felt like one. The HI-HAT is a rather large ranch near where I live, and as I pass it everyday to work, I took the name.

I have had, "The Sovereign Individual", sitting on my bookshelf for several months now. After both you and Aristotle mentioned it yesterday, I read more of it. It is both Empowering and Chilling.

Hill Billy Mitchell

(05/14/2000; 07:49:27 MDT - Msg ID: 30503)

Another alternative

Dear Sir Henri

Re:Henri (5/14/2000; 6:48:58MT - usagold.com msg#: 30499)
There is an alternative.

Another alternative would be: As Journeyman has suggested, "Quit volunteering".

hbm

Black Blade

(05/14/2000; 07:53:02 MDT - Msg ID: 30504)

Everyones going to the net and b2b, Hmmm......

Mining Giants Set Up Internet Procurement Exchange

May 14 5:57am ET

LONDON (Reuters) - Fourteen of the world's largest mining and metals firms said on Sunday they were creating a single procurement marketplace on the Internet in a move that could cut the industry's annual $200 billion spending bill.

The partnership brings together rival companies from Australia, the Americas, Europe and Africa, and includes heavyweights such as Alcoa Inc., Anglo American Plc., Rio Tinto Plc. and The Broken Hill Proprietary Co. Ltd.

Backers will inject up to $100 million into the project, which will be prepared for an eventual initial public offering (IPO).

The exchange, which is expected to start Net-based transactions by the end of the year, is the latest example of business-to-business (B2B) marketplaces springing up in many industries to improve efficiencies in complex supply chains.

One industry source involved in the project said cost savings from online procurement were likely to total five to seven percent.

Last month 14 leading oil and gas companies joined forces in a similar project designed to focus some $125 billion a year of procurement spending on a common Internet site.

Online ordering of everything from trucks to chemicals should cut transaction costs, increase price transparency and allow companies to operate with smaller inventories.

The founders of the mining exchange represent more than 60 percent of the market capitalization of the global mining and metals industry, and include the world's largest producers of aluminum, copper, gold, platinum and iron ore.

The site, which aims to be independent and neutral, will be open to all industry producers and suppliers, and additional mining and metals companies are expected to participate.

In 1999, the industry industry's total procurement spending was an estimated $200 billion.

A chief executive for the cyber market will be appointed shortly and the venture is to bring in a technology partner to help run the run.

The 14 backers of the procurement hub are:

-- Alcan Aluminum Limited

-- Alcoa Inc.

-- Anglo American Plc.

-- Barrick Gold Corp.

-- The Broken Hill Proprietary Company Limited (BHP)

-- Compania Nacional del Cobre de Chile (CODELCO)

-- Companhia Vale do Rio Doce (CVRD)

-- De Beers Consolidated Mines Ltd.

-- Inco Limited

-- Newmont Mining Corporation

-- Noranda Inc.

-- Phelps Dodge Corporation

-- Rio Tinto Plc./Limited

-- WMC Limited

Morgan Stanley advised on the establishment of the marketplace.

HI - HAT

(05/14/2000; 08:41:31 MDT - Msg ID: 30505)

Town Crier,Trail Guide, ORO,Aristotle,Peter Asher,Everybody

Town Crier: A few days ago at the end of one of your posts, you intriguingly put forth a proposition about speculating how TPTB will react in possible future disruptions and the World we are going to be in.

It seems everything is in some kind of Limbo, in a desperate time lines status quo gambit.

I do hope that somewhere up ahead, after the fall, all the Forum participants get into a free-range discussion of what is the best positions and postures to be in and take in the new cycle, out of the ashes.

This probably can't take form until we all see how this thing breaks.

I for one oscillate from patriotism'survival,hope,fear,hate,despair,paranoia,hunkering down,moving to Cayman Islands,Belize,tax non-compliance'some kind of new business plan, etc. etc. etc..

I'm packing the Gold, but still feel like a deer in the headlights.

SteveH

(05/14/2000; 08:52:23 MDT - Msg ID: 30506)

Methodists

I wrote this to the following addresses:

infoserv@umcom.umc.org; umc@umcom.umc.org; ghigh@gbgm-umc.org; newsdesk@umcom.umc.org; jharnish@gbhem.org; pbarrett@gbhem.org; dullrich@gcfa.org; rlewis@umpublishing.org; curricuphone@umpublishing.org

Hello all,

I am Catholic, but I don't practice. This is partly because I believe that Churches meddle in human affairs instead of Godly affairs. A recent case in point is your Churches decision to vote for the banishment of certain guns.

Guns are not in themselves evil. In fact they are the greatest deterrent against oppressive practices of men world-wide. In fact, history is full of examples of church-going peoples who have used guns to protect themselves and their countries against governments and people who sought to take away life, liberty, and the pursuit of happiness. To name a few: Khmer Rouge (sp?), Nazis, Stalinist Russia, Vichy Government in France, Franco Government in Spain. In most, if not all, of these governments, they sought to outlaw private ownership of weapons before affecting the violence upon their own people. In short, private ownership of weapons, irrespective of our own history when the British tried to disarm the Colonists, is the greatest protector of liberty known to mankind.

That gun ownership results in a threat to the public health of our children is a sad affair. However, I would like to point out that the alternative that you voted for, will result in a far worse affect upon public health than you realize. It would be imprudent for me to say that we shouldn't seek to teach our children to respect firearms or that we shouldn't teach them safety and proper handling of firearms, for we should. I would be remiss to not say that we should at every turn take appropriate steps to reduce gun violence, BUT NOT AT THE EXPENSE of our future.

Our forefathers so sought to protect our liberty that they incorporated the Second Amendment into the Bill of Rights. These rights are the hallmark and bulwark of our Nation. Any organization or person who seeks to weaken our Constitution in a manner inconsistent with the Constitution is an enemy of the US and its people. The Second Amendment and the States who have Constitutional provisions for the Right To Keep and Bear Arms do so to protect our rights.

So what does one call it when a Church suggests that something that is guaranteed by the Constitution of many states and by the very Bill of Rights that grants them the right to say what they do and practice the religion that makes them who they are? I offer a term and a definition from the heritage dictionary:
trea�son (trzn)
n.
Violation of allegiance toward one's country or sovereign, especially the betrayal of one's country by waging war against it or by consciously and purposely acting to aid its enemies.
A betrayal of trust or confidence
treason \Trea"son\, n. [OE. tresun, treisun, traisoun, OF. tra["i]son, F. trahison, L. traditio a giving up, a delivering up, fr. tradere to give up, betray. See Traitor , and cf. Tradition .] 1. The offense of attempting to overthrow the government of the state to which the offender owes allegiance, or of betraying the state into the hands of a foreign power; disloyalty; treachery.
The treason of the murthering in the bed. --Chaucer.
Note: In monarchies, the killing of the sovereign, or an attempt to take his life, is treason. In England, to imagine or compass the death of the king, or of the queen consort, or of the heir apparent to the crown, is high treason, as are many other offenses created by statute. In the United States, treason is confined to the actual levying of war against the United States, or to an adhering to their enemies, giving them aid and comfort.
2. Loosely, the betrayal of any trust or confidence; treachery; perfidy.
If he be false, she shall his treason see. --Chaucer.
traitor \Trai"tor\, n. [OE. traitour, OF. tra["i]tor, tra["i]teur, F. tre[^i]tre, L. traditor, fr. tradere, traditum, to deliver, to give up or surrender treacherously, to betray; trans across, over + dare to give. See Date time, and cf. Betray ,Tradition , Traditor , Treason .] 1. One who violates his allegiance and betrays his country; one guilty of treason; one who, in breach of trust, delivers his country to an enemy, or yields up any fort or place intrusted to his defense, or surrenders an army or body of troops to the enemy, unless when vanquished; also, one who takes arms and levies war against his country; or one who aids an enemy in conquering his country. See Treason .
O passing traitor, perjured and unjust! --Shak.
be�tray (b -tr)
v. tr. be�trayed, be�tray�ing, be�trays.
To give aid or information to an enemy of; commit treason against: betray one's country.
To deliver into the hands of an enemy in violation of a trust or allegiance: betrayed Christ to the Romans.
To be false or disloyal to: betrayed their cause; betray one's better nature.
To divulge in a breach of confidence: betray a secret.
To make known unintentionally: Her hollow laugh betrayed her contempt for the idea.
To reveal against one's desire or will. See Synonyms at reveal1 .
To lead astray; deceive. See Synonyms at deceive .

[Middle English bitrayen: bi-, be- + trayen, to betray (from Old French trair) (from Latin tradere, to hand over); see tradition.]
be�tray al n.
be�tray er n.


***

If one were to agree that the RKBA is for the purpose of making the country a stronger country and the people stronger people against oppression and against enemies and criminals, ANY ATTEMPT TO DISARM OR WEAKEN THAT COUNTRY OR THOSE PEOPLE is simply treason and a betrayal of the Constitution and the country and states for which it stands. So, I ask you, why would your Church see fit to betray our Constitution, our country, our people, and the Church you worship in? Why?

SteveH

Aggie

(05/14/2000; 09:18:31 MDT - Msg ID: 30507)

gun control

http://www.cuttingedge.org/news/n1344alt.cfmSteve H something that may interest you

jinx44

(05/14/2000; 09:44:27 MDT - Msg ID: 30508)

Black Blade and your 30484

Thanks for your comments. There are still a number of ways to escape the scrutiny of criminal governments. I do not think that anything done in the country of residence is safe. I have looked into the NV corp. issue and while it is a bit of help with domestic privacy from personal civil mattrers, it still relies on the national system of regulation and banking. With any carribean venture, the scrutiny is intense as well. Physical distance from the US is a good idea. An old rule of thumb that I like is this four country model--a citizen of country A, you live in country B, you hold your wealth in the currency of country C and your bank is in country D.

The incremental enslavement that we have been subject to is insidious. It is the frog in boiling water analogy. Quite a few posters here and at other boards take offense at those of us who rant about taxes and govt regulation. I wish there was a slick way to take them back 50 years ago and expose them to the current days regulation and see how much they would scream bloody murder. I don't condemn people who still have a blind loyalty to this country, but they are a part of the problem, as they accept this creeping socialism and the excuses that precede it--"it's for the children", and all that rot. I only have to remember my own ancestors who fled England and Germany several hundred years ago. They were fed up with religious and economic persecution and voted with their feet. That time is again drawing nigh. Good day, sir.

ss of nep

(05/14/2000; 09:58:40 MDT - Msg ID: 30509)

Another alternative would be: As Journeyman has suggested, "Quit volunteering"

IMHO

TPTB re-lie on, as indicated in Atlas Shrugged,

"the sanction of the victim",

They bring to you the ISSUES they want you thinking
about, via the controlled media, ( the endless
distraction ), until the opinion developed by the
general population is the synthesis they(TPTB) want you
to tell them to adopt.

The population gets exactly what it does not want,
and which only benefits the few near the top of the
food chain.

The general population, for the most part, just do not understand the process.

TownCrier

(05/14/2000; 10:52:42 MDT - Msg ID: 30510)

Mother's Day / Father's Day

http://www.usagold.com/onlinestore/special.htmlWhile it may be too late too late to help you out with Mother's Day (I've got to hit the highway myself to join my own dear Mumm for dinner later today), it occurs to me that in the process of getting some of these for yourself, you might want to pick up an extra for dear ol' Dad.

Just think of the fine conversation you can stimulate with your father in regard to the nature of gold, paper, and money when you discuss the history of this German 20 mark gold coin and the nightmare German hyperinflation that followed a decade after this coin was no longer being minted. (The Special Report on the German hyperinflation is sent to you free with your order, and if you order 10 or more, MK will add a free year 2000 U.S. Silver Eagle to your package.) Your dad will surely be proud to see how you've grown to be such a knowledgeable and independent thinker. And further, his own thoughts on the matter may pleasantly suprise you...can apples really fall that far from the tree?

The highway awaits...(Yes, Mother, I'm on my way!)

YGM

(05/14/2000; 11:26:31 MDT - Msg ID: 30511)

Hathaway Article.."JP Morgan to Rescue"..Still Posted at........

http://www.lemetropolecafe.comFree Two Week Membership is offered.........
(this is a membeship req'd site.....(Midas Bill Murphy)

Snippet of piece--------
John Hathaway
May 2000
� Tocqueville Asset Management L.P.

JP Morgan To The Rescue

Bullion banks expanded their short position in gold by dramatic proportions in the fourth quarter of 1999. Gold derivatives outstanding increased by a record $24.2 billion to $87.6 billion, the largest quarterly increase ever. These positions, reported by the Office of Comptroller and Currency, do not include activity of large non-US bullion dealers or investment banks. Including those entities, the OCC numbers should be "grossed up" by 50% to 100%.

JP Morgan reported the largest exposure to gold derivatives, $38 billion, over 40% of the total. From June 30, 1999, JP Morgan's total more than doubled, from $18 billion. It is possible that JP Morgan's activity was part of a rescue operation for weaker bullion dealers. As the strongest credit among bullion dealers, it might have been called upon (or felt a calling) to shoulder some of the risk of weaker bullion dealer credits rattled by the gold short squeeze of September 1999. Perhaps JPM's vast derivative expansion was a form of reinsurance, an assumption of a layer of risk to shore up the misadventures of their less competent competitors. The shutdown of the firm's New York trading desk at year end 1999 and transfer of most trading operations to London is curious in these circumstances, and raises the question as to whether the objective was to distance these operations from US regulators. Notice that the new address is conveniently near the anti-gold British Exchequer.

The activities of the bullion dealers in general and JP Morgan in particular raise numerous other questions as to the impact these institutions have had on the behavior of the gold price:.......'continued'

This article has been removed from John Hathaways site and Gold-Eagle editorials for some strange reason (we know why).......YGM.

YGM

(05/14/2000; 11:32:30 MDT - Msg ID: 30512)

Midas Latest on GATA........

http://www.lemetropolecafe.comMembership Required......as previously outlined....

Snippet......

Midas du Metropole
"The Gold Market and Precious Metals Commentary"

The Enveloping Horn Will Advance Under The Cover of Darkness

First Alert: Australia

Many battles have been one throughout history using the element of surprise. As long time www.LeMetropoleCafe.com members know, the Gold Anti-Trust Action Committee has employed the "Enveloping Horn" battle tactic of the great South African Zulu Chieftain warrior, SHAKA!

Tonight, the allied "pro gold" forces will be on the move and will strike at the very heart of our adversaries, those malign "axis" forces that have been manipulating the gold market and not allowing it to rise in price; no matter how much wage and commodity prices accelerate in the United States and around the world; regardless of the fact that the natural supply/demand gold deficit exceeds1500 tonnes per year.

Tomorrow, our center spread, full page open letter to the U.S. Senate and House banking committee members will appear in Roll Call, the most widely read newspaper of the Washington political elite. It is a 4 color open letter addressed to all of these banking members that explains to them the reason why they were handed a 90 page document. The Gold Anti-Trust Action Committee's research strongly suggests it is the machinations of certain government officials and certain bullion banks that have allowed a gold derivative problem to develop that could spout an international banking crisis at any time.

This 90 page GATA delegation "Gold Derivative Banking Crisis" document is filled with evidence that supports GATA's case. We only ask the banking committee members in Congress to ask certain questions of the bullion bankers. They can have their answers in weeks and those answers will determine if we are correct or not. No big deal. These same banks report their consumer loan books, their mortgage loan books and their corporate loan books. They brag about the growth of these loans. Yet, they say nothing about their gold loan books or the growth of their gold loans. That is what Frank Veneroso explained to the politicians and economists that the GATA delegation met with in Washington...........

"continued"

YGM

(05/14/2000; 11:42:03 MDT - Msg ID: 30513)

Graduation Day......

Not Far Away..... The "BEST" Gift I can think of for my 17 yr old daughter, is a gift of "Gold"......A gift of Security, Confidence and Timeless Beauty, in the form of Gold Coins. USA Gold deserves our business. It's time to show our appreciation for this site and the education and voice we've all gained.
(IMHO)......YGM.

GO GATA & GOLD.

YGM

(05/14/2000; 11:50:44 MDT - Msg ID: 30514)

Worthy of Praise......

http://www.goldworld.netJosh Wrights site is among the top GoldBug and Financial sites on the web...Josh has been a fervent supporter of GATA over the long haul and this is evidenced by his site Gata banners.......Go Josh, we need more web promoters like you.....YGM

Mirror Site.....http://www.anglefire.com/del/goldmine

Henri

(05/14/2000; 11:59:07 MDT - Msg ID: 30515)

Off for a couple days

In search of the elusive American Turkey

YGM

(05/14/2000; 13:27:06 MDT - Msg ID: 30516)

Of Interest.....

http://www.gold-eagle.com/analysis_00/roffey051500.htmlSorry for all the posts, but this is worthy and it's quiet in here....

Peter Asher

(05/14/2000; 14:31:31 MDT - Msg ID: 30517)

(No Subject)

http://www.latimes.com/news/front/20000513/t000045192.htmlHousehold Debt Grows Precarious as
Rates Increase
Spending: Total liabilities have passed after-tax
incomes for the first time, especially among
lower-earning families. Interest hikes weigh
heaviest on those maxed out on cards.

Leland

(05/14/2000; 15:15:32 MDT - Msg ID: 30518)

Peter Asher, Your Msg. #30517 Reminds me of Something..

Almost very time I look at my credit cards, I'm reminded,
this is an industry built on plastic.

ss of nep

(05/14/2000; 15:30:40 MDT - Msg ID: 30519)

YMG

YGM (05/14/00; 11:42:03MT - usagold.com msg#: 30513)
Maybe enrollment in a Fire-Arms course would be good,
I think the window for Fire Arms Acquistion papers
closes within about 5 months( ? ), but

when your in the Yukon these silly things may not apply.

Peter Asher

(05/14/2000; 15:51:23 MDT - Msg ID: 30520)

They're right in front of your nose

>>>>Henri (05/14/00; 11:59:07MT - usagold.com msg#: 30515)
Off for a couple days
In search of the elusive American Turkey<<<<

Turn on any news channel!

Leigh

(05/14/2000; 16:13:13 MDT - Msg ID: 30521)

Leland

If "all paper will burn," will all plastic melt?

Trail Guide, it's a beautiful day for a hike. We miss you!

Leland

(05/14/2000; 16:51:35 MDT - Msg ID: 30522)

And Leigh, Don't Forget..

A pair of scissors is all that's really needed.

Leigh

(05/14/2000; 17:27:35 MDT - Msg ID: 30523)

My Mother's Day Present

Well, Mother's Day is almost over, and I want to tell you about my present. As we were leaving church, my husband said, "John, have you done anything for Mom for Mother's Day?" John didn't answer, but when we got home he asked me which state quarter I like the best. I said the New Jersey one. John ran upstairs, and soon came down with a beautiful New Jersey quarter, in a plastic container.

This was a BIG sacrifice for him! He loves his state quarters, and is always on the lookout for more.

Hope everyone here is having a happy day.

SteveH

(05/14/2000; 17:58:45 MDT - Msg ID: 30524)

(No Subject)

http://www.goldensextant.com/commentary11.html#anchor17479Snippet:

"When the Russian default and Long Term Capital Management fiasco struck in the fall of 1998, gold prices and Fed outflows again surged together. But then something strange happened. As gold prices continued their upward advance, Fed outflows fell back. But total U.S. gold exports, in amounts far in excess of ordinary monthly levels of around 25 tonnes, still spiked into the rising gold prices. Where did this gold, emanating from the U.S. but not from foreign earmarked accounts at the Fed, come from?

One obvious suspect is the Exchange Stabilization Fund, which also has a gold account at the N.Y. Fed and thus, assuming it had the gold, could have released it into the market through substantially the same channels as previously utilized for foreign earmarked gold. The ESF may also have had an additional motivation at this time. Impeachment proceedings were moving into full gear, and any serious financial disturbance might easily have been fatal to the Clinton presidency.

Where might the ESF have obtained some gold. When the Asian financial crisis hit Korea in late 1997, there was speculation that the Exchange Stabilization Fund might intervene with some sort of support package, although whether it did so has never been confirmed. Korea's own "Save the Nation" campaign took in about 200 tonnes of gold volunteered by its citizens. Accordingly, it is possible that the ESF bought or otherwise obtained some or all of this gold as part of a rescue package, and thus had it available in the U.S. in 1998."

jinx44

(05/14/2000; 18:03:08 MDT - Msg ID: 30525)

Mother's Day

The happiest moments of my life have been the few which I have passed at home in the bosom of my family---Thomas Jefferson

Loving relationships are a family's best protection against the challenges of the world--Bernie Wiebe

I value this delicious home feeling as one of the choicest gifts a parent can bestow--Washington Irving

The mother's heart is the child's schoolroom--Henry Ward Beecher

Train your children to the way in which you know you should have gone yourself--Charles Spurgeon

I pray that I may love enough, care enough, listen enough, share enough and most importently, pray enough, to enable my children and grandchildren to become all God intended--Rose Aker

"Her children rise up and bless her; her husband also, and he praises her saying: 'Many daughters have done nobly, but you excel them all'". Proverbs 31:28-29

The only woman I ever loved was another man's wife, my mother--tattoo seen on the chest of a young corporal, ex-Royal Marine Commando, in darkest Africa, years ago.

Bless all you Mothers.

YGM

(05/14/2000; 18:12:46 MDT - Msg ID: 30526)

ss of nep....

Same Gun Laws in Yukon......except our local potiticos are fighting it......IMHO whenever
Adolph Alan Rock gets involved we're toast......Anyway I
still have my old bumper sticker that says.............

"You Can Have My Gun, When You Pry It From My Cold Dead Fingers"....

Maybe one for Gold would be in order...
"You Can Have My Gold When You Find It"

....And I will hold true to that belief, even tho I only own a few hunting weapons......Shotgun & Slugs for Two Legged Snakes.....YGM.

ss of nep

(05/14/2000; 19:27:36 MDT - Msg ID: 30527)

Good story

http://www.kitcomm.com/comments/gold/2000q2/2000_05/1000514.180426.aynrandee.htm

Gold Trail Update

(05/14/2000; 20:39:27 MDT - Msg ID: 30528)

The Gold Trail Discussion has been Updated

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

Chris Powell

(05/14/2000; 20:44:39 MDT - Msg ID: 30529)

GATA starts new offensive; is Morgan surrounded?

http://www.egroups.com/message/gata/455?A new offensive by GATA starts Monday, May
15, amid signs that the conspiracy against
gold has sensed that it has been exposed.

http://www.egroups.com/message/gata/455?


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

Solomon Weaver

(05/14/2000; 21:04:42 MDT - Msg ID: 30530)

Gold eagles Roffey sees gold stocks preceeding metals.

http://www.gold-eagle.com/analysis_00/roffey051500.html"In a true bull market, Gold stocks always out perform bullion - especially in the more marginal mines. This reason for this is the fact that earnings and profits tend to accelerate exponentially, as the Gold price appreciates above the mine's breakeven levels. Thus, if we are to look for signals of a resurgent Gold price, it must be accompanied by recovering Gold share prices - and especially signs of the shares wanting to out-perform bullion."
-------------------------
Trail Guide.....
I fully concur with the Another scenario that in a time of real financial chaos (large international cross defaults), that the fact that gold miners are locked into fiat contracts where FREEGOLD is not, can create an unusual case where there is most leverage in pure bullion.

Just thought I would point out that as the status quo returns to favor gold, the above quote will represent the logic which we will see....for a while.

Poor old Solomon

PH in LA

(05/14/2000; 21:21:16 MDT - Msg ID: 30531)

Very interesting comments at Golden Sextant tonight

http://www.goldensextant.com/commentary11.html#anchor17479Greetings Trail Guide,

and thanks for your commentary tonight.

All:
There is even more food for thought tonight by Reginald Howe at: .

Solomon Weaver

(05/14/2000; 21:25:17 MDT - Msg ID: 30532)

The Megapolitics of WEB BASED B2B exchanges

http://www.gold-eagle.com/gold_digest_00/butler050800.html
HI - HAT (5/14/2000; 7:32:00MT - usagold.com msg#: 30502)
ET Sovereign Individual

I have had, "The Sovereign Individual", sitting on my bookshelf for several months now. After both you and Aristotle mentioned it yesterday, I read more of it. It is both Empowering and Chilling.

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

Black Blade (5/14/2000; 7:53:02MT - usagold.com msg#: 30504)
Everyones going to the net and b2b, Hmmm......
Mining Giants Set Up Internet Procurement Exchange

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

Hey HI HAT.....I read "The Sovereign Individual" when it was hot off the press in 1997...and picked it up this AM to REREAD it.....

When I look at the list of names on the Mining Giants b2b, I realize that we are facing a megapolitical event where no nation will be the center of trading (like Chicago for commodities). The very interesting aspect here is that they are calling this a "procurement" exchange....not a "futures" or "options" exchange....sssooooooo, it sounds like at least a real honest to goodness "spot" market...and I certainly hope that they will not "allow" the issuing of "options"....and with the number of Euro names on the list, I am sure that quoting in Euros will be possible (built into the software).

If this new b2b exchange is able to hold their members to "the ability to deliver" when "sell contracts" are issued, then they might represent an "alternative" to paper markets as they burn....particularly in a market where sellers are selling the real stuff, price might really dictate what buyers are willing to pay.....

The other dangerous prospect will be when the buyers all move to this exchange....and the sellers remain at COMEX...then what will be the meaning of arbitrage????

Poor old Solomon

Dollar Bill

(05/14/2000; 21:53:00 MDT - Msg ID: 30533)

Chris Powell

Is Morgan surrounded? Murphy thinks murphy is surrounded.
Besides repeating AGAIN this week his paranoia about his alleged conspiracy based stolen car and street punch, he now repeats it in a paragraph compareing his conspiracy theory with Johhny Chungs claims to Murphy to have not one, not two but three hit squads after him. Two Chinese and one Mafia. Murphy then treats his metropole readers to an advertisement promoteing Chungs new video and treats us to Chungs comment about believing in one god I guess as a way to get us to overlook Chungs ethical mistakes. Pathetic.

Buena Fe

(05/14/2000; 22:13:30 MDT - Msg ID: 30534)

Dollar Bill (05/14/00; 21:53:00MT - usagold.com msg#: 30533)

Careful, Dollar Bill. The paper that your "handle" represents has been placed in the crucible of fire (by divine order, imho). I truly hope that you come through this next period of history in better shape then it will.

Stay sharp, the "One God" appears ready to demonstrate a little fire......works!
gold IS precious!

Chris Powell

(05/14/2000; 22:19:50 MDT - Msg ID: 30535)

Fed knows all about gold manipulation

http://www.egroups.com/message/gata/456?Reginald H. Howe demonstrates that the
Federal Reserve knows a lot more about
manipulation of the price of gold than it
admits:

http://www.egroups.com/message/gata/456?


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

JCTex

(05/14/2000; 22:28:49 MDT - Msg ID: 30536)

Dollar Bill

You do not seem to care for GATA or anything that they say, think, or do. Fine, that is certainly your right. If you have an idea that is better, or a plan that will hold more water, then, let's hear it.

Run, fight, or get the hell out of the door.

Marius

(05/14/2000; 23:11:07 MDT - Msg ID: 30537)

Jinx44 (#30525), & Henri (#30499)

Good Evening, All

Am up late trying to digest the near lethal quantities of barbequed roast pork we consumed in my Mom's honor tonight, with the aid of some yummy pure malt. It was a feedbag of terrifying proportions, and Mom held her own, bless 'er!

Jinx:

I enjoyed your list of quotes re: mothers. I add this one to your list only because I've heard the radio ad all week long, and it's burned into my brain. Nowhere near as literary, but memorable if you ever hear it:

"No one ever loves ya like your Mum...
Even when she smacks ya on your bum..."

(Advertising jingle for Outback Steakhouse in Rochester, NY.
Imagine it sung by a chorus of gravel-voiced, half drunk Aussie rowdies, and you've got it down.)

Henri:

"If Congress could possibly curtail its appetite for new taxpayer money..."

I know you were earnestly trying to stimulate constructive discussion, but: hahahahahahahahahahahahahahahahahah!
Sorry, I'm better now. Did you completely miss the Congressional debate over the piddly 4.3 cent per gallon gas tax repeal? Too risky! And this from "conservative Republicans" in an era of alleged trillion dollar surplus.
You're a nice person, you write and spell wonderfully, but what planet have you been living on?

M

schippi

(05/14/2000; 23:19:49 MDT - Msg ID: 30538)

Reasons for Gold to go Up

http://www.SelectSectors.com/gldresit.gif US Dollar appears to be completing a blow-off top.
Oil and commodity prices moving Up.
Equity Market in trouble.
Mutli-year Gold down trend has been broken.
Gold is moving Up from a historical Low point.

YGM

(05/14/2000; 23:35:38 MDT - Msg ID: 30539)

Another....

Thank You for Your Words....You lend much encouragement for strength of conviction and vision to an otherwise weary soul.......Ken...YGM.

Anticipation is good for the soul........Yes?

elevator guy

(05/15/2000; 01:27:02 MDT - Msg ID: 30540)

@YGM- anticipation good for the soul

There was an experiment done with lab rats. Or so I heard, but dont know if its true.

The lab rats were deluged with water for a couple of hours, until they almost drowned and expired. Then they were taken out, dried off, given good food and rest. After that, they were put back in the torrent of rushing water. Rats in a control group, which were given no rest period, had died within minutes, succumbing to the rushing flood.

Rats that had experienced the relief period, hung on for an incredible amount of extra time, like 17 hours or something.

And so the obvious application is that if one has hope, one can survive enormous hardships and adversity, perhaps surviving long enough for times to change, or a rescue to come.

Without hope, the spirit grows faint, and resolve crumbles against seemingly overwhelming odds.

Hope makes all the difference, and faith overcomes all.

Go GATAView Yesterday's Discussion.

Leland

(05/15/2000; 02:09:51 MDT - Msg ID: 30541)

"HAS the problem of inflation been licked? Not even close."

http://nypostonline.com/business/29756.htmJohn Crudele in today's NEW YORK POST..

Leland

(05/15/2000; 02:28:07 MDT - Msg ID: 30542)

Latest from Scott Burns

"Do we hate bears? Or do we just like to shoot
messengers?

My recent column about Monster Bear David Tice
brought some very emotional e-mail responses. A
number of them attacked Mr. Tice as a short seller,
as someone with a vested interest in lower stock
prices and as manager of a fund that has been living
in a bear market of its own making since inception.

So let's talk this through.

First, the facts on Mr. Tice's Prudent Bear fund. If
you had invested $10,000 each in both Prudent
Bear and the Vanguard Index 500 fund on April 1,
1997, you would have had $20,649 in the index
fund by the end of March 2000. Your investment in
Prudent Bear, however, would only be worth
$4,593, a significant loss. Several readers compared
Mr. Tice to a stopped clock, noting that he would
inevitably have the correct time, twice each day.

E-mail is not a medium for pulling punches.

It has been dangerous to be bearish since August
1982. Bearish brokers and investment advisers have
lost clients and bearish investors have lost their own
money. One reader suggested that the column would
have been more credible if it had cited a more
successful investor, one who wasn't perpetually
bearish.

An education

In fact, the column wasn't about the Prudent Bear
fund or about Mr. Tice as an investment manager.
The column was an exercise in learning about all the
forces and data that support the idea that this bull
market may be about to end. Information on bear
markets isn't easy to find and is generally
out-shouted by multitudes yelling that they're part of
the "new economy" ... and we're not.

And it is possible to hear some bearish words from
successful investors. At the recent annual meeting for
Berkshire Hathaway Inc., Warren Buffett observed
that periods like the present were generally noted for
the amount of wealth transferred from one group to
another, not for actual wealth creation. He has also,
like Bill Gates, expressed amazement at the price of
his own stock.

What Mr. Buffett hasn't done is make the effort Mr.
Tice made to assemble the facts that support his
position - and that's why I went to talk with Mr.
Tice. He not only has the facts together and
organized, but they are publicly available on his Web
site. Call it the home page of uneasy reading.

Bright side vs. skeptics

Why should we pay attention to bearish views and
bearish facts?

Because the vast majority of market participants
suppress, deny, reject or otherwise soft-pedal
anything remotely worrisome. While Mr. Tice may
have a vested interest in his bearish information, you
won't find it on virtually any of the sites sponsored
by brokerage houses, mutual fund firms and related
firms because they have a vested interest in looking
on the bright side.

Investors with bright outlooks do more trading and
more buying. Investors with dour outlooks tend to
go away. They spend their money somewhere else.
Witness the fact that assets in equity mutual funds hit
a peak of $55.9 billion at the top of the 1972 bull
market, bottomed at $30.9 billion in 1974 when
things were bleakest and then didn't surpass their
1972 asset high until early 1983, one year into the
current bull market. Similarly, the number of mutual
fund shareholder accounts peaked at 10.9 million in
1971 and then declined every year until 1982. By
1981, there were only 7.2 million accounts.

The sad truth is that an inescapable barrage of
pecuniary pornography - advertising, marketing and
related hype - with no redeeming social value
surrounds us. It is simply designed to excite our
financial interest and keep the cash flowing into
funds and stocks - and into the businesses that make
a profit when the cash comes in.

We need, at regular intervals, to listen to something
beyond the manipulated din of our own wishful
thinking."

(Many Thanks to Scott Burns, THE DALLAS MORNING NEWS, And Fair Use For Educational/Research Only Applies.)

HI - HAT

(05/15/2000; 04:23:27 MDT - Msg ID: 30543)

Trail Guide msg#22 Era's

Hello to you from paradise. Yes the live Pigeon shoot is true, however, we are at the end of an era.

A Ritz-Carlton Hotel complex is going up downtown, [ which I will be part of, Marble - Granite ]. The high end golf-course-clubhouse - other amenities of the Ritz is slated to be built out on the HI-HAT.

So while the pigeons will turn to clay, the herds of Wild Boars rooting up the golf course, should provide future controversy !

Black Blade

(05/15/2000; 05:53:09 MDT - Msg ID: 30544)

Inflation Gauge

http://www.businesscycle.com/index.htmlThe link above is the Economic Cycle Reseach Institute (ECRI) refered to by Crudele's NY Post article as posted by Leland. Look at the Future Infaltion Gauge - Thar She Blows! Also S&P Futures down -5.70, Au down -$0.70 at $274.90, Ag down -$0.01 at $4.99, Pt down -$9.00, and Pd up +$1.00.

Black Blade

(05/15/2000; 06:08:03 MDT - Msg ID: 30545)

Morning Wakeup Call!

Source: Reuters and Bridge NewsMonday May 15, 6:29 am Eastern Time

European gold quiet, market drifts in range

LONDON, May 15 (Reuters) - Gold bullion business was extremely slow in Europe on Monday, and prices were drifting quietly within the well-established recent range of $275/$278, traders said. Gold was fixed at $275.65 an ounce, down $1.00 from Friday afternoon's fixing, as a slight bias developed towards the lower end of the current band. ``It is doing very little, but I think it will drift down with more Swiss sales and the Bank of England (auction) to come,'' one trader said.

The Swiss National Bank (SNB) sales program started this month, while the Bank of England's next regular 25-tonne auction is on May 23. Prior to previous UK gold sales, the price has tended to ease back, analysts noted. In the shorter-term, a Federal Open Market Committee (FOMC) meeting starts Tuesday, with U.S. interest rates widely tipped to rise. ``...a hike of U.S. interest rates by 50 basis points would greatly reduce inflationary concern and place further upwards pressure on the dollar, both of which are negative for gold,'' broker Macquarie Equities Ltd said on Monday.

So far, the market has been defended on the downside by physical support, but if the current range is breached, there is potential for prices to track down to $271/272 on the downside. Spot gold was indicated at $275.45/$275.95 after drifting back from the New York close of $275.90/$276.40 Silver remained bereft of trading interest and continues to cling limpet-like to the $5.00 level. The broader technical range is around $4.95/$5.05, and the market needs to break out to re-awaken trading interest. It was indicated at $4.98/5.01, against a $4.99/$5.01 close.

PLATINUM MARKED HIGHER AS INDUSTRY WEEK KICKS OFF

PGM markets were equally quiet, although platinum was marked up as a major annual industry event got underway. ``It is Platinum Week (in London), so we may get some positive comment there,'' a European trader said. Later on Monday refiner Johnson Matthey (quote from Yahoo! UK & Ireland: JMT.L) will release its widely anticipated annual review of the market. Technically, the uptick was aided by 10 and 30-day moving average support between $500 and $510 holding last week, traders said. Platinum was at $516.00/$526.00 from the New York close of $507.80/$512.80. Palladium was quoted at $565.00/$580.00,
compared with $568.50/$588.50.

Black Blade: Slow action overnight. Notice how the media continues to beat this dead horse issue about Brit and Swiss Au sales. Ho-Hum.


S Africa's Gold Fields seals US $5m Teberebie deal with Ashanti

Johannesburg--May 15--South Africa's second-biggest gold producer, Gold Fields Ltd, has concluded an agreement to acquire sections of the Teberebie mine from Ghanaian producer Ashanti Goldfields Ltd for around 5 million US dollars. (Story .13798)

Black Blade: Ashanti is a dead duck! The consequences of forward sales (shorting gold) is becoming painfully obvious. These clowns won't have anything left before long. Short Ashanti even at under $2.00?


Asia Precious Metals Review: Gold edges firmer above $275 per ounce

Tokyo--May 15--Spot gold edged firmer with sluggish trade on Monday in Asia due to light local physical demand, dealers said. Few wanted to sell gold after prices confirmed the strong support line at U.S. $275 per ounce on Friday, they said. Platinum stayed in a narrow range on a lack of fresh incentives, they said. (Story .2200)

Black Blade: Go gold! Yeah, who will buy Pt and Pd after the stunt TOCOM pulled by defaulting on those contracts?

Black Blade

(05/15/2000; 06:20:33 MDT - Msg ID: 30546)

Shortin Gold, yeah that was a stunning success for the shareholders!

I know that at $2.00/share Ashanti (ASL) isn't marginable, but hey, who knows, they just might pull off a reverse split! :-) Also notice how Newmont (NEM) has outperformed Barrick (ABX). I went to a Mine Expo where ABX had videos and reps who were touting how their hedging program was a stroke of genius. Well these yellow-shirted geniuses were at loss to explain why the Au companies that I held (mostly unhedged) had so well outperformed Barrick. Maybe it was good for the company (at least we know where the corporate bonuses came from), but not so good for the shareholder. At least Newmont was selling Gold (splatters) to the public, Barrick only had a Dog and Pony show.

Cavan Man

(05/15/2000; 06:34:50 MDT - Msg ID: 30547)

Hello Trail Guide

If the paper POG goes to $0 separating from the physical price, how will physical gold be valued? Is it conceivable that an individual's gold holdings might appear to be worth less for a period of time and if so, how long do you think? Also, could you comment on Euro denominated equities? I've been looking at the EAFE index as well.

I'm still not clear on what mechanism will provide price discovery for gold in this new market we watch together.

Many thanks.....CM

Usul

(05/15/2000; 06:55:50 MDT - Msg ID: 30548)

New definitions for a new era

http://www2.active.ch/~rblanc/newera.htm Cynic:
Anyone reminding you stocks can go down.

For more new-era definitions, see link

ss of nep

(05/15/2000; 07:10:32 MDT - Msg ID: 30549)

I think this is a good point

From banned posterDate: Fri May 12 2000 06:28
PERMAFROST (This time IT IS really different...) ID#230273:
Copyright � 2000 PERMAFROST/Kitco Inc. All rights reserved
In the crash of '29, if your money was not in the market, your money was safe because it was _money_, not some note which really is a receipt for a fraction of the paper markets. You didn't play stocks, you didn't lose.

Today, you can have toiled all your life and put away your savings in an FDIC-insured CD account. The stock market crashes, the dollar crashes, you're a pauper. I guess you'll be exercising your freedom to be a bum, in the land that stands for liberty and the pursuit of happiness. No?

THIS NEVER HAPPENED BEFORE...

"This"? Prior to the end of this ominous century, people did not suffer the consequences of a mistake they did not commit, or bear the bitter fruits of wild speculation they did not engage upon. When Tulip Mania imploded in the Netherlands, only those who'd bought the worthless bulbs were left holding the bag.

NEVER BEFORE...

Did peoples by the billions "freely" indentured themselves, many of them already having lost everything they had in Asia and Russia, with a similar fate looming in the horizon for those "luckier" serves living closer to the masters' quarters in the West.

*************************************************************************

GOLD WILL NEVER GO UP ( for long anyway ) . BECAUSE CIVILIZATION HAS ENDED.

*************************************************************************

Leland

(05/15/2000; 07:22:42 MDT - Msg ID: 30550)

ANOTHER Reason for the Weakness of the Euro

http://www.gold-eagle.com/gold_digest_00/taylor051600.html"Marshall Auerback of David W. Tice &
Associates points out (www.prudentbear.com or 1-888-778-2327),
there is reason to believe the continued weakness of the Euro is due at
least in part to significant overstatement of strength in the U.S.
economy. Marshall points to evidence provided by some analysts that
suggests faulty statistical methods related to inflation and productivity
accounting have been employed and as such are painting a false
picture of U.S. economic strength."

Twice Discipled

(05/15/2000; 09:35:52 MDT - Msg ID: 30551)

What is right?

Well folks, I just have to write to express disillusionment and get this off my mind so I can concentrate on work.
I don't post that much, but in the few times I have posted, I noted my search for the method by which I would stand up and say what is happening in our Country is wrong.
+ Congress unconstitutionally handing over printing of money to a private organization called the Federal Reserve. This institution prints money out of thin air and then charges me and you, the taxpayers, interest when it is loaned to our government.
+ Congress passing an income tax act which is legally intended for only government employees and people conducting business within the U.S. territories (not the states of the union), yet most Americans have been deceived into volunteering into this program.
+ A U.S. president removing the gold backing form our money when he no constitutional authority to do so.
+ many, many other things
This all adds up to servitude � don't allow people to easily use free money (GOLD) in their everyday life and tax the transactions associated with fiat so that a select group can reap the gains and BUY GOLD.

Well I decided to take a small stand in my little corner of the world and as a nonresident alien of the territorial United States having no income from business conducted within the United States or associated from sources within the United States, filed a return stating such and requesting a refund.
Saturday I received a notice of a frivolous return and today I mentioned to a co-worker that I had received my first notice from the IRS. This co-worker knew what I was doing because I felt it important to take a public stand so that others might see the truth of how we are becoming enslaved by our government. Well you would have thought I was the worst traitor that ever walked the face of the planet! That person was paying my tax bill and it was patriotic duty to let the IRS take their allotted share of my compensation for labor to distribute and use in whatever form they felt necessary. I could not convince this person that the government did not know best. I was told the government provides the infrastructure necessary for us to be prosperous. Woe is me! I tried to explain the Federal Reserve and the current tax code, but all I got was a stare like "you radical!"

Forget democracy, we live in a thriving socialist state where most of the schools have done a wonderful job of indoctrinating the population.

Oh well, forgive me for my ranting. I feel somewhat better knowing that this forum in a place where freedom is cherished.

YGM

(05/15/2000; 09:42:53 MDT - Msg ID: 30552)

GATA/RollCall Ad.....

Linked at Goldworld.......
Le Metropole Members,

Josh Wright of www.goldworld.net has been a staunch GATA supporter for some time now. Today, he has highlighted
the Gold Anti-Trust Action Committee's open letter to
all the House and Senate banking committee members in
the Congress of The United States.

To review: http://www.goldworld.net/rollcall.htm

This four color, center spread open letter will be
up at www.gata.org and at www.LeMetropoleCafe.com
later on in the day.

For the background to this open letter, refer to
the two commentaries now served at The James Joyce Table
at the Caf�.

Roll Call is read by more of the political elite in
Washington than any other newspaper and that includes
the Washington Post. The issue, with our open letter,
is being delivered this morning to the White House,
Congress and the political community in our Nation's
Capitol.

BILL MURPHY
CHAIRMAN, GOLD ANTI-TRUST ACTION COMMITTEE



Le Metropole Cafe

All the best,

Bill Murphy
Le Patron

PS: Goldworld carries no ads & is not in competition w/ any other Gold sites....Ken

USAGOLD

(05/15/2000; 09:46:11 MDT - Msg ID: 30553)

Today's Report: On-Line Offer Comments, The Importance of Owning Physical, and "Just Who Is Dr. Moneywise?"

http://www.usagold.com/onlinestore/special.html5/15/00 Indications
�Current
�Change
Gold June Comex
275.90
-1.00
Silver July Comex
5.02
-0.03
30 Yr TBond June CBOT
93~31
+0~15
Dollar Index June NYBOT
110.10
+0.35


**NEW** >>> See Our Special On-line Offer <<< **NEW**

-- featuring --

The Historic Kaiser Wilhelm II German 20 Mark Gold Coin

Special Note:

Today's report is further down the page. I wanted to say a few things about our on-line gold coin
offer launched over the weekend, and hope that our regular goldmeisters don't mind this short
diversion.

This Special On-line Offer of pre-1933 German 20 Mark gold coins is a landmark event for
USAGOLD/Centennial Precious Metals. We launched the offer over the weekend and quite
frankly we are suprised at the strength of the response. We would like to thank all who already
ordered and encourage those who haven't to do so before we run out of this Special Offer. We had
hoped to place these over a one month period; it doesn't look like they are going to last that long.
Going in we wondered, if people would order gold on - line. Now we know. They will.

Over the past five or six years, since we first broke ground on the concept of privacy-based gold
investing, we have sold several hundred thousand small European gold coins to investors all over
the United States in tranches from 30 coins on up to several thousand in single purchases. Never
though has a sale of gold coins meant more to us than the one, Randy Strauss, our noble
TownCrier at the Forum page, has assembled for the firm over the past week and unveiled over
the weekend via the link provided above. I approach this offer of German 20 mark gold coins with
the same anticipation, enthusiasm and hope that I did when I first launched Centennial Precious
Metals some 27 years ago (My how time flies!)

We feel fortunate that this web site -- which started as a simple attempt to get the news out on gold
on a daily basis free of the mainstream press anti-gold bias -- has grown to the magnificent
proportion it has over the past few years. We feel doubly blessed with your loyal and consistent
patronage through normal business channels over this period. Now we launch this attempt to place
investment class gold on the internet and hope it meets with your satisfaction, and that it becomes
the first of many similar offers.

So many of you have you called over the past three years to say how important this web site has
become to you, and too, how much you appreciate the extraordinary contributions of the posters
on a daily basis who don't get paid a thing for their determined, scholarly, and at times all too
human efforts. I would like to take this opportunity to salute and thank that fine group who've
given us all so much -- myself included. We have become a community of sorts -- a culture
gathered around a simple yellow colored metal that somehow encompasses the foundation of our
beliefs. Who would have guessed it? Yes, we feel fortunate to be at the center of all this for so
many like-minded goldmeisters. We would also like to take this special moment to offer our
thanks and best wishes to all our clientele for a golden future. MK



Market Report (5/15/00): Gold started the week a little sluggish as is typical for Mondays.
Tomorrow the Fed rolls out the big decision with most top investment houses (27 out of 29)
leaning toward the .5% increase. Both Europe and Asia were quiet overnight waiting for New
York to provide direction.

Standard Bank of London this morning echoes a theme heard here frequently: "The gold price
appears to be in a stranglehold with the upside seemingly capped by the threat of Swiss sales into
rallies, while there is strong support below the market from the physical sector. Although the
current inertia is not good news for the speculative side of the market it will benefit the physical
players. For them price stability equals healthy markets. Standard goes on to say that "a close
above $278 would give a short-term momentum buy signal." As we have cautioned our gold
investing brethren in the past, unless you have an innate desire to become cannon fodder for the
big investment houses short this market,the best way to own gold is by garnering some of the
actual metal and storing it nearby. An added benefit is that enough of the golmeisters see the light,
buy physical and stay away from futures and options, that trade is likely to wither on the vine. We
are already beginning to see the effects of this strategy. As more and more gold investors are
opting for physical ownership, the complaints of low volume and sluggish action among the paper
traders reported by the financial media escalates proportionately. By owning gold outright you
protect yourself against long term currency debasement while providing the best opportunity to
take advantage of any price spikes that could occur if the shorting/gold management strategy fails
as it did in the 1970s.

Tomorrow we have Consumer Prices along with the FOMC meeting. Could make for an
interesting beginning to the week.

That's it for today, fellow goldmeisters. I'll be working on the newsletter for the next few days
and unless something of profound interest occurs, I won't be posting again until Wednesday or
Thursday.



JUST RELEASED!

THE CENTENNIAL PRECIOUS METALS' GOLD ALMANAC 2000

We have just released the Centennial Precious Metals' Gold Almanac 2000 and are making it
available free of charge to new inquiries only WITH A STRONG INTEREST IN GOLD AND
WORKING WITH USAGOLD/CENTENNIAL PRECIOUS METALS ON THEIR GOLD
DIVERSIFICATION.

Just go to the ORDER FORM, make the appropriate entries and we will forward it to
you. Unfortunately due to the size of our mailing list, we can't afford to send it to everybody,
though we are certain all would enjoy and learn from it. Those who would like to receive it, AND
ACQUAINT THEMSELVES WITH THE PERIPATETIC, SCHOLARLY AND
DISTINCTIVELY OWLISH, DR. MONEYWISE, are welcome to call Marie at 800-869-5115,
and if you are willing to cover our costs ($10), we will be happy to send it to you.

THOSE WHO HAVE PURCHASED PRECIOUS METALS FROM CENTENNIAL PRECIOUS
METALS/USAGOLD CAN RECEIVE THE GOLD ALMANAC 2000 FREE OF CHARGE
BE REQUESTING A COPY THROUGH MARIE 800 869-5115, OR BY E-MAIL. BE SURE
TO INCLUDE YOUR CURRENT MAILING ADDRESS (TO MAKE IT EASIER ON US.)



NEWS & VIEWS: ANALYSIS, FORECASTS AND COMMENTARY ON THE
PRECIOUS METALS & THE ECONOMY

If you are looking for a pro-gold view of the various financial markets as well as a summary of the
events affecting the yellow metal, our monthly newsletter might be of interest. News & Views
-- Forecasts, Commentary & Analysis on the Economy and Precious Metals has
been characterized as witty, urbane, intelligent and down-to-earth. Not to mention it's Free of
Charge If you want to keep up with gold, this is the way a large segment of the gold owning
public does it, and has done it for over a decade.

Just click here ---> ORDER FORM <--- and make the appropriate entries.

For an on-going discussion on the gold market and the investment universe that revolves around
it, we invite you to visit our very popular and highly visited DISCUSSION FORUM.


PLEASE REMEMBER: It is your purchase of gold from Centennial Precious Metals that
nourishes these pages.

YGM

(05/15/2000; 09:53:35 MDT - Msg ID: 30554)

Well Done Goldworld....

http://www.goldworld.net/rollcall.htmSpectacular page for GATA Activists.....email addresses of
everybody who needs the truth on Gold Markets......
Josh you did alot in one short week-end........Thanks from all of us Gold Advocates.....YGM.

ss of nep

(05/15/2000; 10:23:08 MDT - Msg ID: 30555)

Twice Discipled

Good luck,

I've heard that the IRS relentlessly hounds people that have done what you have undertaken.

elevator guy

(05/15/2000; 10:54:40 MDT - Msg ID: 30556)

@ Twice Discipled

Let every soul be subject unto the higher powers, for there is no power but of God. Rulers are not a terror unto good works, but unto evil. (Loosely remembered)

If laws are just, we follow them.

If laws are unjust, we follow them but try to change them.

If law of man goes against the law of God, we must protest in good conscience. If not at odds with the law of God, we tolerate, and work for change.

And if the government becomes destructive of its means, we form a new one. This is harder to determine, when our savings is stolen with the smoke and mirrors of fiat currency.

(The frog sits quietly in the water, as it gets hotter and hotter, and the FRNs bubble about).

But the end is known from the beginning, and our task is to seize the day for our creator.

If anyone has an active conscience for truth, and desires financial freedom, perhaps the best thing you can do is to buy physical gold now, while it is artificially cheap, and support GATA.

Leland

(05/15/2000; 11:14:13 MDT - Msg ID: 30557)

Latest John Hathaway Commentary has NOT Been Removed

http://www.tocqueville.com/brainstorms/brainstorm0065.shtml"Morgan to the Rescue"....

jinx44

(05/15/2000; 11:16:52 MDT - Msg ID: 30558)

Twice Discipled - your brave stand

I admire your stand of conscience. You will be misunderstood and vilified, but you are holding to a brave stand. My hat is off to you. I do not believe that there is a way to win a refund for past taxes paid. I would suggest that you sell all real estate and major assets, put the proceeds in gold and cash and get them offshore. Lease or rent and when you move, give no forwarding address to the USPS. That is one way the feds track us. Put your phone in a corporate name and lay low. Only bring back enough money to live for several months at a time. Even better, move to Costa Rica.
I'm not surprised at the angry response from your co-worker. We are a brainwashed group of slaves in this huge national plantation. Our only hope is to get off the USG's radar screen. They are a big hammer looking for nails to smash.
All the best.....

ss of nep

(05/15/2000; 11:26:41 MDT - Msg ID: 30559)

"Why October?"

http://www.sharelynx.net/temp/NWO.htm

"Because that s when they bring in the 'National Identity' program in the U.S.

ss of nep

(05/15/2000; 11:28:15 MDT - Msg ID: 30560)

Extract from the link

http://www.sharelynx.net/temp/NWO.htmMore recently in the fall of 1999 the Canadian government employed a
totally different tactic. Revenue Canada merged with Customs Canada and
created a private agency called "Canada Customs Revenue Agency (CCRA).
CCRA is not a government department. It is a private agency. As a matter of
fact, if you were to go to the CCRA website they brag how this private
agency which is much like the IRS has much more power than any government
department. James Davidson and Lord Mogg Rees advise in their book, "The
Sovereign Individual," that governments will employ the use of private
agencies more and more to complete their agenda. These two lads are well
respected for the accuracy of their predictions made in prior books,
"Blood in The Streets" and "the Great Reckoning." Unfortunately, I don t place
these lads on a pedestal as others do because Lord Mogg Rees is a
Bilderberger and what is really happening is that the public is being
given SANCTIONED glimpses of things to come via their books. This is just
another form of CONDITIONing.

JavaMan

(05/15/2000; 11:29:01 MDT - Msg ID: 30561)

SteveH, your msg# 30506, All...

You said, "In fact, history is full of examples of church-going peoples who have used guns to protect themselves and their countries against governments and people who sought to take away life, liberty, and the pursuit of happiness. To name a few: Khmer Rouge (sp?), Nazis, Stalinist Russia, Vichy Government in France, Franco Government in Spain. In most, if not all, of these governments, they sought to outlaw private ownership of weapons before affecting the violence upon their own people."

Do you know of any legislation/declaration that was enacted in Germany that specifically outlawed gun ownership?

Thanks.

ss of nep

(05/15/2000; 11:29:54 MDT - Msg ID: 30562)

We are a brainwashed group of slaves in this huge national plantation

I can't even fathom the extent of the brainwashing.

MarkeTalk

(05/15/2000; 11:35:39 MDT - Msg ID: 30563)

Fed rate decision

Rumors are now circulating that Big Al Greenspan will raise interest rates just 0.25% tomorrow instead of the feared 0.50%, which explains today's robust rally in the Dow and S&P 500. You know, the Wall Street boys like to get a jump on Main Street. The reasoning is that last week's unexpected decline in retail sales may have changed his mind for the time being. On the other hand, I can't dismiss the accuracy of Steve Puetz's "eclipse theory" which has called market tops and bottoms more than 80% of the time. The Dow bottomed last week around May 4th which was the new moon. Now the rally up into the full moon on May 18th, then the big sell off into early June. If the market breaks into new low ground (which I suspect it will), then the stock market players will think twice about buying the dips and start to see gold as a safe haven. Now that crude oil is knocking on the door of $30 per barrel, the inflation rate should pick up and be reflected first of all in the CRB Index and later in the PPI and the CPI. This summer could be the surprise rally in the metals which no one is expecting. Time is running out for you folks who have not yet purchased your gold. Don't wait until it jumps $80 in one week and then end of chasing it, as many people did last September.

Goldfly

(05/15/2000; 12:05:12 MDT - Msg ID: 30564)

Elevator Guy! There you are!

http://www.geocities.com/SunsetStrip/Palms/7253/soundz/shine.ramThe above link is some context for those who haven't heard of this song before. You'll need RealAudio. It's free at

http://scopes.real.com/real/player/player.html?src=000512realhome,000512choice_1a&dc=516515514.

Elevator Guy.... I took a look at the song when you asked last year but could only find a sound bite and really couldn't make any headway.It's a very spiritual song (Really you people- IT IS!) and the lyrics are so simple. This is not a bad thing, but makes for difficult parody, so I kind of gave up.

A couple of days ago I heard a blurb and got interested again. I found the above link and after listening to the song about 50-60 times, I think I got it. What I came up with relates to the Good vs Evil of paper money and the real thing.

Anyway, if you like it- Great! If not- well...... I tried!


Shine

Give me a claim
Give me a sign
Show me where to look
Tell me what will I find?
.....What will I find?

Pull yours from the air
Pull mine from the ground
Weigh mine in my hands
Count yours without a sound
.....Without a sound

Oh..... Which one will the Light shine on?
Oh..... Which one will the Light shine on?
Oh..... Which one will the Light shine on?
Oh..... Which one will the Light shine on?

Buy a million shares
Buy a bullion square
When the fire comes
Tell me what will be there?
.....What will be there?

Dollars in the trees
Dollars everywhere
When the fire comes
Tell me what will be there?
.....What will be there?

Oh..... Which one will the Light shine on?
Oh..... Which one will the Light shine on?
Oh..... Which one will the Light shine on?
Oh..... Which one will the Light shine on?


gf

Goldfly

(05/15/2000; 12:11:57 MDT - Msg ID: 30565)

A Goldfly Twin Spin!!!

I'm reposting this one because I don't think it got enough airtime where I put it up last. I think this tune could provide some amusement while we watch the market insanity..... Enjoy!


THOSE WERE THE TRADES

Once upon a time there was a market
Where a stock could rise a point or two
Remember how we traded after hours
And dreamed of getting in an IPO?

Then the NASDAQ spike went rushing skyward
We lost our sense of value on the way
We'd bid up companies that had no profits
While staring at our CRT's all day

(Poignant pause)

Those were the trades my friend
We thought they'd never end
We'd bid and ask and never have to pay
With every stock we'd choose
We'd buy and never lose
Those were the trades, oh yes those were the trades

Buy buy buy buy, buy buy
Buy buy buy buy, buy buy
Buy buy buy buy, buy buy buy buy buy buy
Buy buy buy buy, buy buy
Buy buy buy buy, buy buy
Buy buy buy buy, buy buy buy buy buy buy............

While drowning out my sorrows in the tavern
The bartender had on CNBC
There on the screen I saw a strange correction
Was that penny-stock MFST?

I listened for the old familiar blather
Of paradigms and New Economies
But the anchor-babe ignored the teleprompters
Looking in the camera's lens she said to me........

(Big Poignant Pause)

Those......Were.......The.......Trades my friend
We thought they'd never end
We'd bid and ask and never have to pay
With every stock we'd choose
We'd buy and never lose
Those were the trades, oh yes those were the trades

Buy buy buy etc., etc......

gf

Goldfly

(05/15/2000; 12:15:25 MDT - Msg ID: 30566)

Oooops......

The link to the song won't work because it tries to force it into a browser. You'll have to cut and paste into RealPlayer....Sorry

YGM

(05/15/2000; 12:56:22 MDT - Msg ID: 30567)

From ungus @ GE

http://www.Idolphin.org/Gold.htmlGold has been known since the dawn of mankind. Not long after the creation of the earth, the book of Genesis records that the gold found in the land of Havilah "is good." There are 358 references to gold in the Bible, the last of which makes reference to the heavenly city. Only in recent years has a process been discovered for casting gold in transparent form and in gold-plating glass. Scripture records the amount of gold used in adorning the great temple Solomon built in Jerusalem 3000 years ago.

"It's 3750 tons of gold would be worth over 45 billion dollars today!"...........cont'd

YGM

(05/15/2000; 13:00:01 MDT - Msg ID: 30568)

l,I or 1....??

http://www.1dolphin.org/Gold.htmlTricky link?

ss of nep

(05/15/2000; 13:52:22 MDT - Msg ID: 30569)

YGM

Hey, didn't you know, they don't like it around here when ones brings up the topic uf transparent gold,

reminds them of conspiracy theory stuff they don't like.

haha,

Cheers

ss of nep

(05/15/2000; 13:53:59 MDT - Msg ID: 30570)

I know a lot about who the bad guys are but

Who are the good guys ?

Are there any ?

Farfel

(05/15/2000; 14:31:24 MDT - Msg ID: 30571)

Slight profit, Closed out Naz short position today...

Well, I watched this one closely and when I saw the tick move from extremely negative to flat, I closed out and made a nominal profit on my short positions in tech stock today, yet another day of recovery for moi.

Although originally I thought that the lockup expiration would hammer the Nasdaq today, when I saw the Nasdaq suspended in motion for some 15 minutes (-70 or so) then I felt sure that it would not happen today after all and a bullish reversal was in the making.

Upon further analysis, I think that this time, rather than dump immediately (under the advice of investment house consultants?), the lockup insiders will wait until tomorrow when the markets are celebrating whatever rate announcement comes forward, then begin to sell unlocked stock into the celebration. Ultimately the dump of some $20 billion of unlocked stock should overwhelm the celebration, if not late tomorrow, then by the next day.

Remember: tomorrow there will be no surprises and any rate hike announcement will be spun positively. In the euphoria, I would not be surprised to see 300 points or more on the upside.

Gold Market: still watching, not doing anything there. Volumes are next to nothing and that's interesting. Smells weird though, and a strong upside jump would not be a shock.

Thanks

F*

SHIFTY

(05/15/2000; 14:32:15 MDT - Msg ID: 30572)

Ponzi

Nasdaq 3,607.65 + Dow 10,807.78 = 14,415.43 divide by 2 = 7,207.71 PONZI up 138.50

Goldfly : " Those Were The Trades" I love it!

Cavan Man

(05/15/2000; 15:07:03 MDT - Msg ID: 30573)

Trail Guide, I too have trouble.......

........typing after a few glasses of fine wine :). Now, as you know, many here follow your words and many, like myself, have been avid listeners at your table. Many would agree with your monetary analysis and many PGB (physical gold bugs) certainly share your conviction of gold being the ultimate store of wealth (besides which I like 24K cufflinks)!

"All paper will burn"; "stocks trading close to zero"; both statements imply considerable market turmoil and financial stress. No doubt there will be a "sorting out" period replete with currency controls and the like. With no immediate means of price discovery, perhaps gold will not trade. Then there is the "C Word"; I am not so sanguine about that one! I recall your statement about the "five year period" during which we will sit back and watch and then, perhaps "spend some of our gold." Are you implying that an individual might not be able to access their wealth for an extended period?

What I am driving at is, what are the practical considerations for PGB if the events you forecast come to pass? Beginning with a possible Euro/Dollar basket settlement for oil or other significant event, what must one be clearly thinking about in advance of "events" that lead to a much higher POG? Might it be a good idea to take an extended vacation in Euroland for example? Please address your comments to a "US audience".

Perhaps we can get in the details on our next hike?

Thanks....CM

YGM

(05/15/2000; 15:07:35 MDT - Msg ID: 30574)

Love Bug Spawn.....

Losing the "Love Bug"


For those of you concerned with protecting yourself from the "LoveLetter"
virus/worm, here is the latest info:

The virus has now spawned several copy-cat viri, as follows:


Attachment: LOVE-LETTER-FOR-YOU.TXT.vbs
Subject line: Susitikim shi vakara kavos puodukui..

ATTACHMENT: Very Funny.vbs
SUBJECT LINE: fwd: Joke

ATTACHMENT: mothersday.vbs
SUBJECT LINE: Mothers Day Order Confirmation

ATTACHMENT: virus_warning.jpg.vbs
SUBJECT LINE: Dangerous Virus Warning

SUBJECT: "Dangerous Virus Warning"
MESSAGE: "There is a dangerous virus circulating. Please click attached picture to view it and learn to avoid it."
ATTACHMENT: "virus_warning.jpg.vbs"

SUBJECT: "Important ! Read carefully !!"
MESSAGE: "Checked the attached IMPORTANT coming from me !"
ATTACHMENT: "IMPORTANT.TXT.vbs"

SUBJECT: "Mothers Day Order Confirmation"
MESSAGE: "We have proceeded to charge your credit card for the amount of $326.92 for the mothers day diamond special. We have attached a detailed invoice to this email. Please print out the attachment and keep it in a safe place.Thanks Again and Have a Happy Mothers Day!"
ATTACHMENT: " mothersday.vbs"

There is also a another, slight varient on the original "LoveLetter" virus,
though the difference is small.

Those of you using Norton Anti Virus can download the latest updates at:
http://www.symantec.com/avcenter/download.html

http://security1.norton.com


McAfee users will find an update to combat this virus at:

http://www.macafee.com

A Fix for "LoveLetter"

http://www.symantec.com/avcenter/venc/data/fix.vbs.loveletter.html



Note: Mac and Widows 3.1 users are unaffected by this virus, and the virus
cannot propigate under Netscape or Eudora. It is still a good idea to delete
any of these e-mails if they come your way, however.

Journeyman

(05/15/2000; 15:59:02 MDT - Msg ID: 30575)

IRS withdrawl symptoms @Twice Discipled msg#: 30551, ALL

http://www.americancontracting.com/
Twice Discipled, you've got the right idea, but you're on
potentially dangerous ground. You're far from being raided, but
you might want to consider getting your assets out of your name
and out of banks, where they're easily stolen by the grabbit.

The problem in filing a 1040-type return is two-fold. First it
gives them something to work from - - your name for example, and
also evidence, signed, sealed and delivered, for a prosecution,
should they decide to go that route. Second, if you signed it,
that's taken as proof that you agree you're a "taxpayer" (see
below) and are under their jurisdiction. This can be fairly
easily handled, however so don't worry too much.

Your approach is up-front and justifiably angry, but sometimes
the simpler is the better. In general, once you realize your
status (non-taxpayer because you're not a privileged corporation)
you're not required to file. Don't. Let them figure it out and
come to you. When they do, you essentially ask them to show you
the part of the law that makes you, as a flesh-and-blood person
liable to pay the tax the IRS administers --- basically an excise
tax passed on corporate entities that get special priviliges from
the government (such as "limited liability,") in return.

Sometimes they'll fake it, but ultimately they can't "show you
the law" because it doesn't exist. So-many people have been
using this approach, IRS employees often save themselves a lot of
time and money and simply reclassify you as a non-taxpayer _1. --
- unless you're teaching others or you have a lot of money or
property they think they might be able to steal from you.

Otherwise, they pretty much leave you alone, although they may
find ways to test your resolve now and again. If and when they
do, YOU MUST KNOW YOUR STATUS AND HOW TO DEFEND IT AGAINST THEIR
MOST COMMON ATTACKS (which are mostly hot-air intimidation IF
you've set yourself up correctly)!! Luckily, however, there are
more and more people re-discovering their status as free men and
women, so IRS is overwhelmed by shear numbers. I've seen
unofficial estimats as high as 30 million. At least 5 to 10
million is a safe guess. So if you do things right, you'll
probably be in the clear - - - and did I mention, their computer
system is FUBAR?

I have personally seen one IRS response to such a letter
(requesting the IRS to "show me the law"), in which the IRS
admitted they couldn't and eliminating an approximately $120,000
tax liability. That was about nine years ago. About eight years
ago, someone I know very well was about to be turned over to the
IRS criminal division. They sent a similar letter to IRS and
this person, still well known to me, hasn't heard from them
since. (They used to respond to these letters sometimes in the
past. I understand that now they just try to intimidate you with
more letters, but don't followup. Don't count on this info,
though -- it's eight years old. It's your a** on the line; be
sure you know YOURSELF to YOUR satisfaction what's going on!!)

Most of the folks who fall to the IRS these days go about freeing
themselves in one of the many "wrong" ways. There's a huge
amount of propaganda that blows the IRS up to thousands of times
it's actual size and effectiveness. This is because, just like a
teacher in a study hall, intimidation is their main weapon. If
that fails, the "teacher" fails.

Veteran tax fighter Irwin Schiff isn't intimidated. He goes on
network radio every week explaining his approach - - - and has
been doing so for more than five years. His motto, regularly
stated: "Don't be the last person on your block to stop paying
income tax." Clearly Schiff should be a main target and they
should throw him in jail again - - - but they haven't. Are you a
bigger target than Schiff? What are your odds?

To find out more about Schiff do a search for "Irwin Schiff"
using alltheweb.com, google.com, altavista.com, etc. Include the
" marks in the search string. Official Disclaimer: I have no
financial interest what-so-ever in Mr. Schiff or his works.

It sounds as if you're fairly knowledgeable, Twice Discipled, so
I apologize if I'm telling you things you already know. But
sometimes you can know just enough to get yourself in trouble.
There's a lot of good info out there to help you rediscover your
true status and how to reclaim it. (Unfortunately there's a lot
of bad info too. So be careful!)

One of the best sources I've found is "The Biggest 'Tax Loophole'
of All" by Otto Skinner. You can check it out, along with other
Skinner stuff by using altavista, google, alltheweb, etc. and
searching for "Otto Skinner" (include the " marks in the search
string.) Official Disclaimer: I have no financial interest
what-so-ever in Mr. Skinner or his works.

The main problem, though, is how do you get your employer to stop
robbing you on behalf of the grabbit. This is a tougher problem.
I posted a link to an interesting article called "Liberty
Leasing" a few days ago that outlines an interesting proposal to
handle just that problem. The link to that article is:

http://www.webleyweb.com/tle/le9609a03.html

It seems that someone has implemented some version of that
proposal. You can see for yourself at the following link (the
same link cited in the header to this message):

http://www.americancontracting.com/

I've only visited this site a few times, and know nothing about
the organization behind it. I believe, but am not sure, it is
associated with the "Save A Patriot Fellowship," which has been
around for more than ten years. I'd be very interested in any
feedback from anyone who looks into American Contracting. (TIA,
Journeyman)

Once again, though, remember, you're treading potentially
dangerous ground; the IRS employs what amount to professional
con-men and thugs, and the rules are skewed in their favor, as
are their courts of arbitration. You should always keep in mind
that there's some chance of going to court and prepare
accordingly. The better prepared you are and appear to be, the
less likely they'll bother with you. So know what you're doing!!

High regards,
Journeyman


_1. The revenue laws are a code or system in regulation of tax
assessment and collection. They relate to taxpayers, and not to
nontaxpayers. The latter are without their scope. No procedure is
prescribed for nontaxpayers, and no attempt is made to annul any
of their rights and remedies in due course of law. With them
Congress does not assume to deal, and they are neither the
subject nor of the object of the revenue laws. -Economy Plumbing
and Heating v. United States, 470 F.2d 585, at 589 (Ct.Cl. 1972).
[Emphasis added]

Some general guidelines in dealing with IRS employees: ALWAYS
answer IRS written communications in writing in a timely fashion
(usually 30 days, but sometimes more or less depending on the
action) and ALWAYS send stuff to them registered, return receipt
requested. This doesn't mean you give them what they ask for,
just that you send something, maybe requests for further
information, for example. ALWAYS save copies of everything (and
the returned receipts proving IRS recieved your mailings) for
your records. NEVER do anything with IRS employees over the
phone - - - how do you know they really are IRS employees or that
they're authorized to do what they're doing? How can you even
prove what happened or what was saie. Get it in writing.

Trail Guide

(05/15/2000; 18:41:08 MDT - Msg ID: 30576)

Reply

Cavan Man (5/15/2000; 6:34:50MT - usagold.com msg#: 30547)
-------If the paper POG goes to $0 separating from the physical price, how will physical gold be valued? Is it conceivable that an individual's gold holdings might appear to be worth less for a period of time and if so, how long do you think? Also, could you comment on Euro denominated
equities? I've been looking at the EAFE index as well. ----------

-------I'm still not clear on what mechanism will provide price discovery for gold in this new market we watch together. -----

Cavan Man,

Gold will be valued at the currency price physical dealers trade it for. On the spot! Done deal on the barrel head! I use my right hand to grab the cash in your left hand while you grab the gold in my left hand,,,,, Viking style! (smile)

A real life, true supply and demand market! You and I will know it's price the same way you know the price (value) of a loaf of bread. It's the price where one can walk into a store, hand over your currency and walk out with the goods.

Let your mind drift over all the things you can buy today, on the spot. Truly, real life isn't about buying an option that settles in one futures contract for August delivery of "underware". Then taking delivery of that contract and later settling that for a warehouse receipt of Jockey Briefs (smile).

But that is exactly what the paper gold boys have sold the American public on doing. It's become so far removed from reality that many (perhaps yourself) have a seriously hard time grasping how anything can be priced without some huge contract market setting the value.

I expect a period of confusion to rein as this all blows up. This is "exactly" why having physical gold will so greatly benefit the average person. When all the markets are closed for a while, paper holders will have absolutely no value in their hands. Yet, somewhere in the world physical gold will
be trading and it's value will be known. I and many others are betting on 2,000+ years of human history that this will be fact.

I mentioned before that Euro accounts are more for someone that can live there (part time?) and spend and invest their currency there. Even though I can see one day when Euros are held and used here in the US (like dollars in Mexico), I cannot see the average US investor (working family person) having Euros now. Physical gold would do just as well on a functioning basis and outstanding on a return basis. Please understand, our Euro discussion is more to explain the "why"
of the evolution of paper gold and gold's eventual real price. The Euro is not the focus for investment even though myself and others see it as the next major currency.

Hope this helps?

Trail Guide

Twice Discipled

(05/15/2000; 19:48:42 MDT - Msg ID: 30577)

Thanks for the encouragement

@Journeyman
The risks are duly noted. After reading material from 3 different authors on the subject. I have found that of Lynne Meredith most compelling. It all boils down to jurisdiction.
On one note the easiest thing accomplished thus far has been to get the employer to stop withholding. Worked immediately for both me and my wife with the proper documentation.

@elevator guy
Yes we answer only to One who is sovereign. I have asked myself many times if His statement "give unto Ceasar what is Ceasar's" applies to handing over our hard-earned money by volunteering into the tax system we have. I have also asked myself if the knowledge I have gained here on the subjects of Gold and those mentioned in this topic is a gift from Him so that I may warn others.

@ss of nep
Yes, we are like Sampson with our eyes plucked out grinding at the mill of our masters.

Good night all, and thanks for listening.
Gold -- the only monetary freedom.

ced_s

(05/15/2000; 19:55:19 MDT - Msg ID: 30578)

I had to celebrate GATA's trip to Washington (the den of iniquity)

Today after work I drove 60 miles to make a great buy on
3 ea 100 oz bars of silver and 1 oz Maple Leaf ( that is a
beautifull coin ). My goal is to have another 1000 oz silver this year.
Again, Bill Murphy and Chris Powell you are doing a marvelous job. THANKS

Ed Stuart

Chris Powell

(05/15/2000; 20:26:51 MDT - Msg ID: 30579)

New GATA ad posted on Internet

http://www.egroups.com/message/gata/457?The new GATA ad in Roll Call can be viewed
on the Internet.


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

Cavan Man

(05/15/2000; 20:28:35 MDT - Msg ID: 30580)

Trail Guide

I am with you every step of the way. I understand completely. There is a method to my apparent madness:).

Yes, thank you; this last post does help out. It appears to me that the paper gold market for price discovery was designed to limit upside movement for POG. What a convoluted method of establishing market value!

2000 years? What about B.C.? I do understand about the Euro. My question in proper context describes the person who has a choice with regards to preferred domicile. Europe is for small fry too yes?

I "grasp" all your teaching and commentary. We shall soon see what percent of your thoughts are on the mark. Methinks a very high percentage.

Kind regards to you and your "friend".....CM

Leland

(05/15/2000; 20:49:20 MDT - Msg ID: 30581)

Here's One...Picked off This Website...

http://pub5.ezboard.com/fyourdontimebomb2000.html"Imagine for a moment that someone inherits a farm. Let's say that the farm has good topsoil, a
good well, good breeding stock, good seed, and excellent farm equipment in good repair. Prior
to passing into the control of the present owner the farm did a good business selling vegetables,
meat, and dairy products to the local market, and it made a small profit.

But let us suppose for a moment that the present owner of the farm doesn't understand farming,
or isn't even really interested in learning. The present owner has no objection to standing around
looking good, so he stays at the farm, standing in front of it, looking good to passers by.

Of course, the bills still come in, so our farmer puts them on his credit card. When that bill
comes due he uses another credit card, Then another. Pretty soon the interest payments alone
are higher than his bills and the banks get nervous and call him. No problem. Our farmer sells
the tractor, takes the money around to the various credit cards, the food store, the utilities, and
pays off all his bills. Then he stands around in front of the farm looking good to passers-by, the
lord of his domain.

Will, the bills still come in. Again the credit cards get loaded up. So, this time our farmer sells
the harvester. Then later on, the cattle, then the chickens, then the seeds, then he leases the
well to his neighbor and finally sells the top soil from his farm to another farm down the road
whose soil is getting tired. The cash is taken around to the various creditors, the food store, the
utilities, etc.

Now at this point, our farmer thinks everything is okay. The bills are paid, he has a little cash in
his pocket, and everything is fine.

Of course, you know better. The frm simply does not exist any more; it's just an empty lot with
a few buildings, and soon they will be gone as well. The path from the farmer's present condition
to seizure of the property for unpaid taxes is a foregone conclusion, even if the farmer doesn't
look far enough ahead to see it.

Poor, dumb, stupid farmer.

That farmer is our government, and our business leaders."

SHIFTY

(05/15/2000; 20:58:40 MDT - Msg ID: 30582)

Major Oil Find !!!!!

www.drudgereport.com/466.htmCheck this out!

SHIFTY

(05/15/2000; 21:00:27 MDT - Msg ID: 30583)

Major Oil Find !!!!!

www.drudgereport.comTry this one.

SHIFTY

(05/15/2000; 21:02:20 MDT - Msg ID: 30584)

Major Oil Find !!!!!

www.drudgereport.com/Try this one.
Sorry for the last two posts .
Hope this one works.

SHIFTY

(05/15/2000; 21:03:43 MDT - Msg ID: 30585)

Major Oil Find !!!!!

I give up. Go check out drudge. Its a gusher!

SteveH

(05/15/2000; 21:28:14 MDT - Msg ID: 30586)

confiscation

Something while I look. From the US v Emerson case:

33. In response to a report of peasant protests against requisitioning, Lenin ordered "[e]xecution for concealed guns" in an August 9, 1918 telegram. 35 VLADIMIR ILICH LENIN, COLLECTED WORKS 349 (1966). In his "Appeal to the Working Classes," Cheka founder and secret police chief Feliks Dzerzhinsky declared that "anyone caught in illegal possession of a firearm will be immediately executed." COURTOIS ET AL., supra note 35, at 74 (Izvestiya, September 3, 1918). In their Order No. 171 dated June 11, 1921, Bolshevik leaders Aleksandr Antonov-Ovseenko and Mikhail Tukhachevsky planned the pacification of the Tambov province through the killing of hostages if hidden arms were not disclosed, and summary executions of eldest sons wherever arms were found. Id. at 116. In its reports for October 1922, the Secret police noted a record suicide rate in Kiev as peasants could neither pay taxes nor rebel, "since all their arms have been confiscated." Id. at 119 (Russian Center for the Conservation and Study of Historic Documents, Moscow, 17/87/296/35-36).

from: http://www.saf.org/LawReviews/Kates1.html

Contrast an incident that occurred in Madrid on November 6, 1975. A meeting of opposition reform parties was broken up and its participants severely beaten by right-wing gunmen. The victims could offer no resistance, since Spanish law strictly forbids civilian possession of handguns (except by right-wing thugs with permits). Falangist policy follows the gun laws of Nazi Germany and fascist Italy, under which Jews and political opponents were disarmed and left helpless against mob violence in the early 1930s. As Hermann Goring said in 1933, "Certainly I shall use the police-and most ruthlessly-whenever the German people are hurt; but I refuse the notion that the police are protective troops for Jewish stores. The police protect whoever comes into Germany legitimately, but not Jewish usurers."

SteveH

(05/15/2000; 21:31:21 MDT - Msg ID: 30587)

confiscation

http://www.saf.org/LawReviews/Tahmassebi1.htmlJavaMan,

I hope this is enough sources. The above link begot the below:

snippet:

The disarmament of citizens by the Nazis both in Germany and in occupied territories, of Palestinian citizens by the Israeli military in Gaza and the West Bank, of black South Africans by the apartheid government of South Africa, of East European citizens after World War II by the newly installed communist governments and recently of Lithuanian and Georgian citizens by the Soviet central government, were, among many others, the first steps on a road to oppression.

For instance, after their takeover of the German government, the Nazis acted vigorously to confiscate "weapons still remaining in the hands of people inimical to the state." [102.] The 1938 "Law of Weapons" denied firearms licenses to gypsies, persons deprived of their civil rights, under police surveillance, or otherwise politically suspect. [103.] Unarmed Jews, specifically forbidden to possess firearms and not benefited by governmental protection, were left defenseless against official and unofficial violence against them. Subsequently, when German and other Jews in occupied territories were forced into ghettos, intense individual and collective punishment was meted out when a Jew was found in possession of firearms. [104.] Nazi occupation forces ordered the submission of privately owned firearms to authorities and carried out confiscation searches. [105.]

RossL

(05/15/2000; 21:36:10 MDT - Msg ID: 30588)

Shifty

http://www.drudgereport.com/466.htmShifty, you have to put in the full http:// part to get it to work right.

Leland

(05/15/2000; 21:48:32 MDT - Msg ID: 30589)

Thanks, Shifty. It is Important.

http://washingtonpost.com/wp-dyn/articles/A6723-2000May15.htmlThis is the link that Matt Drudge should have included. Thanks again to Shifty.

SHIFTY

(05/15/2000; 21:56:40 MDT - Msg ID: 30590)

RossL

I just read that when I scrolled down on the posting page, but after all those bad links, I just could not bring myself to try it again for fear that.... ( what it that doesn't eihter ? ) It would be just pitiful . So I just let it go.
Thank you for the help.

$hifty

Black Blade

(05/15/2000; 22:28:52 MDT - Msg ID: 30591)

One of Big Als quotables.

An interesting quote that I came across today in the Spring issue of "Grassroots USA" (A people for the USA Foundation publication):

"I believe we are on an irreversable trend toward more freedom and democracy - but that could change"
- Al Gore, May 22, 1922

Poor Al, What a Buffoon! :-)

elevator guy

(05/15/2000; 23:22:30 MDT - Msg ID: 30592)

@Goldfly

I thought no one had heard the song, so I dropped the issue.
I'm surprised you remembered after all this time!

Well, I tried to sing it, and it goes pretty well. I could do a better job if I worked with fitting the syllables to the music, but the family really takes the toll, so I spared them. (!)

Thanks for your efforts.

My wife really liked "I got gold babe". Lots of fun!

I enjoy your stuff, and rock on!

Gandalf the White

(05/15/2000; 23:48:03 MDT - Msg ID: 30593)

BB's Gore Quote !

Check that date, BB !
<;-)

Black Blade

(05/16/2000; 00:37:53 MDT - Msg ID: 30594)

Woops!

Yer right Gandy, Should be May 22, 1998. Its them sticky keys ya know! Then again, coulda been Al senior. ;-)View Yesterday's Discussion.

ORO

(05/16/2000; 00:57:39 MDT - Msg ID: 30595)

Global Governance - no escape

http://www.cgg.ch/contents.htm
The above URL is for the following report:

Our Global Neighbourhood
the report of the Commission on Global Governance

It is part of the Commission on Global Governance (CGG) web site.

Understand that some of these people think they are doing good.

Understand from reading the above that the goals they seek and the methods they suggest will only end with a dictatorship of global bureaucracy. A headless corpse making rules without recourse. Governing the world so that there be no escape from the "values" they want to impose. No way for individuals to avoid the terrors of omnipotent government, because, like one of the many single and all powerfull gods of monotheistic religions, it would be everywhere at once.

A cursory reading of the report will bring any who have a grasp of the principles of economic and political reality to the conclusion that the writers are fronting for a group that believes that global socialism is controllable in the same way local socialism is. It is not.

Like the industrialists of Chile who wanted a "strong leader", the backers of global socialism will find themselves to be among the second tier of victims, with no control over their financial empires, subject to the whims and interests of a armed thugs and aimless bureaucracy. With no place to escape to, and no place to keep one's means from being overtaken, the global economic elite will be bereft of the tool of bribery that has allowed control of local socialism around the globe.

The social democracy envisioned will quickly proceed to become the kind of nightmare that plain folks experience under any tyrany from which they can't escape, not only for the plain folks, but for the the great and mighty financiers who are attempting to construct it in their favor. The realization of this will bring the supporters of this program to reverse course at the last moment. The reversal will be interesting to watch as the support for the neo-Fabian New Left is split and some turns into opposition. Once well respected globalist politicians around the world will have their blackmailer's dossier aired in public. (The powerful financier must have a credible threat over the people he supports for office as well as a tangible reward for their towing the line.)

Mr. David Rockefeller, if my head rolls, be sure that yours is next.



If you believe the principles of the report are a recipe for disaster, call your congressmen and insist that he vote for the US to withdraw from all transnational institutions when they are not under veto control by the United States. First in line is undoing of the GATT and the abominable WTO it has spawned. It is unnecessary, and it is not lawful.

Furthermore, make sure to participate in a push to put all terms of US treaties under the limitations of the constitution. Currently, they are not. The reality of the matter is that the US is defacto ruled by terms of treaty not by law of the court. This has been the case since the days of the founding of the United States.

Finally, participate in a push to remove the treatment of the state (government) as legal successor to the sovereign in common law, and fight to eliminate the immunity of officers of government (local state and federal) from personal liability for their official actions.

Hipplebeck

(05/16/2000; 01:06:07 MDT - Msg ID: 30596)

to oro

well said.
I see it coming too, and I am struggling to find a way to fight it.

Hipplebeck

(05/16/2000; 01:09:36 MDT - Msg ID: 30597)

to oro

instead of Nazis
it will be Wazis

DaveC

(05/16/2000; 01:32:45 MDT - Msg ID: 30598)

Twice Discipled (5/15/2000; 9:35:52MT - usagold.com msg#: 30551)

Here are a few links that may help in your quest.

http://www.freedomabovefortune.com/

Joe Bannister, former IRS Criminal Investigation Division Special Agent who learned of serious constitutional questions relating to the federal income tax and the federal banking and monetary systems.

Major lawsuit filed against IRS

http://www.sightings.com/general/suit.htm

Breakthrough in the search for legality of IRS

http://www.sightings.com/general/abreaktax.htm

House bill to abolish IRS

http://www.sightings.com/general/boohiss.htm

As for the selling assets ideas, I agree. Though don't listen to me since you don't know me from Adam. But I have done this!

Two years ago my wife and I owned 8 pieces of residential real estate in three states. We sold it all and moved. We have the money offshore and THE GOLD IN THE SAFE!

Good luck.

YGM

(05/16/2000; 01:48:41 MDT - Msg ID: 30599)

ORO

Global Governance....no escapeSad but true I suppose....Rockefellers, Gnomes, Bildebergers, Templar Knighst, Skulls,..... on & on it goes......
who and where is the Great Oz....(not the one in Heaven either).....

Well if you can't beat them and you sure can't join them, I guess you just have two choices.....succumb or stand and fight.....Thank goodness many will choose the latter...YGM

ORO

(05/16/2000; 02:40:30 MDT - Msg ID: 30600)

Hip - Organisation

Join the appropriate organizations.

Air your thoughts in public.

Study the reality of the functions and standings of law, statute and terms of treaty.

Press your federal and state representatives to the wall, demand clear answers to clear questions. Demand action. Pester, pester, pester. Record all conversations with the reps and their staffers. Tell them you are doing so before the conversation starts. What you don't have a record of can be denied.

Talk to everyone you know. Ask them what their position is on the different matters at hand. Ask them to justify their position.

A short book with a rather clear presentation is given below:
http://numismaticrareuscoin.com/nbn/Nock/nockpref.pdf
http://numismaticrareuscoin.com/nbn/Nock/nock1.pdf
http://numismaticrareuscoin.com/nbn/Nock/nock2.pdf
http://numismaticrareuscoin.com/nbn/Nock/nock3.pdf
http://numismaticrareuscoin.com/nbn/Nock/nock4.pdf
http://numismaticrareuscoin.com/nbn/Nock/nock5.pdf
http://numismaticrareuscoin.com/nbn/Nock/nock6.pdf

In MS Word format:

http://numismaticrareuscoin.com/nbn/Nock/nockpref.doc
http://numismaticrareuscoin.com/nbn/Nock/nock1.doc
http://numismaticrareuscoin.com/nbn/Nock/nock2.doc
http://numismaticrareuscoin.com/nbn/Nock/nock3.doc
http://numismaticrareuscoin.com/nbn/Nock/nock4.doc
http://numismaticrareuscoin.com/nbn/Nock/nock5.doc
http://numismaticrareuscoin.com/nbn/Nock/nock6.doc

One note about this book is that there seems to be some ambivalence about whether people institute government by free consent or by acquiesence to overwhelming force. History leaves no question behind. It is most definitely the latter. All governments in history have been created by the holders of the power of violence for the reduction in the cost (the amount of violence) of obtaining booty.

Kings and queens and their knights and Lords are the titles of robbers that have cut perpetual deals with their victims in what ammounts to a protection racket.

The only exceptions were (for a short time and largely in an illusory rather than real sense) the USA and Switzerland.



Davidson and Rees-Mogg make the case very clearly and logically, that violence is excercized for gain by government for government. "By the people, for the people" may be written, but it is not the reality. Historically, if a government did not use its available resources, bankers would finance an enemy who would conquer the land and remove the government in favor of a new one that did rob its people of as many of the resources as was possible.

The proliferation of nuclear weapons can prevent this kind of politics. As does the globalization of business in a way that makes supply chains so broadly distributed that no particular nation may have a sufficient resource to assure the prospective conquering government a sufficient return. This is because of the taxation of the resource (necessary for obtaining a profit from violence) makes it uncompetitive in trade and eliminates "the goose" by "taking its eggs". The intelectuallization of so great a portion of the economy, has pushed the backing of any government's empire an anachronism. This is because intelectual property and the few individuals who create it are very mobile and can recreate their business outside the jurisdiction of the conqueror.

The only remaining form that can possible obtain a sufficient return is a global government. However, a global government can take control of the great banker's assets just as easilly as those of any other. Without the strong protections of liberty we are seeking, the global government poses as much threat to bankers as it does to us,

Black Blade

(05/16/2000; 03:52:55 MDT - Msg ID: 30601)

Gold Bar type and weight.

http://www.gold.org/Inve/Bars/Types.htmJust about anything you wanted to know about gold bars. Gos beyond defing Tolas, Teals, etc.

Black Blade

(05/16/2000; 03:54:04 MDT - Msg ID: 30602)

Gold Bar type and weight.

http://www.gold.org/Inve/Bars/Types.htmJust about anything you wanted to know about gold bars. Goes beyond defining Tolas, Teals, etc.

Yep, them keys are sticking.

HI - HAT

(05/16/2000; 04:24:29 MDT - Msg ID: 30603)

ORO

What you have noted about government being the successor to the sovereign in common law and the present state of immunity-unaccountability the RICO, scamster, politicos now enjoy, will I hope soon result in a grassroots seething rage against them during the ensueing chaos their imperious system will no doubt soon engender.

The key to their undoing is that they have poisoned the very body-politic at whose tits their vile mouths suck out their sustanance. The poisoned mothers milk money will drown them in their oun puke.

ss of nep

(05/16/2000; 04:42:57 MDT - Msg ID: 30604)

ced_s (05/15/00; 19:55:19MT - usagold.com msg#: 30578)

Is your name Ed Stuart ?

If so are you related to me, Steve Stuart ?

My branch of the family has been in Toronto for about 150 years.

ss of nep

(05/16/2000; 05:00:11 MDT - Msg ID: 30605)

ORO (05/09/00; 19:43:37MT - usagold.com msg#: 30207)

On the 9-th you stated "The NWO is on its death bed"...

Are indicating something different with this mornings(16-th)
two posts ?

ss of nep

(05/16/2000; 05:12:04 MDT - Msg ID: 30606)

Indicated msg should read ...

ss of nep (05/16/00; 05:00:11MT - usagold.com msg#: 30605)

Are you indicating ....

JavaMan

(05/16/2000; 05:33:56 MDT - Msg ID: 30607)

SteveH...

Thanks for the much-appreciated info.

ss of nep

(05/16/2000; 05:44:32 MDT - Msg ID: 30608)

Extract from the indicated site

http://www.factsoffshore.com/cansit.html

Most Canadians are unaware that they live in one of the World's highest Tax Regimes and Indebted Countries.

Canadians pay 53.6% Personal Income Tax at $60,000. Americans pay 39.6% at US $250,000. Convert to Canadian Dollars and Canadians pay 53.6% P.I.T. at US$40,000.

Canadians in the upper income strata pay 20 times more tax.

Canada's combined Federal, Provincial and Municipal debt is $5,700,000,000,000, (Trillion). The same as the US, but we are 1/10th the population. That's $190,000 for every man, woman and child.

Canadian taxes increase 106% faster than income is earned.

Provincial Health Care programs are $1.4 Trillion in debt.

Canada has monetary controls on $10,000 or more and is considering a "Cash Tax," to deter people from using cash.

Money Orders and Cashier's Cheques in excess of $1,000 are reported.

Canadians are subjected to 165 taxes and license fees which can represent 80% of income.

The Bank of Canada is a private corporation, created December 1913. The same year as the American Federal Reserve. Only coincidental you say?

Your money is not created by your government but by private banks. The Bank of Canada is privately owned with no voting interest by any Canadian. All central banks are owned by the International Banksters. These same International Banksters control the United Nations. Perhaps you should ask the question: who do your military and paramilitary swear an oath of allegiance to? - it certainly isn't Canada.

Hill Billy Mitchell

(05/16/2000; 05:50:37 MDT - Msg ID: 30609)

Official release

http://www.bog.frb.us/releases/H15/update/
Official: Federal Reserve Statistical Release

Release Date: May 15 2000

Rates For Friday, May 12, 2000

Federal funds 6.11

Treasury constant maturities:
3-month 6.14
10-year 6.51
20-year 6.62
30-year 6.20

right-side up spread FF vs long bond = +.09%

ss of nep

(05/16/2000; 05:54:10 MDT - Msg ID: 30610)

Extract from the indicated link

http://www.factsoffshore.com/usasit.html
This entire system has been created to regain control of the colonies, the only way that really counts - financially. The British monarchy owns huge tracts of land in both Canada and the United States and it is the British Government with the consent of the British Monarchy that created offshore tax havens as a means of laundering their drug money.

Black Blade

(05/16/2000; 05:59:56 MDT - Msg ID: 30611)

Morning Wakeup Call!

Source: Bridge NewsAsia Precious Metals Review: Gold hovers around $275 in thin trade
By Hiroyuki Fujiwara, BridgeNews

Tokyo--May 16--Spot gold hovered at around the key U.S. $275 per ounce in a sluggish market on Tuesday in Asia after overnight dips, dealers said. Light buying underpinned prices below the key support line but the absence of buying interests prevented gold from recovering, they said. Platinum was supported above $500 after an overnight slip on a lack of follow-through selling, the dealers said. Expectations of a U.S. interest rate hike following the Federal Open Market Committee (FOMC) meeting later Tuesday kept players hesitant to buy gold here, the dealers said. Players do not expect a near-term sharp plunge in the gold market, however, prices are unlikely to recover steadily without fresh incentives, they said.

Black Blade: Now would a 75 basis point increase just perk thing up a bit? ;-)

Johnson Matthey: Platinum demand up by 4% in 1999 to 5.6m oz

London--May 15--Platinum demand in 1999 rose by 4% to 5.6 million ounces, helped mainly by the 2.88 million ounces consumed by the jewelry industry, according to Johnson Matthey's Platinum 2000 report. Total supply of platinum fell by 10% to 4.87 million ounces--the lowest level since 1994--due in part to the large fall in Russian sales to 540,000 ounces because of legal complications, and despite a 6% rise in South African sales. (Story .14306)

Johnson Matthey: Palladium demand at record 9.37 mln oz in 1999

London--May 15--Demand for palladium was a record 9.37 million ounces in 1999, driven mainly by purchases by auto companies--5.88 million ounces--according to Johnson Matthey's Platinum 2000 report. As a result, demand exceeded supply by 1.31 million ounces. A quarter of the shortfall was met by sales from the U.S. defense stockpile, although heavy selling by funds which liquidated large holdings is also thought to have taken place, Johnson Matthey said. (Story .14423)

Black Blade: This supply-demand equation will only widen as it becomes apparent that the Russians can't/won't deliver. Even had to raid the US Defense Stockpile - Hmmmmm����..

S. Africa's Amplats to up platinum output to 3.5 mln oz in 2006

New York--May 15--South Africa's Anglo American Platinum Corporation (Amplats) plans to increase its platinum production from the 1999 level of about 2 million ounces to 3.5 million ounces by the end of calendar year 2006, the company said in a press release. The move comes in reaction to better jewelry, industrial and autocatalyst demand. (Story .23190)

Black Blade: Russia's loss - S Africa's gain. Look for auto manufacturers to revert back to Platinum autocatalysts as Palladium is found to be unavailable.

SteveH

(05/16/2000; 06:16:57 MDT - Msg ID: 30612)

Oil

http://biz.yahoo.com/bw/000516/tx_gata.htmland GATA.

Oil futures now at $30.05!

See Business Wire press release above re: GATA.

Black Blade

(05/16/2000; 06:21:38 MDT - Msg ID: 30613)

Photos of Gold Bars

http://www.gold.org/Inve/Bars/Hall_1.htmI especially like the Korean "Pig Bar". Anyway, something to gawk at before the market open!

Black Blade

(05/16/2000; 06:25:24 MDT - Msg ID: 30614)

OK, another Photo

http://lam.mus.ca.us/lacmnh/departments/research/entomology/scarabs/art9.htmJust wouldn't be complete without "Insecta", so here's a photo of a gold Scarab Beetle.

ORO

(05/16/2000; 06:47:59 MDT - Msg ID: 30615)

NWO - two, but not the same

The "Novus Ordo Seclorum" of the Federal Reserve Note is a banker's order. That order was built in concert with a socialist "Rhodesian" concept over the process of years. Rhodes was specific in his view that government and business should act in concert to achieve particular social goals for the mutual benefit of both.

The arrangement will be coming to an end because of the simple facts that the one world government envisioned by the socialist faction endangers the business side's ability to control the government side.

The potential for eradication of the dollar is the strongest element. Without a global debt money to benefit from and through which to obtain the public's resources through obligations given by its government, the motivating factor for the arrangement is gone. Only the socialist, or social-democrat global government is all that is left. Without the behind-the-scenes support of debt money banking it is doomed to sink into monetary inflation.

The Euro structure - in which the governments are separating from their old symbiosis with commercial banking is the major change. The dollar system is based on the US government's debt (until last year, when commercial paper was allowed into the mix) whereas the Euro is obligations of whatever borrower created the outstanding Euro, and the Euro's monetary base is based on commercial debt - not government debt.

ss of nep

(05/16/2000; 07:07:11 MDT - Msg ID: 30616)

Rhodes

Cecil Rhodes - Funded via RottenChild established
the Rhodes Scholarships program too mold the future
holders of high government office on its wat to the NWO.

ss of nep

(05/16/2000; 07:10:38 MDT - Msg ID: 30617)

the socialist faction endangers the business side

This may be however,

TBTP could care less about Business

they do not control.

ss of nep

(05/16/2000; 07:18:36 MDT - Msg ID: 30618)

Without the behind-the-scenes support of debt money banking it is doomed to sink into monetary inflation.

http://www.wealth4freedom.com/truth/chapter3.htm
I would not hold my breath.

There is an interesting point of view at the link.

Leland

(05/16/2000; 07:42:58 MDT - Msg ID: 30619)

From INSIGHT MAGAZINE ... Well Written

Gold May Move in Volatile
Markets


By Charles A. Cerami


Despite a booming economy and recent fluctuations
in the price of the precious metal, financial analysts,
fund managers and brokers still regard it as a sound
investment.

When its price dawdled for years, gold was doing its old job by
reflecting an absence of inflation. Now it is stirring again in the face of
volatile stock markets and investors looking for a safe haven.
Last fall the price of gold suddenly took a sharp upswing from
$280 an ounce to more than $300 per ounce. There was widespread
excitement as investors wondered whether it was a warning that
hidden inflation was on the way or a signal that a move to buy coins
or bullion or futures contracts or gold-mine stocks could earn a
bundle.
But it was not a valid signal and the price soon sank back to the
$280 level. The move was related to an obscure fact that has a
bearing on today's situation.
In February, a similar jump occurred � from $288 to $313 in
one afternoon. Even as the price appeared to simmer down to the
$280 range a new fear was created in some quarters, a fear that may
not let the market sleep long. While the price could rise and fall
indecisively at first, insiders claim to see a chance gold could vault to
$600 an ounce.
Investors who realize the implications of this � how much of a
threat it can be to the other markets and how much money a
leveraged investment can earn on that kind of move � are looking
into the facts underlying these fluctuations.
Even when most people � and many central bankers � think
the precious metal is a fading relic, Federal Reserve Board Chairman
Alan Greenspan watches the gold price almost as avidly as he
watches the money supply. So does Insight. For the fact is that gold
has not been the failure that some have called it during the years of
modest prices. The speculators who want it to jump at their command
have not been happy. Nor have the "gold bugs," who consider it a
mystical substance with divine properties. But the gold price stayed in
check because inflation has been in check. Now, after so much
stock-market volatility and such a prolonged period of prosperity,
savvy traders are alertly watching for the possibility that gold will start
telling a new story.
The underlying supply-and-demand situation ultimately will
determine price. All the gold produced worldwide in any given year is
less than all the gold used for dentistry, jewelry, industry and
investment that year. Such factors would create a shortfall and big
upward push for the price, except for the large quantity of old gold
held by governments and institutions such as the International
Monetary Fund, or IMF.
Insight has made a special and very broad review, tapping a
variety of sources here and abroad � brokers, fund managers,
metals specialists and users of industrial gold � for a summary of
findings.
First, these experts say, the cause of the recent volatility was not
in itself proof of a coming price spiral. Second, entirely apart from
this, behavior patterns in the industry now are very similar to past
situations that led to booms in the price of gold. Here is a simple
explanation of the first conclusion and a more detailed picture of the
second.
The October price jump largely was the reversal of a blunder
that artificially had knocked gold's price down to the price at which it
again returned. The IMF had announced a plan to sell off some of its
gold and then use the proceeds to ease the debt burden of some of
the world's poorest countries. Soon after, some governments began
to sell part of their own gold holdings. When word reaches the
market that tons of any commodity are going to leave storage and be
dumped on the market, the price takes a hit. That was expected.
What somehow was overlooked was that gold is mined by
almost 60 countries � including many of the poor nations that the
affluent countries were trying to help. Before long, these supposed
beneficiaries were screaming in pain. "Stop your sales!" they pleaded,
because the lower price they were getting for their newly mined gold
was hurting their finances instead of helping. So when the IMF and
World Bank had their big annual meeting in Washington in September
1999, the embarrassed global experts agreed to shelve those sale
plans, which allowed the price to move back up from around $250
per ounce to the $320 level.
That returned the market to just a little more than the preblunder
prices. It did not, in itself, create the promise of a new gold-price
surge. In fact, the gold price began to sag after the initial boost.
Then something else happened last fall that almost was
unnoticed. Many central banks had been lending gold to some of the
big financial houses on Wall Street, a neat and legal operation that
allowed those houses to borrow against the gold at very low interest
rates and then re-lend the money at normal rates. In September, the
central banks let it be known that they no longer would lend their
gold. The borrowers began living precariously, knowing they would
have to return the borrowed gold at some point. They are in the same
spot as anybody who is in a "short" position on any stock or
commodity: They're in fear of a gold-price increase that could force
them to buy back gold at higher prices.
This potential squeeze, plus the hefty upward move in oil prices,
explains the February jump in the gold price followed by relaxation to
the $280 level. But keep in mind that the basic world supply-demand
picture also is bullish. So three factors seem to be building for an
upward push of gold price.
Needless to say, there are a variety of differing and even
conflicting opinions. If that were not so, if all the highly informed
observers were thinking along one line, the price already would be
heading in some predetermined direction instead of returning to $280.
Those who are most informed tell Insight they sense a major
movement in the offing, but they are hesitant, perhaps because they
know too much.
They know the mine owners and they are critical of their
management methods. They know that most of the gold mines are not
well-financed. And when many small competitors find it hard to hold
out for better prices, they are apt to let their product go too easily,
thus defeating themselves. So as the experts think of the often inept
executives who mine the gold, they find it hard to foresee that such
bumblers will coordinate their actions well enough to move gold
prices back up to the high level of 20 years ago.
The insiders may be wrong in this, for it was not clever
management or marketing skill that sent gold as high as $880 per
ounce. It was scarcity in the face of high demand, which experts say
is what we could be seeing as high fluctuations in the Dow Jones
industrial average and the NASDAQ high-tech market frighten
investors into hedging with gold as well as bonds.
Today, worldwide production of gold is about 2,300 tonnes
annually (or 2,530 short tons; the spelling difference is because gold
professionals count in metric tons of 1,000 kilograms), having
doubled since 1980 largely owing to new technology. But demand is
at an all-time high. During the second quarter of 1999, jewelry
demand increased by 13 percent over 1998. Investment demand rose
by 32 percent. Demand for dental and industrial uses also increased.
Overall, the total consumption was 809.5 tonnes (890.45 short tons),
according to the World Gold Council.
For the full year, this means there were buyers for some 30
percent more than the amount of new gold produced. That normally
would be a prescription for a soaring price, except for the pervasive
fear that government-held or IMF gold suddenly might have come
onto the market. With that fear now abated, any sharp inflation signal
� or an important military scare or market panic � could create an
explosive move in the gold price.
For perspective, it helps to realize that the entire gold market is
quite small in relation to most industries. South Africa has almost half
the world's resources, but it is holding back and producing only about
550 tonnes (605 short tons) annually, which is roughly one-fourth of
the world output. This means that South Africa is not depleting its
underground supply as rapidly as most other countries, and its mines
will remain the richest. The United States is in second place with an
output of nearly 400 tonnes (440 short tons). We export only about
$6 billion worth of nonmonetary gold per year and import only $3
billion worth. In this country, 70 percent of the gold is used for
jewelry and the arts, 23 percent is in electronics and other industries
and 7 percent goes for dentistry. Russia, Australia, Latin America,
China, Ghana and Indonesia are others that produce 50 or more
tonnes (55 short tons) of gold annually.
What makes these little numbers count for so much is that gold is
a sort of "supermoney" that has permanent value because it is hard to
produce, incredibly durable and very useful. Any government can
print paper money without limit, but when that flimsy currency is
compared with gold's steadiness, the contrast forces central bankers
to think a little harder about their decisions.
Greg Weldon, a metals expert who advises Prudential Securities,
while acknowledging that there are no precise fundamentals to prove
it, clearly leans toward the view that the coming year will bring
somewhat higher gold prices than the past year. To the frequent
remark that, "Gold has lost its allure as an inflation hedge," he
responds, "Bull! Gold has been an extremely accurate gauge of
macro-deflation." In other words, he thinks gold also will be well
ahead of the markets when it is time for storm signals to be posted.
Douglas Cohen of Morgan Stanley Dean Witter is sharply critical
of the failure of the gold companies to consolidate, as so many other
industries have done in the search for efficiency and greater financial
strength. "I think all the gold companies have looked across the room
for any dancing partner that may appeal to them," he says. "A few
couples are going to hook up, and then others are going to get out on
the dance floor before the music finally stops."
Actually investing in gold or the stocks of gold mines is not for
everyone. It requires patience and setting aside part of the investment
capital that normally would be devoted to more aggressive uses. At
the very least, investors will find it rewarding to watch gold and the
other precious metals � especially silver and platinum � for the
signals they usually give about other market conditions that may give
weeks or months of head start over the broad investing public.





Getting in on Gold's Long-Term Future

If you are one of those who wants to participate actively in the
eventual profits that gold can bring, you need to choose between
buying gold stocks or owning the metal itself. Stocks have a stronger
appeal because they can earn dividends that gold coins or bullion do
not pay.
Insight does not name specific stocks, but any major brokerage
house can give you a complete rundown on vital facts about South
African, U.S., Canadian and Australian gold-mine shares.
For those who like the idea of having actual gold in hand for the
future, there is a quite conservative way of managing it. First, it never
should take up more than 10 to 12 percent of your investment capital.
The reason is that gold, being a steady store of value, simply will
move up with inflation over a long period of time. A speculator may
make big gains if he or she happens to buy and resell at just the right
moments. But, over the long term, it is a safe haven, not truly an
investment that keeps increasing your purchasing power, as the stock
of a well-run company might do.
Next, if you do make the decision to buy gold, should it be in the
form of bullion or gold coins? The coins referred to here often are
called "bullion coins," meaning that they are recently minted, such as
the South African Krugerrand or the Canadian Maple Leaf, and their
value is only a little more than that of their gold content. The
advantage of these coins is that they enable you to buy in relatively
small quantities � just an ounce or so at a time � and that makes
them the preferred vehicle for the next step that we suggest.
It is not in your best interest to buy all the gold you decide on at
one time. A more prudent financial strategy for getting into almost any
financial market is called "dollar-cost averaging," which most often is
mentioned in connection with stocks. It means setting a certain
amount of money that you know you can invest each month (or each
quarter, if that is more comfortable) and not letting any economic
news alter that decision.
With this method, you never feel stressed about seeing your
investment drop in price. On the contrary, a lower price is exactly
what you wish for, because you then will be getting more gold for the
money. This way of buying at a variety of prices assures you of having
a good average price, and the accumulation will be very rewarding
after a few years of steady buying. Then, whenever gold adjusts to a
much higher price level, the value of your holdings could astonish you.

If coins are the form of gold you decide on, take the time to
compare several possible sources for the best price. The Yellow
Pages of any large city will show a listing of several nearby dealers, or
look for advertisements in journals you trust. There should not be any
huge gap in the quotations you get from the established houses, but
even a few percentage points of difference will add up to a substantial
amount in the number of coins you stack up from this method of
monthly buying.
Some experts believe that silver is an even better play than gold,
that it has a good chance of soaring in price even if gold does not.
Warren Buffet is one of these. He bought 130 million ounces of silver
in 1998. George Soros is another believer. In this case, trading the
metal itself is a roller coaster that can double or fall by half, but
because silver's price is so much less than gold's, this makes it even
easier to use the dollar-cost-averaging method of continuous
purchasing.

� CC

(Fair Use For Educational/Research Purposes Only.)

ss of nep

(05/16/2000; 08:04:58 MDT - Msg ID: 30620)

The NWO agenda

http://quotes.strongcity.com/protocols_of_zion.html
The NWO agenda is there for the reading
Not one single item as written has not come to pass

It is a long term multi-generational plan

To discount it is, IMO, the same as sticking ones head in the sand


- How long can gold manipulation continue - -
- from PROTOCOL No. 22
-

IN OUR HANDS IS THE GREATEST POWER OF OUR DAY - GOLD: IN TWO DAYS WE CAN PROCURE FROM OUR STOREHOUSES ANY QUANTITY WE MAY PLEASE.

- - -


Just What Happened?

We might well observe certain events which are factual and historical:

In 1897 the first Zionist Congress was held for the setting up of a Jewish state in Palestine. Within two years The Protocols of the Learned Elders of Zion surfaced then published in 1905.

In the early decades of the century many were becoming aware of what they perceived was a Jewish conspiracy to not only set up a Jewish state, but to bring the world under Jewish influence.

In the 30s and 40s was the Jewish holocaust (sacrifice).

In the late 40s the U.N. gave the Jews national territory in Palestine and many Jews migrated to that land. The Protocols was discounted as a fraudulent document and in some places banned.

In the latter half of the century the Protocols was described as a hoax. The interesting point here is that there is no evidence or proof that it is a hoax or that it is authentic. If one looks into any encyclopedia he will find the words "forgery", "hoax" or "fraudulent" in regards to this document without the evidence for such a statement. As already stated, their authenticity cannot be proven either. It would be best to stay clear of theories and simply look at events. Events are plain enough and speak loudly enough.

Gandalf the White

(05/16/2000; 08:18:44 MDT - Msg ID: 30621)

BB's golden tour of "bars"

Black Blade (05/16/00; 06:25:24MT - usagold.com msg#: 30614)
OK, another Photo
http://lam.mus.ca.us/lacmnh/departments/research/entomology/scarabs/art9.htm
Just wouldn't be complete without "Insecta", so here's a photo of a gold Scarab Beetle.
====
BUT BB --- you do realize that the Scarab Beetle ie: gold beetle (Plusiotis resplendens) is not Au but just "like" the new golden US Dollar coin !!
<:-)

Leland

(05/16/2000; 08:38:11 MDT - Msg ID: 30622)

"Rubber Band Price for Oil"

Stretching the band
"Rubber" price band for crude oil spells inflation

By Dr. Irwin Kellner, CBS MarketWatch
Last Update: 5:47 AM ET May 16, 2000

NEW YORK (CBS.MW) -- Don't think for one minute that inflation is
cooling off just because wholesale prices fell in April and consumer prices
were unchanged.

The drop in April's producer price index was due entirely to a brief
decline in the price of crude oil, which has since reversed.

Indeed, last week crude oil prices reached a
seven-week high after several major oil producers
said they had no plans to boost output. Prices for
June delivery breached the $30 a barrel mark,
before falling back to close just under $30.

Early last month, the price of crude had fallen
below $25 a barrel in response to an increase in
production by the oil producing countries. It
hovered just above $25 during April, before
shooting up in early May because of strong
demand.

It all adds up

At today's levels, oil prices will add to May's wholesale price index, rather
than subtract, as they did in April.

Unless there were substantial drops in other categories, May's wholesale
price report will not make for pleasant reading, when it is released next
month. This possibility did not go unnoticed by the Federal Reserve's
interest rate-setting Open Market Committee. See related story

Nor did the fact that the oil producing countries
allowed the price of crude to remain above $28 a
barrel. This was the top of the band they said they
were establishing in March; the bottom was $22.

The reason for the band was to give the oil
producers guidance on production decisions, with
the objective to help stabilize oil prices.

In the past year, the price of crude had gone as low
as $10 a barrel, and as high as $34.

Rubber band man

Guess what, folks? This so-called price band has
turned out to be more like a rubber band. And like
a rubber band, it is being stretched to suit the oil
producers.

To be sure, the entire concept of a price band
reeks of elasticity. There is no written document
that I am aware of that spells out the details.

We are not sure which types of crude are subject to this band, nor do we
know if the price they are referring to is based on a moving average, or an
actual daily price.

All we know is that prices have to trade beyond the range for 20
consecutive days. If they do, then the oil producers are supposed to
adjust output up or down by 500,000 barrels a day.

But waiting for more oil is like waiting for Godot; the oil producing
countries are not pumping any more this month, nor do they have plans to
do so in June.

Anyone care to guess what this means for prices---and interest rates?

(Fair Use for Educational/Research Purposes Only.)

Laura

(05/16/2000; 08:59:16 MDT - Msg ID: 30623)

Oil Has Production Peaked?

http://www.aapg.org/explorer/cassandras.html"not all shadows are cast by light---some are cast by darkness."

Leland

(05/16/2000; 09:12:39 MDT - Msg ID: 30624)

Colin Campbell, Referred to in Laura's Posting, Recommended...

http://www.oilcrisis.com/campbell/assessments.htmAssessing the world's oil supply is mind boggling.

ss of nep

(05/16/2000; 09:16:17 MDT - Msg ID: 30625)

I can relate to this

Date: Tue May 16 2000 10:48
CompGeek (@Sheeple of a different flock) ID#343259:
Been cogitating about discussions this past week centering on issue of whether Kitco posters are still sheeple, but of a different flock. After reflection, I think I am a sheeple, but a black sheeple.

YGM

(05/16/2000; 09:16:45 MDT - Msg ID: 30626)

Check Out FallStreet/Gata Ad News Links...

http://www.fallstreet.com/GATA is getting wider press...yahoo...gain a little here!

Elwood

(05/16/2000; 09:42:37 MDT - Msg ID: 30627)

Big Oil find in Kazakhstan?

Does the timing of this announcement strike anyone (besides me) as odd? Oil prices are rising, and the dollar is dying. What more could the administration ask for than a major oil find? I noticed from the article that a big deal is being made about it with only one exploratory well being drilled, and that most of the quotes are not from industry people but Clinton administration people. That's not how things are usually done in the oil business. One well just doesn't make front-page news. From someone with over 10 years experience in the industry.
Elwood

VanRip

(05/16/2000; 09:44:47 MDT - Msg ID: 30628)

Price Inflation?

One way to keep some food price inflation down is to keep the price of an item steady but reduce the contents of the package. I see this happening especially with canned goods. Pretty soon I'm going to have to buy a new hand held can opener with a smaller cutting wheel. The old one I use now has a wheel that is almost too large for the new cans (tuna, beans, soup, etc.) and keeps slipping up and over the edge of the can. I'm lucky to get some of them open. If the cans get any smaller, I won't be able to use it at all. Bummer.

YGM

(05/16/2000; 09:51:28 MDT - Msg ID: 30629)

Noteworthy Gold Purchase

Gold Bashers won't talk about this tho....Tuesday May 16, 7:43 am Eastern Time

"Russia's Sberbank to buy 25 tonnes gold in 2000"

MOSCOW, May 16 (Reuters) - Russia's biggest bank, Sberbank , will buy 25 tonnes of gold from producers this year, up from last year's 20 tonnes, Alla Alyoshkina, the bank's first deputy chief executive, told reporters on Tuesday.

``In 1999 our share was 17 percent of the (domestic gold) market while this year our share should be around 20 percent,'' Alla Alyoshkina said.

In January Russia's Gold Industrialists' Union estimated the country's gold output in 1999 at 125.87 tonnes and said in 2000 Russia could produce between 120 and 125 tonnes.

Accurate gold production data in Russia is considered classified information.

Russia's central bank, which controls Sberbank, is also its main buyer of gold, Alyoshkina said.

``Only when the central bank declines to buy gold from us we turn to the West,'' she said.

Leland

(05/16/2000; 09:51:38 MDT - Msg ID: 30630)

Elwood, I Think You're Right! Something About big Business in Washington

Wednesday May 10, 5:24 pm Eastern Time

US says Kazakh oil find helps
Baku-Ceyhan pipeline

WASHINGTON, May 10 (Reuters) - The United States
believes a potentially huge oil discovery off Kazakhstan's
Caspian coast would help support a proposed multi-billion dollar pipeline to carry the region's
crude to western markets.

Initial estimates put reserves at the Kazakh oil field as high as 30 billion barrels, more than enough
oil to help fill the proposed, $2.7 billion, U.S.-backed pipeline that would stretch 1,080 miles
(1,738 km) from Baku, the capital of Azerbaijan, to Turkey's Mediterranean port of Ceyhan.

``We certainly think (Kazakh) oil from the east Caspian would be beneficial for the Baku-Cehyan
pipeline,'' said a State Department official Wednesday, speaking on condition of anonymity. ``Any
oil discoveries would help anybody trying to develop export pipelines,'' he added.

However, Exxon Mobil (NYSE:XOM - news), one of the oil firms in an international consortium
that is searching for Caspian crude and would have to pay for the pipeline, believes it is too soon
to know if the Kazakh oil find will be big enough to make the Baku-Cehyan route commercially
viable.

``It's just too early to tell,'' said Exxon Mobil spokesman Tom Cirigliano. He said Exxon Mobil
still is not sure Baku-Ceyhan is the best pipeline route for exporting Caspian oil and the project
must be supported by both investors and lenders.

``Studies conducted to date have failed to confirm the commerciality of the Baku-Ceyhan
(pipeline),'' he said. ``We don't think all potential export routes have been evaluated, and that
needs to happen.''

The pipeline has a price tag of about $2.7 billion. The United State believes it can be built by 2004
with loans from several U.S. credit agencies funding part of the project.

While Washington and BP Amoco (quote from Yahoo! UK & Ireland: BPA.L) favour the
Baku-Cehyan route, other oil companies are worried there will not be enough crude supplies
found in the region to justify building the pipeline anytime soon.

The newly discovered oil from the Kashagan field located off Kazakhstan's coastline could be the
gusher the project needs.

Kazakhstan's prime minister said Wednesday the Kashagan oil field promises to be huge. ``We
are talking about big deposits of oil,'' he said.

Preliminary drilling results are still being analysed and an announcement on the size of the oil field is
not expected until mid-August.

Kazakh president Nursultan Nazarbayev said last month that the Central Asian state may rival
Saudi Arabia, the world's largest oil producer, by 2015, when Kazakhstan's daily oil output may
reach 8 million barrels per day from last year's 578,000 bpd.

(As Usual, Fair Use For Educational/Research Purposes Only.)

ORO

(05/16/2000; 09:57:05 MDT - Msg ID: 30631)

ss of nep

The protocols are structured as old arguments put forward by many in opposition to classic liberalism ammended with "goyim" and into which a couple of quotes from the zionist congress were interlaced.

The program is no different from the one warned against before by Jefferson and many others and has little relationship to Jews as such. It is the elitist program of Rhodes and company with embelishments put in by the Tsar's pogrom police. It was printed up in Russian and distributed in quantity. It is poppularly believed, even today, in eastern Europe, to be an authentic document. It is not.

The arguments and the plan are old and some of the arguments work and have certainly gained the attention of Rhodes and Rothschild, as well as Rockefeler and others who have acted on them as the "business opportunities" they were, however disgusting and immoral. That banking had historically seen high participation by Jews is a matter of historical conditions, that reflect only on the particular opportunities available to Jews at the time, when they were not allowed to own land, work land or join guilds. Jews were in merchant and gold businesses because they (1) had little chance to do anything else, (2) had a common language to use from England through Central Europe and to Turkey and Persia. (3) were often forced to travel because of various banishments.

The presentation in your earlier posted URL
http://www.wealth4freedom.com/truth/chapter3.htm
Gives a stronger analysis with better delineation of the same lines of thinking. As you see, the program is no more "Jewish" than anything else.

I like that site - in general - very much.
http://www.wealth4freedom.com/

Particularly:
"This country was formed as a REPUBLIC, not a democracy. As a point of historical FACT, a democracy has never worked and has ALWAYS evolved into a socialistic dictatorship."

"Democracy is when two wolves and a sheep vote on what they will have for lunch."

YGM

(05/16/2000; 10:02:37 MDT - Msg ID: 30632)

From Jeff Rense Site......More GATA Press...

http://www.sightings.com/general/goldmktmn.htm"The Continuing Gold Market Manipulation"...by Bill Murphy.


GO GATA...Gold Eagle forum dwellers have been putting on a spectacular show of solidarity for email campaigns and all around GATA support lately.......truly heartning. ......YGM

YGM

(05/16/2000; 10:10:30 MDT - Msg ID: 30633)

EU & China...WTO

http://www.chinadaily.comBiz News....
China, EU into fine print on WTO deal (05/16/2000)

Chinese and European Union negotiators got down on Tuesday in the Chinese capital to the fine print of a potential deal that would move Beijing to the brink of WTO membership.

Top level political talks lasted a mere hour between EU Trade Commissioner Pascal Lamy and Foreign Trade Minister Shi Guangsheng in Beijing before they withdrew to leave lower level officials to work on the technical details of the crucial pact.

"The atmosphere continues to be constructive and that's not just a diplomatic expression," said Lamy's spokesman Anthony Gooch. "It's workmanlike. We're into the details."

This is their fourth -- and both sides say they hope it is the last -- round of talks this year on agreeing on China's terms of accession to the World Trade Organisation.

Lamy, participating in the tough negotiations for the second time in hopes of getting a better deal than the United States did in November, kicked off the latest bid to seal an accord on Monday but has given no indication of how things were going.

"It is going to be a hard day," Lamy told reporters as he set off for Tuesday's talks. "As long as we have not concluded, we are working hard."

The 15-nation EU, the biggest of about 10 WTO members yet to sign a deal with China, is seeking further concessions in areas where European industry is strong -- telecommunications, life insurance, banking, vehicles and distribution.

It is the only member which seems to be still having serious difficulty reaching terms with Beijing.

Australian Trade Minister Mark Vaile said on Tuesday he hoped to sign an agreement with Beijing this week to maintain the international momentum for China's WTO accession.

NO TIMETABLE

Gooch told reporters after Monday's talks it was too early to say whether China had shown the greater flexibility Lamy called for, but he said technical talks over the past few days were conducted in a "positive and constructive spirit".

"We don't have any pre-ordained timetable," Gooch said when asked how long Lamy intended to stay.

"Our principle will be to stay for as long as it is constructive and useful and necessary, and hopefully that will be culminating with a deal at the end of it," he said.

There has been no comment so far from Chinese negotiators, who have made it plain they have no desire to go beyond the US deal they signed in November -- one which some powerful ministries in Beijing thought had given far too much away.

YGM

(05/16/2000; 10:23:14 MDT - Msg ID: 30634)

Of Interest re NWO Discussions...

Still Don't Believe NWO Domination and Control?



Revelations From Great And Powerful Men



"The world is governed by very different personages from what is imagined by those who are not behind the scenes."
�
Benjamin Disraeli, first Prime Minister of England, in a novel he published in 1844 called "Coningsby, the New Generation"
�
�
"The governments of the present day have to deal not merely with other governments, with emperors, kings and ministers, but also with the secret societies which have everywhere their unscrupulous agents, and can at the last moment upset all the governments' plans. "
�
British Prime Minister Benjamin Disraeli, 1876
�

"Since I entered politics, I have chiefly had men's views confided to me privately. Some of the biggest men in the United States, in the Field of commerce and manufacture, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they better not speak above their breath when they speak in condemnation of it."
�
Woodrow Wilson The New Freedom. (1913)
�
�
"In March, 1915, the J.P. Morgan interests, the steel, shipbuilding, and powder interest, and their subsidiary organizations, got together 12 men high up in the newspaper world and employed them to select the most influential newspapers in the United States and sufficient number of them to control generally the policy of the daily press....They found it was only necessary to purchase the control of 25 of the greatest papers.
�
An agreement was reached; the policy of the papers was bought, to be paid for by the month; an editor was furnished for each paper to properly supervise and edit information regarding the questions of preparedness, militarism, financial policies, and other things of national and international nature considered vital to the interests of the purchasers.
�
U.S. Congressman Oscar Callaway, 1917
�
�
"What is important is to dwell upon the increasing evidence of the existence of a secret conspiracy, throughout the world, for the destruction of organized government and the letting loose of evil."
�
Christian Science Monitor editorial, June 19th, l920
�
�
"The real menace of our republic is this invisible government which like a giant octopus sprawls its slimy length over city, state and nation. Like the octopus of real life, it operates under cover of a self created screen....At the head of this octopus are the Rockefeller Standard Oil interests and a small group of powerful banking houses generally referred to as international bankers. The little coterie of powerful international bankers virtually run the United States government for their own selfish purposes. They practically control both political parties."
�
New York City Mayor John F. Hylan, 1922
�
�
"From the days of Sparticus, Wieskhopf, Karl Marx, Trotsky, Rosa Luxemberg, and Emma Goldman, this world conspiracy has been steadily growing. This conspiracy played a definite recognizable role in the tragedy of the French revolution. It has been the mainspring of every subversive movement during the 19th century. And now at last this band of extraordinary personalities from the underworld of the great cities of Europe and America have gripped the Russian people by the hair of their head and have become the undisputed masters of that enormous empire."
�
Winston Churchill, stated to the London Press, in l922.
�
�
"We are at present working discreetly with all our might to wrest this mysterious force called sovereignty out of the clutches of the local nation states of the world.
�
Professor Arnold Toynbee, in a June l931 speech before the Institute for the Study of International Affairs in Copenhagen.
�
�
"The government of the Western nations, whether monarchical or republican, had passed into the invisible hands of a plutocracy, international in power and grasp. It was, I venture to suggest, this semioccult power which....pushed the mass of the American people into the Cauldron of World War 1."
�
British military historian MajorGeneral J.F.C. Fuller, l941
�
�
"For a long time I felt that FDR had developed many thoughts and ideas that were his own to benefit this country, the United States. But, he didn't. Most of his thoughts, his political ammunition, as it were, were carefully manufactured for him in advanced by the Council on Foreign Relations One World Money group.. Brilliantly, with great gusto, like a fine piece of artillery, he exploded that prepared "ammunition" in the middle of an unsuspecting target, the American people, and thus paid off and returned his internationalist political support."
�
"The UN is but a long range, international banking apparatus nearly set up for financial and economic profit by a small group of powerful One World Revolutionaries, hungry for profit and power."
�
"The depression was the calculated 'shearing' of the public by the World Money powers, triggered by the planned sudden shortage of supply of call money in the New York money market......The OneWorld Government leaders and their ever close bankers have now acquired full control of the money and credit machinery of the U.S. via the creation of the privately owned Federal Reserve Bank."
�
Curtis Dall, FDR's son in law as quoted in his book, My Exploited Father in Law
�
�
"The real truth of the matter is, as you and I know, that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson."
�
A letter written by FDR to Colonel House, November 21st, l933
�
�
"The real rulers in Washington are invisible, and exercise power from behind the scenes.
�
Supreme Court Justice Felix Frankfurter, 1952
�
�
"Fifty men have run America, and that's a high figure."
�
Joseph Kennedy, father of JFK, in the July 26th, l936 issue of The New York Times.
�
�
"We shall have world government whether or not you like it by conquest or consent."
�
Statement by Council on Foreign Relations member James Warburg to The Senate Foreign Relations Committee on February 17th, l950
�
�
"Today the path of total dictatorship in the United States can be laid by strictly legal means, unseen and unheard by the Congress, the President, or the people. Outwardly we have a Constitutional government. We have operating within our government and political system, another body representing another form of government a bureaucratic elite.
�
Senator William Jenner, 1954
���
�
"The case for government by elites is irrefutable"
�
Senator William Fulbright, Former chairman of the US Senate Foreign Relations Committee, stated at a 1963 symposium entitled: The Elite and the Electorate Is Government by the People Possible?
�
�
"The Trilateral Commission is intended to be the vehicle for multinational consolidation of the commercial and banking interests by seizing control of the political government of the United States. The Trilateral Commission represents a skillful, coordinated effort to seize control and consolidate the four centers of power political, monetary, intellectual and ecclesiastical. What the Trilateral Commission intends is to create a worldwide economic power superior to the political governments of the nationstates involved. As managers and creators of the system they will rule the future."
�
U.S. Senator Barry Goldwater in his l964 book: "With No Apologies."
�
�
The powers of financial capitalism had another farreaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements, arrived at in frequent private meetings and conferences. The apex of the system was the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the worlds' central banks which were themselves private corporations. The growth of financial capitalism made possible a centralization of world economic control and use of this power for the direct benefit of financiers and the indirect injury of all other economic groups."
�
Tragedy and Hope: A History of The World in Our Time (Macmillan Company, 1966,) Professor Carroll Quigley, Georgetown University.

�
"The Council on Foreign Relations is "the establishment." Not only does it have influence and power in key decisionmaking positions at the highest levels of government to apply pressure from above, but it also announces and uses individuals and groups to bring pressure from below, to justify the high level decisions for converting the U.S. from a sovereign Constitutional Republic into a servile member state of a one world dictatorship."
�
Former Congressman John Rarick 1971

�
"The directors of the CFR make up a sort of Presidium for that part of the Establishment that guides our destiny as a nation."
�
The Christian Science Monitor September 1, l961
�
�
"The New World Order will have to be built from the bottom up rather than from the top down...but in the end run around national sovereignty, eroding it piece by piece will accomplish much more than the old fashioned frontal assault."
�
CFR member Richard Gardner, writing in the April l974 issue of the CFR's journal, Foreign Affairs
�
�
"The drive of the Rockefellers and their allies is to create a one world government combining supercapitalism and Communism under the same tent, all under their control...Do I mean conspiracy? Yes I do. I am convinced there is such a plot, international in scope, generations old in planning, and incredibly evil in intent."
�
Congressman Larry P. McDonald, 1976
�
�
"The planning of UN can be traced to the 'secret steering committee' established by Secretary [of State Cordell] Hull in January 1943. All of the members of this secret committee, with the exception of Hull a Tennessee politician were members of the Council on Foreign Relations. They saw Hull regularly to plan, select, and guide the labors of the [States] Department's Advisory Committee. It was, in effect, the coordinating agency for all the State Department postwar planning."
�
Professors Laurence H. Shoup and William Minter, writing in their study of the CFR, "Imperial Brain Trust: The CFR and United States Foreign Policy." (Monthly Review Press, 1977).
�
�
"We are grateful to The Washington Post, The New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years. It would have been impossible for us to develop our plan for the world if we had not subject to the bright lights of publicity during those years. But, the work is now much more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national autodetermination practiced in past centuries.
�
David Rockefeller, founder of the Trilateral Commission, in an address to a meeting of The Trilateral Commission, in June, 1991.
�
�
"The most powerful clique in these (CFR) groups have one objective in common they want to bring about the surrender of the sovereignty and the national independence of the U.S. They want to end national boundaries and racial and ethnic loyalties supposedly to increase business and ensure world peace. What they strive for would inevitably lead to dictatorship and loss of freedoms. by the people. The CFR was founded for "the purpose of promoting disarmament and submergence of U.S. sovereignty and national independence into an all powerful one world government.""
�
Harpers magazine, July l958
�

"In the next century, nations as we know it will be obsolete; all states will recognize a single, global authority. National sovereignty wasn't such a great idea after all."
�
Strobe Talbot, Clinton's Deputy Secretary of State, as quoted in Time, July 20th, l992.



�������������������������������

WilloTheWarthog

(05/16/2000; 10:26:22 MDT - Msg ID: 30635)

For the record-Gun Control in the 20th Century

http://www.Federalist.comFOR THE RECORD

In 1929, the Soviet Union established gun control. From 1929 to 1953, approximately 20 million dissidents, unable to defend themselves, were rounded up and exterminated.

In 1911, Turkey established gun control. From 1915 to 1917, 1.5 million Armenians, unable to defend themselves, were rounded up and exterminated.

In 1928, Germany established gun control. From 1939 to 1945, 13 million Jews, gypsies, homosexuals, the mentally ill, and others, who were unable to defend themselves, were rounded up and exterminated.

In 1935, China established gun control. From 1948 to 1952, 20 million political dissidents were unable to defend themselves and were rounded up and exterminated.

In 1964, Guatemala established gun control. From 1964 to 1981, 100,000 Mayan Indians, unable to defend themselves, were rounded up and exterminated.

In 1970, Uganda established gun control. From 1971 to 1979, 300,000 Christians, unable to defend themselves, were rounded up and exterminated.

In 1956, Cambodia established gun control. From 1975 to1977, one million "educated" people, unable to defend themselves, were rounded up and exterminated.

That places total victims who lost their lives -- because they were unable to defend their liberty -- at approximately 56 million in the 20th century.

..ooOoo..

Do we dare fill in the unwritten paragraph, for the next century?

"In 20??, the US established gun control. From 20?? to 20??, ???????? people, unable to defend themselves, were rounded up and exterminated."

ss of nep

(05/16/2000; 10:31:13 MDT - Msg ID: 30636)

Oro - are you certain ?

http://www.christianbiblestudy.org/OPS/JM/JM0023A.htm
Another PROTOCOL, which preceded the PROTOCOLS OF THE LEARNED ELDERS OF ZION, and one which the Jews can hardly call a forgery, since it came directly from a Rothschild Journal published in 1889, contained two unusual documents. One of these dated back to January 13, 1489, when Chemar, Jewish Rabbi of Arles, in Provence, France, wrote to the Grand Sanhedrin (the governing body of world Jewry Constantinople, for advice, as to what to do about the threatening posture of the people of Arles against the Jews. Here was the answer, as shown in the Rothschild Journal:

"The advice of the Grand Satraps and Rabbis is as follows:

1 - As to what you say that the King of France obliges you to become Christians . . . do it! . . . but let the law of Moses be kept in your hearts." (UNQ)
Now let me digress here for a moment, to say that many Jews, who have become converts of Christianity! all in this category. Who they are, I am not to judge. But I would imagine they can be exposed by following Christ's admonition: "By their fruits shall ye know them." I do know that many of them are "fakes." Benjamin Freedman, a Jew converted to Catholicism, in his pamphlet FACTS ARE FACTS, says: "For every ounce of so-called good you accomplish by the conversion of a self-styled Jew, at the same time you do a ton of harm in another direction, by diluting the devotion of countless thousands of Christians from their faith. It is well-known, that many counterfeit conversions reveal these conversions have proved to be but the infiltrations of latent traitors with treasonable intentions . . . The souls of millions of Christians who are totally unknown to you, are quite uneasy about the status of the Christian faith today. The minds of countless millions of Christian clergy are troubled by mysterious pressures from above which prevents them from exercising sound judgment in this situation. If the forces being manipulated from inside against the Christian faith can be stopped, then the Christian faith will stand on its feet against all enemies, as firm as the rock of Gibraltar." (UNQ)
2 - ". . . make your sons merchants that little by little they may despoil the Christians of their possessions."
3 - ". . . make your sons doctors and apothecaries, that they may take away Christian lives. (Have you ever bothered to check the names of those who head the Abortion Clinics in America? You might be surprised to find that most of them are Jewish, and that most of the 2-million babies they murder each year are white. Have you ever bothered to look at the names of those engaged in medical scandals, or unsafe medical practices, if you do, I'll guarantee that a vast majority of them will be Jewish. Do you suppose this may have some tie-in with this Protocol?)

4 - ". . . make your sons canons and clerics' in order that they may destroy their churches. (I challenge you to look at what has happened within the Christian church in the past fifty years. I will mention more about this later.)

5 - ". . . arrange that your sons become advocates and lawyers, and see that the mix themselves in the affairs of the State, in order that by putting Christians under your yoke, you may dominate the world and be avenged on them." (Do you know the number of Jewish advisors who have operated within the past eight Administrations? Why is their number so high compared to their population? Why do we find such a large number of Jewish judges and lawyers? Why do so many Jewish lawyers; like William Kuenstler, major in defending the enemies of America? Why do so many Jewish judges rule against Christians in a court of law? Why do so many Jewish judges turn violent criminals loose on some absurd technicality, knowing they will prey on society? Do you suppose there may be some connection here?)

Ask yourself: "Why is it that the Jewish founded and led, American Civil Liberties Union, universally defends radicals and takes a stand against Christian principles?
Listen to this Communist explanation, as It Is taken direct from their textbook PSYCHOPOLITICS, published in 1933 and taught at the Lenin School of Political Warfare, University of Moscow. Page 52- "We have battled in America since the century's turn, to bring to nothing, and any all-Christian influence and we are succeeding. While we today seem to be kind to Christians, remember that we have yet to influence the Christian world to our ends. When that is done, we will have an end to them everywhere.

"You must work until religion is synonymous with insanity. You must work until the officials of city, county and state governments will not think twice before they pounce on religious groups as enemies.

"You must recruit every agency of the nation marked for conquest, into a foaming hatred of Christianity. You must suborn district attorneys and judges into an intense belief, that Christianity is vicious, bad, insanity-causing, hated and intolerable." (UNQ) It almost sounds as though PSYCHOPOLITICS AND THE PROTOCOLS were written by the same person. Why do you suppose? Because they both reflect the unbending hatred of Judaism for Christianity.

-6 - Do not swerve from this order we give you, because you will find by experience that, humiliated as you are, you will reach the actuality of power." SIGNED: V.S.S.V.F.F. Prince of the Jews, 21st Caslue (November) 1489.

WilloTheWarthog

(05/16/2000; 10:38:03 MDT - Msg ID: 30637)

Quote from a contact in Panama

I thought you would enjoy this observation that an acquaintance of mine in Panama made last week:

"It is ironic today that the Statue of Liberty, whose words are now merely reminders of the values of a distant past, still stands symbolically in the only place Americans still have freedom: offshore".

ss of nep

(05/16/2000; 10:39:28 MDT - Msg ID: 30638)

Oro - "..with embelishments put in by the Tsar's pogrom police.."

http://www.christianbiblestudy.org/OPS/JM/jm0019a.htmExtract from above link
- - - - - - - - - - - -

It might be well for us at this point to go back to the original purpose of the founders of the Illuminati. One branch of the Rothschild family financed Napoleon during the Napoleonic Wars, while the other branch financed Britain, France and Germany and others opposed to Napoleon's internationalist aims. Immediately following the Napoleonic Wars, the Illuminati assumed that all the nations of Europe, who had been involved, were so destitute and worn out from the long fighting, so heavily in debt, that they would do anything and grab at any solution which would lead them out of their dilemma.

So the Rothschild stooges set up what they called the CONGRESS OF VIENNA, and at that meeting tried to create the first League of Nations. This was their first open attempt at a one-world government and was attempted on the theory that since all the crowned heads of Europe were so deeply indebted to them -the International Jewish bankers, they would either willingly, or unwillingly serve as their prostitutes.

Unfortunately for them, the Czar of Russia saw through their scheme and completely torpedoed it. This so enraged Nathan Rothschild, then head of the family, that he vowed that some day, either he or one of his descendant would wipe out the entire family of ly of the Czar. His descendants finally accomplished this in 1917, when the Czar and his entire family were brutally murdered by Jewish assassins. (So much for enduring hatred.)

Keep in mind that the Illuminati was not set up as a "short range" operation. Normal conspiracies are set up on the basis of achieving their aims during the lifetime of the conspirators. But that of the Illuminati, which went back to 500 B.C., was based on the infinite patience of men who meant to be successful, no matter how many ages it took to accomplish their purpose. Strangely enough, this is the same thinking that permeates world Zionism. The reason being, they are one and the same conspiracy.

As a result of this thinking, the descendants of the Illuminati are dedicated to keeping the plot in operation, until one day they believe they will be successful and in the words of the Jewish Talmud, "every Jew will have 2,000 goyim slaves." The Chief Rabbi in France, in 1859, a Rabbi Reichorn stated this when he said: ''Wars are the Jews harvest for with them we wipe out the Christians and get control of their gold. We have already killed 100 million of them, and the end is not yet." This was before the Civil War and the two great World Wars. Many other Jewish writers confirm this Jewish thinking.

Goldwin Smith, Jewish Professor of Modern History at Oxford University, was quoted in October, 1981 as saying: "We Jews regard our race as superior to all humanity, and look forward, not to its ultimate union with other races but to its triumph over them."

On p.155 of his book, YOU GENTILES, Jewish author Maurice Samuels writes: "We Jews, we are the destroyers and will remain the destroyers. Nothing you can do will meet our demands and needs. We will forever destroy because we want a world of our own." (Or under their control).

On Feb. 17,1950, the Jewish banker Paul Warburg, testifying before the U.S. Senate, contemptuously stated: "We will have a world government whether you like it or not. The only question is whether that government will be achieved by conquest or consent."

Gandalf the White

(05/16/2000; 11:23:22 MDT - Msg ID: 30639)

Hello --- Wake up call !!

As the old grandfather's clock finished striking ONE in NY the XAU blasted off into the 60+ area. -- After 20 minutes it had risen over a full point !! SOMETHING is in the works and the Hobbits are getting restless. Hurryup Greenie with the announcement. -- FIREWORKS anyone ?
<;-)

Leland

(05/16/2000; 11:36:29 MDT - Msg ID: 30640)

It's "Market Releases", "Media Manipulation", all that's Happening Today

Oil rally stalls ahead of supply update
Cocoa rallies to 3-week high on possible export limits

By Myra P. Saefong, CBS MarketWatch
Last Update: 1:09 PM ET May 16, 2000
NewsWatch
Latest headlines


NEW YORK (CBS.MW) -- Oil futures rose to a new two-month high
early Tuesday after Saudi Arabia and Iran said they saw no need for an
OPEC output hike in June, but the rally stalled by midday ahead of a report
expected to show a rise in inventories.

Victor Yu, a senior energy analyst at Chicago-based
brokerage Refco Inc. attributed the stalled rally to
"profit taking" ahead of this afternoon's supply data,
which is expected to show a climb in last week's
gasoline and crude stocks.

On the New York Mercantile Exchange, June crude
(CL=M0: news, msgs) jumped to an intraday,
two-month high of $30.25, but was last at $29.93, up
only 1 cent from its close a day earlier.

June unleaded gasoline (HU=M0: news, msgs)
added 1.61 cents to 98.40 cents a gallon amid tight
supplies ahead of the summer driving season which
begins Memorial Day weekend.

June heating oil (HO=M0: news, msgs) rose 0.1 cent
to 77.35 cents a gallon. June natural gas (NG=M0:
news, msgs) was up 5.9 cents to $3.455 per million
British thermal units on Nymex.

In the equities market, the Oil Service Index ($OSX:
news, msgs) and the CBOE Oil Index ($OIX: news,
msgs) lost 3.3 percent and fell 0.9 percent,
respectively.

Within the indexes, shares of Transocean Sedco Forex (RIG: news, msgs)
lost 2 7/8 to 51 1/2, while Unocal shares (UCL: news, msgs) lost 1 7/16 to
36 13/16. However, Phillips Petroleum (P: news, msgs) gained 3/4 to 51
7/16 in recent trading.

The comments out of Saudi Arabia and Iran echo the statements made by
oil ministers from Mexico and the United Arab Emirates over the past few
days.

"OPEC leaders are hinting that they have no plan to raise production when
they meet next month," Phil Flynn, a senior energy analyst at Alaron.com
said.

Flynn commented that the cartel will look toward its price band on oil to
"halt this move higher in energy." The price band allows an increase in
production if prices rise above $28 a barrel and a decrease if prices fall
below $22 a barrel.

Key supply report due out after the market closes

The energy markets are also awaiting supply data from the American
Petroleum Institute Tuesday afternoon. The report is expected to reveal
that last week's crude oil supplies rose between 500,000 barrels and 1.5
million barrels, according to a Bridge News survey.

Gasoline supplies are also expected to have risen during the week ended
May 12. Inventories likely climbed 200,000 barrels to 800,000 barrels, the
survey said.

Distillates, which include heating oil and diesel fuel, are expected to be up 1
million to 1.5 million barrels, while refinery production rates likely rose
between 0.3 percent to 0.8 percent from the prior week's 92.5 percent.

The Energy Department will release its own update on U.S. supplies early
Wednesday.

Gold steady as company stocks trade mixed

Gold and silver company stocks were mixed Tuesday, while gold prices held
almost steady on the Commodities Exchange in a second day of quiet,
low-volume trading ahead of the Fed's decision on interest rates.

June gold (GC=M0: news, msgs) rose 20 cents to $276.60 an ounce. July
silver (SI=N0: news, msgs) was up 8.5 cent to $5.155 an ounce on the
Commodity Exchange division of the New York Mercantile Exchange.

In the equities market, the Philadelphia Gold & Silver Stocks Index ($XAU:
news, msgs) was barely changed at 59.62, while the CBOE Gold Index
($GOX: news, msgs) rose 1.3 to 38.91. Shares of Battle Mountain Gold
(BMG: news, msgs) gained 1/16 to 2 3/16, while Coeur D�Alene Mines
(CDE: news, msgs) jumped 1/8 to 2 15/16 in recent trading. Placer Dome
(PDG: news, msgs), however, fell 5/16 to 8 11/16.

Comex gold warehouse stocks, as of late Monday, were flat at 1,915,040
ounces. Silver stocks were down 82,625 to 102,518,649 ounces.

In other metals highlights, July copper (HG=N0: news, msgs) was up 1 cent
to 85.05 cents a pound. The London Metals Exchange said copper supplies
fell 8,725 metric tons to 642,372 as of early Tuesday. Comex stocks fell
1,065 to 76,751 short tons.

June palladium (PA=M0: news, msgs) rose $7.50 to $575 an ounce while
July platinum (PL=N0: news, msgs) was up $1 to $480 an ounce.

Cocoa hits three-week high

Cocoa futures rose Tuesday to its highest level since late April amid
speculation that officials from Africa's Ivory Coast, the commodity's No. 1
producer, will soon announce a plan to limit cocoa exports.

July cocoa (CC=N0: news, msgs) gained $21 to $831 per metric ton on the
Coffee, Sugar and Cocoa Exchange.

Production in the Ivory Coast during 1999 to 2000 is forecasted at over 1.3
million metric tons, according to Bridge News.

Other commodities on the CSCE edged higher on the heels of cocoa's
gains. July sugar (SB=N0: news, msgs) added 0.14 cent to 7.09 cents a
pound and July coffee (KC=N0: news, msgs) was up 1 cent to 94.75 cents
a pound.

The CRB/Bridge
Index (CR=A0:
news, msgs), a
broad-based measure
of commodity futures
markets, rose 0.7
percent to 221.61.

(To Protect Michael, This is to Invoke Fair Use for Educational/Research Purposes Only.)

TheStranger

(05/16/2000; 11:49:24 MDT - Msg ID: 30641)

Inflation Update

There is a front page article by JACOB M. SCHLESINGER and YOCHI J. DREAZEN in today's Wall Street Journal entitled "Producers Start to Raise Prices, Stirring Fear in Inflation Fighters".

For those who don't have access to a Journal, here are the first three paragraphs:

"Even in the New Economy, at least one old rule still
applies: If demand exceeds supply for long enough, sellers will raise prices.

"That's what Johns Manville Corp., a Denver-based maker of building
materials, is doing. Early last year when the company tried to raise prices
on its insulation and roofing products, customers threatened to switch
suppliers. Johns Manville backed down. But this year, the company has
already succeeded in pushing through price increases of as much as 5% on
many products, and it is considering more.

"The same phenomenon is under way in soft drinks, paper, tires and other
big markets. After a decade of price wars and stagnant inflation, producers
are starting to find that they can once again raise prices."

Stranger's Note: To be sure, the article also quotes a few corporate managers who are still afraid to raise their prices. Nonetheless, most are finding the environment more amenable to increases than has been the case in a long time. Some, in fact, who had difficulty contending with the disinflation of the nineties, are welcoming the change.

On another matter, most stock traders who think they are clever in getting their buy orders in ahead of the Fed this week better be ready to sell soon. This is not the last interest rate increase, probably not by a long shot. First, the logic was, there was no threat of inflation, now the popular wisdom is that maybe we do have incipient signs of inflation but the Fed is quickly choking them off with "tight" monetary policy. Don't you believe it. There ain't nothin" tight about monetary policy yet. And anybody who thinks these five interest rate increases have done anything to reduce the amount of money sloshing around the banking system these days has got another thing coming. Come to think of it, isn't it funny how broad-based inflation didn't even begin to appear until months AFTER the Fed supposedly began to tighten? That's because nudging interest rates up and shrinking the money supply are two entirely different things.

Nobody knows how long this "soft-landing" effort is going to continue, nor whether it will even succeed. But the kind of behavior you are seeing in the markets today is a clear sign that the popular psychology is a long way yet from getting things right.

Patience!

ORO

(05/16/2000; 11:51:33 MDT - Msg ID: 30642)

ss of nep

You put Rothschild up as representative of Jews in general. You put up unquntified claims of statistical over-representation of Jews in this or that function, but you forget that Jews are not unique in thinking themselves best. Everyone thinks of his group as best. Few come out of their group and escape this trap. My most powerful only god is obviously stronger and more powerful than yours. My people are obviously better than all other people.

Jews are over represented in the medical profession just as they are among most highly educated groups - one because of a separate private educational system the likes of which can also be found for Catholics. Second, there is a heavy Jewish tradition of biblical study and thought as well as a body of literature on legal and commercial traditions that date back 3000 years and are always at the forefront of Jewish intelectualism - even when a distance of three or four generations lies between the former Jew and the tradition he left behind.

As to dreams of world domination, there is little to indicate that is a common goal for Jews. It may have been the goal of a group of powerful bankers that included Jews, who are today probably no more Jewish than Henry Ford was.

The Old Testament includes some passages that clearly make reference to the notion of dominance over enemies and to enslavement of foreigners. Up till last century it was a common practice of Christians Moslems and Brahamin Hindus to do just that. Prisoners of war were sold into slavery until the 19th century.

Let's leave this alone and talk of our gold, the economy, the NWO as it manifests, etc.

TheStranger

(05/16/2000; 12:04:09 MDT - Msg ID: 30643)

Post #30638

For the record, I, for one, find post #30638 highly offensive and WAY off topic.

PH in LA

(05/16/2000; 12:11:37 MDT - Msg ID: 30644)

Gandalf: Something happening?

This just in from another board:

All Trade on the Coffee,Sugar and Cocoa Exchange: the New York Cotton Exchange: the New York Futures Exchange has been suspended till at least 11:40 EDT. May go on further as all Exchanges Management are in meeting.

Klein & Co. Futures, a MAJOR clearing house Failed to meet min. Financial Standards, According to T. gordon a NYBT spokesman/ Presently only 20 - 40 million in loses admitted, but developing---

UPDATE: All exchanges reopened. (XAU breakout related?)

TownCrier

(05/16/2000; 12:40:04 MDT - Msg ID: 30645)

FOMC Press Release--May 16, 2000

The Federal Open Market Committee voted today to raise its target for the federal funds rate by 50 basis points to 6-1/2 percent. In a related action, the Board of Governors approved a 50 basis point increase in the discount rate to 6 percent.

Increases in demand have remained in excess of even the rapid pace of productivity-driven gains in potential supply, exerting continued pressure on resources. The Committee is concerned that this disparity in the growth of demand and potential supply will continue, which could foster inflationary imbalances that would undermine the economy's outstanding performance.

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

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

------------
Again: "...the Committee believes the risks are weighted mainly toward conditions that may generate heightened inflation pressures in the foreseeable future," meaning higher pricing pressures as used in this context.

ORO

(05/16/2000; 12:42:22 MDT - Msg ID: 30646)

Soft landing

I am not sure that a soft landing is possible here. The problem is that the Fed is CAUSING costs to increase without coming close (yet) to the point where people would have a problem in satisfying credit demand. When the point is approached, lending will recede quickly. However, the costs of higher rates will cause an acceleration in prices before this happens.

The Eurodollar spread over treasuries is now 85 BP, and ED rates are at a new high. The spread to Fed Funds is only 45 BP
- which strikes me as low.

Voyager

(05/16/2000; 12:49:44 MDT - Msg ID: 30647)

From Bill Murphy / GATA

--------------------------------------------------------------------------------
SIGHTINGS
--------------------------------------------------------------------------------




The Continuing Gold
Market Manipulation
By Bill Murphy
Chairman, Gold Anti-Trust Action Committee
http://www.lemetropolecafe.com
From Rayelan Allan Publisher - Rumor Mill News
5-15-00




Q. Little Bear is in the 'doghouse'. Which table do you think he'd be under ? A. Gold, of course. But he is hopeful.

The Enveloping Horn Will Advance Under The Cover of Darkness

First Alert: Australia

Many battles have been won throughout history using the element of surprise. As long time www.LeMetropoleCafe.com members know, the Gold Anti-Trust Action Committee has employed the "Enveloping Horn" battle tactic of the great South African Zulu Chieftain warrior, SHAKA!

Tonight, the allied "pro gold" forces will be on the move and will strike at the very heart of our adversaries, those malign "axis" forces that have been manipulating the gold market and not allowing it to rise in price no matter how much wage and commodity prices accelerate in the United States and around the world, and regardless of the fact that the natural supply/demand gold deficit exceeds1500 tonnes per year.

Tomorrow, our center spread, full page open letter to the U.S. Senate and House banking committee members will appear in Roll Call, the most widely read newspaper of the Washington political elite. It is a 4 color open letter addressed to all of these banking members that explains to them the reason why they were handed a 90 page document. The Gold Anti-Trust Action Committee's research strongly suggests it is the machinations of certain government officials and certain bullion banks that have allowed a gold derivative problem to develop that could create an international banking crisis at any time.

This 90 page GATA delegation "Gold Derivative Banking Crisis" document is filled with evidence that supports GATA's case. We only ask the banking committee members in Congress to ask certain questions of the bullion bankers. They can have their answers in weeks and those answers will determine if we are correct or not. No big deal. These same banks report their consumer loan books, their mortgage loan books and their corporate loan books. They brag about the growth of these loans. Yet, they say nothing about their gold loan books or the growth of their gold loans. That is what Frank Veneroso explained to the politicians and economists that the GATA delegation met with in Washington.

All of the Senate and House banking committee members are mentioned in our open letter by name and state. The insinuation is clear. Our delegation has delivered an incendiary document to them with specific questions that they can ask the bullion bankers to find out if we are correct in our assertions. If they do not at least get some answers to those questions, and GATA is correct about a potentially serious international banking crisis, then their future individual political lives should be at peril.

How many times do we have to experience a crisis first and then learn of political committees being formed to investigate who is at fault AFTER that crisis developed? We have suggested to Congress that this time they do their homework BEFORE one develops!

Congressional staffers are underpaid and overworked. That is why we have, and will continue to provide, an exact road map of who to talk to and what to ask, so that they do not get bamboozled by the bullion banking crowd. The GATA delegation and GATA committee are working on these in-depth questions for the banking committees as this commentary is being written to you.

The final 3 paragraphs in our open Roll Call letter to the individually named Senators and House banking committee members reads :

"*Too much gold is being consumed at too cheap a price. Massive amounts of derivatives are being used to suppress the gold price. If this situation is not corrected soon, there will be a gold derivative credit and default crisis of epic proportions that will threaten the solvency of the largest international banks and the world standing of the dollar.

"As you are aware, a 90 page document of our extraordinary findings was personally delivered to your offices last Thursday.

"The Gold Anti-Trust Action Committee requests that a full and complete investigation be launched into this matter as soon as possible. The longer the gold price is artificially held down, the bigger the eventual banking crisis." End.

Since I personally dropped off the document at the staff of all of the banking members, they cannot say that they did not receive "evidentiary" notice of our claims. All of Washington will know that the "banking politicos" have been presented with overwhelming evidence of a significant gold derivative problem. If they do not at least make the effort to follow up on our allegations and a crisis does develop down the road, they will have no one to blame but themselves. You can be sure that is the message that their future political opponents will send to all of THEIR CONSTITUENTS if nothing is done.

So, why the announcement that "allied" GATA forces are on the move?

First, the Roll Call open letter seeps through Washington tomorrow morning. We hope to have some sort of presentation of the open letter for you at the Caf� and at the www.GATA.org. web site sometime during the day on Monday. It is a powerful presentation and highlights the burgeoning gold derivative positions of JUST the commercial banks. Hello investment bank Goldman Sachs!

Second, a well known reporter of one of the most respected newspapers in the world, emailed a GATA supporter asking him if I would immediately send a copy of the Roll Call open letter. I have no clue if anything will come out of it. Just in case nothing does, GATA will issue a press release about our recent activities.

Mysteriously third, John Hathaway's brilliant commentary, "J P Morgan To The Rescue," has suddenly disappeared from his own www.tocqueville.com Web site and that of www.gold-eagle.com, at which it was recently posted. The Gold Anti-Trust Action Committee has long decried that it is the real big money powers in the United States that are trying to silence the real facts about the gold market and any written commentary of worth that goes against their PROPAGANDA. Is this just one more common sense example that we are right?

I strongly suggest that it is.

The Gold Anti-Trust Action Committee has been told by very informed sources that JP Morgan had no idea until Friday that their derivative book was in the public domain and uncovered by GATA's investigator. It is obvious JP Morgan was very upset to learn about this and got to Tocqueville!

This is further evidence that GATA's contentions are correct. Otherwise, JP Morgan would have just ho hummed the news of their $38 billion dollar derivative gold position at the end of last year!

John Hathaway's "piece de resistance" can now only be read at the Dos Passos Table at www. LeMetropoleCafe.com. or the GATA e-group site. I don't care who calls; this insightful commentary will not be politically corrected and taken down from the Caf�, for any reason. Besides, I have already forwarded John's commentary to two banking committee staff members who have acknowledged receipt of his essay. Whoever wants to silence this wonderful commentary is too late. THE ENVELOPING HORN IS WAY AHEAD OF THEM!

Finally, we have all of YOU to help our ARMY advance with unprecedented speed and precision. Roll Call is published on Mondays and Thursdays. That means it will be on the desks of the Congressmen for several days.

If you like what you read in our open letter, we urge each Caf� member and every American who believes in "free markets," to contact their Senator or Representative about the Roll Call open letter. JUST ask them to read it and consider what we have to say! Email is great, but a phone call and, even better, a fax, will do the trick more effectively. That is what our allies in Washington told the GATA delegation this past week.

The GATA delegation was received in Washington with more courtesy and attention than any of us believed possible before we arrived at the Capitol. Some of the most influential men in Congress had read our biographies. We were all stunned. Tomorrow morning, the essence of what our team conveyed to those same members of the United States Congress will be revealed to the Washington political world.

The signatures of the Gold Anti-Trust Action Committee on the open letter to the banking committee members reads:

Bill Murphy Chairman

Chris Powell Secretary/Treasurer

Ethan B. Stroud Attorney at law, formerly Justice Department, Treasury Department

John R. Feather Attorney at law, formerly legal staff, Federal Reserve Bank

Ethan and John are two of the most highly respected attorneys in Texas and stoutly stand behind what the Gold Anti-Trust Action Committee has to say.

Now for the kicker. GATA is not a political organization. We have just as many Democrat supporters as Republicans. The Gold Anti-Trust Action Committee's goal is only out to find out the truth about the gold market and expose the reckless manipulation that we believe is flagrantly occurring. Keep that in mind as you proceed from here on.

At the same time, we KNOW we are in a WAR. To win that war one must understand and appreciate certain dynamics. We have no power and little money, much as the Colonists in 1776 must have felt versus the overbearing British tyrants at the time. The manipulators of the gold market have almost ALL the money, power and influence. WE have only the truth, the internet and many of you inspired supporters that are behind our efforts.

That in mind, it might surprise you that on our visit to Washington we learned that Democrat Congressman, Patrick Kennedy, has launched a RICO type of action against one of the most esteemed Republican leaders in Congress, Tom DeLay - Congressman from Texas. From what the GATA delegation could ascertain, this flagrant political assault is one of extreme provocation. WHY?:

Yesterday's Chicago Tribune story might offer a clue:

CARETAKER OF THE HOUSE' HASTERT IS ON A MISSION

By William Neikirk Washington Bureau Chicago Tribune May 13, 2000

WASHINGTON -- In an unexpected blow to Speaker Dennis Hastert's daunting campaign to keep Republicans in charge of the House of Representatives, Rep. Amo Houghton stunned Hastert a little over a month ago with the news he was going to retire.

At 73, Houghton said it was time for him to go.

"I'm the oldest Marine here," he said. "I'm cranky. I forget."

But, he said, the Illinois Republican told him: "You said that if you ever got out, you'd have someone in the wings. You don't. Amo, you can't leave me hanging here. There is too much at stake."

And so Houghton (R-N.Y.) said he reluctantly backed down. "He was right," the congressman said. "If anyone else had said that to me, including [former Speaker] Newt Gingrich, I would not have stayed. He's so decent."

With only a five-seat margin and 23 open seats to defend as the result of other GOP members quitting Congress, Hastert is leaving nothing to chance in a campaign in which a single race could determine which party controls the House next year and whether he keeps his powerful position.

Hastert's job includes talking people like Houghton and Rep. J.C. Watts (R-Okla.) out of retiring, or persuading a former district attorney in Jackson, Miss., Dunne Lampton, to jump into the race against first-term Democratic Rep. Ronnie Shows. It has also included traveling to 100 districts this year and raising nearly $12 million for Republican candidates.

Hastert said that from now until November, he will concentrate on the 40 to 50 truly competitive races.

Since taking control, Hastert has had to endure characterizations such as "the accidental speaker" and "caretaker of the House." Violently disagreeing with depictions of him as weak, Hastert is also on a mission in this race--establishing his own personal legitimacy as Speaker.

Yet in this endeavor, Hastert inspires comparisons with Gingrich, the man who engineered the GOP victory in 1994 and resigned after the 1998 elections narrowed his party's majority. To many Republicans, Hastert's strength is that he is nothing like the fiery visionary Gingrich, who became a favorite target of Democrats.

"Denny doesn't think that fast," said Houghton. "It's an asset. He doesn't dart around like a pea on a hot griddle. He's a thinking politician, not one of those Roman candles."

To Democrats, he is so plain vanilla that they are looking past him and to the holdovers from Gingrich's regime, Majority Leader Dick Armey and Majority Whip Tom DeLay, both Texas Republicans, to brand the party as being out of step with Americans.

Rep. Patrick Kennedy (D-R.I.), the Democrats' chief fund raiser in the House, said Hastert is only in his job at the sufferance of DeLay and Armey, and that DeLay "is still the one running the show." End.

The Gold Anti-Trust Action Committee is not about a political agenda. However, we firmly believe that it is the current Democratic administration that has buffaloed the gold price and engendered a life of financial MISERY for so many of us. That will become clear when the Roll Call add is presented to the thinking world. Patrick Kennedy has taken the gloves off, very unnecessarily, to belittle the Republican opposition in an attempt to influence a few influential political races in the coming, close political election. We are only presenting what is evident.

Something is clearly "rotten in the State of Denmark" when it comes to the gold market AND the fund raising activities of the present U.S. administration.

Johnny Chung, who was much apart of the China Gate Scandal and who visited the White House 57 times to support Hillary and Bill Clinton's fund raising activities, responded to my GATA's allegations over the phone this past week with this comment, "that FITS the pattern of the present administration." By the way, Johnny could not have been more classy on the phone.

This is a Democrat talking, Caf� members, not a right wing Republican zealot!

The GATA delegation was advised of this outrageous Kennedy claim during our visit in the Nation's Capitol. The claim is a scurrilous one and at cursory review, baseless. But, with the control of the Nation's legislative agenda for the years to come at stake, all the gloves are off.

PERHAPS, that is why the GATA delegation was so attentively listened to. We received feedback right away that what we wanted to talk about was already making a few rounds in Washington financial circles in a soft spoken way. But, it is all so complicated. Then, out of nowhere, we show up with a 90 page document of credible evidence of serious manipulation of the gold market by present administration personnel and allied bullion banks. If what we have to say has merit, Goldgate could rival Watergate because of its eventual financial and political ramifications.

Long Live the Enveloping Horn

Bill Murphy

GATA Delegation Makes Significant Progress in Washington

On Wednesday at 11:30, the Gold Anti-Trust Action Committee consisting of Chris Powell, Reginald Howe, Frank Veneroso, a State Senator and myself met with one of the most powerful politicians in Washington. It was only going to be a 15 minute meeting. It lasted 45 minutes.

At the end of the meeting, we were excused from the room for several minutes. When the people we met with returned, we were told that they were going to try and set up a meeting with another influential politician at 2 o'clock, but that we would have to call at 1:30 to confirm.

We were stunned to learn at 1:30 that this politician had said, "I am aware of the issue," and that he wanted to meet with the GATA delegation. The meeting took place and six members of his staff also attended. What was most remarkable is that this politician left the floor of Congress to attend our hastily arranged, unscheduled meeting.

This politician asked many questions and was very focused on what we had to say. So much so, that he was annoyed when a staff member left to deal with some other pending issue, saying that this was more important. He told us he had read our biographies before coming to the meeting and was a bit taken aback when he was handed the "Gold Derivative Banking Crisis" document to him with his name and state on it.

This knowledgeable politician said that he and his staff would look into our contentions and suggested that we might meet again. After this very intense one hour meeting, he returned to Congress which was in session.

From there, we went on to meet with Dr. John Silvia, the Chief Economist of the Senate Banking Committee. I could tell he had spent some time on our presentation because he had highlighted material that I had sent to him. Frank, Reg and Chris did a terrific job (as they did in all the meetings) explaining what we have learned through our extensive research. That meeting also lasted an hour and Dr. Silvia took copious notes.

Yesterday, I passed out 88 of the documents to the staff of all the Senators and Representatives on the banking committees. They were told to look for an open letter to all of them in Monday's Roll Call.

That was some schlep. For the Senate I went to the Dirksen, Russell and Hart buildings. For the House I went to the Rayburn, Longworth and Cannon buildings. It took me the entire day, but was well worth it. Congressman Lee Terry of Nebraska could not have been nicer and said he would read the document on his way back to his native state this weekend.

I was struck by how different all the buildings were. AND HOW BIG. Most were about 100 yards long and were circular for traffic flow. I made the mistake of buying new shoes for the trip. Now, my feet are all blistered. Big booboo.

My last stop was the Rayburn Building and I smiled as I went by The Gold Room.

It was the opinion of the entire Gold Anti-Trust Action Committee delegation that the trip was far more fruitful than any one of us dreamed possible. However, as we all know, that was just our first salvo. There is much to be done to win the day and we are already planning our next course of action.

When our adversaries realize how far we have come, we know that they will go all out to discredit us. If yesterday's meetings were any indication of making a serious impact on those who count in Washington, the other side has their work cut out for them!

Bill Murphy




William J. Murphy III is the Chairman of the Gold Anti-Trust Action Committee and owner of www.LeMetropoleCafe.com. A graduate of the School of Hotel Administration at Cornell University in 1968, he went to become a starting wide receiver with the Boston Patriots of the American Football League. Mr. Murphy, who now resides in Dallas, Texas, spent much of his business career in the Futures Industry with such firms as Drexel Burnham and Shearson Hayden Stone. Today, he writes gold market commentary for his financial web site that features the precious metals and contrarian economic analysis.

Disclaimer notice: Midas du Metropole does not look like an investment advisor, nor is he one. Any comments about any gold and silver shares by Midas or any of the Cafe members are for your information and entertainment only. They should not be regarded as advice and should be treated like comments passed on at any other Cafe. We are only relating as to what we like for our own accounts.

_____

RMNews, The Uncensored National Rumor http://www.rumormillnews.com THE ONLY RUMOR YOU CAN TRUST

RUMOR MILL NEWS AGENCY P.O. BOX 1784 APTOS, CA 95001 TELFAX 831 462 3949





SIGHTINGS HOMEPAGE
http://www.sightings.com


This Site Served by TheHostPros

Strad Master

(05/16/2000; 12:50:32 MDT - Msg ID: 30648)

A Jewish Joke

I haven't had a chance to read all the preposterous (off-topic I might add. MK please take note.) stuff posted today by "ss of nep" about Jews and their supposed power but it reminds me of a very old joke:

During the early days of the Nazi regime in Germany, a Jewish man is sitting in a cafe, sipping coffee and reading a Nazi newspaper. Issac comes over and seeing the paper exclaims, "Jacob, how can you read that scurrilous trash? That newspaper is all anti-Semitic garbage! Are you trying to punish yourself?" Not at all, Jacob responds, "I really enjoy reading this paper." "Have you gone crazy?" Issac asked, incredulously, "After all the attacks that rag has launched against us, how can you even pick it up in your hands?" "Let me explain it to you," Jacob replies. "When I read one of our Jewish dailies what do I read about? Here, vandalism against a Jewish Synagogue. There, a bomb has been placed near a Jewish home. Always, someone is calling for Jews to be thrown out of the country or worse. Right? But what do I see here? It is a pleasure to read that the Jews own all the banks, they control the newspapers, that they are all-powerful doctors and lawyers, and that a secret "Zionist" Cabal is getting ready to take over the world government!"

It was proven long ago that the "Protocols of the Elders of Zion" is a fraud. That supposedly intelligent people still read and believe it is tragic.

ss of nep

(05/16/2000; 12:57:48 MDT - Msg ID: 30649)

TheStranger (05/16/00; 12:04:09MT - usagold.com msg#: 30643)

It is not off topicThe topic started at

ORO (05/09/00; 19:43:37MT - usagold.com msg#: 30207)

.-.-.-

It is about Freedom, Gold, the NWO and whether or not your gold will do you any good.

I strongly suspected you have not read the information

TownCrier

(05/16/2000; 12:59:28 MDT - Msg ID: 30650)

For those having a hard time relating to the actions of the FOMC,

this may provide a more visceral impact...

As a result of the latest rate hike, major U.S. banks have immediately raised their prime lending rate to 9.50 percent.

Farfel

(05/16/2000; 12:59:46 MDT - Msg ID: 30651)

Fed Desperation...it's Worse than it Seems.

As I predicted the market is celebrating the Fed rate hike.

HOWEVER, it is important to note several things:

The developing inflation is FAR WORSE than the Fed is indicating. That is because this particular Fed is without doubt the most disingenuous manipulative Fed to arrive on the American scene. The stock bubble this Fed engendered is the launching pad for enormous amounts of domestic purchasing power and the only way to stifle it is to send the market a message that it is NOT expecting. For example, today, Greenspan should have raised rates ONE PERCENT if he really wanted to get the intended effect of reducing aggregate demand.

Furthermore, investors made far too much money these past several years to let a mere .5% rate increase dampen their enthusiasm. Many still have ample surplus funds to continue heavy spending sprees. There will be more rate increases until reality sets in.

How long will the current market celebration last? That's hard to say but there is still tons more Nasdaq lockup stock to be sold into the market this month.

The next critical date is MONDAY, with another approximately $40 billion dollars of expiring lockup stock hitting the market. Without some kind of "event" designed to prop up the Nasdaq, I think we finally have the conditions for a true market debacle.

So even if this celebration lasts until Friday, I would consider short positions at the end of Friday in key Nasdaq stocks.

As for gold, I think savvy market participants know that inflation is far from solved with this latest rate hike and that the US currency will come under assault at some point.
When that happens, gold should fly but don't ask me exact timing. Furthermore, the continued exposure of the massive gold loan situation with the bullion banks remains a powder keg with potential to explode gold into the stratosphere.

The bullion banks are getting it now from both ends: gold loans that cannot be covered, only rolled forward...and jumping interest rates. SELL BANKS and TECHS at the next market top.

Thanks

F*

TownCrier

(05/16/2000; 13:07:25 MDT - Msg ID: 30652)

Russia's Sberbank to buy 25 tonnes gold in 2000

http://biz.yahoo.com/rf/000516/l16376989.htmlRussia's biggest bank plans to increase purchases from domestic gold producers by 25 percent over last year's amount. Russia's central bank can in turn acquire gold through the Sberbank.

Alla Alyoshkina, the bank's first deputy chief executive, said "Only when the central bank declines to buy gold from us we turn to the West."

ss of nep

(05/16/2000; 13:08:35 MDT - Msg ID: 30653)

Strad Master (05/16/00; 12:50:32MT - usagold.com msg#: 30648)

It was proven long ago that the "Protocols of the Elders of Zion" is a fraud.
If it was a forgery

then what is it a forgery of ?

Why was it that Henry Ford Sr. wrote a book about it
and his business nearlt destroted ?

"That supposedly intelligent people still read and believe it is tragic."

Response - Everything written there is just too coincidental to way way things in the world are today.

Leigh

(05/16/2000; 13:18:48 MDT - Msg ID: 30654)

See How Gore, Bush Invest Their Money - Read Carefully

http://worldnetdaily.com...Interestingly, the lion's share of Bush's known portfolio assets are U.S. Treasury bonds and notes, as well as money-market accounts. These assets total in the millions of dollars, FEC records show.

In arguing for his Social Security reform plan, Bush pointed out that the stock market over the long term has returned an average of 6 percent a year, while Social Security funds, which are invested in Treasuries, earn an anemic 2 percent.

ss of nep

(05/16/2000; 13:19:44 MDT - Msg ID: 30655)

I will not say more than this.

ORO (05/16/00; 11:51:33MT - usagold.com msg#: 30642)oro - Let's leave this alone and talk of our gold, the economy, the NWO as it manifests, etc.


I at this time DROP it, with this statement

I would much rather know the origin of and what to expect from those that originally wrote the play

Gold - get more.

beesting

(05/16/2000; 13:20:11 MDT - Msg ID: 30656)

Test

Test

TownCrier

(05/16/2000; 13:30:21 MDT - Msg ID: 30657)

Bundesbank President Ernst Welteke sees no concerted euro intervention

http://biz.yahoo.com/rf/000516/l16196816.htmlAlso said that the ECB may have to raise rates if the U.S. ups rates by the full percentage point...as is currently being called for by the OECD in order to keep U.S. price inflation at bay.

Welteke said the level of the euro was unjustifiable and that "The trend turnaround must now come at some time."

Elsewhere, the IMF has indicated that the euro is fundamentally poised to appreciate more than 30% against the dollar.

DAYOOPER

(05/16/2000; 13:49:38 MDT - Msg ID: 30658)

Twice Discipled

Concerning your posts yesterday and the responses to it... Although I respect the opinion of Journeyman and others on most subjects, I feel they don't understand everything about the argument you are presenting to the IRS. I have been through the whole process from start to finish with the non-resident alien defense but don't believe it needs to be discussed in this forum. If you would like me to give you first hand information concerning this matter, you can e-mail me at johnncan@hotmail. It is a noble fight but you and your wife are treading on dangerous ground.

dayooper

TownCrier

(05/16/2000; 14:04:58 MDT - Msg ID: 30659)

Republicans Propose Bill to Increase U.S. Oil Output

http://quote.bloomberg.com/fgcgi.cgi?ptitle=U.S.%20Economy&s1=blk&tp=ad_topright_government&T=markets_fgcgi_content99.ht&s2=blk&bt=blk&s=AOSF2IRWOUmVwdWJsAccording to Bloomberg, the U.S. currently imports 56% of its oil, and the Energy Department predicts that figure will rise to 65% by 2020. Senate Majority Leader Trent Lott said "There is a dark cloud on America's future. That cloud is that we don't have a national energy policy. Not to have a plan to be less dependent on foreign oil is irresponsible."

Senate Energy Committee Chairman Frank Murkowski of Alaska said, "Imported energy should supplement our energy supply, not supplant our energy supply."

Perhaps this is too idealistic, but it seems to me that under the auspices and tenets of open markets, each nation need not be self-sufficient, but rather, can capitalize on its unique strengths and resources in order to effeciently acquire what it lacks through trade with others. Thereby, a nation may prosper in accordance with its own ability to produce value, either for domestic use or for use in trade with others. Consequently, there is a practical limit to the value seen externally in the manufacture of national currency units to the exclusion of, or substitute for, real goods.

Magician

(05/16/2000; 14:15:25 MDT - Msg ID: 30660)

The Privateer

http://www.the-privateer.com/gold6.htmlThough I don't have anything to personally contribute today, goldbugs reading the Privateer's weekly commentary today will find the contents especially meaningful.

Mage

Leland

(05/16/2000; 14:18:40 MDT - Msg ID: 30661)

Sums it up...

Date: Tue May 16 2000 14:28
Brian W. Pascal (Everything looks good to me. My monitor's upside down......)
ID#263430:

beesting

(05/16/2000; 14:20:29 MDT - Msg ID: 30662)

For Educational Purposes Only! ss of nep Please Read if you have time Sir!

From; A HISTORY of the SCOTTISH CROWN--Part 3In 1320 the Scottish Earls, Barons and the "community of the realm" sent a letter to Pope John XXII declaring that Robert I (Robert the Bruce) was their rightful monarch.(King of Independent Scotland)
This "Declaration of Arbroath" has become perhaps the most famous document in Scottish history. The Declaration asserted the antiquity of the Scottish people and their monarchy:(excerpt)""...we gather from the deeds and books of the ancients, that among other distinguished nations our own nation,namely of Scots, has been marked by many distinctions.(Please Read the Following Carefully) It journeyed from Greater Scythia (?) by the Tyrrenhien Sea(?) and The Pillars of Hercules(?), and dwelt for a long span of time in Spain among the most savage peoples, but nowhere could it be *SUBJUGATED by any people, however barbarous. From there it came, twelve hundred years after the people of Israel crossed the Red Sea and, having first driven out the Britons and altogether destroyed the Picts(Ancient people of what is now known as Scotland), it acquired, with many victories and untold efforts, the places which it now holds....(Scotland) As the histories of old time bear witness, it has held them FREE of all SERVITUDE ever since. In their Kingdom one hundred and thirteen Kings of their own Royal stock have reigned, the line unbroken by a single foreigner.""( written in 1320)

A few days later, the Pope granted permission for Kings of Scots to be anointed at their coronation. This was a clear acknowledgement that the Pope recognised Scotlands Independence....

David II(King of Scotland) (1329-71) and only surviving son of Robert I(Robert the Bruce) died childless in 1371, his nephew Robert the Steward(Stuart) became King of Scotland!!!

*Subjugated...From Websters:
To bring into servitude : Enslave : To force to submit to control and governance.

Back to the Gold discussion:
Ask yourself this, how could the Scottish people remain independent for such a long time?

Possible answer:
They used their own system of money (Gold and barter) since Antiquity.

Point of post, if you desire freedom from any Government in the World stock up on physical Gold now at extremely cheap prices!
Thank You For Reading....beesting.

Journeyman

(05/16/2000; 14:33:35 MDT - Msg ID: 30663)

Discovering government @ORO, HI - HAT, ALL

Since we're looking into the nature of government today, may
I contribute one of my favorite characterizations?

It's internationally agreed that all types of plunder,
mayhem or murder are acceptable for a government, as
long as it limits its predations to its own citizens.
+
Let me see if I can explain this bizarre game in plain
talk.
+
People cordon off a piece of land and arbitrarily
announce that it is henceforth a "sovereign nation."
Ruffians and schemers soon grab the posts of
government, and by the power they vest in themselves
set about plundering the individuals who live there.
This has been going on for thousands of years, until
today the entire earth (other than a portion of the
oceans) is divided among different gangs, who wear
pinstripe suit[s], and run their plunder under the flag
of governments. -Albert Keuls, The Offshore Game, From
John Pugsley's Journal, Private Conversations with the
Money Masters (and thanx to )

Regards,
Journeyman

ss of nep

(05/16/2000; 15:16:48 MDT - Msg ID: 30664)

beesting (05/16/00; 14:20:29MT - usagold.com msg#: 30662)

Yes, if you desire freedom from any Government in the World stock up on physical Gold now at extremely cheap prices!

I agree.

With Respect to Stuart,

The name can( I have done it ) be traced to the House of David. This may then be why

"Pope John XXII declared that Robert I (Robert the
Bruce) was their rightful monarch.(King of Independent Scotland)"

Also, King James I( Stuart ) ( The King James Version of the Bible ) ( England ), was king of Scotland
before he got the British throne.

Al Fulchino

(05/16/2000; 15:25:11 MDT - Msg ID: 30665)

The Stranger

If I were to grade your investment choices, I would assume an "A" would be given to unhedged mining companies. A "B" would be given to physical metal holdings and a "C" to "C-" would be given to the average NYSE holding. I may be assuming to much, so please clarify if you see fit. Yet, I travel this path to ask you how you see real estate holdings in the inflation scenario, whether it be commercial or residential.

TIA

-Al

Leland

(05/16/2000; 15:43:54 MDT - Msg ID: 30666)

Thanks, Leigh for that "See How Gore, Bush Invest Their Money - Read Carefully"

Perhaps (and we'll never know) it would be a wonderment to
know just how much these people have in off-balance-sheet
assets such as gold bullion. But, we'll never know.

ss of nep

(05/16/2000; 15:47:58 MDT - Msg ID: 30667)

I responded too rapidly

beesting (05/16/00; 14:20:29MT - usagold.com msg#: 30662)Delete

"
This may then be why

"Pope John XXII declared that Robert I (Robert the
Bruce) was their rightful monarch.(King of Independent Scotland)"

From my previous post

ss of nep

(05/16/2000; 15:57:49 MDT - Msg ID: 30668)

Those who currently sit on the British Throne

do not belong there.

Strad Master

(05/16/2000; 16:00:40 MDT - Msg ID: 30669)

ss of nep

Forgery??????Before you make comments you ought to firs carefully read what you are commenting on. I suggest you re-read my 12:50:32MT - usagold.com msg#: 30648 post. I never used the word "forgery". I'll buy you a one ounce Vienna Philharmonic if you can find it anywhere in there. Where did you get THAT idea from? Is it possibly a projection from your own mind?

However, I do retract my use of the word "intelligent". Beyond that, (as much as I'd like to) I refuse to get embroiled in a foolish, off-topic debate.

ss of nep

(05/16/2000; 16:21:50 MDT - Msg ID: 30670)

Strad Master (05/16/00; 16:00:40MT - usagold.com msg#: 30669)

The word is not there,

It is however ONE of the words tipically used in reference to that document.

Maybe you could prove the that document has no validity,

I have seen no such proof,

Lets see now how would one go about proving something wrong when one can't even identify the source ?

On the other hand observation could lead one to beleive in its validity according to transpired histoy .

I drop the topic this is my last response to it.

ss of nep

(05/16/2000; 16:27:49 MDT - Msg ID: 30671)

Strad Master (05/16/00; 16:00:40MT - usagold.com msg#: 30669)

Is it possibly a projection from your own mind?
Those with ears to hear had better listen.

Those with eyes to see had better observe.

Leland

(05/16/2000; 16:32:19 MDT - Msg ID: 30672)

Quote of the Day...From Bill Fleck

"When a guy like
Warren Buffett stands up and talks about the stock market becoming a
casino, you can be sure that is what it's become, as he chooses his words
very carefully."

SHIFTY

(05/16/2000; 16:52:57 MDT - Msg ID: 30673)

PONZI

Nasdaq 3,717.57 + Dow 10,934.57 = 14,652.14 divide by 2 = 7,326.07 Ponzi
UP 118.36 Ponzi points

TheStranger

(05/16/2000; 17:25:49 MDT - Msg ID: 30674)

Al Fulchino's Question

Al - you flatter me with your question.

Among the most common mistakes investors make (in my judgement, anyway) is being either too agressive or too conservative with too much of their money. As you well know, most of the great wealth of the world is made in between these two extremes. For this reason, I do not own coins (too conservative). Nor do I speculate in commodity futures or buy microcap goldminers (too aggressive). And I certainly don't try to balance my mistakes by being both too conservative and too aggressive at the same time.

Please don't get me wrong about coins. There are numerous VERY GOOD REASONS why people prefer coins. And I am fully aware of how little my gold stocks would be worth if people didn't buy coins. I am just saying that, for the risk/reward profile I seek, a well capitalized, senior miner with little hedging exposure makes the most sense.

As far as real estate is concerned, yes, I believe most U.S. real estate is a good value right now. After two very rough years, real estate investment trusts (REITs) are among the very best performing groups this year. Alas, I don't own any because I think the leverage in gold will be better (if it ever gets off its a--, that is).

But what about making the decision to go ahead and buy that building lot or that commercial building you have been considering? Last summer someone else asked me about this here at the forum. I will respond the same way now that I did then. What is coming is higher inflation and higher interest rates. So, don't procrastinate. But, by the same token, I do not believe we are in for as much inflation as we saw in the 1970s, for example. So, you don't want to overextend, either.

Thanks for asking me about this, Al. I would be interested to hear your thoughts on the subject as well.

Journeyman

(05/16/2000; 17:41:14 MDT - Msg ID: 30675)

ARE YOU UNPATRIOTIC? @ALL

I know some posters here are uncomfortable when others of us seem to attack the American government. I remember when I felt that way. Perhaps this quote will help things a bit.

"It must never be unpatriotic to support your country
against your government. It must always be unpatriotic
to support your government against your country." -Stephen
T. Byington, from "Lessons From Libertarian Tax Protests"
by Bob Bennett, LP News, Spring 1986

Regards, J.

I just realized I can no longer be J-Man -- it's ambiguous since Harley
became Java Man!!

Gandalf the White

(05/16/2000; 17:44:26 MDT - Msg ID: 30676)

Journeyman

You are "J-Dude" to the Hobbits !
<;-)

ced_s

(05/16/2000; 17:44:43 MDT - Msg ID: 30677)

@SS of Neph

My family moved to Indiana from New York circa 1800, this
forebearer was born in New York. On the same marriage certificate in 1860 the name was spelled both ways. I doubt if I can trace my geneology further than I have. It is always possible we may have a distant kinsman in common, with one staying in the US and the other venturing into the Canadian provinces.
Make no mistake though, my family were poor dirt farmers, and I am proud of that fact. Red necks in the truest sense, hard working and frugal. Life for them was hard, they took care of their neighbors when the need arose, "colloquially" would give them the shirt off their back. Plow fields for the sick and elderly with no thought of recompense, attended church regularly. And just as regularly visit the nearest tavern (probably 12 miles away) on Saturday night for the music, dancing and socialization.
Maybe that's why I preferr to have hard assets tucked away in the bank vault, rather than bubble.com stock or entries on the banks books other than my 401K. Wish I had that farm too.

Take care
Ed Stuart

Journeyman

(05/16/2000; 17:48:45 MDT - Msg ID: 30678)

In context: NWO @ss of nep, ORO, ALL

"What those calling themselves planners advocate is not
the substitution of planned action for letting things go.
It is the substitution of the planners own plan for the
plans of his fellow-men. The planner is a potential dictator
who wants to deprive all other people of the power to plan
and act according to their own plans. He aims at the one
thing only: the exclusive absolute pre-eminence of his own
plan." -Ludwig von Mises

Regards, J.

R Powell

(05/16/2000; 18:07:35 MDT - Msg ID: 30679)

Daily trading comments

http://www.swiss-financial.com/cotton_market.html Along with gold, I also follow the cotton market which may see some upward movement with the dry weather predicted for this coming year in much of the cotton growing regions of our country. The government (USDA) bases it's yield per acre estimates for the coming year by simply averaging the last five years. This figure will change as the growing season progresses and, if the predicted drought occurs, these numbers will of course become more bullish. The government also subsidizes exports which offsets the negative effect of the strong dollar which has been hurting the POG in US dollars. What's this got to do with gold?
Not a whole lot but I've found sites like the one given above which detail on a daily basis the floor trading in the pits of the cotton exchange. Some reports give the names of the traders and the names of the clients they are buying or selling for. This information is given for both futures and options and the purpose of this post is to ask if anyone knows of any sites/links where we can find similar reports concerning the gold and silver markets? Wouldn't you like to know Who is buying, who is selling and how much and for what months? I know physical in hand negates the need for this type of information but I can't help but try to increase my knowledge of every aspect of gold and the gold market. Trading is still done by open outcry and perhaps someone knows where a detailed account of each day's trades can be found. Thanks Go GATA!

ss of nep

(05/16/2000; 18:11:00 MDT - Msg ID: 30680)

ced_s (05/16/00; 17:44:43MT - usagold.com msg#: 30677)

Maybe we are related somewhere in the distant past.
My father told me today that the family is also in Chicago and Illinos ( sp ) generally.

My grand mother tells of having nothing but onions to feed the kids during the thirties.

One of my great uncles traced the family back to Englw\and, where he apparently found that two were hung as highwaymen,
then proceeded to destry therecord he had collected.

Can't say I could trust a bank vault.

ss

ss of nep

(05/16/2000; 18:20:16 MDT - Msg ID: 30681)

Journeyman (05/16/00; 17:41:14MT - usagold.com msg#: 30675)

Good statement,

although I am Canadian, it works all around.


I must have missed it when Harley D morphed into JavaMan
when was that ?

JavaMan

(05/16/2000; 18:22:21 MDT - Msg ID: 30682)

Journeyman...

Journeyman, your msg 30663 is depressing. Seems like an occasional export of the predations is permitted too if it is determined that a whacking is in order. Reminds me of why I dropped out in the early �70s. It took me quite a while to get it together afterward.

On an even more somber note, the ambiguity of J-Man. As Homer would say, "Doh!"

ET

(05/16/2000; 18:29:59 MDT - Msg ID: 30683)

TC

Hey TC - I sure appreciate the effort you put into this.

You wrote in part:

"Perhaps this is too idealistic, but it seems to me that under the auspices and tenets of open markets,
each nation need not be self-sufficient, but rather, can capitalize on its unique strengths and
resources in order to effeciently acquire what it lacks through trade with others. Thereby, a nation
may prosper in accordance with its own ability to produce value, either for domestic use or for use in
trade with others. Consequently, there is a practical limit to the value seen externally in the
manufacture of national currency units to the exclusion of, or substitute for, real goods".

Well said. Too bad you weren't around back in the 1880's when German Nationalism got its political start around this very issue of self-sufficiency. You might have had a hand in preventing a couple of major wars.

If you haven't read it you would enjoy Mises' "Omnipotent Government" as it covers this bit of history in Europe and what led to the quests for domination.

JavaMan

(05/16/2000; 18:45:56 MDT - Msg ID: 30684)

ss of nep...

The weekend before last, I posted that I had sold the bike that day and no longer felt it appropriate to continue "life" as Harley Davidson so I stepped into a telephone booth and transitioned into...JavaMan. The thread ran through the weekend so I didn't think I needed to repost the event. Thanks for asking.

aunuggets

(05/16/2000; 19:02:11 MDT - Msg ID: 30685)

ss of nep....(#30668)

Those who currently sit on the U.S. throne do not belong there either......(grin)

ET

(05/16/2000; 19:12:21 MDT - Msg ID: 30686)

Stranger

Hey Stranger - how is everything? You wrote in part:

"But what about making the decision to go ahead and buy that building lot or that commercial
building you have been considering? Last summer someone else asked me about this here at the
forum. I will respond the same way now that I did then. What is coming is higher inflation and
higher interest rates. So, don't procrastinate. But, by the same token, I do not believe we are in for as
much inflation as we saw in the 1970s, for example. So, you don't want to overextend, either".

Agreed we are going to see higher inflation and interest rates but it seems to me the relative level of malinvestment in the world is much greater than in the late 70's, early 80's, therefore we should theoretically see higher rates of inflation than in the period you mention. Why don't you anticipate as high or higher rates? I would expect the US will have to inflate its currency tremendously to monetize what is out there in bad loans.

BTW - take a look at the weekly Eurodollar chart. The market has tacked on 200 basis points in just the last year and is showing no sign of reversing anytime soon. Also you might want to check out the direct reverse correlation in the oil and bond charts. It seems those old bondtraders know a thing or two about how the world turns, eh?

Like you, I'm waiting patiently for gold to get off its tail. It'll happen.

tedw

(05/16/2000; 19:25:57 MDT - Msg ID: 30687)

Hall of Shame

http://www.usagold.com
Im not Jewish but post #30638 seems to be anti-semtic with
very little redeeming quality.I nominate it for the hall of shame.

Perhaps the poster should be banned until he wishes to apoologize?

ET

(05/16/2000; 19:51:50 MDT - Msg ID: 30688)

ted

Hey ted - I'll have to disagree with you concerning the NWO/Jews posts. If there is one way to get to the truth of such stuff it is to debate the merit of all positions. As a lackluster student of history, I do know that many versions of the same events are written. It is up to us to read those versions and arrive at something approaching the truth of the situation as it was then. SS and ORO have attempted to do just that. I'd like to draw my own conclusions and to do so I need to hear the evidence as it is known today. The history of money and who is to control it is indeed fascinating.

I don't think at any time in history there was a shortage of those that would like to dominate all others. As I see it, bankers of any faith seem to be most of the problem followed closely by lawyers. History is replete with examples. It's no wonder as controlling the money and the law pretty much controls it all, eh?

Richard640

(05/16/2000; 20:00:34 MDT - Msg ID: 30689)

Why stocks went up today-The effete Fed

From Bill Fleckenstein--(www.siliconinvestor.com)---------I have a somewhat technical description of this that I want to share with readers. It's from an economist that I use, whom I think is quite good, named Carl Pellegrini. When you read Carl's analysis, which describes exactly what's been happening in terms of what the Fed has been doing rather than what it's been saying, you can only reach one conclusion, which is that interest rates are going to go higher until the stock market cracks big time:

"The Fed is raising the Federal Funds rate and the Discount Rate. Does this mean that the Fed is tightening? No! [The Fed is so tight that M2 grew at an 8.9-percent rate in March and an even faster 10.7 in April.] The Fed is not tightening in the sense that the Fed is causing the flow of available funds to be created at a rate slower than the demand for available funds. The Fed talks a lot and does little. M2, at $4.7T, is up 5.7 percent for the 12 months ending March; M3, at $6.6T, is up 8.3 percent for the last 12 months; and Modern Money, at $3.0T, is up 9.8 percent for the last 12 months." (Modern Money, a concept I started measuring when the Euro Dollar market started to become important, is defined as Demand Deposits, Other Checkable Deposits, Money Market Funds, Repurchase Agreements, Eurodollar Deposits, and Sweep Accounts).

"Please do not fall into the mental or emotional trap that current interest rate increases by the Fed will produce a slower inflation/real growth environment. With Modern Money up 9.8 percent over the last 12 months and credit growth well in excess of that figure, current levels of short-term rates have little, if any negative influence on economic decision making. Inventories in the U.S. economy are about $1.16T and inventory profits are running at close to $38B or 3-4 percent. The increase in interest costs means little with an inventory turn over of 4x and inflation profits helping to boost stock prices. Alan Greenspan said in the question and answer period of his last appearance on the Hill that he was going to let demand clear the market, not reduced supply. The Greenspan Fed has little real control over the growth of money outstanding and I'm not sure that they want the control."

Journeyman

(05/16/2000; 20:20:49 MDT - Msg ID: 30690)

Depressing @JavaMan msg#: 30682, Gandolph & Hobbits

"Journeyman, your msg 30663 is depressing. ...Reminds
me of why I dropped out in the early �70s. It took
me quite a while to get it together afterward." -Javaman

Thanx for reminding me. I've been so immersed in this kind of crap on and off since the late '70s, and especially in the last ten years or so, I almost forgot the crap isn't really "normal," only an artifact of the out-sized governments of modern nation-states - - - and paying attention to their "antics" is indeed depressing. Just remember, they _AREN'T_ us. That makes it less depressing I think.

"On an even more somber note, the ambiguity of J-Man. As Homer would say, "Doh!"" -Javaman

I think I'll get drunk!!

Regards,
J-Dude ;)

jinx44

(05/16/2000; 20:28:02 MDT - Msg ID: 30691)

tedw

I disagree with your perception of the ss/oro interchanges. Whoever wrote the protocols, they are scary and have been largely been fulfilled. The fact that they were attributed to jewish writers is incidental to me. Do you really care what nation or political stripe your executioner is? ANYONE who subscribes to or practices that agenda is my enemy. Enough said. All the best.

TheStranger

(05/16/2000; 20:30:08 MDT - Msg ID: 30692)

ET

ET- I am fine. Thanks for asking. How are you?

Because neither of us knows ahead of time what kind of policy decision making will be made in the future, I, like you, can only guess how far the current reinflation will go. But, in response to your remarks, I would make the following points:

In the 1970s, baby boomers constituted an outsized proportion of the U.S. population. They were in their family formation years then, borrowing heavily in order to facilitate spending requirements which far exceeded income. Today, baby boomers still constitute an outsized proportion of the U.S. population, only now, as a group, they produce more than they consume.

Furthermore, in the 1970s, productivity improvements nearly stagnated, while, today, thanks largely to the proliferation of computer networking, that is not the case.

Finally, monetary policy in the 70s was horribly mismanaged. First you had Arthur Burns accomodating Richard Nixon's demands for more money. Then you had G. William Miller doing the same for Jimmy Carter. It was not until Paul Volcker appeared near the end of the decade that any serious effort was made to contain inflation by smothering it at its source. Volcker's successful restraint of money supply growth may have caused a nasty recession, but it also succeeded at stopping the inflation spiral, and, in doing so, taught all future Fed Chairman a lesson about money that should never be forgotten. If that list includes Alan Greenspan, as I presume it does, then things should not need to get so far out of hand this time around. We shall watch and see.

As to your remarks about malinvestment, that sort of thing is terribly hard to quantify in my judgement. Yes, heady times do tend to cause careless decision making. And even though vast improvements in worldwide communications probably bear a mitigating influence nowadays, I am sure the current period is no exception. Still, I would expect the overall effect of malinvestment would be more deflationary than inflationary. Ah...you say, but what about the implications to monetary policy going forward? Yes, good point. That would be inflationary and is, in fact, what prompted me to start forecasting the current inflation well over a year ago when the effects of East Asian malinvestment started bubbling up. But, for reasons stated herein, I just don't envision an inflation of 70's style magnitude.

$5 Indian

(05/16/2000; 20:59:53 MDT - Msg ID: 30693)

Don't become an orphan, tell us when yer morphin!

Javaman so glad to have you back. I had morphed from 4Ducat and before that from Quicksilver. Never said anything because of some predictions I made that might have hurt some "tip takers", well I believed them too be OK for the hour after I posted them. This market is totally skitzo-frantic. Woopie so DELL and LCOS are going to lead the charge of the Lite Brigade. Everthing I look at could fall off a cliff or rally 20 points. It's all churning heavily and very skitish. There is no way the equities will survive these rate increases. Tis a mathematical certainty, no matter what we do from here on, gentlemen, Titanic will founder. "Why this ship can't sink." She's made of iron sir I assure you she can and she will. She can take rate increases over the first four bulkheads but not five.

The only prop holding up the dollar is the flight from the Euro and investment flight from Europe. Oil is being played as the "oil card" for the Republicans.

Money has left the Naz for a vacation at uncle DOW's place, well bricks and mortar don't mix with rate increases. Next step is foreign repatriation and a European real estate boom. Slight vacume action forming under all these sideways trending stoof vit da volumz a dying and der flagz a floppin.

Did I say the Asian nations would get together to form an Asian central bank? Well if I did I probably regurgitated it from someone else's post. All credit belongs to the original thinkerers.

Journeyman

(05/16/2000; 21:11:14 MDT - Msg ID: 30694)

NWO's fate @ORO, Hi - Hat, ALL

I agree with Oro -- the NWO as we know it is doomed. In
addition to Oro's economic points, much of the NWO planning
was based on old simplistic paradigms which seemed to work
because information control was easy, their taxes weren't
starving people, and their proto-organizations were
relatively small and the effects of their bumbling didn't
effect so many people and weren't so highly visible.

One of the most troublesome (for them) of their out-dated
paradigms will prove to be the old idea, embedded in
advertising, that people are "tabula rasa" (empty slates) to
be "written on" at will. That idea, experssed in early
advertising's format and content for example, was that if
you could get someone to sit down and look at your ads long
enough, they'd accept your message, hook, line, and sinker.
This was replaced with a more realistic idea, first widely
expressed in a book called "Positioning: The Battle For Your
Mind."

Who was the first person to fly the Atlantic solo? Who was
the second? The idea here is that all you can hope to
accomplish with advertising is to keep your name and logo in
people's minds, and even that's very expensive. At the time
the book, now a classic, was written, GM was spending
something like $1500 a minute in advertising just to do
that. Similarly, any "party line" is impossible to maintain
in large groups, hence the dictum of successful political
candidates: "Candidates who run on issues lose elections."
(I'm not making this up -- call a political consultant and
ask.) Does this help explain "our" politicians?

The media monopoly has been disintegrating for more than a
decade -- watch the market share for the formerly great NBC,
CBS, ABC as it declines steadily year after year. Sure
there's some overlap, but, for example, there are major
alternatives to Presidential speeches, etc. - - - and most
people watch the alternatives. And that's BEFORE the
internet.

People aren't as stupid as you'd like to believe from
watching the 6 O'Clock News. Don't make the mistake of
believing that the fact people don't voice their opposition
to you under conditions of implicit intimidation indicates
agreement with you're point of view.

I'm reminded of my Polish friends who explained that in
Poland, if a book was subsidized by the government, that was
a good way to know not to read it. When I asked many of
them separately over the years if they believed all that
communist propaganda I'd been taught so much about in
American government schools, they would say emphatically
"No!" Then I would ask them if they knew anyone who did.
They would think about it a second, then they would say
something like, "Maybe someone who lives in the countryside
and never talks to anyone - - - but I don't know anyone who
believes it." I gradually realized they were all giving me
nearly the same answer. It was erie!

Their experiments at controlling populations by carrots and
sticks in Iraq, Somalia, Bosnia, Iraq (regularly), Haiti,
Kosovo, etc. have been major disasters (they know it even if
they've managed to hide it from you.) You can't change
people permanently by force - - - once they figure you out,
they just go behind your back (where they SHOULD shove a
knife.) The unexpected and powerful anti-WTO demonstrations
should sound the wake-up call to the New World Odor folks
that something's not kosher in Denmark.

Further, can anyone imagine the Arab countries, China, etc.
going for Western "values?" Kadafi wouldn't even allow the
trial of a few of "his" citizens until more than a decade of
sanctions.

Regards,
Journeyman

Chris Powell

(05/16/2000; 21:11:42 MDT - Msg ID: 30695)

Midas commentary for May 16, 2000

http://www.egroups.com/message/gata/459?Midas commentary for May 16, 2000:

http://www.egroups.com/message/gata/459?


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

$5 Indian

(05/16/2000; 21:34:36 MDT - Msg ID: 30696)

So Kosher................

If the Democrates stay entrenched in power long then you could have the inflationary collapse because they have a tendency to want to please the masses and attack businesses. If the Republicans become entrenched and we become ruled by banks and multinationals to a severe degree, then expect a deflationary collapse as the politicians please the corporations and decide not to "prime the pump" with cheap money. Former suburbanites singing the Shantytowne Blues on any given Saturday afternoon.
============================================================
OK so the Jews are out to get us, what else is new, (not to diminish from the importance of knowing that truth). But what about the Jews who quote the New Testament casually because they feel "so left out" from all their friends going to Messianic Jewish Protestant Churches. Like my computer friend who can go into the Win95 registry and delete all the junk and clean my system. So some Jews are OK. ;-) And how do we know which ones will marry Christians anyway. That rhymed. Do I love my enemies??? Sure why not. And who knows which ones really feel stupid listening to the rabbi tell them "there is no God because of the holocaust". Sort of takes the wind out of your sails of faith. Bummer, another preacher doesn't believe in God. Must have had a rough time in seminary. Because I believe in Jesus, I gain all the benefits of their heritage with access to the wisdom of their GOD by the Spirit of Truth. When the two prophets of Revelation 11 come back to visit Jerusalem for 3 1/2 years their preaching could galvanize all the world to bitterly hate God and Jesus. All we'll have to do is read the names written on the people's foreheads to see who is pro or con. Tortured, Dragged, tagged, and re-ragged.....can't kill what has already died. The real Jews. Kneel at the cross, your Messiah will meet you.

I don't want to hate Jews because sin brings on stress. They can't muddy my drinking water, I'm farther upstream.

ET

(05/16/2000; 21:51:17 MDT - Msg ID: 30697)

Stranger

Hey Stranger - all is well here except we need some rain.



"In the 1970s, baby boomers constituted an outsized proportion of the U.S. population. They were in
their family formation years then, borrowing heavily in order to facilitate spending requirements
which far exceeded income. Today, baby boomers still constitute an outsized proportion of the U.S.
population, only now, as a group, they produce more than they consume".

I'm not sure I agree. It seems the boomers are in debt up to their ears if those I know are any example. They justify this because of pension plan gains which they believe offset their indebtedness today. I'll share this with you; I was at the home office a couple of weeks ago and happened to play a round of golf with some of these boomers. Two claimed their portfolios had lost about 40% of their value from the peak while one guy claimed to have lost about 60%. They weren't carrying any margin but seemed to have owned the wrong stocks. To them, the market has crashed. They aren't going out buying any new cars anytime soon. Their consumption has been huge the last few years on borrowed money but is now going to stop unless their portfolios recover. This seems to be a perception phenomenon which will require a huge influx of new credit to rescue.

"Furthermore, in the 1970s, productivity improvements nearly stagnated, while, today, thanks largely
to the proliferation of computer networking, that is not the case".

Well, costs have been lowered but I'm unconvinced productivity has vastly improved. We seem capable of moving things a bit faster but I'm unsure this has actually translated into productivity gains. It might be more the case we can move money faster.

"Finally, monetary policy in the 70s was horribly mismanaged. First you had Arthur Burns
accomodating Richard Nixon's demands for more money. Then you had G. William Miller doing
the same for Jimmy Carter. It was not until Paul Volcker appeared near the end of the decade that
any serious effort was made to contain inflation by smothering it at its source. Volcker's successful
restraint of money supply growth may have caused a nasty recession, but it also succeeded at
stopping the inflation spiral, and, in doing so, taught all future Fed Chairman a lesson about money
that should never be forgotten. If that list includes Alan Greenspan, as I presume it does, then
things should not need to get so far out of hand this time around. We shall watch and see".

Yes - I'm not sure any longer if Fed policy has much effect on money creation, at least in the short run. I suspect we'll see the administration soon start bashing the Fed but at the same time it is these bureaucratic entities that are fueling the inflationary fire.

"As to your remarks about malinvestment, that sort of thing is terribly hard to quantify in my
judgement. Yes, heady times do tend to cause careless decision making. And even though vast
improvements in worldwide communications probably bear a mitigating influence nowadays, I am
sure the current period is no exception. Still, I would expect the overall effect of malinvestment
would be more deflationary than inflationary. Ah...you say, but what about the implications to
monetary policy going forward? Yes, good point. That would be inflationary and is, in fact, what
prompted me to start forecasting the current inflation well over a year ago when the effects of East
Asian malinvestment started bubbling up".

And the correct forecast it has turned out to be. My congrats!

"But, for reasons stated herein, I just don't envision an
inflation of 70's style magnitude".

As you say, we'll see. If this Euro thing proves itself, your forecast could be in trouble, but so far so good. I'm keeping my eye on collection data. We've moved a couple of days farther out on the average and this is after no problems at all the last five years or so. I'll keep you posted.

Al Fulchino

(05/16/2000; 21:53:18 MDT - Msg ID: 30698)

The Stranger

Sir, thank you for taking on my question.
You write:
"Among the most common mistakes investors make (in my judgement, anyway) is being either too agressive or too conservative with too much of their money."

Al: My life story when it came to investing :) And I had nothing to show for it. In the last few years, I have moderated some.

You go on:
"As you well know, most of the great wealth of the world is made in between these two extremes. For this reason, I do not own coins (too conservative)."

Al: You shocked me on that! But! With that statement, I can see you are not a 'chicken little type'. Not that you are putting coin ownership down. Not at all. But you just do not deep down see any collapse coming. That is a comforting thought that I tend to agree with, however I suspect that I have less trust in my fellow man than you might have. And the coin I hold is because of that.

You go on, "Nor do I speculate in commodity futures or buy microcap goldminers (too aggressive). And I certainly don't try to balance my mistakes by being both too conservative and too aggressive at the same time."

Al: I am strung out with Newmont, Hecla, DROOY, Battle Mountain etc all the way to Vista Gold. Are you laughing? I am. As you can see I still live a bit on the edge. Maybe I need to lose a bit more. On the other hand I have a pretty good deposit of physical and some numismatic coins. I have totally withdrawn from the CNBC stocks, although I am strongly considering Cisco, for its strength in the internets infrastructure.

You again: "Please don't get me wrong about coins. There are numerous VERY GOOD REASONS why people prefer coins. And I am fully aware of how little my gold stocks would be worth if people didn't buy coins. I am just saying that, for the risk/reward profile I seek, a well capitalized, senior miner with little hedging exposure makes the most sense.

As far as real estate is concerned, yes, I believe most U.S. real estate is a good value right now. After two very rough years, real estate investment trusts (REITs) are among the very best performing groups this year. Alas, I don't own any because I think the leverage in gold will be better (if it ever gets off its a--, that is).

But what about making the decision to go ahead and buy that building lot or that commercial building you have been considering? Last summer someone else asked me about this here at the forum. I will respond the same way now that I did then. What is coming is higher inflation and higher interest rates. So, don't procrastinate. But, by the same token, I do not believe we are in for as much inflation as we saw in the 1970s, for example. So, you don't want to overextend, either."

Al: Your moderating comments on the extent of future inflation is good to hear. And it is because I am going into commercial and residential real estate that prompted my query. I wanted to see how stable you see things. And as I see it, you are calling for a moderate and seasonable snow storm. No electricity loss here. Just be wise and wear your winter clothes. You also must have a reasonable expectation that Alan Greenspan has what it takes to keep things from getting out of control.

I am grateful for your comments.

gidsek

(05/16/2000; 22:25:40 MDT - Msg ID: 30699)

Journeyman ... "Planning"

I once picked up a book by an economist named Heilbroner called (I think) "Between Capitalism and Socialism".

On the first or second page I came across a statement something to the effect that Communist economies are planned and Capitalist ones are not.

With that I put down the book, knowing that what followed wasn't going to be of much value.

I have acquaintances who own a couple of retail stores amd together they "plan" a small portion of the nations' economy, just over $1,000,000 worth of it.

In point of fact Capitalist economies are "planned" in the extreme, by anyone who has earned the right to participate and do so.

gidsek

TheStranger

(05/16/2000; 22:52:40 MDT - Msg ID: 30700)

ET and Al

Another difference between now and the 70s, which comes to mind in a different context, is that the current period was preceded by a brush with dollar deflation (in 1998). Significantly, this was the only time deflation ever presented a genuine risk to the dollar in most of our lifetimes, (that is if most of us are younger than 68).

I bring this up now because, barely 18 months after this latest deflationary episode, the dollar has pulled a complete about face. Suddenly it is INFLATION which is on everybody's lips. I would have thought this quick psychological transition from fear of deflation to fear of inflation would be sufficient to reverse an 18-year bear market in gold. Maybe it has. We are, after all, some 10 months and $23 off the lows. But my bet on gold was based upon this premise that what had been priced for the contingency of SOME deflation would soon have to be repriced to reflect the reality of SOME inflation. I never felt anything more than that was necessary. Maybe I was wrong. I don't know.

I think the problem now is a sort of mental inertia which has so far stopped the critical masses from understanding what's happening. Yes, I read about all the skullduggery that apparently takes place, and I believe a lot of it, too. But, once the reality of inflation starts to sink in, I don't think any amount of clever maneuvering will stop public demand from overpowering the forces against us. After all, haven't we seen all this before? Anyway, here's to the both of you. Here's to all of us. Here's to gold, and here's to a brighter tomorrow.

God knows we're ready.

Journeyman

(05/16/2000; 23:00:22 MDT - Msg ID: 30701)

_CENTRAL_ planning @gidsek msg#: 30699, ALL

gidsek msg#: 30699
Journeyman ... "Planning"

"On the first or second page I came across a statement something to the effect that Communist
economies are planned and Capitalist ones are not.
With that I put down the book, knowing that what followed wasn't going to be of much value." -gidsek msg#: 30699

Hard for me to speak of the value of that author's statement -- I think Mises was talking of _central_ planners, a la the Soviet Union, etc. -J.

"I have acquaintances who own a couple of retail stores amd together they "plan" a small portion of
the nations' economy, just over $1,000,000 worth of it." -gidsek msg#: 30699

I think what Mises is saying (if I may be so bold) is that in a centrally planned economy, your friend planning his $1,000,000 part of the economy wouldn't be allowed -- the central planners would dictate instead. -J.

"In point of fact Capitalist economies are "planned" in the extreme, by anyone who has earned the
right to participate and do so." -gidsek msg#: 30699

Indeed. And this is majorly different from "centrally planned." The major difference is that if someone like your friend plans in ways that don't satisfy their customers, they either change their plan or go out of business. This forces adaptation to what people want, rather than forcing people to adapt to what central planners want.

However, I'm not an advocate of capitalism -- that very name confesses the rules are skewed to favor those who have money over those who don't. I prefer free markets (instead of capitalism) where the rules are truly neutral.

Regards,
Journeyman

elevator guy

(05/16/2000; 23:21:05 MDT - Msg ID: 30702)

Bill Murphy's latest Midas is a real shocker! Very Exciting!

http://www.egroups.com/message/gata/459?Well, its not like we didn't all know some of this, or suspect it, being so enlightened as we are...

But to see the truth fit together like little pieces of a jig saw puzzle...

Seeing JP Morgan go from 18B to 38B in just six months of 99, well its so dirty that its.. its..., its like watching the scum float to the top of the pond, after the sewer main breaks...

I mean, the reality of what is going on is surfacing, and it looks VERY ugly..

Strad Master

(05/16/2000; 23:42:42 MDT - Msg ID: 30703)

ss of nep, $5 Indian, ed al

http://www.cdn-friends-icej.ca/antiholo/protocol.htmlI know I promised not to continue this thread but I thought it would be informative to share the above link I just found with any fair-minded person wishing to put to rest once and for all the claptrap known as the "Protocols of the Elders of Zion". The essay is written by a Canadian Christian (which I only point out for ss of nep's benefit) and it clearly outlines the history of that silly document. BTW, ss, there they do use the word "forgery" - but for obvious reasons.

Leland

(05/16/2000; 23:54:35 MDT - Msg ID: 30704)

Amazing!

http://www.coinfacts.com/SilverDollars/morgan_dollars/1879_morgan_dollars/1879cc_morgan_silver_dollar.htmAnyone sharing my elation? Lookatthat auction price!!

Leland

(05/17/2000; 00:12:30 MDT - Msg ID: 30705)

I Guess That I'm Beginning to Understand Inflation..

And I love my Morgans, including my one an' only 1879cc.View Yesterday's Discussion.

elevator guy

(05/17/2000; 00:44:38 MDT - Msg ID: 30706)

@Jews inwardly

Jesus was a Jew.

The Bible is a Jewish book.

I wouldn't know anything about the one and only true and living God, had it not been for the revelation of Himself through the Jews.

The Jews dont just THINK they are special, in fact, they ARE special, because they were chosen by God. If you cant see this, then you may not be a real Christian at all, because it is a clear teaching of Scripture, and your argument therefore is not with me, but against God.

The Bible is the only book that tells the end from the beginning.

God loves the Jews, and has further plans for them.

We Christians are branches grafted in, and remember that if God spared not the natural branches, then how should we behave as grafted on branches? What should our attitude toward the Jews be? Read your Bible.

Yes, we can state true things. But for what purpose? Many divisive, and hateful things are said and done in the name of truth. We should ask ourselves, what is our true motivation? As Christians, (and I speak not for all, but for a few), our goal is to bring glory to God. Are we doing so? Am I doing so?

You can catch more bees with honey, than with vinegar. And we ARE supposed to be catching bees.

If not for the love of God, then for the truth of gold, lets join forces and move on.

We all have a lot to learn from each other, and this forum profits us all tremendously, intellectually, spiritually, and monetarily.

Heres wishing everyone prosperity, and peace.

Strad Master

(05/17/2000; 01:03:10 MDT - Msg ID: 30707)

Elevator Guy

Bravo!Eloquently stated! You are a credit to your religion and to His name.

Regards to you and to the whole Elevator Guy clan.

tg

(05/17/2000; 02:22:31 MDT - Msg ID: 30708)

RELIGION & GOLD

I have friends who are Christians, and I have friends who are Jews. The ones I dislike are the fundamentalists, who can only see the world from their perspective.
Funnily enough neither religion can tell me what will happen to gold in the near future. So why not shutup about your religious standpoints and get back to the topic of this forum.

Aragorn III

(05/17/2000; 02:55:43 MDT - Msg ID: 30709)

When thoughts run like fire and ice in the same mind

An interesting, but entirely unsettling assortment of posts have been offered this past day. I ask you, where can one find peace when harboring such internal storms? In one breath we are told that our domestic government has gone bad, that overseas governments are socialistic and worse, and yet, that the replacement of these multiple and various governments with a theoretical One World Government or a New World Order would be as bad or worse. Are we therefore to conclude that ALL government is bad, or rather that, as uncharacteristic as it seems, we should throw our support behind our existing governments so as to ward off the dreaded usurpation? Better still, "Let liberty and free enterprise rule the day!" they might say.

Gather your wits please, and know your own mind on government: a virtue or a curse? For as surely as many shall say "Curse", these same will be the first and the loudest to cite the principle evidence of evil to be held against such banking enterprises as the Federal Reserve System or the BIS is that they are NOT strict governmental entities themselves, but rather "private corporations".

In like manner we see people who proclaim that our domestic paper currency has gone bad, that overseas currencies are "socialistic" and worse, and yet, that the replacement of them with a theoretical One World Currency would be worst of all. These are surely among the loudest to proclaim "Gold must be allowed to have its day!" and yet they then cite "better leverage" on gold mining shares and gold futures/options...and therefore embrace the paper status quo.

Such people are keen to say, "Blessed be the simpletons of the world who are buying milk, for I shall be wiser and buy a cow!" As with most plans, it looks good on paper until the moment of truth arrives, revealing your speculative expectations to be pure bull.

It has been long in the baking, but when this cake is served, only one thing will matter...

got milk?

HI - HAT

(05/17/2000; 04:24:21 MDT - Msg ID: 30710)

JOURNEYMAN

The dimensions and tempo, of where this is all going, is both exhiliarating and frightening. Thankyou for reminding us of the inherent common sense of everyday people and the ruminations on Von Mises. The crown jewel of empirical common sense.

Your distinction of Capitolism vrs Free Market is particularly noteworthy. The "GOOD" can only be exhalted on a level playing field of honest weights and measures.

The debauchery and debasement of Man's wealth mediums cheapens and mocks achievement.

This Fiat debasement is the well-spring that waters and nourishes UN necessary evil. I hope our stand for gold and gold itself can provide the foundation to refurbish our Rebublic, our Constitution, our GOOD.

SteveH

(05/17/2000; 05:26:17 MDT - Msg ID: 30711)

Market futures decidedly down...

and a note from the Arkansas Governor re: S&W and manufacturer law suits.

POLICY MATTERS

The following is a copy of the text from a letter written by Arkansas
Governor Mike Huckabee to New York Attorney General, Eliot Spitzer,
regarding the Smith and Wesson quid pro quo -- compliance with
Clinton's gun mandates in order to win federal and state law
enforcement purchase contracts.

Dear General Spitzer:

I have received your letter inviting me to join in your effort to
encourage various state and local governments to award
law enforcement gun contracts only to gun manufacturers agreeing to a
"Code of Conduct" which dictates various business practices,
safety features, marketing strategies, etc., for both gun manufacturers
and gun dealers at the wholesale and retail level. I must respectfully
decline your invitation.

First let me say, if I believed the safety of my constituents were
truly the issue, I would be much more considerate of your request. But
we are not living in a country flooded with "unsafe" guns. It is their
illegal use that endangers us -- that must be addressed through
vigorous criminal prosecution.

Providing for guns safety locks is one thing and, in truth, only a
small part of your "Code of Conduct." However, dictating
how many guns a purchaser is allowed to take home on one day, banning
sales at gun shows and prohibiting a minor from even entering a gun
store without a parent or guardian are parts of a political agenda, not
a push for "gun safety." Coupling the safety issue with a strict
regulation of business practices is merely a maneuver to advance a
decidedly political agenda under the guise of "public safety."

I am a strong proponent and defender of Americans' Second Amendment
right to keep and bear arms. I also make every effort to
be a responsible manager of my constituents' tax dollars. I
ask the director of the Arkansas State Police to make purchasing
and requisition decisions based on quality, service and price. I will not
ask him to award a lucrative government contract in order to further a
political agenda geared at controlling and ultimately destroying the
firearms industry. I want Arkansas State Troopers to protect our
citizens and themselves using the best guns available, not guns from
the most "politically correct" manufacturer.

In 1999, I signed into law an act prohibiting Arkansas' local
governments from suing firearms manufacturers seeking
compensation for injuries and deaths resulting from the illegal use of
these companies' products. To hold the gun industry accountable for crime
is like holding our nation's farmers liable for the health care costs
associated with obesity. The desire of some to blame the gun
manufacturers for crime rather than prosecute criminals seems to me a
sadly misguided attempt at protecting our citizens. It is also a
rather thinly veiled attempt to vilify and control those who engage in
a business which is eminently legal and necessary, yet not
particularly smiled upon by the current administration in Washington.
I thank God previous administrations understood and appreciated not
only the sanctity of the Second Amendment, but its necessity as well.

Gun manufacturers make the Second Amendment a viable right rather than
some theoretical proposition. I will not abuse my authority as
Governor to pursue their demise or dictate their business practices
through coercion.

So the answer is a definite "no," I will not seek the capitulation of
firearm manufacturers through the use of asinine lawsuits or the
doling out of taxpayer-funded government contracts. I regret that you
feel either of these tactics to be worthwhile endeavors.

Sincerely yours,
Mike Huckabee

Henri

(05/17/2000; 05:42:07 MDT - Msg ID: 30712)

Aragorn III Got Milk?

You, Sir Knight are a master at the combination of wit and wisdom into an integrated whole that has my entire being shaking with mirth. I fear I will soon become puddin'

Black Blade

(05/17/2000; 06:11:22 MDT - Msg ID: 30713)

Morning Wakeup Call!

Source: Bridge NewsAsia Precious Metals Review: Gold weaker on absence of buyers
By Hiroyuki Fujiwara, BridgeNews

Tokyo--May 17--Spot gold was weaker due to the absence of buyers on Wednesday in Asia after overnight slips on the U.S. interest rate hike, dealers said. Prices fell below the key U.S. $275 per ounce, while they said few tried to open fresh selling positions at that price level. Profit taking capped platinum in the sluggish market amid a lack of fresh incentives, the dealers said. Physical dealers continued to buy spot gold below $275, but few want to increase gold stocks in hand now on expectations of further price decline, the dealers said. The weaker sentiment was likely to dominate the gold market toward the next U.K. Treasury's auction scheduled on May 23, they said. Players confirmed the support line of $275 over the past few days, but a lack of buying factors prevent prices from rising from the bottom side of the recent range between $275 and $278, the dealers said. Most players were hesitant to dump gold in the near term, while some selling from disappointing players could hurt the market, they said. Overnight firmer NYMEX platinum encouraged speculators on the Tokyo Commodity Exchange (TOCOM) on Wednesday early in the morning, but a lack of follow-through buying triggered profit taking in the afternoon, the dealers said. Spot platinum has been supported at about $500 in the past couple of weeks, while TOCOM February and April 2001 contracts hit life of contract highs Wednesday. The U.S. dollar/yen trimmed overnight gains in the Asian afternoon, this also depressed yen-denominated TOCOM platinum, they said.

Black Blade: Same ole, same ole

NY Precious Metals Review: Jun gold slips on Fed rate hike

New York--May 16--COMEX Jun gold futures settled down 20 cents at $276.20 per ounce, giving up the small gains it saw earlier in the session as the US Federal Reserve said that it was hiking interest rates by 50 basis points. This move hurts gold prices by keeping a lid on inflation pressures and boosting the dollar. Jly silver jumped to a 1-month high of $5.19 on fund short-covering. (Story .2333)

Black Blade: Uh Huh!

ECB says euro zone FX assets fell on portfolio management

Frankfurt--May 16--Foreign currency assets registered by the European central bank system reached 262.3 billion euros as of May 12, down 800 million euros from May 5, the ECB said Tuesday in its weekly financial statement. The decline was related to portfolio management of national central banks' foreign reserves, the ECB said. In addition, total gold assets w ere unchanged on the week at 115.677 billion euros on May 12, the ECB said. (Story .782)

Black Blade: Ho Hum.

Black Blade: Rumor has it that Sunshine Mining and Refining Co. (SSC) could be filing chapter 11 soon. What a shame for a company that survived over 100 years.

ss of nep

(05/17/2000; 06:25:29 MDT - Msg ID: 30714)

Drooy story

Date: Tue May 16 2000 17:13
flierdude (Been alot of Durbin Deep bashers lately.) ID#341249:
Copyright � 2000 flierdude/Kitco Inc. All rights reserved
There can only be 22 shareholders that own more of DRD then myself. The only reason I own the stock is because of the picture of the sun-dial on the front of their Annual Report. I'm not shi*in ya. Thats the only reason I own it........ In the middle of the sun-dial is attached, a bar. At the top of this bar is a pentagram. Inside of the pentagram is three boxs on top of each other symbolising "We control everything" Through the pentagram is an arrow which penetrates through three circles that encompass the pentagram. As soon as I saw that sun-dial I knew it was contolled by 'them'. This holding is insurance, in case 'they' are successful. The same group that controls ABX controls DRD. If you look at their largest shareholders you will find that six groups or individuals own 91.69% of the shares. DRD will not go under unless 'they' lose contol. Unlikely.

ss of nep

(05/17/2000; 06:35:08 MDT - Msg ID: 30715)

testing - testing

http://www.kitcomm.com/comments/gold/2000q2/2000_05/1000516.132024.sharefine.htm

Hill Billy Mitchell

(05/17/2000; 06:59:52 MDT - Msg ID: 30716)

Official release

http://www.bog.frb.us/releases/H15/update/
Official: Federal Reserve Statistical Release

Release Date: May 16 2000

Rates For Monday, May 15, 2000

Federal funds 6.34

Treasury constant maturities:
3-month 6.25
10-year 6.47
20-year 6.56
30-year 6.17

upside-down spread FF vs long bond = .17%)

USAGOLD

(05/17/2000; 08:55:52 MDT - Msg ID: 30717)

Today's Report: Buffett Says What CNBC Won't: "We do not think the general ownership of equities is going to be very exciting over the next 10 to 15 years."

http://www.usagold.com/Order_Form.html5/17/00 Indications
�Current
�Change
Gold June Comex
273.70
-2.50
Silver July Comex
5.11
-0.03
30 Yr TBond June CBOT
94~02
-0~15
Dollar Index June NYBOT
111.92
+0.69


PURCHASE ON LINE:

The Historic Kaiser Wilhelm Gold Mark for Privacy-Minded Investors

Market Report (5/17/00): Gold got pummelled this morning along with just about everything
else in the investment markets, excepting the dollar of course which continued its unaltered march
to currency nirvana -- all courtesy of the Fed half-point interest rate increase yesterday. The stock
market in its best Wile E. Coyote imitation hung suspended in mid-air yesterday thinking it had
survived once again the folly of its ways only to look down today and note grimly that there was
nothing but rarefied air under foot. The sly smile turns to somber resignation. A recognizable
gulp...then the plunge -- the DJIA down 126 as we go to fetch this over.

I received the Grant letter (Grant's Interest Rate Observor) and had a chance to review it early this
morning over a cup of coffee. He reports there what the mainstream press wouldn't about the
recent Berkshire Hathaway stockholder conference. Apparently, Warren Buffett delivered an
address at the meeting titled "Things You Don't Hear Everyday on CNBC." In it he made some
rather disparaging comments about the stock market including the overview that "We do not think
the general ownership of equities is going to be very exciting over the next 10 to 15 years." His
partner, Charles Munger, was less delicate about what he called "the wretched excesses" of Wall
Street. "You are mixing," he observed, "a good concept such as the Internet, with irrational
excess. But, if you mix raisins with turds, they are still turds." Turds. Indeed. Buffett concluded
that "When the reversal comes, it's likely to be extreme."

Along these lines, our friend, Arch Crawford, who has the best track record of all the newsletter
writers in making the calls and has won numerous awards for doing so, reports in his latest letter
this observation from financial editor E.J. Welsh: "[Alan Greenspan] has also said that the Fed is
not targeting stock prices. But to a lot of 28 year-old money managers this seems disingenuous.
They can think of no other reason why a company with no foreseeable earnings should see its
stock fall from 200 times 2001 sales to 100 times in less than four weeks. To those investing
according to the greater fool theory, it must be a bitter medicine to learn there are a finite number of
fools."

As for gold, there was little in the way of fresh news. The market was weak in both Asia and
Europe overnight. Given the circumstances in the stock market, we think the yellow metal will be
getting its fair share of interest among value seeking investors. Physical demand remains steady at
these prices with the paper players continuing to lament their fate in market that has not exhibited
much play in either direction. Stymied on the upside by the supplies coming out of Switzerland
and Britain as well as the downside by strong physical buying from inflation conscious investors
worldwide, the gold market isn't much of a play for traders these days. The knowlegeable investor
is a physical buyer for reasons well known to those who read this report on a daily basis.

If the above comment seems a bit cryptic to you, perhaps you would gain from an information
packet which includes our widely read newsletter and our new Gold Almanac 2000. Please see
below.

That's it for today, fellow goldmeisters. Have a good day. We'll see you back here same time,
same place tomorrow.



JUST RELEASED!

THE CENTENNIAL PRECIOUS METALS' GOLD ALMANAC 2000

We have just released the Centennial Precious Metals' Gold Almanac 2000 and are making it
available free of charge to new inquiries.

Just go to the

ORDER FORM, make the appropriate entries and we will forward it to you.

Note to previous inquiries:

Unfortunately due to the size of our mailing list, we can't afford to send the Alamac to everybody,
though we are certain all would enjoy and learn from it. Those who would like to receive it, AND
ACQUAINT THEMSELVES WITH THE PERIPATETIC, SCHOLARLY AND
DISTINCTIVELY OWLISH, DR. MONEYWISE, are welcome to call Marie at 800-869-5115,
and if you are willing to cover our costs ($10), we will be happy to send it to you.

THOSE WHO HAVE PURCHASED PRECIOUS METALS FROM CENTENNIAL PRECIOUS
METALS/USAGOLD CAN RECEIVE THE GOLD ALMANAC 2000 FREE OF CHARGE
BY REQUESTING A COPY THROUGH MARIE 800 869-5115, OR BY E-MAIL --
marie@usagold.com. BE SURE TO INCLUDE YOUR CURRENT MAILING ADDRESS.



NEWS & VIEWS: ANALYSIS, FORECASTS AND COMMENTARY ON THE
PRECIOUS METALS & THE ECONOMY

If you are looking for a pro-gold view of the various financial markets as well as a summary of the
events affecting the yellow metal, our monthly newsletter might be of interest. News & Views
-- Forecasts, Commentary & Analysis on the Economy and Precious Metals has
been characterized as witty, urbane, intelligent and down-to-earth. Not to mention it's Free of
Charge If you want to keep up with gold, this is the way a large segment of the gold owning
public does it, and has done it for over a decade.

Just click here ---> ORDER FORM <--- and make the appropriate entries.

Laura

(05/17/2000; 09:03:12 MDT - Msg ID: 30718)

oil consumption will exceed production 3rd and 4th quaters

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Bloomberg%20Energy&touch=1&T=energy_news_front.ht&s=AORwoDhKDQ3J1ZGUg``The speed and velocity of this thing is quite frightening.''

PH in LA

(05/17/2000; 09:36:28 MDT - Msg ID: 30719)

"Long live the King!"

Hail, Sir Aragorn!

Only yesterday, wondering what might have happened one of my favorite posters, I noted that you had not posted since November 24, 1999. Here's hoping that you have spent at least part of that time sailing and garnering more of the coveted (gold) medals you deserve.

And further... that this "return of the King" to our discussion presages positive augurs for our beloved "prescious" POG.

Welcome back, Aragorn!

Christopher

(05/17/2000; 10:04:58 MDT - Msg ID: 30720)

Re:yesterdays discussion

Good Morning Gentlemen, Ladies, Knights:

For those of you involved in the discussions of yesterday concerning mainly the NWO and further along the Jewish and Christian veins of said topic, please allow me to direct you to furhter study and contemplation of ALL that was spoken of. Let me not do this with my words, (for they can not be trusted) but with the Words of God(whose can.) Please read the whole of the book of 1st Peter-it is a short five chapters and can be read in 15 minutes. And for those of you who feel this is off topic, the Apostle mentions Gold twice in the first chapter, and almost the whole of the second chapter is devoted to how a Christian should react to kings and governors

Sincerely,

Christopher

Luv_G7

(05/17/2000; 10:08:19 MDT - Msg ID: 30721)

USAGOLD - Your market report does a disservice

I take issue with today's market report, where you write:

"Stymied on the upside by the supplies coming out of Switzerland and Britain as well as the downside by strong physical buying..."

Everyone following this sector knows that the Swiss sales will be handled through the BIS, and will never hit the spot market. The Swiss gold will just be transferred from one EU bank to another - it will have no effect on the spot price. Gold is sinking today because people expect it to be forced down before next week's auction. But right after the March auction, it jumped about $7.

There is an absolute shortage of liquidity in the gold market right now, and it will only take a spark to send gold above $300.

When you discuss supply, please be more specific. The Swiss announcement was actually good for the market. There's not much Central Bank gold left to come on the market.

RS

(05/17/2000; 10:27:07 MDT - Msg ID: 30722)

(No Subject)

There is a radio talk/call-in show produced in Nashville, Tennessee called "The Money Game", hosted by one Dave Ramsey.
Mr. Ramsey is a financial planner who councils people generally to "get out of debt".

It's quite common to hear callers to the show seeking help with CREDIT-CARD debt in amounts equal to the family's anual salary, or more.

One recent caller and her husband had accumulated over $75K in plastic obligations. They are no longer able to service the interest at this point. When Mr. Ramsey asked her how this happened, her response was "Well... we've been married for nine years..." and here she paused, as though this explained everything.

There, but for the grace of God...

Leland

(05/17/2000; 11:04:25 MDT - Msg ID: 30723)

RS, It Gets Complicated, too...As This Article Today Tells...

http://www.globalinvestor.com/archive/gam/20000517/ROUTS.html"The high dollar is the result of the high propensity of
Americans to consume. Indeed, the United States has
reached a point where spending has caught up with income.
How can American consumers and businesses invest in
housing, plant and equipment, research and development and
other expensive activities without financial capital? They
cannot, and so if the funds are not being saved by
Americans, they must be obtained from overseas.

This means that the United States is importing capital month
after month. What is happening is that foreigners are
'lending' the United States the funds needed to finance U.S.
investment by buying up U.S. equity and debt securities.

Of course, these have to be paid for with U.S. dollars, which
is what foreigners are buying up. This in turn forces up the
value of the dollar, so the more the United States depends on
foreign capital, the higher the greenback goes."

The next chapter of the story is titled, "REPATRIATION".

Leland

(05/17/2000; 11:17:30 MDT - Msg ID: 30724)

Correction....

http://www.globeinvestor.com/archive/gam/20000517/ROUTS.html.

SHIFTY

(05/17/2000; 11:18:28 MDT - Msg ID: 30725)

RS

That caller reminds me of an old friend's wife. She didn't see how they were out of money, she still had checks left.!!
My friend lost it all.

oldgold

(05/17/2000; 11:53:32 MDT - Msg ID: 30726)

LUV-G7

How can you say there is a shortage of liquidity in the gold market? The problem is there is way too much liquidity as shown by dirt cheap lease rates. When short sellers can borrow gold for a year at 1.5% and invest the proceeds in riskless t bills at well over 6% -- that creates a mighty strong headwind for gold to overcome.

The simple fact is that gold rallies will continue to peter out fast unless and until lease rates climb sharply and stay up.

Luv_G7

(05/17/2000; 12:22:36 MDT - Msg ID: 30727)

Oldgold: Liquidity IS tight

I'm not so sure that a low lease rate means there is actual physical to borrow at that price. The gold market is very opaque, and the central banks reveal little to the general public. The BS "Analysts" who talk down the market want eveyone to believe the world is flush with physical. Frank Veneroso, the worlds leading supply/demand expert says otherwise.

If you're a Goldman trader, and want to bring down the market, it's not as simple as calling a German bank and asking "Do you have 15 tons to lease". Many of the central banks are scrambling to get back the gold they previously leased.

Reports from smaller (non-corrupt) bullion dealers across the country have all reported difficulty in obtaining physical metal. Many contributors to GATA's cause have also written about tightness in the market. Even the US Mint has withheld gold coin sales in recent months, then (as poker faced liars) issue a statement saying no one buying (becuase they can't).

But yes, higher lease rates would certainly help, even if it's only a psychological thing. I'd love for GATA to find out why the rates stay so low.

oldgold

(05/17/2000; 13:23:21 MDT - Msg ID: 30728)

Luv-G7

I hope you are right that the market is much tighter than implied by the very low lease rates. But after so many false rallies in POG I have developed a great deal of skepticism re predictions of an imminent turn in the gold market.

To my simple way of thinking, the CBs can turn this market anytime they want to by simply withholding bullion from the lease market. BTW, that would enable the British and the Swiss and the other sellers to get much higher prices for the gold they want to dispose of.

The fact that they continue to lease gold at giveaway rates even at the cost of lower prices for the gold they want to sell tells me their primary objective is to keep POG depressed. Now this objective could change on a dime, but until it does I very much doubt that POG will rally above $300 no matter how much the dollar may fall or inflation may rise.

SteveH

(05/17/2000; 13:50:30 MDT - Msg ID: 30729)

a few thougths

It seems that the dollar is being held up by the rise in interest rates. This is the whole point of the rate hikes. Discount all the rest of the hoopla seems to be the mantra here. The rate hikes are to keep people demanding green backs. Gold v dollar relationship is a direct inverse one. When one goes up, the other goes down.

The key (I believe) to understand when gold will reverse is to understand under what condition it would be ok for the dollar to reverse.

If it is as I fear, there is no condition under which the dollar can safely reverse without the following ocurring:

gold rise to unprecedented heights.
stock markets world-wide to tank.
Gold derivatives to crash and burn a few select bullion houses.
Oil to move throught he roof.
Euro to become the world reserve currency.

So, folks of the roundtable, let us put our heads together and focus in on the condition(s) under which it is ok for a weak dollar. If there are none, then what is happening now is tantamount to a big stalling tactic by the dollar forces. To stall is to delay. The big ticket at stake is the US Presidency. Could the delay then be to get us through the election with the big-fall to arrive shortly thereafter? Some folks think so.

Yet, somehow I see the falling gold price now as an indication that desparate folks are taking desparate measures. I know I see the POG at 272 and just shrug my shoulders while I think, "Seems like somebody really wants to see the POG really low -- or the dollar really high. This will end soon enough. Wish I had some more bucks to load up on physical."

end of thoughts.

Gandalf the White

(05/17/2000; 13:54:11 MDT - Msg ID: 30730)

The Hobbits are celebrating !

THE KING HAS RETURNED !!! -- Welcome back Aragorn III !!!!! -- I am please to report that each of the Hobbits have successfully completed your challenge and have the little round yellow thingie sown in their vest pocket. -- We are awaiting your further instructions. -- Gandy
<;-)

PH in LA

(05/17/2000; 14:12:29 MDT - Msg ID: 30731)

Keepin' an eye on the election.

SteveH:

Trouble is, the low price of gold has already endured for several years. Once we get the next election out of the way, it will be time to start thinking of the following one. Wouldn't want everything to go to hell in advance of the 2004 election, would they?

Beowulf

(05/17/2000; 14:21:27 MDT - Msg ID: 30732)

Time to start regulating disgruntled employees

http://biz.yahoo.com/rf/000517/n17626370.htmlAngry shareholder halts Texas meeting with grenade.

This was a 72 year old ex-employee. He did exactly what I've always wanted to do at work while sitting in boring unproductive meetings.

TownCrier

(05/17/2000; 14:22:33 MDT - Msg ID: 30733)

Sir Luv_G7 on MK's market report mention of Swiss sales

Thank you for your attention to this matter, and for also providing additional facets for discussion of this at the Forum.

While it is true, as you rightly observe, that the Swiss gold shall be allocated through the BIS and not, therefore, appear as "oversupply" being dumped on the spot market, please consider that this gold is, nonetheless, helping to fill some very important demand for the metal. Were it not for these needs being fulfulled through the BIS with Swiss gold, the demand might then surely have to turn to "the spot market" as you say in seeking the desired metal.

In such an event, the arrival of this level of demand for gold at the cash-counter would thus bring about certain market turmoil, revealing the dirty little secret of the spot gold market...that there isn't one.

That being said, for as long as the wide and real demands for metal continue to be satisfied "by hook or by crook," we continue to heed our own counsel, joining in with those seeking acquisition of metal at these artificially low "spot prices" which are themselves only derivations of prices for the inflated supply of paper instruments parading as gold.

It is only when you consider the inevitable collapse of this patchwork structure that you can clearly recognize the most important "leverage" of all...to be found only in ownership of the metal itself. When the rains come, how very nice it is to have a tangible house and roof overhead, while all others suddenly see the weakness of their strategy to hold instead only blueprints of houses.

TownCrier

(05/17/2000; 15:11:55 MDT - Msg ID: 30734)

The Week in Gold has been updated!

http://www.usagold.com/wgc.htmlGrab your torch and follow the link above to the latest commentary from the World Gold Council on the events that shaped the gold market for the week May 8 - 12.

Of interest:

"There were no statistics released by the Commodity Futures Trading Commission this week. The last figures published, which were for the two weeks ended May 2, showed a sizeable 60 per cent jump in the net short position of the large speculators on Comex - up from 20,353 contracts (equivalent to 63.3 tonnes) to 32,595 contracts (101.4 tonnes)."

In all candor, while these parenthetical figures may give you an appreciation for the theoretical reality of this action, the less flashy truth of the matter is more like this version:

"The last figures published, which were for the two weeks ended May 2, showed a sizeable 60 per cent jump in the net short position of the large speculators on Comex - up from 20,353 contracts (equivalent to 20,353 sheets of paper) to 32,595 contracts (32,595 sheets)."

This is not a dig on the WGC. Here in The Tower we have on occasion offered the tonnage equivalents of COMEX open interest as a means to enhance the perspective. But the reality is, these contract can and largely will be closed with an offsetting contract in an all-cash round trip.


WGC futher tells us:

"The fifth seat on the London Gold Fix, made vacant by the merger of fixing members HSBC and Republic National Bank of New York, has been purchased by Credit Suisse First Boston. The five members of the Fix are now N.M. Rothschild, Deutsche Bank, HSBC, ScotiaMocatta and Credit Suisse First Boston."

Canuck

(05/17/2000; 15:52:29 MDT - Msg ID: 30735)

@ PH in LA and Steve H.

I am completely ignorant of politics but noticing your posts today I must ask a question; please forgive me if it is way out in 'left field'.

If we are to assume the Democrats are manipulating all markets from bananas to gold and everything in between to re-elect their party why are the Republicans not exposing the scam? Is this not the 'Achilles Heel' of the Democrats?

It has been mentioned on this forum numerous times that the government is working all angles to hold on to the economy for re-election sake. So, conversely why are the Republicans not exposing the shams and scams? Do the Republicans want to inherit this mess and then (possibly) be blamed for the fall of the 10 year bull?

Again, I am totally ignorant of US politics but I know in Canada the 'opposition's' campaign is to smear the government any way it can.

Canuck.

ss of nep

(05/17/2000; 16:30:06 MDT - Msg ID: 30736)

Canuck (05/17/00; 15:52:29MT - usagold.com msg#: 30735)

I interject

all parties and all candidates in all parties

in all countries are puppets of the same puppetmasters,

a better question is who are the puppetmasters.


The individual smeer tactics are an illusion, the sole intent of which is to distract.

BTD

(05/17/2000; 16:41:50 MDT - Msg ID: 30737)

Will Fed rate hike lead to stronger dollar and lower gold price?

http://www.goldminingoutlook.com/This is an excerpt from Steven Kaplan's web site:

"KAPLAN'S CORNER: QUESTION: Won't the recent rate hike by the U.S. Federal Reserve lead to a stronger dollar and therefore a lower gold price? ANSWER: No. Although the initial knee-jerk reaction may be for investors to buy dollars, the inevitable slowdown in the U.S. economy which will result from the recent Fed rate hikes will have a far greater negative effect on the dollar than the positive impact of a greater nominal interest value for time deposits. If the U.S. dollar were really going to rise, overseas investors would be eager to buy U.S.-denominated bonds and notes, whereas they are actually reducing their net purchases of such securities. More importantly, the Treasury yield curve would be normal, not inverted; an inverted curve, in which the 5-year Treasury has a higher yield than the 30-year Treasury, almost always leads to a recession and a lower greenback. The 6-month Treasury has a higher yield than the 30-year Treasury; even the 3-month has almost as high a return as the long bond. Also, a look at previous historical occasions when the Fed raised rates at this pace shows that in almost all cases the U.S. dollar became weaker, not stronger, after several rate increases had been made. "

SHIFTY

(05/17/2000; 17:03:02 MDT - Msg ID: 30738)

Ponzi

Nasdaq 3,644.96 + Dow 10,769.74 = 14,414.70 divide by 2 = 7207.35 PONZI
Down 118.72

Yesterday the ponzi was up 118.36 ponzi points.
Today the ponzi was down 118 .72 ponzi points.

I look forword to the day the string break's on this yoyo!!

$hifty

Al Fulchino

(05/17/2000; 17:14:48 MDT - Msg ID: 30739)

The Stranger

Thanks for your comments. I believe the inertia you refer to is still not here. Largely this is due recent investment history being all that a large body of investors understand as their reality. And because there is no other choice "in "their minds", there is as of yet no need for an alternative way of thinking. The signs are there though for another reality that is lying beneath the sand on a beach. The next wave "could" be the one that uncovers the realities of currency debasements. As I have said before, when the time is right and when the latest "smart" leader or manipulator has used their last trick, the wave will wash into view what has been there all along. I do hold onto the view that things could be still corrected. But history has shown me that the odds say that a re-evaluation of a currency is the likely answer, thus a dollar rise in the value of gold. I am probably preaching to the chior but those are my thoughts anyway.

Best to you.

TownCrier

(05/17/2000; 17:28:48 MDT - Msg ID: 30740)

Hear ye! Hear ye! You don't want to miss this new addition to the Gilded Opinion

http://www.usagold.com/gildedopinion/crowdsandgold.htmlGrab your torch and let the link above be your guide down the hallways to find this latest offering from Alan Brown, entitled "Extraordinary Popular Delusions, The Madness of Crowds, Markets and the Gold Price." Below is a sample of the commentary that awaits your arrival...(be sure to hurry back here to share your own thoughts on these matters.)

"From the mayor to the chambermaid, all become involved in the notion of new wealth and instant riches. Even those opposed to the bubble usually try to make money on the other side of the equation. ... Whether one is "bullish" or "bearish" it is the same game and when it ends it has a tendency to end badly, taking all participants with it. Both the "bulls" and the "bears" get their respective heads delivered to them on a plate. Being right and being poor is not the same as sensing that something will end badly and then doing something constructive about it. Standing in front of the bulls prior to a stampede is a mistake many bears make. Being dependent upon a bubble for ones investment strategy, whether to the upside or the downside, means you are involved in the bubble itself. When it bursts it is of no consequence as to where you were sitting, the chances are you will get covered in something not of your own making....
What is interesting in the "extraordinary popular delusion" we are witnessing is that somebody is buying gold at these levels, and its not the gold bugs. Regardless of what the price is, every transaction has a buyer and a seller. Gold at these levels (even if the price does decline) is a great buy, providing of course one takes delivery of the purchase. While it is common knowledge that something funny is going on in the paper gold market, it still sets the price of physical metal; and should the shortage that shows up in the supply and demand numbers finally become a reality, then the leverage is in owning physical metal. Paper contracts will be shunned."

Nice work, Mr. Brown.

SteveH

(05/17/2000; 18:16:50 MDT - Msg ID: 30741)

Canuck

Good question.

Way I see it. It took me forever (but then that isn't unusual) to figure out what the heck is going on in gold. I was a motivated investigator. I turned every stone to figure out why my gold stocks and thus gold were taking it in the shorts, so to speak.

Now, do the Repubs have an inside track into the inner workings of the gold market. I think not. No, they are just now finding out something that is probably washing out the ears of those in high places, as we speak. Thanks to GATA.

I believe once it sinks in they will have to figure out what there is to be done with the greatest financial scandale of all time. Do they expose now; or do they expose later or do they just play dumb? You tell me.

Carlos

(05/17/2000; 18:25:07 MDT - Msg ID: 30742)

Get Your Suitcase. (THIS IS GOLD RELATED)

I have been a lurker here for a little while. Stumbled onto this site, read ABC's of Gold Investing and became a PGB.
I am grateful for the outstanding posters here.

Following are some snippets from a long article in the Providence Journal written by former Governor Bruce Sundlun.
He was a pilot in WW11, shot down over France but survived
the war. This article is the story told by a retiring prof. at URI recently.

FLIGHT FROM NAZISM
WITH A LITTLE LUCK AND A BIG SUITCASE. BY BRUCE SUNDLUN

"Friday, MAY 10, 1940, was a significant date in history. At 5:30 a.m., Hitler gave the order for Germany to attack the Netherlands, Luxembourg, Belgium and France. By the end of the day Neville Chamberlain had resigned as British prime minister, and Winston Churchill had become prime minister.
Robert Gutchen was eight years old and living in Antwerp , a seaport in northeast Belgium. On that day he, his mother, Stella, and his older sister, Claudine, was awakened by explosions. They didn't think much about it, because the Belgium Army often practised artillery shooting nearby. Alex Gutchen, his father, was away in England for a few days on business, and expected to return that day. Bob remembers that from his fifth-floor apartment window, he could see 'black things' falling on downtown Antwerp about a mile away, and he saw much smoke over the city.
The apartment concierge knocked on the Gutchen door and told everyone to go to the basement. Down there, they heard King Leopold 111 anounce on the radio the attack, and urged everyone to stay calm. He assured his listeners that the Belgian Army would stop the attack. Bob remembers that he knew there was war in Europe, he remembers photos of men in white on skis fighting in Finland with the Soviets, and he remembers that Germany had invaded Poland. He doesn't remember anyone in the family being concerned about Germany
invading Belgium. That was a big surprise.
Bob Gutchen remembers other details, too, details resulting in his life being saved, and his not being shipped to Auschwitz, and death in the gas chambers. His mother and his Uncle both took actions that morning that saved the family's lives. His mother sent her 15-year old daughter quickly downstairs to the apartment garage to get the keys to the family car, a 1937 green four-door Pontiac sedan. More important, Uncle Herman took Bob's sister, Claudine downtown to the family's successful diamond company offices, and took all the cash and diamonds they could find, packed them in a SUITCASE (italics mine), and quickly left. From that moment on, that suitcase never left Uncle Herman's hand. 'The suitcase saved our lives.' says Bob today.
By midday, the Gutchen family had left Antwerp in a two-car convoy.....Bob's mother called her father in Brussels and urged him to join the family.....The grandfather, David Ptasznik declined...that cost him his
life." (They went to Ostend to get a boat to England. Had to leave there and went toward France. With much difficulty, they finally crossed the border and headed for Boulogne.)
"Along the road to Boulonge they learned another lesson that was to become an ironclad rule. Always keep the two cars together.......(the Pontiac had a flat tire, Uncle Herman had to turn around, come back a get someone to change the tire)."Uncle Herman went into the suitcase to get money or diamonds to pay someone to change the tire. Travelers could not buy gasoline at a French service station. They had to get permits from the local mayor. So the trick for Uncle Herman was to go to the mayor's office and see him personally to get the permits.The suitcase never failed."

(Boulogne was filled with British troops so they headed for Abbeville just ahead of the German's, turned toward Paris. After arriving there, they had to leave immediately becaus the German's were near the city. They headed for Bordeaux. On the way, the heard that Belgium had surrndered.)

"They had to cross the Loire river on a ferry. Uncle Herman got his car on the ferry, but there wasn't room for the Pontiac. Hundred's of cars jammed the road behind the Pontiac so it could not move.It was scary; the two cars would be separated. Once again the suitcase was useful. Uncle Herman persuaded the drivers of the cars on the road to inch backwards so the Pontiac could back up, and let his car off the ferry. The two cars stayed together and took a later fery.Within a few days Paris was declared an "open city" and the French government moved to Bordeaux.(Four days later, they arrived in Bourdeaux, the city jammed with refugees). "The Hotels had no rooms, but Uncle Herman used his suitcase and got three rooms."(They had to go to Arcachon to get visas. After this they went to Bayonne to get the ship but red tape held them). "The next day there was another ship, the Ettrick. Thanks to the suitcase, Uncle Herman got two taxi drivers to drive them to the ship.

(The story continues and ends with all reaching safety in England, eight year old Bob studied in England, later in America and just retired from URI, which is 10 minutes from my home.)

I trust this has not been posted here amiss. I felt it spoke
clearly to the tenor of this forum. I happened to live during these times and well remember the gallantry of the Finnish troops, the dynamics of Winston Churchill and Edward R. Murrow from London and Gabriel Heather with his "there is
good news tonight". Also was working on the C&O piers under Army control, loaded the convoy that invaded North Africa, later the one to Sicily and receiving the wounded on the returning ships. That was the worst experience.Outstanding
men my age leaving on the ships and some returning shell-shocked, on stretchers or helped off the ship into the red cross cars. We also were one of the areas receiving POW's. Afterwards, was drafted and finished in the
Navy.

If this was out of order, I ask your forgiveness. An article like this makes that period seem like yesterday. I would that it were possible to round up the entire bureaucracy in Washington and transport them back in time for 48 hours of the horrors men went through to allow us the freedom we have today. Just maybe they would see things differently.

Carlos

Mr Gresham

(05/17/2000; 18:34:04 MDT - Msg ID: 30743)

Elevator Guy #30706

http://www.seattleweekly.com/features/0015/features-miller.shtmlThanks, EG! You remind me why I love religion so much that I am not a part of any organized one. Anytime people bring up that topic in small, petty ways, it's such a relief to me when you or someone with your insight speaks up to remind us what it's about. Fresh air!

TC -- The Gilded Opinion Alan Brown sample you gave looks juicy! Reminding us of the dangers of playing with paper, you might get burned, even if you are "right" as a bear. Also, that "SOMEONE is buying that gold, whatever the price languishes at..."

Now I wonder who that might that be? (I got in trouble before for using my Dana Carvey Church Lady voice to answer such a question, so I'll leave it to the active imaginations of you inquring -- or is it "enquiring"? -- minds out there.) Clue: It ain't Santa Claus. Read the link.

Two+ weeks of catching up reading to do here after 14 days of mentally knocking three zeroes off Italian lire prices, then dividing by two, to shop in US comparisons. The funny thing is, they price everything with "000" or "500" at the end anyway. The extra digits contain no data at all. Just waiting for the Euro currency to totally retire the lire, I guess.

Glad to be home...

SteveH

(05/17/2000; 18:55:11 MDT - Msg ID: 30744)

I am not Kevin; I am SteveH

but this is about Kevin's experience. He gave his permission to post it.

Protecting gold:

After an incident this last weekend I composed the following
letter that I'm sending out to all papers, all my representatives
and senators and speaker of the house, Mr. Periconne. I also plan
on dropping a copy off to the woman who treated me badly and the
store manager. It is long but hopefully the papers will print it
anyway.

I have a problem I'm going to share with everyone because I feel
it's important. My name
is Kevin Volz. I live near Hessel, MI and I'm a Corrections
Officer. I believe in god. I
believe in law and order and except for occasionally speeding, am
a law abiding citizen. I care about my family. I've raised a son
that everyone tells me is a well behaved, polite young man which
makes me proud. I consider myself a good father because I try to
make time for my son and his interests. I have volunteered my
time for several organizations including Little League, Boy
Scouts and the Moose Lodge. I give to charity. I am willing to
give any of my neighbors or friends a helping hand if they need
it, sometimes even if they don't need it, I'll help out anyway.
I'll stop to see if someone broke down on the road needs help.
Basically, I've always considered myself a decent, hard working
average person. It seems though, that none of that matters for
one little reason, I own and enjoy shooting guns. I enjoy
shooting for fun and competitively. I also enjoy hunting.
Last Sunday while grocery shopping in Sault Ste. Marie, I picked
up a gun magazine and
was I in for a surprise when I got to the check out. When the
woman who was working
that check out, realized that it was a gun magazine, her eyes got
wide and she exclaimed
"OH". She then turned to a coworker at the next check out,
showing her the magazine and
stated to her, "Look at this. He's one of those." I was stunned.
I replied "Excuse me. What do you mean by that?" She then took
about a half step back, held up her hands and said "Don't go
postal on me now." I was utterly astonished. Just because I was
buying a gun magazine, I had suddenly became some sort of insane
monster. I didn't know what to say or do because I wasn't sure
how it would be taken as. I finally just stated, "Just because a
person is interested in guns, does not mean that they are some
sort of nut case."
I am thoroughly disgusted that due to the actions and lies of
the government's present
administration, abetted by the media, I have been turned into
some sort of person not to
be trusted, to even be feared just because I own guns. The fact
is that they are using lies to perpetuate this fear among people
which hopefully I will try to dispel here. Most of the facts that
I use here are taken right from governmental agencies of the same
government that spreads the lies in the first place or from
accepted studies done by major universities and can be verified
if the people take the time.

Fact 1; Of the 230,000,000 guns in America today, less than 1%
are used in any type of
criminal activity.
Fact 2; Using the most conservative estimates at least 700,000
lives, or up to as many
as 250,000,000 lives a year are saved by guns. Most times
without a shot even being fired.
Fact 3; Unintentional deaths from guns has went down over the
last 30 years while
the numbers of guns in this country has doubled.
Fact 4; You are more likely to die from a car accident, a fall,
drowning, a fire, choking on something or by poison
than being accidentally shot.
Fact 5; Over 70% of the people who shoot someone else have been
convicted of a
prior criminal act.
Fact 6; Of the supposedly 13 children who die daily from guns, 11
of them are 15 -19
year olds that are killed in mostly gang related
shootings.
Fact 7; Gun use, sales and manufacturing is one of the most
regulated industries with
over 20,000 laws concerning guns on the books.
Fact 8; If you are depending on the police to protect to you, you
are sadly misinformed
being the courts have ruled time after time that the
police have no duty to protect you. This is not meant
to disparage any of the fine people that work as police
officers because they try to do the best that they can but they
could stand there and watch you being victimized,
doing nothing to help and would be perfectly legal in
doing so. Ever call 911 only to have the police never
show up?
Fact 9; The government has commissioned their own studies that
say gun control does
not work. If their own studies show that gun control
doesn't work, what is their
reasoning for pushing it?
Fact 10; In the most comprehensive study ever done concerning
guns and crime (John
Lott's, More Guns - Less Crime), it was shown more guns
in the hands of law
abiding citizens do more to prevent crime than any other
measure taken.

As a Corrections Officer, I know that we can not stop those who
wish to cause harm to
others even inside the correctional setting where we have removed
all conventional
weapons and they are under basically 24 hr surveillance.
Criminals are always going to
use whatever possible to give them the most power over their
intended victims which
unfortunately includes guns. Being this country has been waging a
losing war on drugs for the last 25 years, what makes them think
they can stop criminals from getting guns when they can't stop
drugs.

Kevin Volz

Leigh

(05/17/2000; 18:57:51 MDT - Msg ID: 30745)

Carlos

Thanks for posting a great story! I think many of us have such scenarios in the back of their mind as we stash our gold away. The universal money, eagerly accepted by (just about) everyone in an emergency.

I spent my elementary school years in Rhode Island, in Barrington. It will always be my favorite state, though it's becoming increasingly socialistic.

How interesting that the Governor wrote this piece! I wonder if he's a goldbug, too?

Leigh

(05/17/2000; 19:10:45 MDT - Msg ID: 30746)

Oldbug on Gold-Eagle

Dear Oldbug: We didn't answer the long form either, and we were visited by the census worker last week. My husband politely gave her the minimum information (number of people in the household, ages, names) and told her we would not answer any further questions. Sure, she threatened us with a visit from her supervisor, but we're not exactly shaking with fear. We'd rather pay a fine than answer the outrageous questions the census asks. Wait till 2010; they'll be asking, "Are you a gold investor? How many ounces do you own? Where is it?"

PH in LA

(05/17/2000; 19:32:09 MDT - Msg ID: 30747)

Politics as usual!!

Canuck:

Good point. Of course, the operating fiction is that the Federal Reserve (with its chairman appointed at rather long intervals) is supposed to be more or less detached from politics. There is no way the Dems are going to take responsibility for this whole mess, which has been building up gradually for a very long time. And if the Republicans even tried to tar and feather Clinton/Gore with all of this, they know full well that lots of the muck, missing its target, would end up on them. And of course, as with all scandals, when they start delving into things, there is no telling what may turn up. (For example, they haven't forgotten about G. Bush Sr.'s lame "out of the loop" excuse on all that CIA/Iran Contra drug smuggling that almost surfaced when Eugene Hassenfuss got shot down in Central America... there also seems to have been a connection to the state of Arkansas where Clinton was governor at the time...) In any case, with infinite layers of "plausible deniability" built up over the years, the responsible parties are mostly going to wind up pointing the finger elsewhere. So what's new? You guessed it... more "same old, same old".

Journeyman

(05/17/2000; 20:17:25 MDT - Msg ID: 30748)

Fire and ice in the same mind - - - during interesting times @Aragorn III msg#: 30709, ALL

"An interesting, but entirely unsettling assortment of posts
have been offered this past day. I ask you, where can one
find peace when harboring such internal storms?" -Aragorn
III msg#: 30709

There are certain periods in history, often known as such in
retrospect only, when peace, both internal and external,
become inappropriate to the circumstances. Many fine
posters here believe such a period here in America is close
at hand, and most of those of us who feel this way feel
cursed. As in, "May you live in interesting times."

In such times, inner peace is the easier one to come by.
Some believe such inner peace comes through truth and
understanding. "Know the truth and the truth shall set you
free."

But there are groups, mainly governments and/or their brown-
nosers, suck-ups, and hangers-on, who don't want us to be
free because they count on us to support them with our
labor, stolen through taxation and money devaluation
(inflation). For obvious reasons, these groups don't want us
to know the truth, and indeed have done a fine job of
keeping us and our children and grandchildren in the dark,
even about the true nature of government.

"*Are we therefore to conclude that ALL government is bad,
or rather that, as uncharacteristic as it seems, we should
throw our support behind our existing governments so as to
ward off the dreaded usurpation*? Better still, "Let liberty
and free enterprise rule the day!" they might say. ..." -
Aragorn III msg#: 30709

Our founding fathers knew the truth about government --- ALL
government --- over two centuries ago:

"Government is not eleoquence, it is not reason; it is
force, and like fire, makes a dangerous servant and a
fearful master." -George Washington

How is it we've forgotten?

"Gather your wits please, and know your own mind on
government: a virtue or a curse? For as surely as many
shall say "Curse", these same will be the first and the
loudest to cite the principle evidence of evil to be held
against such banking enterprises as the Federal Reserve
System or the BIS is that they are NOT strict governmental
entities themselves, but rather "private corporations". -
Aragorn III msg#: 30709

Even in the two cases cited by ORO where governments were
not a curse to start with (U.S.A & Switzerland), inevitably
they evolve into one. Look to today's Washington D.C. if
you need proof. -J.

The problem with such organizations as the Federal Reserve
is that while they indeed function as "private
corporations," they pretend to be branches of government.
At least in the case of the Federal Reserve, it would more
accurately be described as a clandestine fascist
(capitalist) corporation in cahoots with government, and it
couldn't have been brought into existence or continue to
exist without explicit government force and threats of force
choking off it's natural competition. Thus fascist bankers
get the best of both worlds and "the people" get the worst.
Free market banking would give us banking variety on the
same order as the variety we now find in food choices and as
free markets do, also give us control at a very personal
level. -J.

"In like manner we see people who proclaim that our domestic
paper currency has gone bad, that overseas currencies are
"socialistic" and worse, and yet, that the replacement of
them with a theoretical One World Currency would be worst of
all." -Aragorn III msg#: 30709

There IS a "One World Currency." Gold. What the NWO
proposes is a one world megabyte (paper/electronic) currency
installed by "fiat," that is by law rather than choice and
competition. They need this megabyte currency so they can
continue to rip us off by seigniorage and inflation. I
personally favor free-market competing currency. Any IOU
will do, even the one scribbled on the back of that envelope
by uncle Joe - - - as long as no one is forced to accept it
by fiat, by "legal tender" threats of government force. -J.

"These are surely among the loudest to proclaim "Gold must
be allowed to have its day!" and yet they then cite "better
leverage" on gold mining shares and gold
futures/options...and therefore embrace the paper status
quo." -Aragorn III msg#: 30709

Indeed, there are many gamblers here on this site (and
elsewhere), and they have every right to gamble on Uncle
Joe's IOU --- or any other paper or electronic IOUs (gold
futures/options, etc.) they choose. They don't have a
legitimate gripe if they lose, however. Incidentally, I
wish all gamblers the best of luck. -J.

"Such people are keen to say, "Blessed be the simpletons of
the world who are buying milk, for I shall be wiser and buy
a cow!" As with most plans, it looks good on paper until the
moment of truth arrives, revealing your speculative
expectations to be pure bull." -Aragorn III msg#: 30709

Yep! Prediction is very difficult, especially of the future.
And speculation based on such predictions is even more
difficult. -J.

So, as Aristotle says, "Gold; get you some."

Regards,
Journeyman

gidsek

(05/17/2000; 20:24:26 MDT - Msg ID: 30749)

Oil

Laura (5/17/2000; 9:03:12MT - usagold.com msg#: 30718)
oil consumption will exceed production 3rd and 4th quaters
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Bloomberg%20Energy&touch=1&T=energy_news_front.ht&s=AORwoDhKDQ3J1ZGUg
``The speed and velocity of this thing is quite frightening.''
----------------------------------------------------------
This won't be a problem as gas stations will soon offer call options, right there under the glass along side the scratchable lottery tickets :)

gidsek

gidsek

(05/17/2000; 20:59:25 MDT - Msg ID: 30750)

Journeyman

Journeyman (05/16/00; 23:00:22MT - usagold.com msg#: 30701)
_CENTRAL_ planning @gidsek msg#: 30699, ALL
gidsek msg#: 30699
Journeyman ... "Planning"

"On the first or second page I came across a statement something to the effect that Communist
economies are planned and Capitalist ones are not.
With that I put down the book, knowing that what followed wasn't going to be of much value." -gidsek msg#: 30699

Hard for me to speak of the value of that author's statement -- I think Mises was talking of _central_ planners, a la the Soviet Union, etc. -J.
------------------------------------------------------
-/Let me apologize for my somewhat off-target post. I guess my post was more about the axe I like to grind with Dr. Heilbroner than a properly formed reply to your post. What I wanted to highlight was that the notion of "planning" as we conventionally apply it to the question of economies can be misleading. I do believe Von M meant what you say he does.
-------------------------------------------------------
"I have acquaintances who own a couple of retail stores amd together they "plan" a small portion of
the nations' economy, just over $1,000,000 worth of it." -gidsek msg#: 30699

I think what Mises is saying (if I may be so bold) is that in a centrally planned economy, your friend planning his $1,000,000 part of the economy wouldn't be allowed -- the central planners would dictate instead. -J.
------------------------------------------------
-/Yes, I agree he is saying that.
------------------------------------------------
"In point of fact Capitalist economies are "planned" in the extreme, by anyone who has earned the right to participate and do so." -gidsek msg#: 30699

Indeed. And this is majorly different from "centrally planned." The major difference is that if someone like your friend plans in ways that don't satisfy their customers, they either change their plan or go out of business. This forces adaptation to what people want, rather than forcing people to adapt to what central planners want.
--------------------------------------------------
-/The author/economist whos' work I rejected seemed to be of the view that our (Western) economies consisted of somekind of glorious entrepreneurial chaos, at least that's something I often pickup when some people get all warm-and-fuzzy about free enterprise. I intended to debunk that with my post.
---------------------------------------------------
However, I'm not an advocate of capitalism -- that very name confesses the rules are skewed to favor those who have money over those who don't. I prefer free markets (instead of capitalism) where the rules are truly neutral.

Regards,
Journeyman
-----------------------------------------------------
-/ If you have a mind to Journeyman, I'd be interested to hear you draw a distinction between capitalism and free markets. Seeing you contrast the two as you have done made me realize that I can't define the difference properly.

Thanks for reading.

gidsek

Canuck

(05/17/2000; 21:09:32 MDT - Msg ID: 30751)

Response

@ Steve H.

You said,
-----------
"Now, do the Repubs have an inside track into the inner workings of the gold market. I think not. No, they are just now finding out something that is probably washing out the ears of those in high places, as we speak. Thanks to GATA.

I believe once it sinks in they will have to figure out what there is to be done with the greatest financial scandale of all time. Do they expose now; or do they expose later or do they just play dumb? You tell me."
----------------------------------------------
So, a) are you and I more astute than the Republican party or
b) are they arming for the 'assault' going into the last 90/120 days of the campaign?

If the Democrats are 'pulling the stops' to hold onto the electorate then logically (when the time is right) the Republicans will expose the 'truth', yes?

If no, then this manipulation of 'truth', free markets, and
rights is much more than we bargained for, yes?

Imagine a concerted effort of electorate and 'opposition' to hold the nation in tact. This is scary shit. If the latest Gata effort does not expose and bring forward the 'greatest scandal of all time' I fear for all of us.
If it doesn't, I fear more. The next couple of months will be interesting, the clock is ticking, and frankly, the charade really does get worse each and every day. Gather your gold, silver, guns and women (rhetorically
speaking), after that not much matters.

Hill Billy Mitchell

(05/17/2000; 21:23:22 MDT - Msg ID: 30752)

Official release

http://www.bog.frb.us/releases/H15/update/
Official: Federal Reserve Statistical Release

Release Date: May 17 2000

Rates For Tuesday, May 16, 2000

Federal funds 6.13

Treasury constant maturities:
3-month 6.20
10-year 6.43
20-year 6.52
30-year 6.12

upside-down spread FF vs long bond = (.01%)

Canuck

(05/17/2000; 21:25:26 MDT - Msg ID: 30753)

Response

@ PH in LA

You said,

"Of course, the operating fiction is that the Federal Reserve (with its chairman appointed at rather long intervals) is supposed to be more or less detached from politics. There is no way the Dems are going to take responsibility for this whole mess, which has been building up gradually for a very long time."
--------------------------------------------------------

So how do the Republicans and Democrats 'detach' themselves of the responsibility when elected/re-elected. I have recently thought that it might be a blessing in disguise to loose the election, particularly from a Republican point of view. Again from my severely novice point of view, I'd hate to be next President of the United States.

elevator guy

(05/17/2000; 21:40:40 MDT - Msg ID: 30754)

Thank you!

Thank you, Strad. Wishing you well.

and

Thank you, Mr Gresham. Funny link there!

MarkeTalk

(05/17/2000; 22:28:30 MDT - Msg ID: 30755)

Turning points?

Interesting that the stock market would rise sharply after Fed Chairman raises interests rates by one-half percent. Maybe it has something to do with market cycles and timing which, upon further observation, underpins the market. Take, for example, tomorrow and Friday. Tomorrow is the full moon which, according to Steve Puetz's "eclipse theory," tends to mark turning points in various markets--most notably the stock market. Judging from this week's action, I would say that it will be a top just before or even coinciding with Friday's stock options expiration. Further observation and study of history shows that the stock market changes direction markedly about 75-80% of the time in the week following the expiration of options. Putting all of this together, my best guess is that stocks are headed down after tomorrow or Friday. Monday the 22nd should be very interesting! And if eclipse theory is valid, then the selloff should continue until the new moon on June 2. As far as gold goes, long-term cycles are bottoming in this time frame. The next gold auction of 25 tons to be held by the Bank of England occurs on May 23. Don't be shocked to see a surprise rally in the metals take place as these events unfold.

Finally, the anemic CPI number (unchanged from previous month) which was released yesterday took into account the recent decline in oil prices. However, now oil has rebounded to near its old highs of $30 per barrel. What are the spinmeisters going to do next month? Already there is talk about urging (forcing?) OPEC into another increase in production. (Iran is going to love this one.) The government must be getting really desperate. And don't forget the unfolding drought in the Midwest. Soaring corn, wheat, and soybean prices will tack on more percentage points to the PPI and CPI Indexes. This story was all over the national news today. Even Al Gore is calling for some committee to help against future droughts. What's he going to do? Hire shamans and medicine men to pray for rain? Keep tuned for further updates.

Chris Powell

(05/17/2000; 23:54:17 MDT - Msg ID: 30756)

Clinton administration moves against GATA

http://www.egroups.com/message/gata/460?Clinton administration moves against GATA:

http://www.egroups.com/message/gata/460?


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

Journeyman

(05/18/2000; 00:41:29 MDT - Msg ID: 30757)

Capitalism vs. free markets @gidsek msg#: 30750, HI - HAT,

"If you have a mind to Journeyman, I'd be interested to hear
you draw a distinction between capitalism and free markets.
Seeing you contrast the two as you have done made me realize
that I can't define the difference properly." -gidsek msg#:
30750

Free market is the easy part. A free market is a
theoretical geographical area in which people can trade
anything they own for anything others own and are willing to
trade --- and at what ever "price" they agree to without any
interference by ANY unwanted third parties in any way what-
so-ever. No rules, regulations, orders, or controls. No
taxes. No protections for either "buyers" (those with
"money" to trade) or sellers (those traders who want to
trade FOR "money") unless they agree to such between (or
among) themselves.

Free markets have NEVER been very popular, particularly with
businesses.

As I think you can see, we don't have any free markets in
the united States, except perhaps in the case of private
transactions that ignore all the rules, regulations, orders
and controls - - - and don't pay any sales taxes to unwanted
third parties. We here in the freest country in the world
have something else. What we have is capitalism.

The word "capitalism" was coined by, I believe, Karl Marx as
a pejorative term aimed at the ways he observed many
businesses, especially the bigger ones, functioning in his
day. They still function in a similar fashion.

Ironically, Adam Smith, THE father of free trade and author
of "Wealth of Nations" ran head-on into similar observations
more than a century before, causing him to burn the latter
portion of his life's work just before his death, apparently
in disgust.

What did these two men with very different political agendas
see?

What they saw was the results of businesses, when ever
possible, using all sorts of manipulations, the most
effective requiring government complicity, to defeat free
markets and the inherent competition free markets, by their
nature, guarantee. It's my contention that it was this
business-government matrix and it's results that underlay
both Marx's perceptions and Smith's disgust.

This all sounds somewhat innocuous, but a look at some early
examples will give you an idea of just how seriously people
dislike free markets and free trade.

"_(h) The countryside was cut out of trade in the Middle
Ages._
'Up to and during the course of the fifteenth
century the towns were the sole centers of commerce and
industry to such an extent that none of it was allowed
to escape into the open country' (Pirenne, _Economic
and Social History_, p.169). 'The struggle against
rural trading and against rural handicrafts lasted at
least seven or eight hundred years' (Heckscher,
_Mercantilism_, 1935, Vol. I, p. 129). 'The severity of
these measures increased with the growth of 'democratic
government' . . . .' 'All through the fourteenth
century regular armed expeditions were sent out against
all the villages in the neighborhood and looms or
fulling-vats [in which cloth was dyed] were broken or
carried away' (Pirenne, _op.cit_., p. 211)." -Karl
Polanyi, _The Great Transformation_. (Boston: Beacon
Press 1957), p. 277

Seven or eight centuries of "struggle against rural
trading," not to mention a century of loom-stealing and vat-
smashing does seem to indicate a rather serious dislike,
don't you think?

The government's payoff is it gets to use businesses as it's
tax collectors. In America today, for example, who collects
sales tax? Who collects so-called income tax? Who collects
FICA (Federal Insurance Contributions Act or "Social
Security") tax?

Things are more underground, more civilized today, but the
same anti-competition practices and government complicity
are still there. Today, however, they're more circumspect
and the most effective are hidden under the ruberic of
"regulation" and "consumer protection." Yes, I know that's
perverse, but it works better for them that way. A few
examples:

"[U]nder the licensing provisions," says Rep. John
Dingell, chairman of the House Energy and Commerce
Committee, "we give the broadcasters an absolute
federally supported and sustained monopoly which
denies anybody else the right to broadcast wView Yesterday's Discussion.

Journeyman

(05/18/2000; 00:46:42 MDT - Msg ID: 30758)

Capitalism vs. free markets @gidsek msg#: 30750, HI - HAT,

"If you have a mind to Journeyman, I'd be interested to hear
you draw a distinction between capitalism and free markets.
Seeing you contrast the two as you have done made me realize
that I can't define the difference properly." -gidsek msg#:
30750

Free market is the easy part. A free market is a
theoretical geographical area in which people can trade
anything they own for anything others own and are willing to
trade --- and at what ever "price" they agree to without any
interference by ANY unwanted third parties in any way what-
so-ever. No rules, regulations, orders, or controls. No
taxes. No protections for either "buyers" (those with
"money" to trade) or sellers (those traders who want to
trade FOR "money") unless they agree to such between (or
among) themselves.

Free markets have NEVER been very popular, particularly with
businesses.

As I think you can see, we don't have any free markets in
the united States, except perhaps in the case of private
transactions that ignore all the rules, regulations, orders
and controls - - - and don't pay any sales taxes to unwanted
third parties. We here in the freest country in the world
have something else. What we have is capitalism.

The word "capitalism" was coined by, I believe, Karl Marx as
a pejorative term aimed at the ways he observed many
businesses, especially the bigger ones, functioning in his
day. They still function in a similar fashion.

Ironically, Adam Smith, THE father of free trade and author
of "Wealth of Nations" ran head-on into similar observations
more than a century before, causing him to burn the latter
portion of his life's work just before his death, apparently
in disgust.

What did these two men with very different political agendas
see?

What they saw was the results of businesses, when ever
possible, using all sorts of manipulations, the most
effective requiring government complicity, to defeat free
markets and the inherent competition free markets, by their
nature, guarantee. It's my contention that it was this
business-government matrix and it's results that underlay
both Marx's perceptions and Smith's disgust.

This all sounds somewhat innocuous, but a look at some early
examples will give you an idea of just how seriously people
dislike free markets and free trade.

"_(h) The countryside was cut out of trade in the Middle
Ages._
'Up to and during the course of the fifteenth
century the towns were the sole centers of commerce and
industry to such an extent that none of it was allowed
to escape into the open country' (Pirenne, _Economic
and Social History_, p.169). 'The struggle against
rural trading and against rural handicrafts lasted at
least seven or eight hundred years' (Heckscher,
_Mercantilism_, 1935, Vol. I, p. 129). 'The severity of
these measures increased with the growth of 'democratic
government' . . . .' 'All through the fourteenth
century regular armed expeditions were sent out against
all the villages in the neighborhood and looms or
fulling-vats [in which cloth was dyed] were broken or
carried away' (Pirenne, _op.cit_., p. 211)." -Karl
Polanyi, _The Great Transformation_. (Boston: Beacon
Press 1957), p. 277

Seven or eight centuries of "struggle against rural
trading," not to mention a century of loom-stealing and vat-
smashing does seem to indicate a rather serious dislike,
don't you think?

The government's payoff is it gets to use businesses as it's
tax collectors. In America today, for example, who collects
sales tax? Who collects so-called income tax? Who collects
FICA (Federal Insurance Contributions Act or "Social
Security") tax?

Things are more underground, more civilized today, but the
same anti-competition practices and government complicity
are still there. Today, however, they're more circumspect
and the most effective are hidden under the ruberic of
"regulation" and "consumer protection." Yes, I know that's
perverse, but it works better for them that way. A few
examples:

"[U]nder the licensing provisions," says Rep. John
Dingell, chairman of the House Energy and Commerce
Committee, "we give the broadcasters an absolute
federally supported and sustained monopoly which
denies anybody else the right to broadcast w

Chris Powell

(05/18/2000; 00:47:16 MDT - Msg ID: 30759)

Washington buzzes about GATA

http://www.egroups.com/message/gata/460?Clinton administration moves against GATA
as Washington starts to buzz about the
gold issue.


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

Usul

(05/18/2000; 01:19:48 MDT - Msg ID: 30760)

Magnum Force

A market's got to know its limitations.

SteveH

(05/18/2000; 02:13:37 MDT - Msg ID: 30761)

Letter to my friend Leroy

Leroy,

GATA's Goldgate continues to enfold. I too believe that the Gold market manipulation by the US and the Brits to be the biggest scandal about to ever enfold. Why? Gold was purposely removed from the spotlight and then shorted for 20-years. During that time, large efforts were made to discredit it, yet all the while it remained more than a commodity -- central banks still hold it as a currency and gold still plays a role if not the major role of valuations of major currencies. Yet we are led to believe that it has no value but industrial. In the meantime, secret deals are cut to ensure a little bit of gold goes along with a little bit of oil. Cheap gold has been used to provide cheap oil. That is correct. The purpose, it would seem, of the large gold short position was to make sure that oil actually stayed cheap in US dollars. Bullion banks loaned money to the mines who sold the contracts for the return of gold to pay back those loans to the bullion banks, who in return sold the contracts to oil interests. Oil money provided gold mines with funds whose gold then went to the oil countries as it was extracted. More and more of these contracts were made until the number of years gold was hedged forward has become untenable. Throw into the mixture the concept that if gold were to rise to the price that would curtail demand, it would make the dollar devalue significantly and signal the true state of monetary inflation as the number of dollars to buy gold has increased dramatically in recent years.

Now the gold loans and short position has reached epic proportions. That the problem was known by certain high level persons whose former employer was a major bullion bank, which has been known to be the biggest paper-gold (gold contracts) dealer during any of the recent price run ups in gold, appears to be no coincidence. This is why GATA is focusing in on the Exchange Stability Fund of the US Treasury department. It seems that all the fingers are pointing there. In the meantime all efforts to point out this major fault in the cinderella economy go unheard by the watchdog organizations that are meant to or should pick up on such a major problem. Evidence of this is the large of amount and proper timed news reports that bash gold, especially during recent gold price rallies.

Evidence of major collusion amongst the Brits and the US comes recently in the form of the widely publicized British Gold Auctions whose primary purpose almost seems to cap the price of gold. The one time that gold did rise $85, after one of the auctions, two major gold mining companies ran into financial stress as their hedge positions put them in serious jeapordy of bankruptcy, which merely confirms the above.

SteveH

oldgold

(05/18/2000; 04:16:27 MDT - Msg ID: 30762)

gold and oil

The idea that gold has been surpressed to keep oil cheap is on of the most idiotic ideas ever.

Oil prices have exploded while gold continues to sink into the toilet. Cheap gold has not prevented oil prices from taking off. Saudi prices are investing heavily in the US stock market -- they could not care less about gold for the most part.

This particular emperor has no clothes at all.

Aragorn III

(05/18/2000; 05:14:07 MDT - Msg ID: 30763)

Gandalf the White and PH in LA..."The Return of the King"

I must counsel you to exercise caution with your well-intentioned (and appreciated!) literary references of this nature, lest the uninitiated visitor be led to believe my posts may contain more merit than is warranted. I am to be the last person to lead another beyond the exercise of their own clearest thought and free will.

PH, your observation, "I noted that you had not posted since November 24, 1999." It would seem that I sat down at the Thanksgiving table and found that I had very much for which to be thankful.

Gandalf, it was nice of you to seek tidings of this errant Ranger in these past few days. You, especially, will be glad to know that true to the Red Book's lore of my namesake, I too have been kept busy in the assembly of a most special "Grey Company" to keep a watchful eye upon the lurking perils pressing at the wild borders of "the Shire". If, as you say, your hobbits have sewn gold into their vests or breeches, then they have brought about the very best protection of self-defense, reducing in essence my offered service to being little more than that of a night-lite within a well-secured household...perhaps comforting for the little ones, but otherwise and nonetheless completely without value.

Yet, if this voice has been silent for overlong, it can only be for two reasons: development of these various projects has consumed much thought and time; and moreso, I am sure it benefits nobody to suffer through such commentary as this when other voices continue to convey the messages so well. Truth, as you know, is not determined by election--to be awarded to the position receiving the most popular votes. Some here have laid it quite bare, making it an easy path to find for others to follow if they will. I would do well not to offer these distractions--for as surely as I might embark on such frivolity as to reveal non-interest-bearing gold assets (closely held physical metal) to comprise the bulk of my own quantifiable wealth, there would inevitably emerge inquiries seeking investment insights based upon the composition of the remnant non-gold fraction...missing the true insight entirely.

Henri, I am pleased that you saw the good humour intended in my post. You have offered many nice posts, and I hope you continue to share your candid thoughts on the nature of money and investments, and what expectations you have for those charged to be custodians of your currency. What point would be reached for you to declare them to have failed utterly, and what advice would you offer in the discharge of their duties?

Journeyman, you honor me with the thorough scrutiny you gave to my post, though I fear it breaks down woefully when each line is called upon to stand alone. Working as a whole, the post was to convey the tendency of a people to run with what sounds good, coming down variously on both sides of an issue, never actually pursuing a personal *Resolution*. While I indicated such limbo takes its toll on attaining a degree of peace, such "peace" was not intended to equate with "sleep"--as we do find ourselves to be "living in interesting times". Such "peace", as you will likely agree, can be attained even during times that action is called for by forming personal internally-consistent convictions through thoughtful arrival at a guiding philosophy and understanding. It must be taken as a whole, for the post was structured (perhaps inartfully so with weak parts) to reveal how many are seen seeking to benefit by insistently standing upon the very foundations they purport require a prompt tearing down.

You offered, <>

Yet, we would do well to balance or resolve that sentiment with this from one I deem to be of greater stature than George Washington:

"We hold these truths to be self-evident,
THAT all men are created equal,
THAT they are endowed by their Creator with certain unalienable RIGHTS,
THAT among these are Life, Liberty, and the pursuit of Happiness.
THAT to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.
THAT whenever any Form of Goverment becomes destructive of these ends, it is the RIGHT of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate
THAT Governments long established should not be changed for light and transient causes...But when a long train of abuses and usurpations, pursuing invariable the same Object evinces a design to reduce them under absolute Despotism, it is their RIGHT, it is their duty, to throw off such Government, and to provide new Guards for their future security."

Obviously, those are the good words of Thomas Jefferson.

You objectively provided that,
<<"The problem with such organizations as the Federal Reserve
is that while they indeed function as "private
corporations," they pretend to be branches of government.
At least in the case of the Federal Reserve, it would more
accurately be described as a clandestine fascist
(capitalist) corporation in cahoots with government, and it
couldn't have been brought into existence or continue to
exist without explicit government force and threats of force
choking off it's natural competition. Thus fascist bankers
get the best of both worlds and "the people" get the worst.
Free market banking would give us banking variety on the
same order as the variety we now find in food choices and as
free markets do, also give us control at a very personal
level." -J.>>

And yet, while this is a powerful argument, why is it that a goodly portion of those who gather at this knowledgeable table remain reluctant to take the "high road" by seeking the wealth of gold as their profit, preferring instead to use the gold industry and its derivative markets merely as their vehicle to deliver them to prosperity while they remain entrenched within and supporting (though not verbally) the system offered by this "clandestine fascist (capitalist) corporation in cahoots with government"? In my "fire and ice" post, I sought to question aloud whether this particular and specific group of "gold" investors suffered any pangs from a crisis of conflicted conscience. (To be sure, those in the majority seeking a similar prosperity within the existing system but doing it elsewhere (such as internet stocks?) are not likely to feel conflicted by their actions because they do not similarly have the first notion of these gold/currency/banking issues as openly discussed here.)

In this regard, I relished your mature observation, and shall allow it to be the good anchor for my otherwise poorly constructed post.

<elsewhere), and they have every right to gamble on Uncle
Joe's IOU --- or any other paper or electronic IOUs (gold
futures/options, etc.) they choose. They don't have a
legitimate gripe if they lose, however. -J>>

And yet, who will it be to stand firm as necessary to remind the masses they have no legitimate gripe when one day the chips do in fact fall as they are destined to do so? If only we could get your good message printed upon cereal boxes...

got gold?

Aragorn III

(05/18/2000; 05:44:40 MDT - Msg ID: 30764)

For Oldgold

"The idea that gold has been surpressed to keep oil cheap is on of the most idiotic ideas ever. ... Saudi prices are investing heavily in the US stock market -- they could not care less about gold for the most part."

When we see a well-dressed man dash for a phonebooth, need we conclude the "obvious" intent that he must make an urgent call, or can we rightly see that a matchbox is too small to suffice as a hasty makeshift shelter from the sudden or threatening downpour? To draw the broader conclusion that standing in a phonebooth is somehow testimony that such a man is utterly without a home seems faulty beyond merit to suggest.

I hope this is helpful to you in some way.

got gold?

ORO

(05/18/2000; 06:05:36 MDT - Msg ID: 30765)

OldGold - Patience

The line of thinking presented here on the topic stressed that oil would go first because of the lack of physical gold and credible contracts for future delivery.

The 50% decline in volumes on the LBMA and the fall in COMEX volume fall in line with this reasoning.

The fact that the bankers joined together rather than each running for their lives (what ANOTHER expected them to do under the circumstances), illustrates the same point. The fact that Morgan (probably no longer "guaranteed") took on the bulk of the positions from BT (a Deutche sub), seems to have taken on the positions of Republic (an HSBC sub) and perhaps some from Credit Swiss (First Boston's positions or CS positions) - it all comest to it being a symptom of a problem of lack of liquidity in the gold markets.

Whether Morgan is doing this with a clear guarantee of bail-out, whether it is the "sacrificial lamb" (like Summers), or whether it is doing so out of arrogant belief in its ability to control the market through diversion of bullion buyers to other avenues, it is a dangerous step.

I said that I suspect that the British traded their loyalty to the US/IMF side in return for maintaining London's preeminence in financial markets (soon to be shared with Frankfurt). I believe FOA said so explicitly as well. The appropriate deal to save them would have included unloading the gold liabilities of English bankers - (i.e. banks backed by BOE) onto US bankers backed by the Fed.

---------------
Journeyman -
You do such a marvelous presentation of the concepts. So concise. Bravo.

I have been reading slowly and carefully though www.wealth4freedom.com

For the most part, they took Mises' view from outside and turned it inside out into a view from inside, put in the first person.

It is quite shocking to see it condensed that way.

Black Blade

(05/18/2000; 06:30:06 MDT - Msg ID: 30766)

Wakeup Morning Call!

Source: Bridge NewsAsia Precious Metals Review: Gold stayed at $273 with sluggish trade
By Hiroyuki Fujiwara, BridgeNews

Tokyo--May 18--Spot gold stayed at around U.S. $273 per ounce with sluggish trade on Thursday in Asia after an overnight slip, dealers said. The absence of buyers led gold slightly weaker but players were hesitant to decide price directions, they said. Platinum was steady following overnight firmer NYMEX, while profit-taking continued to prevent prices from surging, the dealers said. Overnight gold's slip to 7-1/2 months low in the U.S. market discouraged players from buying gold on Thursday, the dealers said, adding that market sentiment remains weaker towards the next U.K. Treasury's auction on May 23 Meanwhile, players expect $270 could be the next strong support and buying from physical dealers is expected to underpin gold around the level, they said. Many local jewelry makers continue to buy gold from hand to mouth as they do not want to increase stocks, but further price decline might attract some bargain hunters to start buying more, the dealers said. Players have confirmed the strong support line at $500 for spot platinum in the past few days, dealers said. They said some speculators on the Tokyo Commodity Exchange (TOCOM) resumed to open fresh buying positions on Thursday after taking profits on the previous day. However, a lack of fresh incentives prevented platinum prices from extending the early morning gains in the sluggish market, as TOCOM players expected 1,500 yen per gram could be a strong resistance for the benchmark April 2001 platinum contract, the dealers said. Platinum's lower 1-month lease at about 45%, compared with above 60%
last week, also kept players hesitant to buy platinum aggressively here, they said.

Black Blade: Same ol song and dance. Everyone is just waiting to see how Au will go, and see who will make the first move.

Munk defends Barrick's gold hedging strategy

Toronto--May 17--Peter Munk, the founder and chairman of Canada's Barrick Gold Corp., set the record straight about the company's gold-hedging strategy by saying it has set apart the company as the leader in its industry. Munk distinguished between Barrick's low-risk means of hedging gold production and the more speculative method used by some other mining firms. (Story .21590)

Black Blade: Suppose that he got his start by playing 3 card monty when he was a child? Nice try at the "snow-job" Pete. According to Gold Fields Minerals Services LTD, hedging in 1999 amounted to 11% of the 4,079-mt world gold supply - some 445 mt. Barrick has sold forward 3 years production!

TVX Gold to consolidate shares

Toronto--May 17--Canada's TVX Gold Inc. on Wednesday said it is seeking approval from its shareholders for a share consolidation on a 5-for-1 basis at its annual shareholder meeting on Jun 27. This move will allow TVX shares to remain listed on the New York Stock Exchange, which introduced a requirement that all listed companies maintain a minimum trading price of US$1.00 per share. (Story .22265)

Black Blade: Add insult to injury, gold companies now reduced to reverse stock splits just to remain visible on the Big Board! Others are likely to follow.

S Africa's AngloGold allays investor fears on Zimbabwe

Johannesburg--May 18--South African gold producer AngloGold has allayed fears that South Africa was poised to follow Zimbabwe on the road to economic breakdown, pointing out that the South African economy was in better shape now than in any time in the past 25 years. (Story .12893)

Black Blade: Indeed, there is no comparison to the problems of Zimbabwe's economy to S Africa. Zimbabwe is a dictatorship run by a madman (Mugabe), and S. Africa is a relatively stable democratic republic lead by a weak-willed president (Mbeki). Albeit both have very high crime rates.

DaveC

(05/18/2000; 07:00:26 MDT - Msg ID: 30767)

Secrets of the Temple

"After years of inflation," Paul Volcker told the audience in the autumn of 1979, "the long run has caught up with us." The message was clear to every member of the Federal Reserve Board, even to those three reluctant governors who had recently voted against even a modest increase in the Discount rate. In the last half of September, their worries about imminent recession were contradicted by the new data on economic output coming in from the Commerce Department. Despite all the forecasts, the economy wasn't tipping into a contraction; it was accelerating again.

And despite the Fed's gradual efforts to slow things down with measured increases in interest rates, the banking system was actually accelerating it's lending. Bank credit was expanding at an annual rate of more than 20%, and, as Fed officials heard from worried bankers, a lot of that new credit was going into speculative ventures - businesses and individuals borrowing in order to buy things on the rising prices, speculative investments from gold and silver to real estate. They were betting that inflation would drive prices much higher. The smart speculator would then sell the commodities or other tangibles, repay the loans and reap a smart, quick profit.

Speculation did not look like a risky bet: the overall inflation rate was near 13 percent and the price of oil was increasing at an alarming rate of more than 6% a month-an anuual inflation rate of nearly 80 percent. Gold had jumped 28 percent in value in a single month, reaching a record $411 an ounce. The price of silver, in the same period, had increased by a staggering 53 percent, up to $16.89 an ounce.
"The specter of 1929 was raised by me and others," Governor Coldwell said. "Look, we're on the verge of going into a hyperinflation in the United States."

While that sounded much too apocalyptic, the frenzy of borrowing and buying did resemble the potential for a classic speculative bubble, one of tose fevers that has occurred periodically in economic history. The marketplace losses touch with real value and plunges forward in an orgy of aquisition. Whether it is stocks or bonds, corner lots in big cities or underdeveloped swampland in Florida, speculative bubbles all derive from one conviction: the buyers are convinced that in a few days or weeks or months they will become sellers and unload their purchase at a profit. Bubbles always collapsed eventually; the fever broke and prices fell drastically. Then speculators were forced to sell at a loss. They failed and so would banks that lent them money to take their gambles. That is approximately what happened to Wall Street in 1929, when the bubble of financial speculation burst and the stock market collapsed.

From Secrets Of The Temple - How The Federal Reserve Runs The Country by William Greider

DaveC

(05/18/2000; 07:05:43 MDT - Msg ID: 30768)

God Help Australia

I was talking to a newly-married couple from Australia yesterday on a train in Italy (where I live). They are traveling around Europe. They told me that the Aussie government has finally passed a 10% VAT (or GST for you Canadians) tax. The woman said something like "I'ts no big deal. It just gets passed on." And the gent chimed in "Yea, only the last one in the chain pays it. The problem is all the paper work because everyone in the chain has to collect it." They said New Zealand has had it for a long time. I got the impression they are tax-numb.

What was even sadder is she told me that she works for an internet company and she said her stock options were now worthless.

God help Australia.

nugget101

(05/18/2000; 08:00:45 MDT - Msg ID: 30769)

Twice Discipled msx30577 (Tax avoidance)

I've been researching this subject for years now and have found that Lynn Merideth has been pretty well discredited. I would also be wary of Irwin Schiff. I suggest you dig further. I've come to the conclusion that it doesn't matter that you have the law on your side, the IRS is a bully and will do what is pleases. They also have deep pockets whereas you and I have to make a living and feed our family. If you find a good solution post your email so we all can benefit.
Good luck.

Twice Discipled

(05/18/2000; 08:19:06 MDT - Msg ID: 30770)

@nugget101

Please send an e-mail to USAGold and asked for Twice Discipled's e-mail. MK -- Permission granted. I would like to talk.

Elwood

(05/18/2000; 08:51:22 MDT - Msg ID: 30771)

From the Trail: FOA (04/03/00; 20:58:36MDT - Msg ID:15)

http://www.usagold.com/goldtrail/"More importantly about the WA, the total existing contracts held at signing time were allowed to continue without any draw down criteria (gold to cover) over the 5 yr. term. Over time, this will squeeze the dollar physical market in an effort to fill existing paper commitments. In effect, the BIS now has it's hand on the gold valve and is controlling the contract filling flow at will."

Trail Guide, are you saying here that it's the BIS people who (since the WA) are behind the flow of gold from the earmarked accounts of the Fed, and not the American administration delivering into a dying system? Do you have any ideas as to where the additional flow, that over and above the earmarked stock(20+ tonnes per month through Feb), is coming from? Thanks.
Elwood

USAGOLD

(05/18/2000; 08:51:23 MDT - Msg ID: 30772)

Today's Market Report

5/18/00 Indications
�Current
�Change
Gold June Comex
273.20
-0.60
Silver July Comex
5.01
-0.03
30 Yr TBond June CBOT
93~21
-0~10
Dollar Index June NYBOT
112.06
+0.07


Market Report (5/18/00): Gold was off marginally in the early going. Most market observers
expect the market to remain in the current price range for the remainder of the week as we ramp up
to the Tuesday Bank of England auction. Strong sentiment in favor of the dollar is also keeping
gold within a stone's throw either side of the $275 mark. For those looking to make a purchase,
the next two days might be a good time to do so. The market tends to trade down before BOE
auctions and up after. In addition, we are at 8 month lows with Financial World News (FWN)
reporting good physical demand at these levels. "At the moment demand has died down a little to
allow the BOE auction to pass and take prices briefly lower, but physical demand remains buoyant
and dip-buying around these levels will be the shape of things next week," a dealer said. The big
players looking to fill orders tend to do so at the expense of the Bank of England. The Asian
market reports sluggish trade. Europe is reporting good physical demand probably related to euro
weakness. Standard Bank reports that "New York pressured [the London] market lower." They
also report a wave of "short selling" on the COMEX yesterday driving prices lower.

That's it for today, fellow goldmeisters. Have a good day. We'll see you back here same time,
same place tomorrow.

Henri

(05/18/2000; 10:01:08 MDT - Msg ID: 30773)

Aragorn III Post #30763

Thank you for the kind words concerning my previous posts.

You are right. Is is far simpler to point out the fallacy of the structure which exists than to propose one that would work better. Alas your queries are mine as well and in calling the world as it is now commonly perceived (nay, as it commonly exists for those entranced by the illusion)foul, I am obligated to advance a solution. Is it no wonder so many remain silent and only read the ongoing commentary rather than engaging it?

Your query:
"...what expectations you have for those charged to be custodians of your currency. What point would be reached for you to declare them to have failed utterly, and what advice would you offer in the discharge of their duties?"
__________________________________________________________
Here is my tentative response:
I have been gently brought around to the perspective that gold has enduring value and will retain such even in the face of the manipulation of its apparent valuation in terms of currency. As such, gold should never be lent directly. If the wealth represented by gold is to be utilized, then it should be done by the offering of it as collateral for a loan of currency. The credit line of the loan should be of fluctuating value relative to the "valuation" of the asset held in escrow. The amount of currency drawn on the credit line should not exceed 10% of the collateral valuation. This is known as credit worthiness. With such an arrangement, the fee charged for the use of the currency should be very low as there is very little risk associated with the transaction. The presumption is that the amount of the loan is sufficient to generate more currency in a commercial endeavor than is needed to pay the fee for usage and the profits of said endeavor (that being excess currency generated after paying protection fees to that entity commonly charged with upholding the contract law of the land)are able to be converted back into something of enduring value. Such an arrangement must be kept on a schedule which is restrained to an increment of time that is a small fraction of the projected lifetime of the currency borrowed. One should never engage in such a transaction in a currency that is beyond its lifetime and on life support. The escrowed wealth should be held by a reliable third party for a small fee and in such a way that the escrow agent has no access to the wealth but is liable for its integrity. A three way SDB comes to mind. The box cannot be opened without all three parties or their trustees being present. This should be done on a regular schedule so that the integrity of the escrowed wealth is validated. That portion of the escrow which is drawn (10%) is the amount considered at risk and the escrow agreement must be written such that the provider of the wealth may liquidate at any time the conditions of the loan by the transfer of 10% of the wealth to the loaner of the currency thereby making free and clear any and all encumberment of the asset base. The loaner of the currency should never be allowed this same priviledge nor should any of the three parties be able to further encumber the collateral by writ against its valuation. The collateral should never be placed on any public books of any of the three entities as an asset; however, the paper contract representing the fee structure of the time arrangement should only be recorded. That paper contract, not representing any value other than future fees to be paid must not be sold or transferred without the agreement of the three parties. Such transfer can be imagined if the lender becomes insolvent and wishes to terminate the arrangement prior to the contract specification.

Notice that in the above, the individual holding the wealth, retains control of it at all times and does not subject it to any threat other than the ability to liquidate 10% of the wealth in escrow. This is considered "capital at risk". The timing of such an liquidation should be solely at the discretion of the borrower of the currency (the owner of the wealth at risk).
At the time of such liquidation, the credit line is marked to market. The contractual obligations of the borrower to repay the loaned currency are terminated and there may be no further connection or encumberment of the business venture funded by the escrow arrangement.

That someone would be charged to be the custodian of my currency (as opposed to money or wealth)would imply that they could return real value for its temporary usage. If I am to bond it to their care for some increment of that illusion called time, at the conclusion of the agreement I should expect that the return (interest) be able to be converted to something of enduring value. It would be currency that I lend, not wealth, but perhaps wealth at risk. If I have created value in my commercial endeavor as described above beyond the carrying cost of the operation, the business plan should allow for the termination of the escrow agreement first and foremost before any currency can be utilized for a purpose beyond business at hand. In this way, the profit generated by the business allows settlement of the escrowed account in currency and any excess is profit. This profit may then be put at risk by loaning the currency (not the now free and unencumbered wealth) to a third party who promises some return. A more prudent business plan is to generate sufficient capital to free the escrowed wealth and then use the profits to accumulate more wealth (at least equivalent to the original credit line-10% of the wealth originally escrowed). Further profits generated by the business may then be placed "at risk".


As a guiding principle, they (the borrowers of my currency)must acknowledge the concept that it is indeed my currency that I lend them. And not their currency to use in risky ventures of which I have no knowledge. In other words, they should not put my capital at risk without my explicit approval.

I would consider it a breech of trust for that set of laws which protect the sanctity of the escrow arrangement to appropriate the escrowed wealth without my having committed any act which they might call "illegal". There was a provision in the business plan of the commercial endeavor to include the payments to the authority guaranteeing the sanctity of the business environment. Therefore, no illegal act was intended. The other breech would be for that authority to deny me the right to convert the currency of my profits into a medium of enduring value (more wealth).

I hope this expose on my current thoughts on wealth and business helps to explain my thoughts on money and freedom to engage in business. As you can see, for this to work, one must first have wealth to put "at risk". It takes wealth to make more wealth. That said, the primary objective for freedom to accumulate wealth is to first become debt free. It seems incredible to me now that I have been debt free for many years, how much easier it is to be comfortable living on an income that most people (and more importantly the local authority) would consider to be poverty level. Think of it...I am in a low tax bracket yet enjoy the comfort and lifestyle of many far more encumbered than myself. Taking the standard deduction is actually a government subsidy for me. Assuming of course that I acknowledge their authority to tax my commercial endeavors...which I currently do since they allow me to continue to accumulate wealth.

As to what advice I would offer the authorities in the discharge of their duties, I propose the following:
1) do not overly encumber the people and under no circumstance should the unborn or child or the elderly (over 75)be encumbered or taxed. The elderly who have resided in the country long enough to have accumulated wealth sufficient to carry them should not be taxed during their remaining life nor should their estate be taxed when passed on to their children. It should not matter in the least whether such beneficiaries are residents or not.
The elderly who come here live from abroad that have sufficient wealth to carry themselves should not be taxed. But they should not be allowed social benefit payments subsidized by those that are in residence and working.

2)Educate the masses to the benefits of being debt free and reward the accomplishment of such status. Interest from savings at a bank should not be taxed. If wealth is utilized to generate an ongoing commercial endeavor, the profits from such an endeavor should not be taxed beyond the normal (and marginally acceptible) draw already taken from the endeavor itself.

3) Practice what you preach. Do not encumber the people beyond their carrying capacity (That point which the govt must borrow against the future earnings of those not yet working or not yet born.

4) provide a safe and reasonable legal structure to guarantee the sanctity of contracts. Allow contracts to be made with any entity in the world. Only encumber business that falls under the jurisdiction (protection) of the law. Whether it is owned by residents or foreigners. Foreigners will invest here since the structure allows the accumulation of wealth. Do not encumber the people with social programs or large bureaucracies.

5)Punish the vertical integration of business, and reward the horizontal integration of business with greater or lessor encumberments.

6) Outlaw the engagement of derivative trading beyond simple futures delivery contacts and simple put/call activity (assembly of complex-multicomponent or index derivatives swaps etc.) Do not "bail out" industries or banks. Allow this punishment for excessive risk to assert itself.

7) Allow the people to own the money as was intended by the US Constitution. This would require the repeal of the Federal reserve act.

8) maintain a balance of fair and just power between the federal and state jurisdiction. Allow the affairs of the people to be overseen by common law. The affairs of business may be retained under admiralty law. When the state is found to be corrupt, punish it with exertion of federal authority. When the state operates efficiently and with integrity reward it with unprecedented freedom.

9) when a group of states find that the federal govt has become oppressive without justification, they may petition the remainder of the states represented within the senate for the orderly return to constitutional mandates.

ORO

(05/18/2000; 10:08:14 MDT - Msg ID: 30774)

FOA, AragornIII, Aristotle

http://hotyellow98.com/maui/DEPRESSION.htmlThe URL above has a great discussion of McFadden's attack on the Federal Reserve system in the Senate.

The logic of his argument is simple and impecable. It can be summarrized as follows:
1. The Federal Reserve, like all Central Banks, is the instrument of a bank cartel through which government FORCES upon their people the use of bank debt as money.
2. That Central Banks and Debt Money are economically destructive by the nature of their business.
3. That when given the choice, people voted against parties and candidates that support Central Banks. That despite this poppular opposition, every democratic nation, and many who are not, have instituted Central Banks.
4. That the US passed the legislation in secret and without quorum, that Wilson, the President who signed it into law was completely under control of Col. House.
5. That every kind of crime was committed in the creation, operation, maintenance and utilization of this system.
6. That debt money has no possibility of stability and must increase debt loads in a spiraling debt inflation. That inflation transfers purchasing power to the bankers and their associates. That cessation of the expantionary spiral results in a chain of default that transfers wealth from the people at large to the banks that cash in on the security posted against loans.
7. That the great banks operate in tandem to time their inflation and deflation so as to create crisis.
8. That history has shown that central banks were used, and are used today, for the purpose of transferring resources from one country in support of its enemies.
9. That bankers behind central banks have done their best to maintain military conflict where they could by supporting both sides through the issue of government debt. That the indebted governments fall under more thorough control of the bankers so as to make all but the most impassioned political impulses of the poppulation carry any weight in government decision making.
10. That the governments of most nations have subjected themselves to the interests of these bankers.


I say to Aragorn

Debt money is bad on a national level. Therefore all modern currencies are bad, since they are all debt currencies. A global debt currency is worst. It allows grand theft on a scale from which none can escape, find recourse to, nor otherwise avoid. No people can opt out of a global currency, once established, because of the disaster of default on transnational obligations specified in that currency. The management of a global debt currency is outside the authority of any people.

Government.

Government is brute force. All structures of government for a free peoples must be so very tightly limited that a government official need go through many steps and tests to excercise authority, and must be kept personally liable for his actions at all times.

All governements in existence today are successors to Feudal governments established by the strongest armed bandits of their time. As their cleptocratic nature dictates, governments have routinely moved to expand and deepen their power, their allocation of the resources of any economy, and their control over the rest. The officials of government in dictatorial societies take their spoils directly. In a democratic system, the officers of government use their positions to further their own interests through exchange of favors or through their self-serving ideological zeal.

National government is best suited to protect people against other governments, domestic and foreign. Checks and balances must be strong enough to keep government preoccupied in fighting against itself.

The Jeffersonian view of the PEOPLES INTEREST in government still reflect Washington's view of government as a dangerous tool. So much so that Jefferson found it necessary to repeatedly tie the hands of government and clarify its purpose, yet it was to no avail, and the power of government was taken over by the same powerful interests Jefferson fought throughout his life.

I repeat what I said before, government power will be used to plunder its people and its friends and allies if there is some profit to be had by any possessor of capital or by government officers themselves through the use of this power. For this reason, only the most narrow powers should ever be bestowed on a government. The people must stand vigil constantly so as to catch those attempting to expand government power and boot them out.

If not, people find themsleves outside the ballroom built out of their own hide looking at the great splendor within, feeling desperate in their misery as others enjoy the product of their efforts.

Economically;

I say again that there is nothing but damage in debt money. It is a negative sum game. It transfers resources from those who produce to those who can't or won't for the simple reason of banks having a carte blanche to allocate resources through the issue of unlimited money to selected borrowers. Though the system has been flattened and broadened, there is still a advantage to the great banks in this allocation.

Only debt money issued at full liability of the owners and officers of banks and only to the extent it is accepted willingly can avoid the economic losses inherent in current fiat debt money.

ORO

(05/18/2000; 10:41:51 MDT - Msg ID: 30775)

Henri - Commodity money, tar and feathers

The solution to Aragorn's question has been there forever.

Leave government outside the decisions respecting money.

Let people decide how to contract with each other, how to bank, how to borrow how to lend, and most of all: to decide in what units they would like to do so. Government should only enforce contracts as they are written, holding bankers to their promisses and allowing them the positive and negative consequences of their judgement.

People do not need the patronage of government to make their decisions. They can hire debt rating agencies. If the rating agencies fail, they would be able to compete on the merits of their record and when they do not do their job "on purpose" they should be prosecuted for breach of contract and for fraud.

I propose that government have no choice but to accept as legal tender what people have chosen to use as money and do so at the exchange rates and proportions in which the money is used in trade, debt, and cash holdings. Government should have no choices in the matter. A choice would imply that government has a possible preference. A preference is a policy. All government policy is suspect, and government should not be allowed to have such dangerous discretion.

Follow these principles:

The best currency is no currency.

The best debt contract is the one into which both sides entered with full understanding of what they are doing.

The best money is that which people choose of their own accord. It may - or may not - end up being gold and silver. One should remember that both these metals were the choices of governments made under the influence of bankers. Who knows, the "monetary basket" may include S&P depositary receipts or Wilshire Total Market Index units along with gold, silver, copper, nickel and grain elevator receipts or gasoline certificates.

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

Wouldn't it have been great if the constitution were to just say "Congress shall make no law" and the president shall just look pretty?

Henri

(05/18/2000; 11:08:17 MDT - Msg ID: 30776)

ORO

Thank you for the engagement on these issues.

Yes you are right. The terms of any contract should be those agreed by the participants. I used the example of gold as an easily recognizable representation of a thing of enduring value. A formidable estate as collateral however would need to have some further agreement as to how it would be liquidated protioned off or otherwise.

I only meant to present how I thought things could work given the representation of wealth as gold coexisting with an overlay of mandated currency usage. Certainly, in a land of opportunity the mandate to use a currency at all is suspect to be sure.

That is why I stipulated what I considered to be good credit as the escrow of funds 10X the amount drawn on the line of credit or the actual borrowing of only 10% of the allowed creditline. This allows margin for error in the "valuation" of the underlying asset in currency terms ("funny business" by the authority). The marking to market on disposition of the escrow, if it is not paid off in currency and must be relinquished to the loaner of the currency, makes it capital "at risk". This procedure I did not mean to "codify", I only presented what I thought would be a prudent course of action for myself and my own assets.

If there is a structure that enforces contract law, then those who write contracts in that jurisdiction should supply the monetary support of that structure. "protection money" and an escrow lending agreement is a contract for sure.

It would be nice if they would have said "...shall pass no laws. But that would not have been too realistic as the ingenuity of man to work any "system" is all to real.

Henri

(05/18/2000; 11:14:55 MDT - Msg ID: 30777)

ORO - On currency

Note: In my defense, I did stipulate the terms of your comment see#7

SNIP
7) Allow the people to own the money as was intended by the US Constitution. This would require the repeal of the Federal reserve act.
UNSNIP

YGM

(05/18/2000; 11:17:10 MDT - Msg ID: 30778)

Support a Fellow Gold Advocate and GATA Soldier..

http://www.egroups.com/subscribe/GoldWorldNet?referer=1Josh Wright of Gold WorldNet site has given us another venue to vent and share info....Gold World is not in competition w/ MK & USA Gold so we may want to drop in & leave a comment or two...to my way of thinking there's never too many places for Gold Bugs to hang out and this is just one more......I'm sure we can all support this effort and see where it leads.......Just another Trail in the Gold Hills......Go GATA
......YGM.

ss of nep

(05/18/2000; 11:36:40 MDT - Msg ID: 30779)

Some of you may like this.

http://www.silentbrowser.comDate: Thu May 18 2000 11:45
gwyz (Surf the Web with total privacy\anonymity...) ID#44161:

http://www.silentbrowser.com

- - - -


Have Gold - Will Travel

YGM

(05/18/2000; 11:40:22 MDT - Msg ID: 30780)

Mind Boggling or What....

http://www.bis.org/press/index.htmPress Releases




BANK FOR INTERNATIONAL SETTLEMENTS
CH-4002 BASLE, SWITZERLAND


Press releasePress enquiries: +41 61 / 280 81 88
Ref. No.: 14/2000E
18 May 2000

The global OTC derivatives market at end-December 1999


The BIS is releasing today its semiannual statistics on positions in the global over-the-counter (OTC) derivatives market for end-December 1999. These statistics constitute the fourth set of data released under a new regular reporting framework on OTC market activity. They include the notional amounts and gross market values outstanding of the worldwide consolidated OTC derivatives exposure of major banks and dealers in the G10 countries (see attached tables)1.

After adjustment for double-counting resulting from positions between reporting institutions, the total estimated notional amount of outstanding OTC contracts stood at $88.2 trillion at end-December 1999, an 8% increase over the $81.5 trillion reported for end-June 1999. This represents a significant acceleration relative to the first half of 1999, when business had expanded by a mere 1% from the previous half-year. Similar growth patterns have been reported by other surveys of OTC market activity2.

The return to growth of the OTC market was essentially concentrated in the interest rate segment, with an increase in outstanding contracts of 11% over the previous half-year period (to $60.1 trillion). By contrast, there was a further contraction of foreign exchange instruments, which declined by 4% (to $14.3 trillion). The reduction of activity in this segment had been particularly pronounced in the first half of last year (17%), in the wake of the introduction of the single European currency. The much smaller equity-linked and commodity segments expanded the most rapidly of all underlying risk categories, with increases of 20% and 24% respectively (to $1.8 trillion and $0.5 trillion).

While the acceleration of activity in the interest rate compartment was fastest in the swap markets (15% to $43.9 billion), the expansion of business in the option market was fairly sustained (10% to $9.4 trillion). The forward rate agreement market, which had experienced a sharp increase in the first half of 1999, contracted (by 5% to $6.8 billion). Thus the reduced rate of growth seen in the first half of 1999 can be attributed to this unwinding having run its course. However, it also reflected the introduction of the euro. The expansion of euro zone instruments slowed sharply relative to the previous reporting period (to 6% from 21%) as the introduction of the single currency eliminated interest rate arbitrage activity between the various legacy currency segments. Of note, business in the US dollar returned to rapid growth (to 17% from 4%). The reduced presence of leveraged funds appears to account for a redistribution of activity among counterparties back towards the group of reporting dealers (50%).

The most recent data on the OTC interest rate market confirmed the rapid development of non-dollar instruments. Indeed, while euro- and yen-denominated contracts accounted for the bulk of market expansion, the increase in dollar business was marginal. This enabled the euro-denominated sector to increase in size and reinforce its lead over the US dollar segment (34% of outstandings versus 27%). The lethargic pace of activity in the latter segment is somewhat difficult to reconcile with reports of growing use of interest rate swaps as hedging and positioning alternatives to US Treasury securities, and of brisk millennium-related activity. The withdrawal of certain US-based financial institutions since the crisis in the second half of 1998, the paring down of market-making capital by some institutions and/or the adoption of more conservative risk management policies might have reduced market liquidity and, therefore, hampered business. The data for the second half-year also show that the swap market remains the preserve of financial institutions. Such entities (both reporting dealers and other financial institutions) accounted for all of the increase in activity in the second half of 1999 and for 91% of outstanding contracts. Positions involving non-financial customers increased marginally. In fact, in spite of the buoyancy of capital market activity, such users have barely increased their recourse to the swap market since the BIS began its survey of OTC markets.

In the area of currency instruments, the stock of outright forward and forex swap contracts was stable following the sharp drop resulting from euro-related consolidation in the previous period. This was not the case with the stock of currency options, which declined for the fourth consecutive half-year period. Meanwhile, business in currency swaps continued to exhibit a steady upward trend. A look at the currency breakdown for all types of foreign exchange positions reveals that activity moderated in contracts involving the three major world currencies, with the most pronounced decline being in yen contracts. Although the review period was marked by rising currency volatility, which could have been expected to fuel turnover, the steady strengthening of the yen against the two other major currencies might have led to a drying-up of some option products involving the yen, such as barrier options3. Moreover, the lower level of activity in currency derivatives might also have been the result of subdued business in the underlying markets. Informal estimates by market participants suggest that there has been a sizeable decline in foreign exchange turnover in the major centres since autumn 19984. As in the market for interest rate products, the share accounted for by financial institutions rose further.

The equity-linked sector revived in the second half of last year, with growth in outstandings of 20% (to $1.8 trillion). Business is likely to have been fuelled by the very strong performance of global equity markets during the review period. The most striking development in this market sector was the particularly pronounced increase in business with non-financial customers.

Commodity derivatives markets were also highly active, with outstandings rising by 24% (to $548 billion). Transactions involving gold, the largest single component of the commodity derivatives market, were particularly buoyant. The review period was eventful for the broader gold market. The metal's price, which had followed a downward trend for much of the year, rose sharply in late September following an agreement among central banks limiting official gold sales over the next five years.

Estimated gross market values in the second half of 1999 rose by 7% (to $2.8 trillion) but their share of reported notional amounts remained stable at 3%. Such values exaggerate actual credit exposure since they exclude netting and other risk reducing arrangements. Allowing for netting, the derivatives-related credit exposure of reporting institutions was much smaller ($1 trillion).


------------------------------------------------------------------------
1The notional amount, which is generally used as a reference to calculate cash flows under individual contracts, provides a comparison of market size between related cash and derivatives markets. Gross market value is defined as the sum (in absolute terms) of the positive market value of all reporters� contracts and the negative market value of their contracts with non-reporters (as a proxy for the positive market value of non-reporters� positions). It measures the replacement cost of all outstanding contracts had they been settled on 31 December 1999. The use of notional amounts and gross market values produces widely divergent estimates of the size of the overall market and of the various market segments.
2For example, data released by the International Swaps and Derivatives Association show that the outstanding stock of interest rate swaps, currency swaps and interest rate options grew by 11% in the second half of 1999. This was appreciably faster than in the first half of the year, when business had expanded by only 3%. Quarterly data published by the US Office of the Comptroller of the Currency on holdings of derivatives by US banks (largely OTC contracts) also showed more rapid growth in the second half of 1999, to 5% from zero growth in the first half.
3A barrier option is an option for which the payoff pattern and survival to expiration depend not only on the final price of the underlying but also on whether the underlying will reach or go through a set price (barrier) during the life of the option.
4See "A look at trading volumes in the euro", BIS Quarterly Review, February 2000, pp. 33-35.

lamprey_65

(05/18/2000; 12:11:45 MDT - Msg ID: 30781)

Gold for Oil

IF an arrangement exists regarding gold for oil, I would expect any such equation to mean that the higher the dollar, the lower the price of gold priced in dollars or the equation would have to be changed. Of course, changing the equation would necessitate more gold per barrel.

Anyone have any thoughts on what this equation might look like?

lamprey_65

(05/18/2000; 12:19:17 MDT - Msg ID: 30782)

Oh, yes...of course

The equation could also remain the same if the price of oil were higher in dollars.

Crude now back over $30 a barrel as I write this!

YGM

(05/18/2000; 12:21:29 MDT - Msg ID: 30783)

Lamprey_65......Oil/Gold Equation?

GUNS=OIL + OIL=GOLD + GOLD=MORE GUNS....Vicious circle.........Go for the Gold & forget the oil.....Guns are for protecting Gold, not acquiring it (smile)....YGM

Journeyman

(05/18/2000; 12:46:13 MDT - Msg ID: 30784)

Capitalism vs. free markets @gidsek msg#: 30750, HI - HAT, ALL

"If you have a mind to Journeyman, I'd be interested to hear you
draw a distinction between capitalism and free markets. Seeing
you contrast the two as you have done made me realize that I
can't define the difference properly." -gidsek msg#: 30750

Sir gidsek, you're not the only one with difficulties in
distinguishing between "capitalism" and "free markets." It's
taken me decades of sporadic reading and thinking to straighten
it out for myself. I'm sure others "got it" quicker, but, well,
we all proceed at our own chosen speed. The fact this
distinction isn't widely understood explains a great deal of the
confusion in the economic and political arenas.

Free market is the easy part. A free market is a
theoretical geographical area in which people can trade
anything they own for anything others own and are willing to
trade --- and at what ever "price" they agree to without any
coercion --- and no interference by ANY unwanted third parties in
any way what-so-ever. No rules, regulations, orders, or
controls. No taxes. No protections for either "buyers" (those
with "money" to trade) or sellers (those traders who want to
trade FOR "money") unless they agree to such between (or
among) themselves.

As I think you can see, we don't have any free markets in
the united States, except perhaps in the case of private
transactions that ignore all the rules, regulations, orders and
controls - - - and don't pay any sales taxes to unwanted third
parties. We here in the freest country in the world have
something else. What we have is capitalism.

Free markets have NEVER been very popular, particularly with
establishment businesses. They have their reasons.

The word "capitalism" was coined by Karl Marx as a pejorative
term aimed at the ways he observed many businesses, especially
the bigger ones, functioning in his day. They still function in
a similar fashion.

Ironically, Adam Smith, THE father of free trade and author of
"Wealth of Nations" ran head-on into similar observations more
than a century before, causing him to burn the latter portion of
his life's work just before his death, apparently in disgust.

What did these two men with very different political agendas see?

What they saw was the results of businesses, when ever
possible, using all sorts of manipulations, the most
effective requiring government complicity, to defeat free
markets and the inherent competition free markets, by their
nature, guarantee. It's my contention that it was this
business-government matrix and it's results that underlay
both Marx's perceptions and Smith's disgust. U.S. President
Dwight David Eisenhower apparently saw the same type of thing
himself when he warned in his farewell address of the "military-
industrial complex." This is just a subset of the "government
industrial complex."

This all sounds somewhat innocuous, but a look at some early
examples will give you an idea of just how seriously people
dislike free markets and free trade.

"_(h) The countryside was cut out of trade in the Middle
Ages._
'Up to and during the course of the fifteenth
century the towns were the sole centers of commerce and
industry to such an extent that none of it was allowed
to escape into the open country' (Pirenne, _Economic
and Social History_, p.169). 'The struggle against
rural trading and against rural handicrafts lasted at
least seven or eight hundred years' (Heckscher,
_Mercantilism_, 1935, Vol. I, p. 129). 'The severity of
these measures increased with the growth of 'democratic
government' . . . .' 'All through the fourteenth
century regular armed expeditions were sent out against
all the villages in the neighborhood and looms or
fulling-vats [in which cloth was dyed] were broken or
carried away' (Pirenne, _op.cit_., p. 211)." -Karl
Polanyi, _The Great Transformation_. (Boston: Beacon
Press 1957), p. 277

Seven or eight centuries of "struggle against rural trading," not
to mention a century of loom-stealing and vat- smashing does seem
to indicate a rather serious dislike, don't you think?

The government's payoff is it gets to use businesses as it's tax
collectors. In America today, for example, who collects sales
tax? Who collects so-called income tax? Who collects FICA
(Federal Insurance Contributions Act or "Social Security") tax?

Things are more underground, more civilized today, but the same
anti-competition practices and government complicity
are still there. Today, however, they're more circumspect and
the most effective are hidden under the ruberic of
"regulation" and "consumer protection." Yes, I know that's
perverse, but it works better for them that way. A few
examples:

"[U]nder the licensing provisions," sa

YGM

(05/18/2000; 13:25:52 MDT - Msg ID: 30785)

Bank Derivative Exposure 1995 & 1999

What Banks are Safe......Remember when Gold started it's manipulated downward trend...1995 right after the Bre-X fraud perpetrated by JP Morgan standing behind the fall guy...David Walsh Bre-X Pres..........The opening salvo in Gold Bashing and the beginning (IMNSHO) of the Great Gold Caper......

Well @ 4th Q /95 Banks held $16.86 Trillion in Notional Amount of Derivatives exposure...

....@ 4th Q /99 the same banks held $88.2 Trillion...

..If Gold goes North, many Banks would fail due to the various Derivative instruments they've over exposed to......Some Banks have exposure value 100's of times over their asset base........

Better believe Greenspan when he says that institutions are never too big to fail and that the bailouts are NOT a fact of life.....Do you know the exposure of your own Bank????? Find out for the sake of your financial future. ......YGM

Journeyman

(05/18/2000; 13:31:38 MDT - Msg ID: 30786)

Ah, sorry folks!

I've been trying to send that post, as you may unfortunately discover, since early this morning. I don't know what keeps going wrong, but, well, just ignore the earlier versions. Since we have a LIFO [Last In, First Out] forum format here, you will encounter them further down.

Apologies,
Journeyman

Journeyman

(05/18/2000; 14:08:46 MDT - Msg ID: 30787)

Capitalism vs. free markets Part 3 @gidsek msg#: 30750, HI - HAT, ALL

In short, to Adam Smith's chagrin and Karl Marx's delight,
businesses and governments work together, defeating free
markets in all sorts of ways. While this has always been
"the way of the world," it's now comming out of the closet:

The media officially dubs Japan "Japan Inc."

"The United States needs a new kind of capitalism
as they already have in Germany, Canada, and
Japan, where there is close cooperation between
business and government." -John Chancellor
commentary, CBS's _Sunday TODAY_, November 10,
1991

"Ross Perot wants to move into the twenty-first
century and, like the European countries, have a
partnership between business and government where
government helps business compete." -Perot's
designated surrogate on _Good Morning America_?,
Friday October 30, 1992

It was reported today that the sale of a large
number of jumbo jets to Saudi Arabia has become a
contest between French and American aero-space
companies. President Bill Clinton intervened in
the negotiations on behalf of the American
companies, McDonnell Douglas and Boeing. -CNN,
21 Aug. 1993

The Republicans shouldn't cut foreign aid because
80% of it goes directly to American companies
operating overseas. -pro foreign aid spokesman,
C-SPAN 24 May 1995 ~~0800

The Central Intelligence Agency is stepping up
efforts to discover "who in foreign countries is
bribing who else in order to get contracts that
American companies are losing." according to James
R. Woolsey, the CIA director. -International
Herald Tribune, Hong Kong, Wed. Dec. 18, 1993, pg.
3

"The Japanese have now seen that US business is in
partnership with the US government, and they had
better sit up and take notice." -Lee Iococca
after Jan. 1992 trip to Japan with George Bush and
other US Auto CEOs

The Clinton administration announced a joint venture
with auto makers to develop a more efficient gasoline
engine. -CNN Sept. 29, 1993 ~14:32 EST

*PHOENIX -- Twentieth Century Fox will launch an
animation* division by building a $100 million studio
that will employ 300 people here. The state has
committed $300,000 to train workers. -*USA TODAY*,
Aug. 3, 1994, pg 6A

*SIOUX FALLS [South Dakota] -- State officials pledged
$1 million a year in annual* debt reduction for the
next 10 years to keep meatpacker John Morrell and Co.
in Sioux Falls. -*USA TODAY*, NOVEMBER 11, 1994, pg 4A
"Partnerships between business and labor need to
be translated from local agreements into national
policy." -Speech by Bill Clinton July 26, 1993
from CNN

"There is a coalition between old line Russian
communists and industrialists," according to
_McNeil Lehrer News Hour_. "Industrialists [i.e.
the commisars who ran the state enterprises
before] are real partners in the Russian
Government now." -Yeltsin cabinet minister,
_McNeil Lehrer News Hour_, November 30, 1992

If you've been thinking "fascism" here, give yourself five gold
stars. That's right, I'm suggesting that "capitalism," is, as
Marx suspected, a somewhat mild and early stage of
fascism. Of course "communism," fascism from a different
direction, didn't exactly foster free markets either.

That's right, neither fascists nor communists like free
markets or free trade. Once govenments take hold, societies
always evolve towards one or another form of fascism.

What's NAFTA and GATT all about then, you ask? Well, they CLAIM
to be about free trade. In reality and true to fascist form,
they've been perverted into an attempt at _equally restricted_
trade.

Conclusion: The only connection between free markets and
"capitalism" is that "capitalists" ingenuously claim they
like free markets, while at the same time taking every
opportunity to destroy them, or to encourage governments to do it
for them.

Or, a little less harshly, a capitalist is someone who wants to
buy from a free market, but sell into a restricted (protected)
market, where he/she is protected from competition.

Regards,
Journeyman

Journeyman

(05/18/2000; 14:11:14 MDT - Msg ID: 30788)

Capitalism vs. free markets Part 2, @gidsek msg#: 30750, HI - HAT, ALL

Things are more underground, more civilized today, but the same
anti-competition practices and government complicity
are still there. Today, however, they're more circumspect and
the most effective are hidden under the ruberic of
"regulation" and "consumer protection." Yes, I know that's
perverse, but it works better for them that way. A few
examples:

"[U]nder the licensing provisions," says Rep. John
Dingell, chairman of the House Energy and Commerce
Committee, "we give the broadcasters an absolute
federally supported and sustained monopoly which
denies anybody else the right to broadcast who
does not have a license." -"The 'Fairness
Doctrine': Keep It Buried!" by Jorge Amador, THE
PRAGMATIST, Feb. 1994, pg. 10

"Essentially airline regulation was an organized
attempt to keep out competition." -Alfred Kahn,
chairman and chief architect of the Civil Aeronautics
Board (CAB), from an episode of "Economics USA"
produced by the Annenberg CPB project, aired on NJN
920705 [CAB was the bureaucracy which regulated airline
fares and routes. ed.]

*Bill recasts phone, cable law* Senate allows firms to
offer competing services By Barbara Woller -USA TODAY,
JUNE 16-18, 1995 front page headlines

All organizations fear competition because it could put them out
of business if someone else satisfies their customers
better - - - or for that matter, if the product they produce goes
out of fashion. And I do mean ALL organizations:

The Russian Orthodox Church got a bill through the
Russian Parliament prohibiting "foreign" missionarys
because Billy Graham, etc. are luring Russians away
from the Russian church. Yeltsin hadn't signed the
bill yet. -CNN, July 15, 1993

He signed it later.

The way to run a pyramid company was defined by AMWAY, when after
being harrassed by the government, it finally went to AMWAY for
the regulations governing operations of such a company. Needless
to say, AMWAY gave ITS rules, which now constrain all AMWAY's competitors.

The practice of government going to the biggest in an
industry for the blueprint for "regulating" that industry is now
standard operating proceedure.

Journeyman

(05/18/2000; 14:12:32 MDT - Msg ID: 30789)

Capitalism vs. free markets Part 1, @gidsek msg#: 30750, HI - HAT, ALL

"If you have a mind to Journeyman, I'd be interested to hear you
draw a distinction between capitalism and free markets. Seeing
you contrast the two as you have done made me realize that I
can't define the difference properly." -gidsek msg#: 30750

Sir gidsek, you're not the only one with difficulties in
distinguishing between "capitalism" and "free markets." It's
taken me decades of sporadic reading and thinking to straighten
it out for myself. I'm sure others "got it" quicker, but, well,
we all proceed at our own chosen speed. The fact this
distinction isn't widely understood explains a great deal of the
confusion in the economic and political arenas.

Free market is the easy part. A free market is a
theoretical geographical area in which people can trade
anything they own for anything others own and are willing to
trade --- and at what ever "price" they agree to without any
coercion --- and no interference by ANY unwanted third parties in
any way what-so-ever. No rules, regulations, orders, or
controls. No taxes. No protections for either "buyers" (those
with "money" to trade) or sellers (those traders who want to
trade FOR "money") unless they agree to such between (or
among) themselves.

As I think you can see, we don't have any free markets in
the united States, except perhaps in the case of private
transactions that ignore all the rules, regulations, orders and
controls - - - and don't pay any sales taxes to unwanted third
parties. We here in the freest country in the world have
something else. What we have is capitalism.

Free markets have NEVER been very popular, particularly with
establishment businesses. These businesses have their reasons.

The word "capitalism" was coined by Karl Marx as a pejorative
term aimed at the ways he observed many businesses, especially
the bigger ones, functioning in his day. They still function in
a similar fashion.

Ironically, Adam Smith, THE father of free trade and author of
"Wealth of Nations" ran head-on into similar observations more
than a century before, causing him to burn the latter portion of
his life's work just before his death, apparently in disgust.

What did these two men with very different political agendas see?

What they saw was the results of businesses, when ever
possible, using all sorts of manipulations, the most
effective requiring government complicity, to defeat free
markets and the inherent competition free markets, by their
nature, guarantee. It's my contention that it was this
business-government matrix and it's results that underlay
both Marx's perceptions and Smith's disgust. U.S. President
Dwight David Eisenhower apparently saw the same type of thing
himself when he warned in his farewell address of the "military-
industrial complex." This is just a subset of the "government
industrial complex."

This all sounds somewhat innocuous, but a look at some early
examples will give you an idea of just how seriously people
dislike free markets and free trade.

"_(h) The countryside was cut out of trade in the Middle
Ages._
'Up to and during the course of the fifteenth
century the towns were the sole centers of commerce and
industry to such an extent that none of it was allowed
to escape into the open country' (Pirenne, _Economic
and Social History_, p.169). 'The struggle against
rural trading and against rural handicrafts lasted at
least seven or eight hundred years' (Heckscher,
_Mercantilism_, 1935, Vol. I, p. 129). 'The severity of
these measures increased with the growth of 'democratic
government' . . . .' 'All through the fourteenth
century regular armed expeditions were sent out against
all the villages in the neighborhood and looms or
fulling-vats [in which cloth was dyed] were broken or
carried away' (Pirenne, _op.cit_., p. 211)." -Karl
Polanyi, _The Great Transformation_. (Boston: Beacon
Press 1957), p. 277

Seven or eight centuries of "struggle against rural trading," not
to mention a century of loom-stealing and vat- smashing does seem
to indicate a rather serious dislike, don't you think?

The government's payoff is it gets to use businesses as it's tax
collectors. In America today, for example, who collects sales
tax? Who collects so-called income tax? Who collects FICA
(Federal Insurance Contributions Act or "Social Security") tax?

Journeyman

(05/18/2000; 14:41:49 MDT - Msg ID: 30790)

Apologies @Aragorn III

King Aragorn III (I'm not completely unaware of your lineage), I didn't intend to dissect your excellent post so unceremoniously. I tend to get sucked into the details, as you so accurately observed. I have, as have you, recognized that some of the posters here have unresolved conflicts in their thinking, especially about short-term wealth parking alternatives, governments, and other things. Your post teased many of these out into the open. Perhaps your message got through where mine have failed.

High regards,
Journeyman

Hill Billy Mitchell

(05/18/2000; 15:28:01 MDT - Msg ID: 30791)

Official release

http://www.bog.frb.us/releases/H15/update/
Official: Federal Reserve Statistical Release

Release Date: May 18 2000

Rates For Wednesday, May 17, 2000

Federal funds 6.25
Treasury constant maturities:
3-month 6.05
10-year 6.48
20-year 6.58
30-year 6.18

upside-down spread FF vs long bond = (.07%)

lamprey_65

(05/18/2000; 15:28:04 MDT - Msg ID: 30792)

From Bridge News...

NYMEX, 15 traders sue NYBOT, NY Clearing Corp, Klein: NYMEX
New York--May 17--The New York Mercantile Exchange (NYMEX) and 15 of its members Wednesday filed a class action complaint seeking a temporary restraining order and injunctive relief to block the New York Board of Trade (NYBOT), New York Clearing Corp (NYCC) and Klein & Co Futures Inc from using innocent third party customer funds to meet margin obligations on the NYBOT. (Story .21057)


Comments?

TownCrier

(05/18/2000; 15:55:13 MDT - Msg ID: 30793)

Give thanks to the FOREX and COMEX!

http://www.usagold.com/onlinestore/special.htmlBlessed by the trading action on the foreign exchange (currency) markets, and by the appropriate disinterest in CONTRACT "gold" on the New York Commodity Exchange, the dollars in our pockets may now be exchanged for a greater quantity of gold than it could fetch just a few short days ago. So while the various coins and bars remain as yellow, as heavy, and as intrinsically valuable as they ever have, a given quantity of dollars today may be exchanged for more of the precious metal than they could when this week began.

To wit, our special on-line offer of German 20 mark gold coins has been amended to reflect this herculean dollar, and the exchange rate is now $76 per coin. The decision to act, or not, on these developments is entirely up to you.

"You have to choose (as a voter) between trusting to the natural stability of gold and the natural stability and intelligence of the government. And with due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold." --George Bernard Shaw (1856-1950)

SHIFTY

(05/18/2000; 16:09:33 MDT - Msg ID: 30794)

PONZI

Nasdaq 3,538.71 + Dow 10,777.28 = 14,315.99 divide by 2 = 7,157.99 Ponzi

Down 49.36 Ponzi points!

Leland

(05/18/2000; 17:32:05 MDT - Msg ID: 30795)

Just Plain, Simple Truth...Kudos to Bill "Fleck"

"Every week
the national debt is published in
the back of Barron's, and if you
look at where we are this year versus last year, routinely we're about $100
billion higher, even as the government claims we're running a surplus; some
weeks it's less, some weeks it's more. At any rate, a few readers got the
idea that I was saying we add $100 billion to the debt each and every week,
which would annualize to $5.2 trillion. That would clearly be a serious
problem, since that's about the total size of the current national debt. I hope
this clears up any confusion: We are increasing the national debt at a rate
that's in the neighborhood of $100 billion annually, and the rate can be
checked every week."

TownCrier

(05/18/2000; 17:48:36 MDT - Msg ID: 30796)

Of Herculean dollars and the crouching euro...a play in two acts

http://biz.yahoo.com/rf/000518/l18148205_2.htmlACT ONE -- Whither goes the dollar and company?

Marshall Gittler, head of global currency risk at Bank America in Hong Kong was qoted by Reuters: "People who lived through the collapse of the bubble in Japan are worried that the U.S. equity market is about to collapse. They've been burned so many times by taking positions in foreign assets only to see the yen move 10, 20 percent in a week. They don't have any confidence in a long-term uptrend for the dollar...and are simply conservative in their international investment outlook." Reuters buttresses that sentiment with a report that five of Japan's largest life insurers had abandoned plans to shift around 900 billion yen offshore in foreign investments, opting instead to reduce forex risk.

So while the Fed tries to bolster the dollar with the highest interest rates seen in nearly 10 years, New Zealand tried to follow suit with their own 0.5% rate hike, but their dollar is bouncing along at 15 year lows. Similarly, the Bank of Canada raised rates only to see their currency falter also. A U.S. bank dealer in Tokyo told Reuters, "The feeling is that no one can keep up with the tightening going on in the U.S. and if they try, it'll be the ruin of their economies."

ACT TWO -- Does euro-land fret with the rest?

European Central Bank President Wim Duisenberg said he was vigilant, but not overly concerned about the euro's external exchange and the risk of imported inflation. As he explains it, 85% of all trade (imports and exports) by euro members were among each other, meaning that the euro exchange rate affects only 15 percent of all trade flows.

There's a deep monetary/economic lesson in there, somewhere.

John Doe

(05/18/2000; 17:51:10 MDT - Msg ID: 30797)

Journeyman

"Or, a little less harshly, a capitalist is someone who wants to buy from a free market, but sell into a restricted (protected) market, where he/she is protected from competition."

I like this, as it reminds one of the vertically integrated monopolies of Old, which apparently have never left us. They've just learned to better work the system they've always controlled to yield more palatable "perceptions" among the general populace. Both verticality and monopolism have been downsized, virtualized, and decentralized. They still remain, de facto, but not in hard copy form that one can easily point to and demand redress and reform.

Monopolism is, was, and always will be the heart of the matter. What are Fascism and Communism but the utter, bald-faced, Totalitarian monopoly of political and economic thought? Freedom and Monopolism are, were, and always will be diametrically opposed. Any monoculture is stifling, inherently counter-productive, and doomed to destruction. Yet, the current moneyed interests and power-hungry never cease to see or admit this situation. Rather than designing and implementing equitable, sustainable systems, they instead endlessly pursue various forms of monopolism in wave after wave of failure and destruction, all in the name of temporary (or lineal?) advantage.

A global government will not work any better than a global religion would, and a global currency will not succeed any better than chopping down every other type of plant in the jungle for the sake of a single one. A healthy, dynamic, evolving system requires a continuously varying multiplicity of inputs. Nature tells us as much and, in my opinion, nature has it exactly right. Good government needs a two-way flow of corrective feedback and new ideas and the free means to inspect, select, and apply the corrective feedback and new ideas. Likewise, a healthy economic and monetary system requires multiple viable choices among freely operating investment vehicles, stores of wealth, and transmissions of value. What passes for Capitalism these days actively and forcefully subverts both the proper functioning of a rational, viable governance and a long-term, sustainable, equitable economic and monetary system.

Enjoyed your dissertation on Capitalism, you are now promoted to Master. :o)

Elwood

(05/18/2000; 18:36:22 MDT - Msg ID: 30798)

Free Markets, Capitalism

Market - an environment created for the purpose of exchange

Free Market - a market devoid of intervention

Capitalism - a social system based upon private ownership of the means of production.

USAGOLD

(05/18/2000; 19:06:07 MDT - Msg ID: 30799)

Hall Nomination. . .

I would like to nominate John Doe's #30797 for the Hall of Fame...Hardly a John Doe rendition in my book, but the sort of insight that puts the flame on the candle. Thank you , John Doe. Is there more where that came from?


Looking for seconds............

HI - HAT

(05/18/2000; 19:12:34 MDT - Msg ID: 30800)

Journeyman Parts 1 ; 2 ; 3

Thankyou for all your effort. It is very GOOD stuff.

To me what you have written about will always be immortalized in how the Capitolists operated and acted towards the Free Marketeers in Atlas Shrugged.

The mind set and honoring of clean achievement in Galts Gutlch was a delicious symghony that elevates Man to on high.
Gold was revered.

A toast to you, and to everyone in Galts Gultch.

The simple ways are what makes way for the Glory.

Solomon Weaver

(05/18/2000; 19:15:37 MDT - Msg ID: 30801)

(No Subject)

http://washingtonpost.com/wp-dyn/articles/A63590-2000May13.htmlThe slow pfffffft of a "stock market collapse"

Link has some data on up days vs. down days...

USAGOLD

(05/18/2000; 19:21:02 MDT - Msg ID: 30802)

By the way. . .

The posting today has been extraordinary. I mentioned as much to Townie earlier today -- and out of the clear blue, for no apparent reason that I can put my finger on. My compliments to today's participants. It's been a special day. It seems this Forum has a rhythm of its own detached from the markets or any other external factor I can put a finger on.

Thanks. And special thanks to all the new members who've pulled a chair to this Table Round.

I would direct all to take note on the movement in the CRB and the building of the inflation phenomena seemingly beneath the radar. Oil went over $30 today. Platinum up almost $20 today. Commodities are moving up. Got permission today from James Turk to use a new article he has written on inflation in the commodity sector. We'll get it up at the Gilded Opinion as soon as possible. Mr Turk says: ". . .the run-up in CRB cannot easily be blamed on bad weather, poor crops or oil embargoes. We are seeing a fairly broad-based rise in the index, which can really mean only one thing -- the Dollar is being inflated."

He concludes: ". . .I think the big jump in the Gold price will probably begin in the last half of the year."

Watch for his in-depth treatment of the subject at a GILDED OPINION near you .......soon.

Solomon Weaver

(05/18/2000; 19:25:11 MDT - Msg ID: 30803)

Second nomination for John Doe #30797

MK yes this is a very simple and clear post which deserves to be saved for future guests...

"A healthy, dynamic, evolving system requires a continuously varying multiplicity of inputs."""

John wouldn't it be nice if one of the inputs to today's system would be a real gold and silver market???

FYI in systems theory, a "healthy" system is one which has a wide set of boundry conditions outside its usual midpoint...for example...a healthy gold market could go to $1000...just like oil went from $10 to $30. An unhealthy system is one which becomes unstable even at conditions moderately distanced from the current condition.

Poor old Solomon

USAGOLD

(05/18/2000; 19:47:08 MDT - Msg ID: 30804)

My dear -poor - old Solomon. . .

http://www.usagold.com/INFOPACKET.htmlI think you would agree that this was particularly insightful:

"A global government will not work any better than a global religion would, and a global currency will not succeed any better than chopping down
every other type of plant in the jungle for the sake of a single one."

In Europe now, gold has been among the best currency plays not just for now but the future. We are beginning to see that as the euro goes down, gold will rise ( like the sunrise viewed by Dr. Moneywise on the cover of Gold Almanac 2000 -- to see it click on link above.) and take an ever more significant nominal position in euro reserves. If you owned gold in Europe, you have gained significantly because the gold price has risen and price on everything else has remained relatively stable (while the euro has fallen). And you do not have to hope for the U.S. government and economy to provide that strength. This policy I believe gives gold a special place in Europe -- in a monetary sense an inspired protection similar to the inspired, time-honored legal protections built into the U.S. constitution.

This is what our own Mr. Doe points to as the benefits of currency diversity.
So let's celebrate diversity!

Mr. Doe: Sorry to talk about you as if you weren't here. Once again, an excellent post.

Solomon Weaver

(05/18/2000; 19:51:50 MDT - Msg ID: 30805)

Liquidity in the gold market

A few nights ago there was some discussion about how much liquidity there is in the gold market...a and that a low lease rate implied high liquidity.

This topic has been rolling around in my head these days...and now with my Earl Grey tea I am trying to read the leaves....

Can any of you out there follow this train of thoughts???

1. The "gold market" where "leases" are born is a "members only" kind of place....like belonging to the big gold trading country club.

2. GATA recently posted on how the gold derivatives position of J.P. Morgan has grown dramatically, and it has been postulated that Morgan was acting as a buyer of last resort helping many bullion banks unload out of the money gold short positions (restructuring the paper markets) and since Morgan had relocated to England it also serves as a way to move the dangerous elements of the gold paper markets offshore out of the regulatory hands of USA Govt.

". Then, during the last half of
1999, Morgan more than doubled its total gold
derivatives, taking them from $18.4 billion to $38.1
billion, amounting to 43 percent of the total for all
banks. What is more, Morgan's over-40-percent dominance
stretched across all maturities. In the fourth quarter
alone, it increased its gold derivatives with
maturities over one year by more than 80 percent to
$17.1 billion from $9.4 billion, which may well answer
the question of who sold Barrick the calls." Reg Howe

3. If this is the case with Morgan, and Morgan is holding a large short position (heavily laden with lease contracts), then Morgan is extremely exposed to dramatic increases in the Lease Rate...Let's be hypothetical and say that $15 billion dollars of Morgan's gold exposure is acutal leases...this would mean that a 1% increase in lease rates would cost them $150 million in a year.

4. So we have this huge concentration of gold carry trade being "consolidated" into one large place (that will allow a more simple bailout negotiation if needed, and will allow the bail out to focus on other non-gold positions as well).

5. Central Banks gain because J.P Morgan has helped reduce the risk of a single Bullion Bank defaulting and causing a stampede....so in exchange for this, they create a new "gold leasing market" where the "rules" are actually different....meaning that the "lease rate" which goes against Morgan's books is the "official (and low) lease rate...but anyone who really wants to lease gold will pay a higher rate.

6. Just like gold price is no longer a proxy for expectations about inflation, the gold lease rate is no longer a proxy for liquidity.



Poor old Solomon

Gandalf the White

(05/18/2000; 20:03:33 MDT - Msg ID: 30806)

Sol's Tea Leaves !

WOW -- I gotta get some of that type tea !
Can you really see all that in those leaves ?
<;-)

Solomon Weaver

(05/18/2000; 20:14:48 MDT - Msg ID: 30807)

of John Doe and USA gold

MK

I am currently in the middle of re-reading the "Sovereign Individual"...which bears the central thesis that the use of global communications technology is a Metapolitical event which will force central governments to return to providing economic solutions...considering that as much as %50% of United States Federal Income tax is paid by the top few percent of "entrepreneurs" (those whose capital so far exceeds their needs that they will invest anywhere), and that the "gold standard" of debt instruments is the USA Treasury Bond, a very small portion of the population can make major changes.

When one understands the compelling arguments in this book, that although the details are unclear, the "weakening" of national activities seems to be in the cards, does it not seem obvious that any "legislation" to create "global religions and currencies" are only doomed to be washed away with the rising tide???

I see the Euro not as an attempt to "politicize" Europe into a "United States of Europe", but rather as an attempt to create a fiat currency which goes beyond the interests of a give nation...the learning curve on today's Euro will benefit the world as we strive for new fiat models (disconected from politics). The Euro is the "concept seed" of a future which can hold any number of separate Sovereigns (including individuals) under a single money...gold and other mechanisms will reinforce discipline. The dollar on the other hand is an attempt (through dollarization) to "cast a net of political influence" across the globe. In the end, the targets are the same...but as the zen teachers understand, the goal is the path itself...

poor old Solomon

Elwood

(05/18/2000; 20:18:58 MDT - Msg ID: 30808)

Second for JD

I'll add a second to USAGOLD's nomination for John Doe. It goes great with what I'm doing currently: trying to make my way through Volume 1 of Rothbard's "Conceived in Liberty."

John Doe (05/18/00; 17:51:10MT - usagold.com msg#: 30797)

Mr. Doe, I can't remember any previous posting you've made here, so welcome, friend.

Solomon Weaver

(05/18/2000; 20:20:15 MDT - Msg ID: 30809)

tea time

WOW -- I gotta get some of that type tea !
Can you really see all that in those leaves ?
<;-)
......
I gotta get off the stuff....but it is not nearly as bad as some of the things I saw in my college days when we used to drink magic mushroom tea.

Poor old Solomon

Solomon Weaver

(05/18/2000; 20:29:20 MDT - Msg ID: 30810)

How to get Euro in IRA???

An investment question:

I currently hold a large portion of my IRA in a money market account....I want it there available so that I will have money to reenter the market later (only stocks I hold are NEM and PAAS).

Now that the dollar has done well against the Euro, I consider that denominating some of those funds into Euro would be good.

Is it better to buy Euro govt bonds or Euro corporate money market instruments. If so, any recommendations on specific "safe" holdings which a "stock broker" can buy.


Poor old Solomon

Leigh

(05/18/2000; 20:38:42 MDT - Msg ID: 30811)

The Eloquence of Golds Revenge

http://www.sharelynx.net/temp/GoldsRevenge.htmGolds Revenge's AMAZING poetry has been gathered by Sharefin into a beautiful webpage. If you love gold, you'll want to read this. Thanks, Flierdude, for posting the link.

YGM

(05/18/2000; 20:59:13 MDT - Msg ID: 30812)

Repost...Concerning Email Adresses Gov't & GATA

http://www.goldworld.net/rollcall.htmFrom: Josh Wright�� Date: Fri�May�19,�2000�1:29am Subject: About GATA's Washington D.C. Ad

GATA's ad (Gold Anti-Trust Action)was originally
released on the internet in PDF format.

GoldWorld.Net created a HTML version of the original
text published in Washington D.C. in "ROLL CALL",
the paper most read by the U.S. Congress.

This HTML version added a few things to the original ad.
Namely the biographies, email addresses, phone numbers,
and websites of the politician this publication was
addressed to. I know we all was to encourage Congress
to do the right thing. All the contact information is
there so that they know we are here.

This document can be accessed at
http://www.goldworld.net/rollcall.htm

Also the GATA website has the ad, but
without the contact information.
http://www.gata.org/latest.html

Please contact these members of Congress.

Josh Wright
GoldWorld.Net webmaster
http://www.goldworld.net

USAGOLD

(05/18/2000; 21:04:27 MDT - Msg ID: 30813)

Poor Old Solomon. . ."Gold Will Take No Prsioners."

The euro is a trailblazer and it has taken the heat as a result. This business of nation building can be difficult at times, as we are seeing. Overall though I think they are on the right track despite some of the problems.

A long time ago, I asked Another if the Europeans would buy or sell gold to defend the euro. So far they have done neither. I wonder what he would say about this now. (??) I would suggest the ECB consider buying gold to defend the euro. Contributions from the nation states to ECB reserves are fine, but adding to the overall reserve would send a very clear message about the future of the euro as opposed to its competitors. There is a very clear message emerging that a private gold owner in Europe will benefit from his or her ownership should the euro falter and that this message is officially sanctioned -- far from the message U.S. policy makers are fostering here.

I note with relish that U.S. policy makers have stated publicly that this country is not a gold seller, that our gold reserve will remain intact. I think this is because of Europe's choice on reserves. We are at a watershed for gold and this has been frustrating to some of the goldmeisters as the past few years have seemed interminable, but the unwinding of the short gold position is going to take time, and gold will move once the central banks decide that its moving won't undermine its endangered counterparties and the system as whole. Once that is over, and we may be rapidly approaching that time, gold will move with a vengeance. As Robert Guy from Rothschilde said last year just before the Washington Agreement was signed, "Gold will take no prisoners."

To be sure, the Europeans are not holding gold because they think gold does not have a future. The United States is not making noise about a sacrosanct gold reserve because it believes there is no future role for gold in the official sector. To the contrary, they are holding it because they think it does have a future. The U.S. will have to compete someday in a tri-currency world and there are those in monetary policy community who understand this.

This will mean not only protecting the reserve we have but developing a policy to acquire the reserve we are going to need -- both here and in Europe. If the gold mining industry truly wanted to advance its future, it would not be sending $18 million (as the owners of Gold Avenue have recently announced) on a website, but $18 million to finance the political parties in the United States and Europe which are interested in advancing and expanding the euro concept of gold reserves. This is the real future for gold.

I no more believe that the euro is a failure at this point than I do that Europe is a failure. I think it is experiencing growth pains, and I think that Another is right: It will someday pick up some of the reserve currency load as the United States realigns its own currency to gold and deals with its debt problem. I think this is what G-7 is planning, and in the end it may be the best policy (if I'm right). For gold investors, this will mean a much higher dollar price someday. It will also mean a time of economic hardship in the United States as the adjustment is made, but not as bad as it would have been had the euro never existed. It will be dangerous time, but more hopeful for those who understand the nature of money. Those who own gold will be immune to the type of disaster that would occur if the above outlined attempt to stabilize the international economy fails. However, if we continue on the path we are now on, the future holds even more danger. A financial collapse would then come into the picture. Some would say, that we have already stepped foot on that road, never to return. I have not yet decided whether or not they might be correct.

oldgold

(05/18/2000; 21:10:06 MDT - Msg ID: 30814)

Solomon Weaver

Interesting speculation on gold lease rates and liquidity. But it remains just speculation at this point.

I for one will not buy the argument that low lease rates no longer imply high liquidity until I see a big jump in POG with lease rates remaining low. I very much doubt I will ever see that. But stranger things have happened under the sun.

oldgold

(05/18/2000; 21:18:07 MDT - Msg ID: 30815)

USA Gold

I may be dense, but I cannot see how selling gold could help the Euro under any circumstances. European gold sales can only help the dollar.

Solomon Weaver

(05/18/2000; 21:32:44 MDT - Msg ID: 30816)

(No Subject)

http://www.simplex.co.il/fed/finetune.htm#t1MK

Was just reading this link...I do not agree with all the author has to say...but he makes the interesting point that the real crash in stocks must be preceded by the weakening of the institutions supporting it.

oldgold

Yes I will agree with you...let's see a $50 spike in gold like we saw in September and see if lease rates jump up.

On the other hand, I am not sure if this "future" observation will prove today's correlation between gold lease rates and the liquidity available through leasing. (Isn't it one of Another's things to prove today by looking at the future??).

Just seems that TPTB in gold have a lot to gain by having the lease rates at historic levels....volatility in lease rates have been an indicator of the market (outside of paper and spot prices)...now with the world's hedgebooks looking like an old ball of silly putty is it not putty....

The liquidity that the lease rates provide is a liquidity which is also dependant upon the willingness of counterparties to step into either side of a lease....so if the rates are low, but the rate of new leasing is not high, this means that a factor outside of lease rates is controlling the willingness of large counterparties to "create liquidity" by "borrowing" gold.

Poor old Solomon

USAGOLD

(05/18/2000; 21:35:44 MDT - Msg ID: 30817)

oldgold

I agree that gold selling does not help currencies in the long run, and I think if you have read my stuff over the years you would see that this isn't a new position for me. The United States though sold roughly 12000 tons of gold if memory serves to keep the price of gold at $35. In the eyes of U.S. and British policy makers however, this was defending the dollar. In reality, the best defense of the dollar in the long run would have been to resist printing currency to purchase good overseas. Sound familiar? There's no limit to the shortsightedness of politician, or a political party, trying to get elected particularly if monetary policy can be used to grease the wheel.

At any rate, I thought I was very clear that I encourage the Europeans to purchase gold as a defense of the euro not sell it. My original question to Another was to gauge what Europe might be thinking at a time they were publicly debating the level of gold reserves in ECB. Following along the lines for a purpose for everything under heaven, I was curious why they wanted gold in their reserves in the first place.

ORO

(05/18/2000; 21:43:13 MDT - Msg ID: 30818)

Henri - Re - Grabit concepts

My point regarding your post is this:

Government is not good at determining what "fair" is. For the government official, "fair" gets him more responsibility and authority with less accountability.

In the excercise you engaged in you kept a sense of subservience to government, as if saying "please do the right things" despite keeping powers that make for a strong disincentive to do so.

In common law, though the Judiciary is within the government, it is operated at the initial level by Juries and grand juries. They can disregard the legislation and the prosecutor's case and convict, acquit, indigt, release, or decide for defendant or plaintif according to their understanding of both the application of the statutes and whether the law is appropriate or not.

That we need to jump through so many hoops to reach a jury trial is a symptom of the diseased state of government as it tries to avoid equalization of the playing field in court - i.e. "fairness".

I guess that I feel you are accepting government as a general proxy for the will of the poppulace at large, and in some way representative of their interests. Quite frankly, it isn't either. The staffers of the mechanism for the excercise of violence are not suited for sympathy, sensitivity, fairness, etc.. They will do their utmost to "look good" to superiors, to the publc, etc. But will stay beholden to those who promise them a better future.

Elwood

(05/18/2000; 21:58:13 MDT - Msg ID: 30819)

USAGOLD (05/18/00; 21:04:27MT - usagold.com msg#: 30813)

I think ANOTHER would say look at the ECB. They do not raise their rates while the Fed rate increases accelerate. Which currency needs to be defended?

MK, I think that the Euro folks ARE purchasing gold. Just not publicly (yet).
Elwood

SHIFTY

(05/18/2000; 22:11:47 MDT - Msg ID: 30820)

Saudi Billionaire buys Internet Stock

http://www.worldtribune.com$hifty

SHIFTY

(05/18/2000; 22:16:49 MDT - Msg ID: 30821)

Saudi Billionaire buys Internet Stock

http://www.worldtribune.com/tout-3.htmlSorry for the bad link. This should do it.

$hifty

Black Blade

(05/18/2000; 22:19:43 MDT - Msg ID: 30822)

Gold weakness could trigger return to hedging (From miningweb.co.az)

Lets hope that producers don't start up hedging in desperation. There is a ray of hope however. read on:

Renewed gold price weakness to near eight-month lows disappointed but did not surprise most UK and South African analysts. The metal fixed in London at $272.80 on Thursday (18 May) down from 273/oz the previous day.

Philip van Klapwijk of London consultancy, Gold Fields Mineral Services, says there simply isn't an ideal mix for a strong gold price at the moment. The approaching summer months in the Northern Hemisphere are usually quiet ones for gold demand while the next UK gold auction � another 25 tons will be sold � signals volatility in the price, Van Klapwijk says. He offered qualified comfort, however: "There's a chance gold will bounce back ... a little. There is usually physical support at $270 per ounce." GFMS forecast a trading band of $265-$305/oz in its annual review.

South African gold producers are comforted by the continuing weakness of their currency to the US dollar. One South African analyst said operating margins for local gold producers are now as good as in 1993/94, ranging between 25-30 per cent. However, a failure to control costs had put pressure on most South African gold producers. Cash costs increased at all but a few individual mines in the March quarter. This included operators such as Harmony Gold Mining Company which is renowned for its miserly cost control habits. Even Anglogold, the premier South African stock, suffered a poor March quarter.

He said the strength of the dollar, gaining on the 50-basis point increase in US interest rates rise, is not helping bullion. "Fundamentally, the gold market is very strong and very over-sold. But we expect gold to remain under pressure for some time. In any event, this is seasonally a bad time for gold," he says. The fear among dealers is that once through $270 per ounce, gold could collapse to about $260/oz.

Independent technical analyst, Clive Roffey, believes gold is ready to bounce: "The recovery is so close, I can smell it," he says. He believes bullion could smash through $330/oz, forecasting slight corrections along the way.

Hedging now tempting

A consequence of the weakening gold price will be the growing attractiveness of forward sales. A host of major gold producers, including Placer Dome, stepped back from their aggressive hedging policies believing limited forward selling was a tonic to the market from which all producers could benefit. But recent comments by Barrick's Peter Munk that hedging had in fact helped the market, captures the change in sentiment towards revenue protection.

"The contango has been north of five per cent for a while, and with US interest rates ticking up, it must be getting very attractive for some people to hedge," an analyst said. The contango was as much as six per cent a year in some cases. "There has been little producer hedging but as the contango becomes more attractive it is more tempting to lock things in," Van Klapwijk added. A report from Reuters quoted dealers saying that the Australian producers were most partial to forward sales. "Australian producers (were) expected to sell more forward gold if the Australian dollar continued its fall against the US dollar," the report said.
By: David McKay

SHIFTY

(05/18/2000; 22:24:18 MDT - Msg ID: 30823)

Saudi Billionaire

Now this guy needs to buys some gold to balance his holdings.

CoinGuy

(05/18/2000; 22:59:24 MDT - Msg ID: 30824)

USAGOLD...

MK,

You hit the nail on the head, if the new Roman Empire wants to defend their currency, they need to step up their gold reserves to 30% as rumoured. Look at the correlation between the pound and their currency strength since the beinning of the BOE auctions. Your answer is right there in the chart. Don't think so, ask a Canadian.

should've bought those CD's in euros...

Coinguy

Elwood

(05/18/2000; 23:00:30 MDT - Msg ID: 30825)

History Repeats - The Death of Bretton Woods

(This was an old letter that I researched for a debate with an economist.)

Bretton Woods worked just as intended up until early 1965 when the French announced they were tendering up to $300 million for conversion (Hazards of colonialism, I guess). This kicked off 5 years of beggar-thy-neighbor policies on the part of the Europeans and Americans against each other, nearly all of it due to irresponsible monetary debasement. The whole episode would have been hilarious except for the damage they caused to their own citizens.

Pressure from the Americans came when Johnson ran the SEA war while, at the same time, spent hand-over-fist on his Great Society programs. Later Nixon compounded the problems with even more spending programs and his continuation of the war. They couldn't raise taxes (they were already high) so they debased the money.

In November 1967 the British blew $1 billion in the forex markets trying to support a debased pound before devaluing on Nov 18 from $2.80 to $2.40. Before they devalued they hit the IMF up for a loan for $3 billion, but were handed their hats and shown to the door. After this debacle the sterling zone countries fell like dominoes: Denmark, Iceland, Ireland, Israel, New Zealand, Spain, a few others.

The French devalued in August '69 and the Germans later that summer. Both of these are interesting stories in their own right, the French for their timing, the Germans for their innovation, but we'll save that for another time. So far, so good. Bretton Woods was holding. That brings us to 1970. Enter the Arabs.

During 1970 OPEC asserted itself. In May the TAPline (Trans-Arabian Pipeline) from Saudi to the Mediterranean coast was interrupted in Syria. This drove tanker tariffs to their highest levels ever, before or since. In September, in what has become known as the Libyan price controversy, Libya raised posted prices and increased the OPEC tax rate from 50 percent to 55 percent followed by Iran and Kuwait in November. For strike three, in December OPEC met in Caracas and declared the Libyan tax to be the new OPEC tax and, furthermore, OPEC would adjust its posted prices to reflect changes in currency exchange rates. Later, OPEC enforced the tax by announcing that failure to pay the tax by any nation would result in an embargo.

This was the first supply shock of the 70s. The effect was to reduce the world oil supply by approximately 1.3 million barrels per day (mbd) through December of '70. This is compared to the approximately 2.4 mbd reduction at the height of the '73/'74 embargo.

All of this raised eyebrows on both sides of the Atlantic. To settle the Libyan price controversy there were two groups of talks, one in Tehran, the other in Tripoli. The one in Tripoli was the more significant. Libya, negotiating for itself, Saudi Arabia, Algeria and Iraq, was able to get about a 50% base price increase, 2.5% annual allowance increase plus additional allowance for inflation and finally an increase in the OPEC tax rate to 60 cents. Talks concluded on April 2, 1971.

With the Arabs now insisting on fair prices for their oil everyone knew that the Bretton Woods scheme was done for, because none of them intended to do anything about the debasement of their currencies (except maybe the Germans who relearned the lessons of '23). Yet, no one wanted to be the one remembered as the guy who brought down the financial system of the entire world.

Then, on Saturday, July 31st, Venezuela announced they were nationalizing their oil. That was enough for the Brits, and they moved in the following Monday. This is per Paul Volcker through John Connally's book. They say the Brits came in on Monday the 2nd with the request that they would be tendering $3 billion, their whole forex reserve of dollars, for conversion. The Brits have a different story, and their amount is the $750 million currency swap that they executed on Friday, Aug 13. Originally they had asked for $2 billion on the swap but were turned down. Since they had requested the conversion for Monday Aug 16, Nixon acted on Sunday after that famous Camp David meeting. At the time of the notice of tender by the Brits there was approximately 10.1 billion in reserves. The outstanding claims for it were over 70 billions.

Bretton Woods survived all the despicable monetary machinations that we Westerners perpetrated against each other during the sixties. Four months after the April 2, 1971 agreement on the Libyan price controversy in Tripoli and a couple of days after Venezuela began nationalizing their oil, Bretton Woods died in the mad dash of the dogs after the scraps.

The closing of the gold window angered the Arabs terribly. With them, revenge is a holy thing. In response to Nixon's action they immediately raised prices and began nationalizing western assets in their countries. Libya, Iraq, and Iran all started nationalizing. Yes, they hated Israel, and they still do. Yes, the Yom Kippur War was a factor in the '73 Embargo, but that was more for political cover directed at the folks back home. The Arab oilmen were just that, oilmen. They weren't soldiers. They wanted to get Nixon for what, to them, was a humiliation by a moneychanger. They wanted to hurt the men who they thought were trying to cheat them out of a fair price for their oil.

(end of letter)
Today, we seem to be in that twilight zone between the settlement of the Libyan price controversy (Washington Agreement) and the action by the Venezuelans(?). Everyone knows the system is dying, but, it seems, no one is ready to make the first move. I keep remembering something Another said to the effect that this was a way to end dollar settlement for oil without war.

ORO

(05/19/2000; 00:42:38 MDT - Msg ID: 30826)

Solomon - gold liquidity and rates

The lease rate is the interest rate on gold.

Looking into the greatest incident of liquidity crisis in history - the 1929-1930 crack up of US financial markets, one can note the following phenomena:

Commodity prices were suddenly rising as the crissis first started, earlier in 1929 (if memory serves right). They later receded and fell steadilly for another 3 years.

Short term interest rates spiked up to double the rates just a couple of weeks before. Soon after, the rates fell and continued falling.

To understand what happened today we should look at the causes for the above phenomena. As then, so now in the gold markets, the "gold standard" was functioning. Then, as now, paper gold debt (then called dollars) diluted the physical metal and caused its value to fall relative to other financial instruments (stocks and real estate) that were purchased by issue of increasing quantities of gold debt.

As the liquidity crissis started (a planned and coordinated event - by the Fed and its European and American member banks then, and now by the ECB and its European member banks) interest rates rose to a steep spike (as occurred in September in gold and more recently in Pd and Pt). After this, borrowing stopped at first because lenders were reluctant to lend, and later borrowing never recovered because borrowers were reluctant to borrow.

The gold markets then (1929) could have had a liquidity recovery if the banks rushed to lend further funds as they do today under Fed leadership (e.g. in 1998). Morgan seems to have done this in the gold markets in Q4 1999 and prior to that in Q2 1999 (taking BT - and Deutsche - off the hook). We all saw the gold supplies coming onto market from the small non-EU CBs, and how Morgan and others supplied options in order to prevent many producers from buying back hedges (I assume the options were sold at a discount to market value, which is why they were accepted in preference to physical by the producers).

In the aftermath of the 1998 Russian default and the resulting LTCM crissis, dollar lending in the international arena dried up. Dollar creation outside the US fell into negative values and exacerbated a small shortage and turned it into a big one. The carry trade borrowing in Euro is reflected in the last BIS report (see YGM post) in a rise of Euro derivatives to 34% market share relative to the Dollar - which fell to 27% market share in the currency derivative markets. Dollar illiquidity resulted in a steep acceleration in short term Eurodollar rates. The Fed simply raises rates so as to reduce the spread between US short term rates (particularly Fed lending rates) and the Eurodollar rates. The purpose is to prevent US banks from lending into the international arena and creating more dollars that could satisfy the surplus demand (for debt payment) without imports enetering the US. In this way, the only way dollars enter the international currency markets is through US income payments and the trade deficit. The increased imports serve to dampen price pressures in the US and are the conduit to exporting our inflation into the rest of the world.

In the gold markets, Morgan absorbed some of the liabilities, as the US bank positions grew from 8600-8700 tonnes to 9300-9400 tonnes in Q4 alone, and from 7300 tonnes in Q2 99.

The BIS report, however, shows an increase to 26000 tonnes, from 21000-22000 at end Q2. This comes out to a 4000 tonne increase, coming half (2000 tonnes) from the US half from outside the US.

Needless to say, the liquidity in the paper gold market was maintained by the issue of much paper gold.

The appearance of Credit Suisse at the London Fix, and the increase in non-US bankgold obligations may indicate that HSBC did not unload the Republic position.

On the other hand, the 1/2 and 1/2 split in new positions between American and non-US banks may have to do with Credit Suisse and perhaps HSBC covering their positions indirectly; i.e. they took out long positions with Morgan and Citi as indirect counterparties - possibly through an intermediary fund or producer that is short and in which they hold a gold debt interest - having lent them the gold.

The 2000 tonne figure fits perfectly with the Washington agreement and the growth of Citi and Morgan positions by exactly that amount. The agreement put an end to further growth in leveraging of the gold market while supplying the necessary liquidity to prevent an immediate unwinding by providing a publicly known source for the gold that would cover these new obligations. The path could have been: EU member CBs guarantee accounts at CS to 2000 tonnes, CS lends gold to a desparate group of over-hedged miners and funds who buy calls from Morgan and friends to hedge the loan. In return, the Brits join the EU with the LBMA intact, and CS gets a seat at the Fix - the first non-Anglo bank to hold one.

So we have all the elements in place to show a resumption of liquidity powered by the EU member banks providing finite credit and allowing the increase in gold obligations by 400 tonnes per year - 400 tonnes after 5 years (and the appropriate increase in the 5 year and over position in the OCC report), 1600 tonnes within 1-5 years - enough to cover 1/2 of the 2500 - 3000 tonnes due in that time frame.

Interesting?

Comments?View Yesterday's Discussion.

elevator guy

(05/19/2000; 00:49:15 MDT - Msg ID: 30827)

@Aragorn, Henri, Oro, et al

First, I must ask your indulgence, as economics is not my chosen field of endeavor, nor is it even a hobby. I'm just an average Joey-Six-Pack, who is only very recently giving any thought at all to currencies in general.

The discussion of the most perfect currency got me thinking-

Since the US dollar ("FRN") is the leverage of the Federal Reserve, and hence the constituent banking interests who profit from the transfer of wealth thereby,

And since the whole United States, and much of the world at large is "forced" to use FRNs for trade,

And since there is no other "game in town" or currency at this time that can compete sucessfully against the FRN,

And since the Federal Reserve has "rigged" the game of commerce and trade to benefit them exclusively,

Why can't we institute several competing currencies, right here in the United States? Maybe each region (Eastern, Southern, Southwestern, Northwestern) could issue a fiat currency. Or maybe each state could have their own.

To what advantage?

Each currency would have to compete with others, sharpening its value, and reducing the abuse of the issuer.

The FRN would lose its place as the worldwide tyrant of economic theivery.

No doubt ideas like this are bashed soundly, labeled as subversive, revolutionary. But I say that the FRN is subversive, and has become the task master of the people.

Is there nothing we can do? Shall we carry gold in our pockets, and trade little hunks for bread and milk? Obviously not.

Ok, enough for me. Just thought I'd shoot a post towards the center ring. Good night all.

Aragorn III

(05/19/2000; 03:00:10 MDT - Msg ID: 30828)

Currency comments...

Henri (05/18/00; 10:01:08MT - usagold.com msg#: 30773), I am honored to receive the depth of your reply to my "challenge", and this Round Table has been well-served by your efforts, and your subsequent refining dialogue with ORO.

I am particularly pleased to see your careful and clear use of the terms wealth, gold, capital, money and currency. For long I was myself one who preferred to reserve the term "wealth" only to those goods that were directly needed to preserve a body's wellness + health (hence, "weath"). However, through Aristotle's "thinking out loud", I have seen the need for relenting, agreeing that discussion is better facilitated by abandoning my strict definition and allowing gold, this nearest and most universal proxy for items of "wellness + health", to be included in the short list of wealth assets. I see "capital" as that larger class that may include wealth, but also the tangible means with which to create new wealth...mining equipment comes to mind as a suitable example, or the factories that manufacture Levi Strauss jeans used to clothe the miners and their families. As has been discussed here already, "money" is that confusing term that originally applied to the items of wealth or capital that were nearly universally accepted in trade, but has in time been the bankers' blurry bridge for the introduction and acceptance for wide use of this other creature we call "currency".

Evolution has shown me that modern currency and banking is not to be reviled for the world we live in. But it must be said that that comes with TWO important conditions: 1) ALL users of the banking and currency system MUST be made knowledgeable of the nature of and distinction between wealth, gold, capital, money, and currency. Woe (or an infant) is the person that believes bank currency is the equivalent of capital or wealth. 2) There must exist an unmanipulated safe haven for the saving of wealth outside of the currency system. An educated person will use currency only for the purposes for which it is suited...borrowing and immediate spending.

When a person finds himself blessed with time, talant, and energy, but precious little capital with with to make a proper go of his life, we would not need bankers if venture capitalists were in abundant supply. And yet, there would always be those with the need to borrow nevertheless. To borrow a "thin air" currency is essentially to make a temporary creditor (venture capitalist) out of every person involved in accepting this currency until they have been paid in full at such a time that the currency they accepted in return for their own ventured service or capital has been "redeemed" for an equivalent level of capital from another. The "dirty little secret" of the banking system that "allows" us all to particpate as erstwhile venture capitalists is that under normal circumstances, the currency--for receipt of which we each venture our capital today--is ever in a state of supply inflation. Therefore, when we seek to "reap the gains" of our part of the venture by passing along the currency which represents our stake in the original borrower's grand design, not only do we find that we fail to achieve a small gain on our risk of participation, but invariable we take a loss! Such is the nature of currencies and inflation.

Mark my words, this inflation effect from the lending/borrowing process is as real whether the currency units be the product of thin air, or whether they be "backed" by a real good...such as gold. The effeciency of banking assures it. I felt this item to be well-addressed through the Aristotle posts of early February and well-supported at the time by Trail Guide. A review of an abridged executive summary would serve us all well here:

Aristotle (2/7/2000; 7:15:24MDT - Msg ID:24589)
*** Any monetary system that attempts to coin gold, or otherwise use gold as currency will naturally give rise to banks--for security and quality assurance if for no other reason.

*** History reveals time and time again that this seemingly "perfect" gold-only system naturally evolves into fractional-reserve lending because it is what the people want.

*** While lending depositors' money, the efficiency of banking to reallocate fungible funds allows many people to behave as though they all are owners of (have access to) the same original money on deposit.

*** The artificial increase in the money supply erodes its per-unit purchasing power.

*** A growing economy (complete with rising prices from a "softer" currency) raises the customers' demands upon the banker's art of money creation, widening the gulf between here and reality...between the vast amount of banking credit and the small original amount of real wealth-money upon which it was all built.

*** Because coin and bank-credit circulate as equivalent, interchangeable currency, the value the currency-unit regardless of form (Gold coin or paper) falls in accord with the growing supply of bank-credit.

*** When the value of the coin comes to be viewed as a simple representation of the abundant currency and fails to reflect the value of its metal, it might as well be made out of anything at that point.

*** The concept of money gradually loses its original meaning and its ties to real wealth; it comes to be built upon the thin ice of confidence and good loan performance of the banking system.

*** Fixed gold convertibility of the currency on account looms large as a threat to the banking system.

*** What then is the role for Gold? Gold qualifies as the only TRUE money. Among the many national currencies, only Gold fills the three important monetary criteria: store of value; medium of exchange; and unit of account. Gold, therefore, remains the ultimate king of them all and subject to none...as long as it isn't attached in any official capacity to the fate or fortune of any one of them. Therefore, the monetary system architecture must be such that Governments find no temptation; they are unable to derive any benefit to their own situation through any efforts to "keep a lid" on Gold.

*** Gold must be set free to float, seeking its proper value among the world of circulating currencies; preserved as a unique currency that may NOT be lent (because lending effectively causes a perceived increase in its supply and decrease in its purchasing power, as outlined above.) Gold must only be bought and sold outright, and must remain free of the attachments of any and all financial derivatives.

*** All people, regardless of nationality, must be free to exchange their national currency for Gold at prices established by an open physical Gold market.

*** Gresham's law predicts that the world's supreme currency, Gold, will not actually circulate in the conventional sense. Gold will be saved (and will appreciate in value without lending/leasing it out for interest,) while national fiat currencies will circulate under the needs of the economy. It is these national fiat currencies that will continue to satisfy the demand of borrowers for loans. National fiat currencies will also serve as the means to satisfy the various governments' unrestrainable inclinations to "manage" their economies to the extent that they are able. They, too, will hold Gold in savings (reserves) for the same reason we do.
-----end of repost excerpts---------

While there are many that remain nostalgic for the fixed convertible gold standard of our father's day, I beg that a reassessment is in order. While I have said earlier that we all pay a little for particpating as the unwitting "venture capitalists" in a thin-air currency system, I hope you can see that we fall as incremental victims under any currency system that allows for the lending of the currency be it in the form of paper OR gold. The solution is to ensure that a safe harbor is provided such that we may park our wealth to escape this insidious effect in addition to weathering the occasional currency/banking storm.

The full removal of gold from the currency/banking/derivative system will result in a natural revaluation of gold as pure wealth property so much higher than you can imagine...you will be more than compensated for your bruised egos and ongoing currency-related losses. I have become fond of Trail Guide's term "free gold". With the euro currency system, we are given a framework that will facilitate this standard of "free gold"; a "gold standard" not like your fathers', not like any known before...lest you revisit the pre-banking days where a man in a bearskin plucked a heavy yellow pebble from a stream, whereby the envy of his fellow man taught him the meaning of its true value in trade.

ORO, I compliment you on this commentary...
ORO (05/16/00; 06:47:59MT - usagold.com msg#: 30615)
"...The Euro structure - in which the governments are separating from their old symbiosis with commercial banking is the major change. The dollar system is based on the US government's debt (until last year, when commercial paper was allowed into the mix) whereas the Euro is obligations of whatever borrower created the outstanding Euro, and the Euro's monetary base is based on commercial debt - not government debt."

whereas I question you on this commentary...
ORO (05/18/00; 10:08:14MT - usagold.com msg#: 30774)
"Debt money is bad on a national level. Therefore all modern currencies are bad, since they are all debt currencies. A global debt currency is worst. It allows grand theft on a scale from which none can escape, find recourse to, nor otherwise avoid. No people can opt out of a global currency, once established, because of the disaster of default on transnational obligations specified in that currency."

Do you see no validity in the case presented above where even the use of gold as currency provides "grand theft", and worse, leaves simple people with no escape to opt out? By this my meaning is, if you can no longer run TO gold, where CAN you run to? What you say there IS true enough, but consider also what you have said with regard to the euro, particularly when coupled with the notion of "free gold". Will you soften on "currency"? To be sure, it is not that a "euro" functions differently than a "dollar", but the supporting framework is better, and not burdened with a relic world reserve overhang that only awaits the moment to come home to roost.

On governments you offered this commentary from the same post...
"National government is best suited to protect people against other governments, domestic and foreign. Checks and balances must be strong enough to keep government preoccupied in fighting against itself."

That all sounds like a waste of money in a modern, civilized world. (smile) I might suggest their best purpose is in paving interstate highways through the middle states that do not have the population to foot the bill while the whole country benefits.

You also offered...
"Jefferson found it necessary to repeatedly tie the hands of government and clarify its purpose, yet it was to no avail, and the power of government was taken over by the same powerful interests Jefferson fought throughout his life. I repeat what I said before, government power will be used to plunder its people and its friends and allies if there is some profit to be had by any possessor of capital or by government officers themselves through the use of this power. For this reason, only the most narrow powers should ever be bestowed on a government. The people must stand vigil constantly so as to catch those attempting to expand government power and boot them out."

True enough. And are private forces immune to temptations at pursuing a similar advantage? Microsoft? It would seem that goverments and corporations grow under a similar sun, though they employ different tools to extract what they can from those with the ability to pay. As with Microsoft, do we see an element of the people banding as yet a third force, albeit acting through their support of the goverment, to bring about conditions for their own advantage? And social programs/entitlements...an example of one man picking the pocket of his fellow man with the strong arm of the government? With the government as its tool, I fear the "majority vote" far more than I fear the government in and of itself, or the individual confronting me in a dark alley.

When you suggest in a following post that banking should be taken away from the government and left to the people, please consider the above thoughts, and also our natural, proven history of banking and what the results were. I suggest that the people had their go of it, they still do, and the result is utter rot. By this I do not suggest that government control is the answer. Far from it. However, calling the largest lender (there surely will be one) by the public name of United States Bank, the quasi-public/private name of Federal Reserve System, or the private name of Bancrosoft will do little to materially change things on the street level.

I am in agreement with you in principle as you say...
"Government should only enforce contracts as they are written, holding bankers to their promisses and allowing them the positive and negative consequences of their judgement. People do not need the patronage of government to make their decisions. ...I propose that government have no choice but to accept as legal tender what people have chosen to use as money and do so at the exchange rates and proportions in which the money is used in trade, debt, and cash holdings. Government should have no choices in the matter. ... The best money is that which people choose of their own accord."

However, you must not fail to appreciate that the will and the best judgement of an individual in such matters becomes quite another thing when it is amplified through the circuitry of the population. There seems to be an unmistaken desire for easy money and bottomless punchbowls, even if they (the masses) must ultimately use their government as their tool to extort themselves for it. Given all as it is, I ask...

got gold?

Leland

(05/19/2000; 03:13:59 MDT - Msg ID: 30829)

From Colin J. Seymour...Overseas Markets...Looks bad

Nikkei ends [May 19] "nosedive" "heavy selling"
Nikkei ends lower, investors drop high-techs [May 19] "Tokyo stocks dipped to close on
Friday at lows last seen last September"
IHT: WTO Allows Ecuador to Impose Tariffs on EU in Banana Dispute [May 19]
IHT: Tech Stocks Drop Amid Rate Jitters [May 19] "Technology stocks fell Thursday amid
the threat of higher interest rates and a growing perception that stock valuations are not
justified by earnings"
IHT: South Korean Stocks Plummet [May 19] " ''Fears mostly originate from declines in
the U.S. market,'' said Kim Gi Ho, a fund manager at CJ Investment Trust"

Aragorn III

(05/19/2000; 03:38:57 MDT - Msg ID: 30830)

Very good thoughts to consider from John Doe (05/18/00; 17:51:10MT - usagold.com msg#: 30797)

Sharing this excerpt to stimulate today's participation, and to voice support for Michael's wish to place this into the Hall of Fame. As indicated, we would all do well to strive to appreciate the dynamic and evolutionary nature of life. Business, politics, and economics are not immune to change, particularly when viewed globally, and a dollar tomorrow may not be the same dollar you know today.

From John Doe...
"Any monoculture is stifling, inherently counter-productive, and doomed to destruction. Yet, the current moneyed interests and power-hungry never cease to see or admit this situation. Rather than designing and implementing equitable, sustainable systems, they instead endlessly pursue various forms of monopolism in wave after wave of failure and destruction, all in the name of temporary (or lineal?) advantage.

"A global government will not work any better than a global religion would, and a global currency will not succeed any better than chopping down every other type of plant in the jungle for the sake of a single one. A healthy, dynamic, evolving system requires a continuously varying multiplicity of inputs. Nature tells us as much and, in my opinion, nature has it exactly right. Good government needs a two-way flow of corrective feedback and new ideas and the free means to inspect, select, and apply the corrective feedback and new ideas. Likewise, a healthy economic and monetary system requires multiple viable choices among freely operating investment vehicles, stores of wealth, and transmissions of value. What passes for Capitalism these days actively and forcefully subverts both the proper functioning of a rational, viable governance and a long-term, sustainable, equitable economic and monetary system."

You are a fine communicator...a man with a golden tongue (pen...keyboard?)

got more?

HI - HAT

(05/19/2000; 03:58:17 MDT - Msg ID: 30831)

Mutually Assured Co-Dependancy

The term, "He's a rugged individualist", will if present trends continue make the expression as relevent as, "T-Rex was an awesome hunter".

From grade schools on up, the collectivism Zeitgiest is to find strength, fulfillment, and security in the GROUP.

This is what is weakening the Constitution.

The promuligation of this theme marginilizes the individual and predicates a grey area where laws and norms undergo a co-dependant homoginization.

As is inevitable the soulless group thunders as a mighty herd until the false premise induces them to turn into Lemmings.

Handily one can see why the holding of the strong wealth gold is to be shunned, while fully embracing the Fiat debt symbol, that collects all into NOTHING.

Aragorn III

(05/19/2000; 04:56:04 MDT - Msg ID: 30832)

Last burden on your eyes

Michael, from your post USAGOLD (05/18/00; 19:47:08MT - usagold.com msg#: 30804),
"If you owned gold in Europe, you have gained significantly because the gold price has risen and price on everything else has remained relatively stable"

Yes, that is a fine summary to describe the behaviour (performance?) to be anticipated by "free gold" within any such currency system that can inflate apace with economic growth (stable prices) while "free gold" may only be "inflated" at the pace of new mining. The initial revaluation of gold--to be in tune with this developing platform--is one not to be missed, and one that will only provide its full benefit to those with metal in hand.

Solomon Weaver (05/18/00; 20:14:48MT - usagold.com msg#: 30807), your comments serve as a good alternative for a person seeking the "short and sweet" of my earlier post today. Had I read through the day, my effort could have been spared, along with Michael's bandwidth. You offered...
"I see the Euro not as an attempt to "politicize" Europe into a "United States of Europe", but rather as an attempt to create a fiat currency which goes beyond the interests of a given nation...the learning curve on today's Euro will benefit the world as we strive for new fiat models (disconected from politics). The Euro is the "concept seed" of a future which can hold any number of separate Sovereigns (including individuals) under a single money...gold and other mechanisms will reinforce discipline. The dollar on the other hand is an attempt (through dollarization) to "cast a net of political influence" across the globe. In the end, the targets are the same...but as the zen teachers understand, the goal is the path itself..."

Michael also said later "There is a very clear message emerging that a private gold owner in Europe will benefit from his or her ownership should the euro falter and that this message is officially sanctioned -- far from the message U.S. policy makers are fostering here."

That is so true! As you are aware, Germany's Bundesbank has designs to issue next year a one-mark gold coin, offering at market prices one million of the 11.8 gram items (12 tonnes) for the purpose of fostering, in the words of the Bundesbank, "monetary and currency stabilty consciousness" among the general public. They might seek to take notes from the fine example you are currently setting in that same regard using German gold coins...a pioneering effort for which our fellow man at large would do well to take notice.

Some additional thoughts on finding gold's value in a modern world...
Those familiar with conditions in "third world" type nations knows that a dollar enjoys a tremendous purchasing power there which is not to be found here. The explanation is the desire by the citizens to hold dollars for their superiority over the local currency. How is it that the dollar is deemed superior, while both currencies are cut from the same fiat air? Scarcity. The local perception is that the scarce dollar requires effort to attain, whereas the locally manufactured currency is perceived as worth "a dime for a dozen". And make no mistake, in many of these locations, gold enjoys the same superior purchasing power over what it demonstrates on our own shores. However, there is no reason to expect that gold is any less scarce here than there when compared against the available economy. This example might help some people begin to form the tiniest grasp of the nature of the gold "re-evaluation" to be expected and enjoyed for gold owners against real things even here in banker's paradise.

To borrow again from Michael's good words as I conclude for the day, "It will also mean a time of economic hardship in the United States as the adjustment is made, but not as bad as it would have been had the euro never existed. It will be dangerous time, but more hopeful for those who understand the nature of money. Those who own gold will be immune..."

The reason the euro is key, as Michael says, is that its independence offers a viable shelter into which the international world of commerce may run and yet function while the dollar and its banking system is sorely tested.

got gold?

Richard640

(05/19/2000; 05:49:03 MDT - Msg ID: 30833)

Why gold should....Nay! Must, go up! What it will take to duplicate 1994

The bulls are in trouble--world "paper asset" markets are like a pie crust stretched across the roof of a volcano. The bulls hope for a repeat of 1994 not 1929--in expiation for their sins, they'll settle for '94. So far, with minor variations on a theme, this is 94--we have fed rate hikes and the marvelous "stealth bear" mkt. in the old economy stocks The bulls and Pollys could argue, we have been in a 2 yr bear mkt. that started about March 98--the New Economy stocks have had their own compressed bear mkt. the past 3 or 4 months. Like 94, the popular averages are holding up at high levels and investor cofidence is shaken but FAR from broken. Like 94, we bears have high hopes for a crash and other mkt. mayhem that never seems to materialize, as just at the last moment, "mysterious" buying comes in to save the day.----------So how is it that gold will soar eventually? To answer that, we must look to the wisdom of my good friends, Hong Kong based financier Steve Saville and Don Wolanchuk-top S&P timer of the year for the past 12 or 13 years. Steve maintains that the more than decade long debasement of world currencies guarantees, eventually, that gold will have its day. This ties into HOW the U.S. Fed will, again, try to engineer, a 1994 scenario--no big mystery-they'll just whip out the old U.S. charge card and create a lot of liquidity-(ot turn a blind eye to the non-Fed sources that can do the same)-foreign C.B/s will follow suite which ties into the Wolanchuk scenario of a world boom, rising inflation, rising rates, and stocks-politicians will always choose to reflate-(no guarantee of success-the world could end up like Japan-hope! hope!)--Wolanchuk says, under his scenario, that gold and crude will "go to the moon". As world currencies get worn to a frazzle, the cabal will be powerless to restrain investor demand for gold.

Black Blade

(05/19/2000; 05:52:18 MDT - Msg ID: 30834)

(No Subject)

http://www.cnnfn.com/markets/morning_call/European Markets are getting CRUSHED this morning. Looks like several people are ready to bail out at the open on Wall Street. The s&p Futures are down -9.00, -10.55 fair value. Meanwhile gold is anemic this morning, slowly passing into a coma. Maybe at the open in NY, the poor old boy may perk up a little.

Richard640

(05/19/2000; 05:52:19 MDT - Msg ID: 30835)

Gee. O option expiration day and the S&P is down about 10 pts--gold up 50 cents

This set up seems to indicate that we will NOT bottom the first 15 minutes but may close on the lows--but ya know what?--it's still the same old shuttlecock market--we just went up 500 pts. prior to the Fed meeting--that created a cushion--we gotta break out of this 9800 to 11,000 range before we can show the slightest bit of bearish glee---this shuttling about is just a dumb show for the bears...Have you noticed how all the analysts are upping their earnings projections? Contraryinvestor said don't be surprised to see another 1/2% rate hike and a statment that the Fed is on hold for the year....then, "mysteriously", all the economic reports will be friendly through the election. Yep, the bulls are pulling out all the stops!

SteveH

(05/19/2000; 06:02:41 MDT - Msg ID: 30836)

ORO

ORO,

Based on your comments, the price of gold is steady as she goes for four more years? OR, can we expect all heck to break loose a bit earlier? When?

Black Blade

(05/19/2000; 06:16:22 MDT - Msg ID: 30837)

Morning Wakeup Call!

Source: Bridge NewsAsia Precious Metals Review: Gold recovers on short-covering
By Hiroyuki Fujiwara, BridgeNews

Tokyo--May 19--Spot gold slightly extended late overnight recovery Friday in Asia. Players were hesitant to decide price directions, while light short-covering--buying by players who had sold--underpinned gold ahead of the weekend, dealers said. Platinum was firmer on short-covering and some fresh speculative buying, they said. Spot gold is likely to slip to U.S. $270 per ounce in the near-term under the weaker sentiment toward the U.K. Treasury's auction scheduled Tuesday, the dealers said. However, few want to open fresh selling positions due to the unclear forecasts after the auction, they said.

Black Blade: Ho Hum. Wait until Wed., the day after the UK auction. Rather the Barbarians get their due when they have their auction, let gold rise on Wed.

Europe Precious Metals Review: Gold supported at $273, rest steady
By Gavin Maguire, BridgeNews

London--May 19--Gold prices kept mainly to within a U.S. $273-274 per ounce range after having crept to those levels late Thursday and overnight on the back of short-covering. Dealers said spot metal was expected to drift slowly lower over the rest of the day as end of week book-squaring "leads to players taking profits," in the words of one. The rest of the complex edged sideways at overnight levels in thin trade. Sources said profit taking in the $274 area would continue to cap trade in that vicinity and define the upside in the near term. However, one dealer argued that as the amount of short-covering dies down, the end of week profit takers would drive prices slowly lower. Support is expected to remain firm on the dips towards $272, although buyers are expected to increasingly shuffle toward the sidelines ahead of Tuesday's Bank of England gold auction, which may mean spot prices drift lower to test support in the $270 area, a dealer warned. Silver kept to within a $4.96-5.00 range to extend the recent trading pattern, but dealers warned of further probes lower in the short term as the $5.00 level--ominously reinforced by the 10-day moving average this morning--solidifies as resistance. Platinum and palladium stuck to overnight levels in thin trade.

Black Blade: Same song and dance as in Asia. Ho Hum.

SteveH

(05/19/2000; 06:32:48 MDT - Msg ID: 30838)

Record trade deficit at ...

$30.2 Billion. Expected was $29.5b.

Black Blade

(05/19/2000; 06:51:01 MDT - Msg ID: 30839)

Euro Continues To Sag, Dollar Hits 11-Year High Against Swiss Franc

http://www.quicken.com/investments/news_center/story/dj/?story=/news/stories/dj/20000519/on20000519000250.htm&column=P0DFPDump your gold and unlink the currency. Oh yeah - good idea. Notice that the English Pound is also getting pounded. Smooth move people!

Cavan Man

(05/19/2000; 07:37:01 MDT - Msg ID: 30840)

USD vs Swiss Franc

Dollar at high mark vs Swiss? What's wrong with that picture?

USAGOLD

(05/19/2000; 08:32:50 MDT - Msg ID: 30841)

Today's Market Report: Shedding the Pre-BOW Gold Sale Blues

5/19/00 Indications
�Current
�Change
Gold June Comex
274.50
+0.80
Silver July Comex
5.02
-0.02
30 Yr TBond June CBOT
93~08
+0~06
Dollar Index June NYBOT
112.20
+0.11


Market Report (5/19/00): Gold showed some signs of life this morning as it attempted to shed
the Pre-BOE Gold Sale Blues and look toward life after the auction. Cratering stock markets in
both Asia and Europe overnight played a role as investors shed the techies and looked around for
places to put their money. Gold has done well against the euro, and the euro, is well. . .acting like
the euro -- down another half cent in New York this morning. Weak currencies tend to bolster
physical gold demand. The U.S. stock market in sympathy with the international equities' sell-off
is experiencing its own version of the blues this morning with the Dow dropping nearly 100 points
from yesterday's close. Malaise, it would seem, turns to decay. One is reminded through all this
that the typical bear stock market can last up to 15 years and increasingly it does appear that we are
in a bear market. As they say, nothing lasts forever -- not even gold bear markets.

The one bright spot in the investment landscape these days appears to be the commodity sector and
in the next few days we will have two excellent articles going up at the Gilded Opinion section of
this page dealing with the developments there. R.E. McMaster, who has done long service as a
commodity analyst and generally viewed as one of the best, believes that the age of paper assets is
over and a new age is dawning -- the age of hard assets. His current thinking will be presented for
the benefit of our readers. James Turk, a familiar name hereabouts, zeroes in on the CRB Index
and its usefulness as an indicator of gold's future. He says gold will probably make a "big jump"
in the second half of the year. These two will join Mr. Alan Brown's visions of delusions and the
madness of crowds and why gold held firmly in one's hands might be the best alternative these
days. The "leverage is in the physical," he concludes.

As for gold itself this morning, the story remains good physical demand in juxtaposition to paper
traders selling their hearts out for reasons only they truly understand. It certainly cannot be based
on the fundamentals or visions of a deep downside. As we point out in the upcoming issue of
News & Views, borrowing from Newmont Mining CEO Ronald Cambre's recent study presented
in Australia, the standing shortfall between gold supply and demand at present hovers near the 900
ton mark with the official sector making up that difference. That shortfall, it is anticipated will be
made up from 400 tons in sales and 500 tons in the lease pool (presumably). These numbers are
locked in via the central bankers' agreement to freeze sales and leasing. Mr. Cambre suggests that
by degree, from year to year, the Gold Gap will grow in size to the point that in the year 2020, it
will stand at 2700 tons -- a figure roughly equivalent to a current year's production in an industry
that has the propensity for shooting itself in the foot mercilessly. The fissure could even be worse
when you realize the net result of all the hanky-panky in the gold carry/forward trade has produced
an end result akin to a virtual standstill in the production figures. The implied question begging an
answer is: "Where will this gold come from?"

That's it for today, fellow goldmeisters. Have a good weekend. We'll see you back here Monday.

To receive a gold information packet geared to physical ownership please go to link above.

USAGOLD

(05/19/2000; 08:34:49 MDT - Msg ID: 30842)

Sorry Goldfly and all. . .

That supposed to be:

The Pre-BOE Gold Sale Blues

way down yonder in the bottom of my shoooooo oooo ooooes...

OK.....

Goldfly, I'm not.

THC

(05/19/2000; 09:05:08 MDT - Msg ID: 30843)

Question for Oro

Dear Oro,

I have this terrible problem. Every day, those who are short platinum on the Tocom keep sending large amounts of yen into my futures account.

What should I do? I know they are hoping that I will choose to hold their paper instead of taking delivery of the platinum bars when my contracts expire in June......

My inclination is to take their bribe and allow them to bring me cash each day.........

Your thoughts on this awful dillema?

THC

THC

(05/19/2000; 09:13:45 MDT - Msg ID: 30844)

Question for USA Gold

Dear USA Gold,

I am interested in your 20 Mark gold coins.

I note that the price is $76 each, or a premium of 22.5% over the bullion value of the coins, as calculated below.

Spot price = ($270 x .2304) = $62

Premium = $14 / $62 = 22.5%

I would assume that this is because the coins are uncirculated.

Now, just so that I know the bid/ask spread, at what percentage premium will you buy back these coins should a potential customer such as myself decide to sell in the future?

Thank you,

THC

Gandalf the White

(05/19/2000; 09:26:24 MDT - Msg ID: 30845)

THC's calculations !

Where do you get the Spot Price of US$270. ?
<;-)

PH in LA

(05/19/2000; 09:29:37 MDT - Msg ID: 30846)

Then and Now... Indian Gold Plan: Interest by any other name

REALITY CHECK!!...
The Indian plan was discussed here last September when it was proposed and implemented. Looks like it didn't work out quite like anybody predicted. Oh well... That's reality for ya. Just when you thought you knew what was happening (and what was going to happen)...

FOA/Trail Guide: Are we still "on the road" or are we stuck in some kind of an unexpected time warp? Is ORO onto something with his "next four years" scenario?

Date: Fri May 19 2000 05:46
SlangKing (Crusty@The Economist reader) ID#293152:
Copyright � 2000 SlangKing/Kitco Inc. All rights reserved

Did you read the article this week about the failure of the Indian gold scheme?

India who import 600 tonnes of Gold a year was hoping to solve it's balance of payments problem by getting it's citizens to turn in their gold for a 3-4% interest rate return p.a. The target was 100 tonnes in the first year, they achieved 3.5 tonnes in the first 6 months.

Reasons given for failure:

1. Gold is the black market currency, depositing it would invite the attention of the taxman
2. Gold is often in jewellry form, and they have to pay 10% to have it melted down, if they redeem their gold loan they get back gold bars, which then cost ANOTHER 10% to be fashioned back into jewellry
3. Gold is often the only form of wealth a woman has

Bottom line is scheme has failed miserably.

PH in LA (9/20/99; 12:33:17MDT - Msg ID:13984)
India's Gold Plan: More Rechless Abandon by the IMF


It is not too difficult to imagine a big ulterior motive present in the IMF's encouragement of the frighteningly reckless plan currently being floated by the government of India.

We have seen desperate-looking machinations on the part of the IMF recently. First they wanted to sell 10 million ounces of gold "to provide debt relief to impoverished nations"; an absurd idea on many levels...(as if the IMF had ever had any interest in alleviating the debt load of already impoverished nations: On the contrary, their austerity restructuring plans always seem to make things worse for the country on the receiving end of their "generosity".) More likely it would seem that someone desperate for gold was pressuring the IMF to provide some. The same motive behind the bizarre BOE auctions. What a co-incidence!

When the US Congress shot that idea right out of the water, the IMF decided that instead of selling 10 million ounces, they would merely mark those ounces to market. Details of the plan that have been suggested to accomplish this boggle the mind in their outright absurdity. Allowing a bankrupt nation to buy gold at book price to immediately sell it back to the IMF at market prices would be a novel new way of doing business, to say the least. I'd like to get in on such a deal, myself.

Obviously, the IMF is desperately looking for new sources of gold to supply a world situation on the brink of massive gold shortages, even likely defaults. And their latest plan in India to bring more world supply online leaves one aghast in its implications.

Gathering in a nation's privately-held gold by paying interest on it sounds harmless enough on the surface. But thinking about the all-too-likely effects of such a practise is frightening. Let's say a depositor turns over gold in exchange for interest. What happens to that gold? It would have to be sold to give the plan any viability at all. There could be no point at all in merely holding the gold whild paying interest only to return it to the depositor on demand! No! The gold would have to be "mobilized"...that is, sold (in one way or another).

So let's say the new owner of the gold decides to deposit it with the same government. OK, now we have a government paying interest to two depositors for the same gold. Has there ever been a government capable of restraint when it came to printing promises? Never!

So we can imagine a whole industry growing up around the idea of paying government interest on the nation's privately-held gold. A good idea for the government until the depositors decide they would like their gold back, probably in a moment of national uncertainty, which would be the worst possible moment for the government. Suddenly, the government has to supply the metal or face the consequences; with revolution rearing its ugly head, gold would have to be purchased to cover the ponzi scheme.

The inevitable outcome? Worldwide shortage and upward price pressure, even in "innocent" countries with no involvement in the renegade nation's reckless gold practises. Internation destablization! This is why a responsible IMF should be reacting with horror to India's gold plan, not encouraging it. Their reaction of approval is just another indication of their desperation.

They are obviously out of control! And their desperation is obvious!

Where will it all end?

FOA (9/21/99; 10:01:04MDT - Msg ID:14042)
The Road to $30,000
PH in LA (9/20/99; 12:33:17MDT - Msg ID:13984)
India's Gold Plan: More Reckless Abandon by the IMF...Where will it all end?

PH,
Everyone is holding up the new India plan in the light of BB gold loans. Don't be so sure it's headed in that direction. Banks in India can lend currency against gold holdings. It's not entirely viewed as a currency asset, but it is seen as a worthy collateral to be held as reserves. As such they don't have to lend gold to make a return.

Watch the physical gold import figures and we should see that no major bullion is leaving that country to satisfy world BB paper. The IMF and LBMA would love to paint a picture showing India gold flowing out to balance loans. Especially now that they are trapped. No. The India operation is going to fit well because the new Dinar offers a different context for that part of the world.

I look for China to flow in the same direction. Absolutely huge amounts of gold were brought into China over the last several years. Yet, these physical flows were not reflected in official Hong Kong bookings, nor were they placed into the Central bank of China accounts. They were holding there cards back from US /IMF eyes just in case they needed to dash for the Euroland economic arena. These people are sharp and can play us for fools in the financial chess game. Just like the India scheme, that gold will not be lent out for IMF / dollar paper. Believe it! Several large traders brought this gold some time ago through the LBMA when paper was still exercised. Most likely they used the BIS to move that gold. Hence their (BIS) new offices in HK.

It's going to end, PH. But some gold assets will not work during most of this change. We are, "On the Road Now"......... FOA

THC

(05/19/2000; 09:37:24 MDT - Msg ID: 30847)

Gandalf

It's clearly past my bedtime.

Using the Kitco quote of $273 the premium is slightly over 20%........

G'night!

THC

YGM

(05/19/2000; 10:00:31 MDT - Msg ID: 30848)

Blanchard on Soros...1997

http://blanchard.stockscape.com/archive/97feb2-0.htmFrom: Ken Reser....YGM�� Date: Fri�May�19,�2000�6:54am Subject: Soros/Chinese and Gold....Jim Blanchard..../97



This is a 6 part series Jim ran on Soros Feb /97
http://blanchard.stockscape.com/archive/97feb2-0.htm


The one below is # 6........Myself I believe what Jim wrote then still applies today more than ever.....Ken

CHINESE AND GOLD

According to Yasuro Morita, Soros' interest in China may be far
greater and it may involve gold. In "Behind the Scenes Mampulators of
the Gold Market," published by Shima Media Network (Tokyo, Japan),
Morita says that Soros has developed quite a relationship with the
Chinese when it comes to gold.�

According to the article:�

"Overseas Chinese were unable to just watch from the sidelines when
the news hit about Soros buying Newmont Mining Company. To the
Chinese, gold is the common currency fir overseas Chinese...their
history of manipulating the market for gold (which is easily
converted into money and provides good investment opportunities) has
given them not only a considerable fortune but a good deal of
confindence in their ability. They were not about to let this latest
opportunity pass them by, and they joined with Soros in his
manipulation of the market...Gold suddenly jumped to $400 per troy
ounce. Soros and the overseas Chinese saw this as the ceiling and
ended up earning hundreds-of-millions of dollars through the sale of
gold."�

Morita also alleges:�

"...The main figures from groups of overseas Chinese across the world
hold secret 'gold hedge' meetings. It serves as a forum for the
exchange of information on the gold market, as well as on
international politics and economics. This meeting, which determines
money-making methods for overseas Chinese, has at times decided to
move the price of gold. At other times it has decided to work on the
market. To date, there have been two known meetings. The first was
held in November 1987 to deal with the confusion in international
stock markets caused by the so-called Black Monday crash, which
resulted in instability fir the Hong Kong dollar. The second known
meeting was held in May of1994, when the Bank of China issued Hong
Kong dollars in Hong Kong for the first time. However no one knows
that this group has joined with George Soros to manipulate the gold
market."�

According to Morita's report, some profits from this "manipulation of
the gold market" are being used to fund expansion of China's
electrical power infrastructure: "China, which suffers from a severe
energy shortage, will be the main recipient Since this energy
shortage may prove a big obstacle to China's double-digit economic
growth, it has provided an opportunity for Soros and overseas Chinese
to join hands to promote their ambitions in the China market...when
speculating about what will happen to gold prices, the yen exchange
rate, and the development of the Chinese economy, one cannot ignore
Soros and the 'gold hedge meeting' of overseas Chinese."�

whether Soros is eyeing another major move in the gold market any
time soon (with or without the "overseas Chinese," Morita refers to),
no one knows. However, it is generally under stood that Soros is a
long-term bull on the gold market, and one reason may be the outlook
for higher growth and inflation in China.

*About eGroups | Privacy Policy | Terms of Service | No Spam! | International | Contact Us
Copyright � 1998-2000 eGroups, Inc. All rights reserved.

Mr Gresham

(05/19/2000; 10:21:55 MDT - Msg ID: 30849)

FOA's Gold Trail

http://www.usagold.com/goldtrail/I don't know how many of us have already done this, but I strongly recommend:

Take the Gold Trail page off into a separate WP document, re-arrange the posts in order from their current last-first arrangement, print out the 40-50 pages FOA has already given us, and take them out with you on sunny spring days to read in your favorite backyard hammock or lawn chair. To read in about 3 or 4 sittings, as your comfort allows.

I thought I had read and mostly understood FOA before, on our Forum, and as I watched for each of his 22 posts to appear on the Trail, but I find in spending an hour or more at a time following his story on my 40-page printout (through #19), that he carries an amazing coherence and thoroughness in everything he gives us. My underlines and questions to follow up on fill the margins, and I can't wait to get some time to do some Sherlocking on my own! I wish I knew his sources, and I wonder how to locate their equivalents on my own.

The new insights we get each time we read through a body of work like Oro's or FOA's show our own individual growth in understanding, on a month-by-month basis. I see how fast my 4-year-old daughter is growing and learning about the world, and I feel like I get to parallel here by this experience here with you all.

FOA's is an insightful, playful, integrating and responsive mind at its playful work -- I wonder what understandings and experience he brought to the cooperation with Another, and which insights are pass-throughs from Another. What a prospect to meet them both some day! We can hope.

Prophetic or not, as time will tell, FOA has put it to us to do our OWN research (and action) in response to the very complete picture written for USAGold readers.

Someone asked me yesterday what my hobbies are. This pursuit of ours was the first thing that sprang to my mind, so I remained silent. (Yes, I need to re-activate the old ones everyone mentions, like sailing and hiking, that don't quite happen to get done anymore...) How could I have explained this to anyone?

I also find myself thinking around the fringes of my daily activities what career or business opportunities might follow from the learning taking place here? Maneuvering (and helping others do so) through chaotic times with my eye on the game (not the ball). Reading is not experience, I know, but it is hard to know just how much of a leap it might be, if nearly everything is turned upside down anyway. The experience many think they have will only burden them, rather than prepare them.

Cavan Man

(05/19/2000; 10:49:36 MDT - Msg ID: 30850)

Mr Gresham

Ditto for me.

How was your trip to Italy? Hope all's well

Farfel

(05/19/2000; 10:55:16 MDT - Msg ID: 30851)

Fast recovery from gold losses!

Closed out a position in Cisco 60 dollar puts and made another good pile.

I am fast on the road to financial recovery. The thing that kept me afloat through all this misery: NO Debt! Thank God for that or I'd have been bankrupt several months ago.

Now here's the latest: on Monday, another $40 billion of Nasdaq locked up stock begins to hit the market.

I would expect another recovery in the Nasdaq of sorts (maybe today) but it can only be a sucker's rally AGAIN. The next downturn takes the Nasdaq under 3000, it will be swift and hard and high volume. Anybody expecting any kind of pre-election runup in the Nasdaq is dreaming, the new Nasdaq bear market will last for years.

If the Nasdaq is not gaining strength by the end of the day
then you might have to dive in and pay the higher premium for short side action because it means that the "Buy on the Dip" mentality is disappearing, a prelude to a panic dump.

Spoke with a fellow at an internet incubator and he expects a crisis in internet Etail stocks to break out any day now. They are ALL running out of money, most having little more than three months cash to operate their businesses.

As for gold, I honestly believe the only reason they've taken it down so low is to position themselves for a full contrarian explosion in the price once the bonds, stocks, and US dollar are all dropping together.

So be skeptical of any new developments in the gold sector that smack of manipulation to bring down the price of gold or gold stocks. When hell hits in all three mainstream financial markets, there is nowhere else to go but gold and the rise should be stunning.

Thanks

F*

schippi

(05/19/2000; 11:06:34 MDT - Msg ID: 30852)

XAU & HUI Gold chart

http://www.SelectSectors.com/xauhui.gif XAU and HUI are now BOTH Up!

Farfel

(05/19/2000; 11:20:50 MDT - Msg ID: 30853)

P.S. Beware of scare tactics by "Trend Followers"

Kitco guru APH called for 252 gold today, and missed by TWENTY bucks.

So much for the accuracy of trend following chartists.

The trend is changing, the bear is growling, we are NOT in an equities bull market anymore.

Ergo we are at the cusp of a major gold bull market.

Thanks

F*

Journeyman

(05/19/2000; 12:17:11 MDT - Msg ID: 30854)

Seidman Says a little inflation is like being a little pregnant @TheStranger, ALL

Caller: ~"What's wrong with an economy growing at 10%. So what if there's a little inflation?" ~"A little bit of inflation is no longer possible. We know from experience that once it starts, it's very difficult to stop. It goes like the wild-fires in New Mexico. If inflation gets out of control, that's the end." -CNBC Chief Commentator Bill Seidman, 18-May-00, 11:25:54 AM

Regards, J.

Elwood

(05/19/2000; 12:24:10 MDT - Msg ID: 30855)

Gold still flowing out

From latest Commerce figures

Gold Exports for March 77.12 tonnes (not as much as Feb but about same as Jan), and still way over production.

Imports more than doubled, however, to 46.01 tonnes in March from 22.28 in Feb. This figure is the highest level of imports in the 10 years of data that I have. Next highest is about 40 tonnes in May '98.

Anyone subscribe to the Federal Reserve Bulletin? Is the May issue out yet with March numbers in Table 3.13?
Elwood

TownCrier

(05/19/2000; 13:44:27 MDT - Msg ID: 30856)

Hear ye! Hear ye! A new addition to The Gilded Opinion!

http://www.usagold.com/gildedopinion/mcmastercosmos.htmlThis latest commentary is courtesy of R.E. McMaster on "What's Important."

I think you will find that it provides a timely tie-in with recent conversation here at the forum on the nature of modern capitalism verus free markets.

Here are some exerpts from the text to entice you to visit the full commentary at the link provided above.
--------
The hands down winner regarding the key philosophical economic insight I have gleaned so far this year came from the pen of Dr. Kurt Richebacher in the January 2000 Richebacher Letter. His comments are as follows:

"Dogmatic socialism is dead. Welcome dogmatic Anglo-American capitalism. The more we have thought about this new capitalism, the more we have effectively realized that it really puts everything on its head that historic capitalism stood for. The essence of that capitalism was capital accumulation out of savings. What is the essence of this new Anglo-American capitalism: deal-making for quick profit and inherent neglect of new investment, a dissaving public and unfettered credit creation for consumption and speculation. The old capitalism had a sense of high responsibility for future generations. The rising responsibility of corporate managers under the new Anglo-American capitalism begins and ends with today's stock prices.

"Capitalism has always been about profit; this 'late' capitalism is about greed. Yet, the decisive reason for our aversion lies in the fact that this capitalism, with its manic search for quick profits, essentially undercuts capital accumulation for the future. The effective result of this Anglo-American capitalism is that the present generation raises its living standard at the expense of future generations. In the last analysis, there are two ways one generation can betray and burden future generations: by bequeathing them: (1) a mountain of foreign debts and (2) a depleted capital stock.

"It is the great, negative peculiarity of this capitalism that the entrepreneur and the corporate manager is discouraged from building new factories because it tends to depress profits in the short run. In a desperate search for quick profits, imposed by the imperative to raise shareholder value, cost-cutting, mergers and acquisitions are going to excess in Corporate America with negative effects. Readily, the stratospheric rise of stock prices is regarded as the direct outgrowth of this new corporate strategy, although every child meanwhile knows that this surge of valuations is chiefly courtesy of the most generous monetary accommodation by Mr. Greenspan.

"In reality, this is not new capitalism but late, degenerate capitalism dominated by the most narrow-minded financial interests.

"It is late, degenerate capitalism because it propels asset trading at the expense of asset creation with inherent negative effects on economic growth and overall profitability."

What Dr. Richebacher is telling us, is that our economic system is no longer capitalism in any traditional sense of the word. [...] Profit used to be a byproduct, a result, of producing a desired good or service for people-at-large, for the marketplace. Yet today, greed, the root of all evil, is what is at the forefront of what Richebacher calls "dogmatic Anglo-American capitalism." Far from providing a base for the future, too, this present warped Anglo-American capitalism steals from the future and raises its living standard at the expense of our children and our children's children. This is totally opposite from what has produced a successful free market society longterm - savings, a long-term view, investing for the future. Those who have done such historically are those who have risen to the top, have led, become the elite, and provided a heritage for the future. This does not exist today. Richebacher properly calls this new capitalism "degenerate capitalism dominated by the most narrow-minded financial interests." This means we need to be very, very careful, cautious, even protective, in defending our assets against a rapacious and elitist political and economic system. [...] Moreover, day traders account for nearly 20% of daily NASDAQ volume. This is a clear indication that the U.S. stock market has turned into a speculative leveraged gambling casino. I'm amazed in conversations that I have had with professionals in Austin at how many of them have told me that their friends have given up their jobs to become day traders. This is a sign of the times, of a bubble, a mania, and a sign of an approaching end. Day trading is a non-productive economic activity. It adds no new goods or services to the economy.

Leland

(05/19/2000; 13:44:47 MDT - Msg ID: 30857)

Story of a VERRRY Valuable $20 Gold Coin...Let's Hope it's Recovered

RAISING CONFEDERATE SUB
HUNLEY A QUEST TO SOLVE
136-YEAR MYSTERY

By Dahleen Glanton
Tribune Staff Writer
May 19, 2000

CHARLESTON, S.C. -- On a February night in the
midst of the Civil War, a Confederate submarine, one of
the earliest submersibles ever built, slipped out into the
Atlantic Ocean and into history and mystery.

The H.L. Hunley, a vessel crafted out of locomotive
boilers, made history the night of Feb. 17, 1864, when it
sank the USS Housatonic, a Union ship blockading the
Charleston Harbor. It was the first time a submarine had
ever brought down a warship. But after signaling to
shore that it was returning to port, the Hunley vanished,
creating a mystery that has baffled Americans for more
than 130 years.

This week, marine archeologists began a long-awaited
recovery mission that will help explain what happened to
the craft.

In mid-July, the crew plans to raise the 16-ton vessel,
believed to be superbly intact, from the muddy ocean
bottom near the mouth of Charleston Harbor, not far
from where the Civil War began.

Inside the 40-foot-long iron structure, buried under 27
feet of water and 3 feet of sediment, researchers expect
to find the skeletal remains of the nine crewmen and
finally an answer to the nagging question: What caused
the Hunley to sink?

Over time, the Hunley has become a legendary part of
Southern folklore. It is believed that the crew, the third
group to die on a Hunley mission, had a pact to go
down with the vessel rather than refloat it.

Since the Civil War, adventurers and treasure hunters
have combed the Atlantic Ocean in search of the
submarine. Showman P.T. Barnum once offered
$100,000 to anyone who could find it.

But the Hunley's whereabouts remained unknown until
divers, funded by author Clive Cussler, discovered the
sunken vessel in 1995, 4 miles off the Carolina coast.

For scientists, the recovery effort is a marvel of
technology, and they will employ state-of-the-art
retrieval equipment never tried before. Inside the
submarine, forensic archeologists hope to find clothing,
provisions, letters, photographs, documents and
weapons--items that could lead to a better
understanding of one of the most devastating episodes in
American history, the war that divided the nation.

In the Deep South, where Civil War relics sometimes
are given the status of a national treasure, the recovery
of the Hunley is more personal. It is a step toward
closure to a chapter in Southern history that is looked
upon both fondly and bitterly--the end of the
Confederacy.

"A lot of people say this is a grave, and we should leave
it there," said state Sen. Glenn McConnell, a Charleston
Republican and chairman of the state Hunley
Commission overseeing the project. "But the Hunley tells
us something about who we are as a people and where
we came from. It's a story of honor, courage and valor
that has endured forever."

South Carolina has earmarked $3.3 million and the U.S.
Defense Department has added $2.3 million to help
bring the Hunley back to shore and start restoration.

The total cost of recovering the submarine and
preserving it is estimated at $18 million, most of which
will be funded through private and corporate donations.

The Hunley is one of a small number of vessels that have
been on the ocean floor more than a century and
remained intact, researchers said. Most ships deteriorate
too much to be recovered in one piece.

Scientists believe that in the first 25 years after the
Hunley sank, the tides off Sullivan's Island swirled
around the submarine and buried it in a hole on the
ocean floor.

Silt eventually covered the iron hull and combined with
coral and shell formations to form a half-inch thick,
rock-hard shield that protected it from saltwater
corrosion.

Within the first two or three months, sediment filled the
sub through a viewing portal. Researchers said the
sediment might have helped preserve the Hunley and
provide a rare archeological site with all its historical,
scientific and human aspects intact.

Though a renowned recovery team of underwater
archeologists, engineers and conservators are leading the
mission, plucking the fragile submarine from the ocean
will be no easy feat.

Divers working in water with near-zero visibility first will
sink hollow pilings on both ends and place a steel truss
resembling a railroad trestle over the vessel. As the
submarine is uncovered a section at a time, belts
attached to the truss will be slung beneath the Hunley,
cradling it from bow to stern.

Using a new technique, divers will wrap the submarine
with vinyl slings filled with liquid foam. With the foam
slings cradling it, the Hunley will be raised, put on a
barge and pulled up the Cooper River to a
46,000-square-foot conservation building at the old
Charleston Navy Base.

The building formerly was the sound stage for the filming
of a TNT television movie, "The Hunley," which aired
last year.

In the lab, the sub will be placed in a tank of chilled
freshwater to prevent bacterial growth and deterioration.

Researchers will then use a state-of-the-art digital
radiography unit to locate the sub's seams underneath
the thick coat of sediment.

"The Hunley is the most difficult composite iron artifact
ever undertaken and it is by far the largest and most
complex object ever recovered," said project director
Robert Neyland, who also directs the Navy's
Underwater Archeology program.

"It's unique because it is so intact. It's like uncovering a
time capsule. And because it is so intact, so pristine, it's
like uncovering an egg."

The excavation could take up to six months, and the
restoration from 5 to 10 years, said Neyland. Though a
replica of the Hunley has been on display for years, it
could be more than a decade before the real submarine
is placed on public display in the Charleston Museum.

The remains of the nine crewmen will be buried with
military honors in the Hunley plot of Charleston's
Magnolia Cemetery. Two other crews that died during
the submarine's test voyages also are buried there.

Conservation of small artifacts, such as textiles, shoes
and buttons will begin immediately, Neyland said.

But it could take longer to find out if the tale of a $20
gold coin is true.

Legend has it that Lt. George Dixon, the 25-year-old
captain of the Hunley, carried the gold coin, given to him
as a good luck charm by his girlfriend, with him on the
fatal voyage.

He had carried it in his pocket at the Battle of Shiloh,
and when he was shot in the hip, the coin caught the
bullet and saved his life.

According to McConnell, who wears a replica of the
coin around his neck, the bent coin could be among the
artifacts buried in the submarine.

"We have heard that fortune hunters would love to get
their hands on the gold coin, and the submarine could
possibly be raided for that," McConnell said, adding that
officials deliberately gave out misleading information
about the sub's actual location for the past several years.

"That's another reason we have to move quickly. If we
don't bring her home, we will have left her for the
plunderers."

(Thanks to the CHICAGO TRIBUNE and Fair Use for Educational/Research Purposes Applies.)

Leland

(05/19/2000; 14:09:38 MDT - Msg ID: 30858)

Some Background on the H.L. Hunley...

http://www.history.navy.mil/branches/org12-3.htmFor history buffs, like me.

SHIFTY

(05/19/2000; 15:02:27 MDT - Msg ID: 30859)

NY Ponzi

Nasdaq 3,390.40 + Dow 10,626.85 = 14,017.25 divide by 2 = 7,008.62 PONZI

Down 149.37 Ponzi points

ORO

(05/19/2000; 15:51:02 MDT - Msg ID: 30860)

AragornIII - Future and Past wealth and the impossibility of a dream

http://www.usagold.com/halldiscussion.html
My criticism of Aristotle's suggestion and the FOA suggestion and the program ANOTHER implied is that:

1. It implies that a debt money is stabilizable in the presence of an alternative. It is not. Even without an alternative commodity money it is not stable.

2. The cash and the denominator of debt must be the same, or tied together indirectly so as to make it close to being so.

3. The value of the currency is tied to maintenance of its parity with a universally accepted commodity money/monies. Without the hook-up, debt currency spirals out of control and with no relationship to the economy.

4. The ppurchasing power of commodity money is limited when the debt induced demand is not available.

5. The purchasing power of a pure commodity money is completely unstable. There has yet to be a mechanism available to solve that problem.

A review of the discussion in the URL above can help with understanding the caveats I pose.

Below is a set of explanations covering most [I hope] of the aspects to consider.

Selling the Future

The obvious problem of debt money is that the value is provided by the intentions to return the balances created by a bank loan in the specified time in the future. As the view of the future incomes and production of the borrowers changes, so does the value of the currency that represents that future. Furthermore, the greater the certainty in future capacity, the greater the obligations borrowers are willing to commit to and lenders willing to back. However, the view of the future changes significantly more quickly than the present and the accumulated productive capacity. Thus the view of the future dictates the preference of currency cash balances that people want to hold. So long as the view of future availability of goods and services grows rosier, so would the willingness of people to hold large amounts of currency and currency denominated paper on account rather than buy real items and services. Thus the inflation of currency is not reflected in pricing of current goods and of contracts for future supply until the perception of the future begins its move from positive to negative - or just less positive.

Thus, an inherent instability is part of any debt currency system on account of its being a call on the future alone.

This is not to say that people should not attempt to discount the future and take obligations against it. Nor is this to imply that the future expectations would necessarilly be inflated.

Liquidity

The structure of debt currency is such that at any given time there are more obligations written than there is currency to cover it. It is deflationary in its nature. This brings into focus another point: a monopoly currency in any region allows no recourse for borrowers against the cartel if the cartel finds it to be in their favor to arbitrarilly decide to stop lending - and thus create an immediate shortage of currency. Under these circumstances, the cartel can call in loans and seize security put up against it. This is part of the inflation and deflation cycle by which cartel member banks have denuded the globe of large scale private capital.

Jefferson warned against this very loudly. He was forever harping on the issue - stating that banks never be allowed the central bank that makes it possible for them to enforce coordination of lending policies on the members. Without a central bank the banks lack a mechanism to coordinate policy and prevent each other from "cheating" when the cartel decides to close the lending faucet.

Obviously, without a central bank it is in the interest of banks to act AGAINST the decisions of the cartel. The cartel decides to stop lending and the corporations become desperate to roll over debt and create new loands. A non-cartel bank would use this opportunity to lend to good credit risks that are the targets and clients of the cartel - those corporations who's assets the cartel wants to seize. The maverick bank would expand its business and the cartel would loose its best customers, losing both the loans and the cash balances.

This is the free banking restriction on deflation.

Another restriction arrises in the process of inflation and comes from the math of settlement. Without a central bank, the bank that issues more debt relative to reserves is the one most likely to become insolvent. This is because the bank creates a liability when it lends that may be drawn by clients of another bank upon settlement.

A great discussion of this is given by Mises in rather condensed form at the URL:
http://www.mises.org/humanaction/chap17sec12.asp

"...within a market system [with] several independent banks ... Each bank has a clientele and has issued a certain quantity of fiduciary media [currency] ... in the cash holdings of various clients. ...
"But now, we assume further, one bank alone embarks upon an additional issue of fiduciary media while the other banks do not follow suit. The clients of the expanding bank--whether its old clients or new ones acquired on account of the expansion--receive additional credits, they expand their business activities, they appear on the market with an additional demand for goods and services, they bid up prices. ... The clients buy more from the nonclients than they sell to them; they have more to pay to the nonclients than they receive from them. ... In order to settle the payments due to nonclients, the clients must first exchange the money-substitutes [checks etc.] issued by their own--viz., the expanding bank--against money. The expanding bank must redeem its banknotes and pay out its deposits. Its reserve--we suppose that only a part of the money-substitutes it had issued had the character of fiduciary media--dwindles. The instant approaches in which the bank will--after the exhaustion of its money reserve--no longer be in a position to redeem the money-substitutes still current. In order to avoid insolvency it must as soon as possible return to a policy of strengthening its money reserve. It must abandon its expansionist methods."

As this demonstrates, the natural system has a limitation on lending that causes a bank's agressive lending policy to endanger its solvency. It does not matter whether the currency unit is gold or fiat, the bank has a consideration of solvency to weigh against inflation.

By introduction of a regulating authority to dictate a certain level of reserves, the force of this limitation is gone since all banks will race to create as much debt as the reserve requirement allows. By introduction of a lender of last resort, the fear of insolvency not due to client default is removed since the lender of last resort can buy the loans from the bank's books and provide the funds necessary for settlement.

It has been claimed that the regulation limits over-extension of the banks. In reality, banks have allways managed to staff the regulating agency with cronies that consistently lowered the reserve requirement. Today there is no effective reserve requirement and there is an active lender of last resort - so that banks are limited only by the good performance of their loan portfolio.

Therefore we come to the conclusion that inflationary limitations are inherent to banking but may be removed by use of regulation and a lender of last resort that issues currency as required. These functions are served by the central bank as bank regulator and lender of last resort.

To summarise:

Free banking, where government serves only to enforce bank-client contracts, there are natural limitations to the power of a bank cartel to inflate or deflate. The historical figures on reserve holdings are such that banks hold reserves of 25% to 60% of deposits when there is no regulator or lender of last resort.

Gold and other commodity money

These are cash monies that are the product of the past. Even when artificially limited to gold only, the production of the money commodity grows in tandem with economy, enjoying the same technological advancements and investments in productivity improvement and new capacity. With a variety of commodity moneys, but also with only one, the quantity of the commodity money stays in proportion to the productive capacity of the economy as a whole.

If too much commodity money is produced, prices denominated in it will rise. The general rise in prices will cause a rise on costs and will make further production in marginal producers uneconomical.

If the economy expands without increases in the production of commodity money, prices will fall and will cause costs of production in commodity money production to fall. Thus marginal producers will find expansion of production to be profitable.

Banking with commodity money:

In the historical perspective of commodity money being the unit of denomination for bank debt currency, the banks can do the following:
1. Free banking:
- Banks can lend into existence new paper money that eventually increases prices because of the monetary inflation.
- Commodity money producers find prices are rising and they restrict production from marginal operations because costs have gone up.
- The decline in supply of physical commodity money causes demands for redemptions to rise at the banks, causes difficulty in debt repayment and the banks reduce lending.

The understanding of this process induces banks to limit new lending when slightly rising prices indicate that future supply of physical money is about to be reduced. Those banks that have failed to see this find themselves trending towards insolvency as reserves recede.

2. Central banking with commodity money
- Banks will lend to the reserve limits set by the central bank causing an inflation of the money supply that eventually moves into prices.
- Because of higher prices, the commodity money production is reduced in proportion as the costs of production rise.

A note on the interplay of these factors: bankers can do their best to control commodity money producers and thus extend the supply well past the limits of production profitability when costs are high or limits of opportunity costs in not producing when costs are low.

- A shortage of physical money causes physical draws on banks to increase and causes the debtors more difficulty in repayment of debt.
- Banks are then restricted from further lending by declining reserves and a rise in bad loans .
- The lending restraint causes a reduction in availability of paper money as well as physical money.
- Large cash holders who understand the system will tend to have already converted paper accounts into physical holdings - thereby exacerbating the reserve shortage when it comes. These would typically be bankers.
- A credit crunch ensues against which there is no remedy through further expansion of lending. - Unless initial expansion was limited to the same level of reserve holdings that occurs naturally in free banking. Since the purpose of central banks is the extension of leverage of the reserves in the first place, it is impossible to expect that this would be the case.
- If the bankers lowered reserve requirements during expansion from the natural free banking bottom of 25% to 40% to an artificially low figure agreed upon and enforced by the central bank (typically at or below 5%, historically - e.g. 3.75% by the Fed in 1929) then banks will fail and corporations and individuals lose their assets as they are seized by banks and bank creditors. Prices will collapse untill commodity money production rises to the point of supplying significant new physical money.
- Because of the extended period of paper money expansion, the marginal producers would have been closed and exploration would have ceased long before. Borrowing for the purpose of funding exploration and capital for new commodity money production would be difficult because of the reserve shortage and would delay further the solution to the crissis.

In short, the system will break.
Some would simply lose their accounts at insolvent banks altogether while losing their property as well.

The holders of physical money (typically bankers holding for their private accounts- rather than corporate accounts) would then buy up the seized security assets slowly and at fire-sale prices. While this would be increasing reserves, the slow legal process of bankruptcy would still limit the ability of surviving banks (or new ones) to use these reserves to supply new money for lending.


Pure debt money systems.

As described earlier, banks may succeed in displacing cash physical money through legal enforcement by a government.

1. If the central bank, i.e. the bank cartel's coordinating authority, is interested in maintaining the steady supply and demand balance of money for cash balances and debt service, it would severely limit lending in bank, bond, and derivative markets to the current or near future income generating level of the economy. However, banks and borrowers alike would exert pressures to allow further expansion. Citing price stability, they would quickly find support in government and in popular opinion to increase lending levels allowed.

Furthermore, this policy would eliminate the inflationary effects necessary for bankers to cash in aand allocate a greater portion of the economy for themselves. Thus the purpose of the cartel would be eliminated and banks would preffer a free market. Government would find no benefit in a system that does not shroud the effects of its seigniorage nor allows it borrowing at artificial below market rates.

Because of the tendency of the future discount to change, often in sudden moves of mass hysteria, the central bank would find no clue in the level of prices of anything as to whether it has allowed too much or too little expansion. It would succumb to demands of loosening policy when debt balances expand but no price changes are noticed in optimistic environments, and would be assaulted with demands to tighten when prices are out of control but debt balances are falling after the pessimistic transition or during pessimistic periods.

It is also difficult to judge what it is that people consider to be proxies for cash balances. Furthermore, people tend to change their view of these instruments as market conditions change. Therefore, central bankers will find no clue to guide them in making decisions but for the narrow interests of whomever pressures them most.

Therefore, it is highly unlikely that the central bank would pursue this policy. Indeed, none have done so.

2. Structural inflationary banking

The central bank guarantee of bank liabilities to bank depositors is the key element in inflationary banking.

- There is no limit to borrowing but for the bank's view of the credit worthiness of borrowers coupled with the borrower's willingness to borrow at particular rates.
- Cash balances are held at banks with the best returns, the best service, or the best promotional results.
- As discussed above, the issues of knowing what, aside from cash balances in limited or free withdrawal accounts, constitutes a cash balance in the mind of the holder, is still a problem. Stocks, bonds, commodity money accounts, and physical commodity money and funds who hold them may be considered accessible and liquid enough for the holder to think of them as cash.
- Interest rates are set by the markets - long term - and by both the markets and the central bank in the short term. Interest rates reflect both price inflation expectations of the market and of the central bank.
- Settlement liquidity problems are handled by the central bank buying government or commercial paper through permanent or temporary purchase agreements (repos etc.) and supplying cash accounts in return.
- The demand for currency for the purpose of debt repayment is the main factor for demand for currency accounts, since excess cash holding demands will tend to flow into other means (stocks etc.) beyond that ammount necessary for commercial/private debt settlements at particualr dates.
- The currency supply demand balance is given by the rate of new lending less the sum of the products of contract interest rate times the debt outstanding at each set of conditions.
Note: This does not consider the possibility of net debt repayment of principal. Why? because the creation of a bank account cash balance during accumulation of the funds for the principal payment coming due induces the bank to lend that balance at the best rate it can obtain. If borrowers are not available at the current market rate, it will lend it at a lower rate, or use the funds to buy a bond, thereby lowering interest rates - and the demand for money in the immediate future. (Remember that no currency is created when a bond is issued but currency is created when a bond is bought by a bank.)

- When the rate of new borrowing falters to that below that necessary to create the currency needed for interest payment, the borrowers tend to reduce the prices of their goods and services to a point where they sell at a sufficient volume while maintaining a sufficient margin to increase company cash flow. In parallel, the debtor will unload costs of inventory and employees to limit the costs, even if they threaten the future of the business. Defaults start occurring as the process continues develops. The CURRENT rate of defaults is equivalent to the FUTURE loss of interest payment demand for currency. Default, however, reduces interest payment demand permanently. The commercial paper a bank sells to the central bank in order to make up the lost cash flow increases the monetary base as defaults occur, but at no point does it decrease the bank client's cash balances to any significant extent.
- Banks that have taken excessive credit risks will reach a point of insolvency, where assets are lower than liabilities (customer accounts), at market values of assets or at book values of assets.
Note that when a bank feels the interval between market value of assets and its liabilities is shrinking (as debt assets do when interest rates rise) it will sell assets to the markets or the central bank. If sold into the markets, interest rates will rise further, making the value of the remaining assets even lower. As interest rates rise, borrowing recedes. This pushes towards increasing rates of default.
- The banks will often buy interest rate derivatives from each other in order to prevent exposure to the loss of market value of assets. The large banks that have the wherewithal to sell these derivatives are the same banks that enjoy the strongest central bank support and are "too big to fail". Their staffs often run through the central bank's revolving door at some points of their careers, and will bias central bank decisions to the directions that benefit them most. When the central bank sees the liabilities of these major banks to other banks growing, the central bank will - without exception - act to supply further currency (monetary base) so that the interest rate derivatives that tie these banks to the whole system are not in jeopardy of defaulting. It is also important to the central bank to avoid having to fulfill its commitment to back the depositor accounts at the greater banks.

- The result of the rise in interest rates is a decline in all financial assets, including bonds and stocks. This increases the rate of defaults as holders of these securities as substitutes to cash balances tend to sell them. Since the buyer's cash is a bank account entry before the sale, as is the seller's after the sale, the amount of currency had not changed at all.

- Earlier, I covered the effects of optimism vs. pessimism on cash preferences of holders and how they discount the value of future productivity and future income streams. I noted that the change in perception is rather violent. This change in view tends to affect financial allocations towards real holdings and currency cash rather than currency proxies (financial assets). The tendency is to both increase prices and reduce liquidity at the same time. The response by the central bank exacerbates the problem by adding to the monetary base which runs after commodity money accounts and real assets, while interest rates rising maintain the lack of liquidity as fewer borrowers are available as net perceived rates rise.

Commodity money accounts tend to see a great rise in incoming flows, however, because of the limits of reality in commodity money accounts, as discussed in the commodity money with central banking section, there is eventually a point where inteligent depositors "grab the [physicl] money and run". The banks are then faced with a settlement problem and must change the terms of deposit to settlement in currency cash. As the currency cash increases, the commodity money buyer will tend to cash out of the account and buy physical. Once the process starts there is no turning back and the government guarantee of cash accounts at the bank cause the rise of money supply to rocket up in the worst way - with no counterweight in debt demand.

- Cash holdings in currency are dumped during a change in view of the future supply of product and of income. The cash is thrown into the real goods markets but can't disappear because of the central bank's guarantee of bank cash balances. They just don't go away. Furthermore, as this starts, it is nearly impossible to stop without external supplies of goods that somehow do extinguish the cash.
- Raising interest rates AFTER this process starts simply moves costs higher. As demand for goods as replacements for cash balances increases, the costs are easier to pass on - interest costs included. Some get the idea to borrow more and buy further goods beyond their normal needs as a substitute for cash and financial cash proxies. If bonds and stocks were absorbing the price effects of monetary inflation, the move out of these proxies into real assets will not be seen in the monetary aggregates since the buying and selling of real goods and of financial assets does not change the outstanding amount of currency in bank accounts.
- Though initially a rise in interest rates may induce further demand for currency for interest payments, it will most probably result in further draws by great banks from the central bank to cover defaults by weak borrowers that these same interest rate increases caused. The defaults reduce demand for currency soon after they occur.
Thus this system induces monetary inflation, than asset price inflation, then financial asset price decline and real asset price rises accompanied by defaults and drops in currency demand - which cause a further push away from financial assets and into real ones.

Thus, in summary:
a. Pure debt currency is discounted in value according to both the view of future productivity and future income streams. These views change abruptly.
b. Demand for cash balances moves from currency to financial proxies as borrowing grows at given interest rates. (Under these conditions, bank lending and monetary aggregates do not increase but bond lending grows tremendously.)
c. When resource limitations are met late in the inflation stage, real goods prices start rising and depositors move from cash to real goods and commodity money accounts.
d. When interest rates are raised due to the increase in real goods prices, financial asset prices fall, increasing the currency discount and the rate of escape from financial assets to real assets.
e. As interest rates rise, defaults cause a parallel effect of increasing defaults without lry
8e`"�Làn the only f5�0of wealth a woman has

Bottom line is scheme has failed miserably.

PH in LA (9/20/99; 12:33:17MDT - Msg ID:13984)
India's Gold Plan: More Rechless Abandon by the IMF


It is not too difficult to imagine a big ulterior motive present in the IMF's encouragement of the frighteningly reckless plan currently being floated by the government of India.

We have seen desperate-looking machinations on the part of the IMF recently. First they wanted to sell 10 million ounces of gold "to provide debt relief to impoverished nations"; an absurd idea on many levels...(as if the IMF had ever had any interest in alleviating the debt load of already impoverished nations: On the contrary, their austerity restructuring plans always seem to make things worse for the country on the receiving end of their "generosity".) More likely it would seem that someone desperate for gold was pressuring the IMF to provide some. The same motive behind the bizarre BOE auctions. What a co-incidence!

When the US Congress shot that idea right out of the water, the IMF decided that instead of selling 10 million ounces, they would merely mark those ounces to market. Details of the plan that have been suggested to accomplish this boggle the mind in their outright absurdity. Allowing a bankrupt nation to buy gold at book price to immediately sell it back to the IMF at market prices would be a novel new way of doing business, to say the least. I'd like to get in on such a deal, myself.

Obviously, the IMF is desperately looking for new sources of gold to supply a world situation on the brink of massive gold shortages, even likely defaults. And their latest plan in India to bring more world supply online leaves one aghast in its implications.

Gathering in a nation's privately-held gold by paying interest on it sounds harmless enough on the surface. But thinking about the all-too-likely effects of such a practise is frightening. Let's say a depositor turns over gold in exchange for interest. What happens to that gold? It would have to be sold to give the plan any viability at all. There could be no point at all in merely holding the gold whild paying interest only to return it to the depositor on demand! No! The gold would have to be "mobilized"...that is, sold (in one way or another).

So let's say the new owner of the gold decides to deposit it with the same government. OK, now we have a government paying interest to two depositors for the same gold. Has there ever been a government capable of restraint when it came to printing promises? Never!

So we can imagine a whole industry growing up around the idea of paying government interest on the nation's privately-held gold. A good idea for the government until the depositors decide they would like their gold back, probably in a moment of national uncertainty, which would be the worst possible moment for the government. Suddenly, the government has to supply the metal or face the consequences; with revolution rearing its ugly head, gold would have to be purchased to cover the ponzi scheme.

The inevitable outcome? Worldwide shortage and upward price pressure, even in "innocent" countries with no involvement in the renegade nation's reckless gold practises. Internation destablization! This is why a responsible IMF should be reacting with horror to India's gold plan, not encouraging it. Their reaction of approval is just another indication of their desperation.

They are obviously out of control! And their desperation is obvious!

Where will it all end?

FOA (9/21/99; 10:01:04MDT - Msg ID:14042)
The Ro

ORO

(05/19/2000; 15:54:57 MDT - Msg ID: 30861)

Continued - from "garble point"

Thus, in summary:
a. Pure debt currency is discounted in value according to both the view of future productivity and future income streams. These views change abruptly.
b. Demand for cash balances moves from currency to financial proxies as borrowing grows at given interest rates. (Under these conditions, bank lending and monetary aggregates do not increase but bond lending grows tremendously.)
c. When resource limitations are met late in the inflation stage, real goods prices start rising and depositors move from cash to real goods and commodity money accounts.
d. When interest rates are raised due to the increase in real goods prices, financial asset prices fall, increasing the currency discount and the rate of escape from financial assets to real assets.
e. As interest rates rise, defaults cause a parallel effect of increasing defaults without decreasing currency supply and costs of goods and services rise.
f. Defaults prolong the period in which high interest rates are necessary for maintenance of currency demand and prevention of further currency supply.
g. Because of central bank guarantees of currency deposits the currency simply does not recede in quantity - it just moves from being a bank liability to being a central bank liability - an addition to the monetary base.

We call this stagflation.

Note on international currency issues:
The creation of currency debt traps outside the central bank's region of authority allows excess issuance of currency within the central bank's region without prices rising. The supply of currency to the trapped foreign debtors prevents them from defaulting en-masse, and keeps their supply of goods to the central bank's region, thus hiding the fact of regional goods demand being much higher than regional supply by the needs of foreign debtors to cover their loans by selling of goods. As these debtors pay down debt (which they will certainly do after their near death experience) their need to supply more goods abates and they may quickly collect an excess of currency in their reserves.

When real goods prices start a climb, there is further supply of currency to the indebted foreigners balanced against higher currency reserves and less debt. The resulting situation is such that in order to maintain absorption of the same quantity of currency by the foreign debtor or reserve holder, the interest rate must be increased in proportion to the drop in outstanding debt of the foreign debtors and sufficiently high so that reserve holders are not tempted to sell reserves and buy commodity money and real assets.

Eventually, a different currency will have lower interest rates and the foreign debtors would preffer to roll over loans into the currencies offering a lower interest rate instead of rolling them over into the high interest rate currencies.

This system of debt currency tends to simultaneously implode and explode as bank liabilities increase whether or not accompanied by an increase in bank assets.


Debt currency money with commodity money having legal tender status.

The debt money system would suffer from the same problems denoted above and would implode/explode anyway.

The parallel cash commodity money would not be used for debt payment, but would instead be used as security for borrowing currency. The borrowed currency would pay down debt, thus not decreasing debt demand's contribution to currency demand. However, everyone would take down their currency cash reserves and put them into commodity money, thus making for a further slide in currency purchasing power. The currency purchasing power would further decline because of loans created for the purpose of using commodity money to produce currency for debt payment. Because of this, the transition to a pure cash commodity money legal tender parallel would destroy the debt money completely. Bank physical costs would overcome their interest income as prices rise, and no interest rate would be sufficient to block the transfer of assets to commodity money.

This would only work if there were a parity for exchange of currency and commodity money, thereby reintroducing the central bank managed commodity money standard - the gold standard that failed in 1929 and in 1970-71, and is about to fail again this year or next.


Parallel debt currency and cash commodity money:

The debt currency system would undergo its standard boom and bust process.

During both stages people would borrow currency in order to buy commodity money, if a commodity money is not available for borrowing, and if its price increases in proportion to excess currency being created in the present, or the fear of future creation of currency to alleviate a credit crunch. Therefore, the currency cash holding demand would remain next to zero, and only enough to cover immediate needs for debt payment.

The fact that no paper proxy for the physical money is available would destroy the possibility of stable commodity money currency prices. They would go up under inflation and under deflation and no interest rate would be able to induce people to let the precious go. People would transfer their gold to "trusted" others and go bankrupt before letting it go. In order to prevent the lending of the commodity money it would be necessary to also avoid enforcement of its use as security for currency lending.

Besides this, even without government enforcement of commodity money debt, the interest rate needed to induce people to keep the currency cash balances vs. the purchase of commodity money, would need to be so high that a "black market" in commodity money debt would arise and a whole new Cosa Nostra would grow around enforcing it.

In summary:

The cash balance function and the debt denominator function are not seperable in money. It is a logical fallacy.

Pure debt money goes through one or two cycles of inflation and deflation within no more than 20 years (enough for two) and is forever discredited after that.
If a parallel system of gold debt is functioning, it can stabilize the system for a long while, particularly if hidden from public view as it has been for the past 20 years with the currency's parity kept as a closely held secret.


The current situation in which US banks had a 10-11% margin between assets and liabilities at mid 1998, has seen the margin decline. With a three to five year average maturity for bank assets, the assets have fallen in market value about 5-6% as interest rates rose from 5% to near 7%. Though their assets also grew with the ongoing boom in new lending, their liabilities have grown more rapidly than their assets.

Foreign owned income producing US assets are producing higher incomes as interest rates rise and these incomes further help reduce the foreigner's dollar debt and increase the dollar income stream going into reserves.

Since the gold accounts and gold derivatives tend to rise in proportion, the rise in gold derivatives outstanding would imply a 20% rise in the parallel gold accounts. This would imply a significant increase in cash holding preference from dollar assets to real assets in the international arena. At some point, one would expect the gold reserves that the bankers are draining in order to supply the deficit in the physical markets to dry up. As this nears, more and more people, many with far less patience than current account holders in the know, will start converting the paper gold into physical.

The gold derivatives indicate investment demand for gold proxies of up to 4000 tonnes. If this is added to the 1000 tonnes of gold supplied from reserves in the last 12 months, this ammounts to a 5000 tonne deficit in supply. Though the derivative numbers are not directly representative of 4000 tonnes of deficit in supply being covered by paper, a great proportion of this would certainly be expected to be part of the deficit which is being filled by paper gold obligations.

The scenario for gold banking with a central bank applies as to the end game of this system.

TownCrier

(05/19/2000; 16:34:24 MDT - Msg ID: 30862)

Another update to the Gilded Opinion has been provided!

http://www.usagold.com/gildedopinion/crbturk.htmlThis time, thanks to James Turk, whose style of writing makes for easy reading. In his commentary, Mr. Turk discusses the latest jump in the CRB index and his related thoughts on gold.

Click the link above to see the full text from which I have drawn these excerpts:

"...the run-up in the CRB cannot easily be blamed on bad weather, poor crops or oil embargoes. We are seeing a fairly broad-based rise in the index, which can really mean only one thing - the Dollar is being inflated. ... Sooner or later though the Dollar is going to 'fall out of bed', and I don't think it will be a very pretty sight when it happens. The Dollar is vulnerable, and when it falls, it will probably do so quickly and persistently. ... Gold still is money, so it still is sensitive to inflationary pressures of the Dollar. So why isn't Gold leading the CRB Index higher as experience and logic say it should? Gold has stopped leading the CRB for the moment because the Gold price is being manipulated. That observation should not come as any surprise to the readers of these letters. ,,, If Gold were trading freely here, it's price would be a lot higher. ... This manipulation is a reality that we have to contend with at present. But it is also a reality that no market can forever be manipulated by any government or any group of governments working in concert because markets are bigger than governments. In time, Gold will head higher. ...I think the big jump in the Gold price will probably begin in the last half of this year."

TheStranger

(05/19/2000; 17:54:10 MDT - Msg ID: 30863)

They Still Don't Get It

If you want to be wealthier than the guy next door, you are going to have to be very lucky or else develop an ability to see farther into the future than he can. But, despite the carnage on Wall Street these days, it seems there are still very few who even understand the present, much less what is coming. Witness these comments culled from Wednesday's LA TIMES. And I don't have to pick on just the TIMES. This kind of stuff is ubiquitous. My reactions are inserted parenthetically.

Fed Targets Inflation, Hikes Rate
Half-Point
Economy: Central bank hints at still more tightening. Banks
quickly raise their prime rates, meaning consumers will soon feel the
pinch.

By THOMAS S. MULLIGAN, Times Staff Writer


NEW YORK--Escalating its campaign to preempt inflation(PRE-EMPT? HOW CAN ANYBODY STILL THINK THE FED IS OUT AHEAD ON THIS) , the
Federal Reserve on Tuesday raised a benchmark interest rate by
one-half of a percentage point and hinted that there may be more
credit tightening ahead (MORE THIGHTENING? THERE HAS BEEN NO, ZERO, ZIPPO "TIGHTENING" SO FAR).
It was the biggest Fed rate hike in five years and underlined the
central bank's determination to squelch what it called "inflationary
imbalances that would undermine the economy's outstanding
performance."

"The Fed is flying blind on interest-rate policy," Sen. Byron L. Dorgan (D-N.D.)said in a
statement. "Inflation is down (FIRST QUARTER CPI WAS UP 5.8% YEAR OVER YEAR), productivity is up (FIRST QUARTER PRODUCTIVITY GAINS FELL TO 2.4%) . There is no excuse
for central bankers to impose another increase in interest costs on
the American people."
Martin Regalia, chief economist for the U.S. Chamber of
Commerce, chided the Fed for impatience.
"It often takes over a year before interest-rate changes affect the
economy, and the Fed began to tighten(SIC) less than 12 months ago,"
he said. "At this point, to escalate from quarter-point increases
seems premature, but it seems they got the OK from Wall Street
and the next thing you know--bingo!--they go a half-point."
Many analysts believe the Fed's rate hikes, and the threat of
more to come, were one factor contributing to many stocks' sharp
declines over the last two months (GOD FORBID WE SHOULD SEE INFLATION, BUBBLE.COM, OR AN 18 MONTH BOND BEAR MARKET AS RESPONSIBLE FOR ANY OF THIS). The Nasdaq composite index
has dropped 26% since March 10. The blue-chip Standard &
Poor's 500 index is off 4% from its March peak.
In a four-paragraph statement accompanying its rate-hike
announcement, the FOMC said it believes that "the risks are
weighted mainly toward conditions that may generate heightened
inflation pressures in the foreseeable future."
The hawkish language in the statement, released at 2:15 p.m.
Eastern time, caused the stock market to dive briefly. But by the
end of the trading session, market indexes recovered to close
broadly higher. The Dow industrials added 126.79 points, or 1.2%,
to 10,934.57.
Wall Street was encouraged by the government report earlier
Tuesday showing that consumer inflation advanced only weakly in
April, following a disturbing leap upward the month before.
The new data convinced some economists that the March spike
in the consumer price index was an anomaly and that inflation
remains tame. "There's very little real inflation (THE CRB COMMODITIES INDEX ONLY HITS NEW HIGHS ALMOST DAILY - despite the recent 30% decline in oil prices - AND IS NOW UP OVER 20% IN LITTLE MORE THAN A YEAR)," said Carl Weinberg,
chief economist at High Frequency Economics in Valhalla, N.Y.
"The Fed's goal is to keep inflation risks from getting traction."
Clearly, the Fed thinks the risks are high. Despite five straight
quarter-point rate hikes since June 30, the economy has stubbornly
resisted Fed efforts to restrain it (STUBBORNLY RESISTED WHAT? WE'VE HAD HIGHER MONEY GROWTH DURING THIS PERIOD THAN DURING ALMOST ANY OTHER TIME IN HISTORY!). Just Monday, the government
reported that factory production remained strong, growing 0.9% in
April.
Even though consumer inflation indexes remain relatively
subdued (THE FIRST QUARTER'S CPI INCREASE WAS THE HIGHEST IN A GENERATION), there are signs more companies are putting through price
increases. The National Federation of Independent Business
reported in a survey Monday that 25% of its small-business
members reported higher selling prices in April.
Key commodity prices also have been on the rise this year, from
energy to pork to wheat to cotton. The Commodity Research


Another factor on the Fed's mind may be the presidential
election. To avoid accusations of political motivation, analysts said,
Fed governors would like to get their tightening (WHAT TIGHTENING?)done before the
campaign heats up in the fall, ideally before their Aug. 22 meeting.
That could imply a bigger rate-hike in June, these experts said.
There is a danger, as implied by the criticisms from Dorgan and
Regalia, that the Fed will squeeze too hard and tip the economy
into a recession (I WOULDN'T STAY UP NIGHTS WORRYING ABOUT THAT ONE, NOT YET, ANYWAY).
************************************************************
Stranger: Something wicked this way comes and IT AIN'T HIGHER INTEREST RATES (although those are coming too). No, what I am talking about is a collapse in the public's faith in the Fed to restrain inflation! Finally, when that happens, writers, like the one who wrote the article above, will begin to make sense of what is going on. Only then, for the poor schmucks who read and believe such drivel, it will be too late to benefit.

Elwood

(05/19/2000; 18:13:16 MDT - Msg ID: 30864)

ORO (05/19/00; 15:51:02MT - usagold.com msg#: 30860)

"5. The purchasing power of a pure commodity money is completely unstable. There has yet to be a mechanism available to solve that problem."

Why is this a problem? Money is nothing more than a good subject to the economic laws of supply and demand. That prices change should be seen as no more of a problem than the fact that grass grows better in sunlight than in shade.

lamprey_65

(05/19/2000; 18:21:17 MDT - Msg ID: 30865)

Mr. Turk's Article

I agree, wholeheartedly. As many of you may remember, I stated a similar opinion 6 months or so ago. As the CRB moves higher, it's going to be harder and harder to hold down the price of gold. I disagree with Kaplan in this respect - when gold moves up for good, it won't be like '93 (slow and methodical)...it's going to go very fast, first to the $335 an ounce level and then higher. The longer it's held at these ridiculous levels, the more it will have to play catch-up with the CRB and the more explosive the move will be.

I'm finding more mainstream columnists recognizing that gold is being manipulated (even as they ridicule us gold bugs). Will the Republicans seize on this new Clinton scandal? I'm not convinced...this is the BIG TIME - we're talking gold here, not some sexual indiscretion and cover-up. Finding yourself on the wrong side of this issue can cost you in a big way...ask Safra.

lamprey_65

(05/19/2000; 18:31:48 MDT - Msg ID: 30866)

The REAL news this week...

The Fed raises rates, the dollar moves higher (as expected), yet...

The CRB index soars and the dollar falls today.

People, this is the sign - we're getting ever so close to the endgame.

-----

Time for Lou Rukeyser...I'm sure he'll have a flippant comment or two about gold, always does. That's ok, watching him in the Great Bear Market of 2000- will be fun, if he doesn't retire, that is!

lamprey_65

(05/19/2000; 18:36:00 MDT - Msg ID: 30867)

P.S.

OK, he's blaming the Fed's rate increases for everything bad in the market. How convenient, eh? Oh, no inflation in the April CPI! Can you say - DRIVEL?

Solomon Weaver

(05/19/2000; 20:04:04 MDT - Msg ID: 30868)

Premiums are the price of making gold ownership fun.

THC (5/19/2000; 9:13:45MT - usagold.com msg#: 30844)

The real question is not why there is a 20% premium on these German coins, but what is the comparable premium that other vendors are charging for identical coins. And perhaps the premiums on other simlilar sized coins of similar era like Swiss and French 20 Francs.

THC....suggest you use some of those paper Yen and some real German gold...

and don't forget.....silver is the poor man's gold.

By the way, the premium on a new 2000 one ounce silver eagle is on the order of 60%!!!! Fair???

Poor old Solomon

USAGOLD

(05/19/2000; 20:06:13 MDT - Msg ID: 30869)

Stranger. . .

Watching the Rockies hockey match, but I had to say that I truly enjoy your dissection of the LA Times article and think you should do that sort of thing more often. You have a way of cutting to the heart of the matter that I am sure most of us appreciate and gain from -- myself included. I also had the thought that there are those new to this forum who learn from such efforts -- that there is "reading the news," and then there's "reading the news with your head screwed on."

Thanks, Stranger, and please keep it coming.

Solomon Weaver

(05/19/2000; 20:25:03 MDT - Msg ID: 30870)

back to ORO and gold liquidity -first posting of the day

ORO

Thank you for your detailed post on liquidity in the gold market.

In digesting your comments, I come to the conclusion that there are two forms of liquidity:

1. Financial physical gold backed liquidity which derives from a central bank leasing physical gold (to a creditworthy borrower) who then offers this gold to the market as a liquid asset for exchange. The gold liquidity may correlate in general to gold lease rates...assuming an elastic willingness to borrow with lower rates is in effect.

2. Paper gold liquidity which derives from the willingness of two creditworthy parties to exchange bets on the direction of gold price.....in this market dollar reserves are able to create liquidity...the lease rate need not have any correlation to this form of liquidity.

oldgold - really appreciate your willingness to be a devil's advocate here on the forum....let's keep our perceptions about the role this lease rate is playing very open as we move into the future. Perhaps you are right and as soon a borrowers are ready, they can get more gold out of CB vaults.

Poor old Solomon

Chris Powell

(05/19/2000; 20:53:59 MDT - Msg ID: 30871)

Nuclear bomb hangs over the gold market

http://www.egroups.com/message/gata/462?Latest from GATA Chairman Bill "Midas"
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

TheStranger

(05/19/2000; 22:06:49 MDT - Msg ID: 30872)

Thanks, Michael

Flattery will get you everywhere.

THC

(05/19/2000; 22:59:38 MDT - Msg ID: 30873)

Solomon

Thank you for your comments, my brother in SILVER!!!

My question is all about liquidity. If I accept that 20% premiums are a "good deal", then perhaps I will buy. But then, how much lower will the premiums be when I sell? If the premiums are significantly lower when one sells, then I must either hold until there is a big move, or take the loss when I need cash.

It's a question of liquidity.......

I agree, silver is great........and I do own some........but for now paper plat is my favorite.....I love the backwardation money pump!!!!

I will buy more silver when I see backwardation there.

Cheers,

ORO

(05/19/2000; 23:36:04 MDT - Msg ID: 30874)

Post correction

ORO (05/19/00; 15:51:02MT - usagold.com msg#: 30860)

"5. The purchasing power of a pure commodity money is completely unstable. There has yet to be a mechanism available to solve that problem."

Should read

"5. The purchasing power of a pure DEBT money is completely unstable. There has yet to be a mechanism available to solve that problem."

Jon

(05/20/2000; 00:30:00 MDT - Msg ID: 30875)

Inflation Trail

As I've suggested before, I wish consideration could be given to establishment of regular commentary by Stranger, and perhaps others, in a section devoted exclusively to inflation.
Thanks.View Yesterday's Discussion.

Solomon Weaver

(05/20/2000; 00:36:05 MDT - Msg ID: 30876)

(No Subject)

But THC

Why would you go to the trouble of buying a few of these beautiful coins with the intention to sell them???

If gold goes where we hope it will, you will have treasures you could never afford to get later on!!!!

I hope that you have truly understood the value of holding the physical and that those contracts you trade are just for entertainment....gold in your palm requires no "counterparty" to call it an asset.

Poor old Solomon

Elwood

(05/20/2000; 02:18:11 MDT - Msg ID: 30878)

Jigsaw Puzzles

Ok, Trail Guide, you've been beatin' around the bush on this for awhile. Isn't it time we started putting these jigsaw pieces together? (smile)

Euro people want to get away from the dollar inflation that is robbing them blind(I don't blame them, I do too.), or maybe they just want to do some robbing for themselves. I don't know. At any rate, they need help from the Arab oil interests.

Arabs say, "OK, but give us a gold money, and the deal is done." Euro people say, "You got it."

This kicks off the accelerated expansion of the paper gold markets gunned by the Euro and other CB lending and sales. Since the oil interests control the physical flow through the LBMA (courtesy BIS) all that metal ends up somewhere under the Arabian desert via Euro and American bullion banks. It's got to be this way because we know that central bankers don't really need the pittance earned by leasing gold. They earn plenty enough already at the printing press. If anyone could use the money it's the ECB. I'm not sure but I'm guessing that they haven't leased a single ounce.

The bullion banks get the physical from the CBs and sell it many times using certificates and other paper derivatives as proxy for the physical. If it was strictly a matter of gold for oil the CBs wouldn't use the BBs to transfer their metal to the Arabs. They'd do it directly bank-to-bank and it wouldn't slam the market price. There's a reason for running it through the paper markets and that's to further inflate the dollar in order to kill it.

Thus, the physical game is not enough. What destroys a currency is inflation, not mere competition from other currencies. The demand is there for the physical due to all the dollar inflation that's going on. Rather than bid outright for metal that's not there, the Arabs start another game. They begin trading their oil that's still in the ground for gold that's still in the ground. That is, the bullion banks have hedged their central bank loans with claims to future mine production which they now trade to the Arabs in return for claims to future oil production.

But, while it may be profitable, doing this places the bullion banks on a one-way train to default. Now, they're on the hook for metal that's owed to everyone they've sold to (certificates, other derivative holders and Arabs), and everyone they've borrowed from (central banks).

Then the Washington Agreement is sprung. With this the European central banks are saying no more metal for loans, and, by the way, where's the payment that's due on our outstanding? The bullion banks don't have the metal, nor do they still possess sufficient claims to the future mine production from which they can deliver or with which they could renegotiate the loans. We need the oil to run the economy so they can't offer those claims.

The Europeans will have their gold by threatening to go to the open market, bidding up the dollar price until enough comes available to replace what they've loaned, but there's no real need to stop there since by that time there will be no need to hold now-worthless dollars. Perhaps this is why they don't need the WA gold for coverage? The Arabs will have their gold or we'll have no oil or much less oil which has the same effect. The derivative holders will have......well, let's just say they're about to learn the hard way that bank certificates aren't the same thing as cash in hand. The 2000 tonnes from the WA must be to protect the oil flow to the European economies by insuring that any gold-for-oil claims owed by European bullion banks are paid when due. All those new gold-oriented internet sites like GoldAvenue.com won't be selling, they'll be used for buying. Why would a banker like JP Morgan need the internet to sell gold?

When the Americans can no longer deliver the required gold payments then either the oil flow will decline sending its dollar price higher or the price of gold will run because the Euro folks entered the market with their dollar reserves. Of course, either of these events will destroy the dollar as a functioning reserve currency. What makes this so elegant is that this is all they need to do. They don't need to fiddle with any other financial markets or anything.

So, Trail Guide, would I be in the ballpark if I stated that the price of oil is rising because someone is late with their payments?

If this scenario is correct then it's another piece of evidence that all physical gold advocates everywhere will eventually be vindicated. The world is about to say, "Gold is money, after all." However, don't underestimate the American administration. Remember, these men, more than once, were willing to risk the lives of other Americans, not to mention foreigners, to save their political hides. It's a safe bet that they'll do just about anything to keep the game going. Comments?
Elwood

Topaz

(05/20/2000; 04:14:42 MDT - Msg ID: 30880)

Buying below Spot!

http://www.xe.net/ucc/Solomon: THC: All

Great site to do the Math:
The recent spike in US$-vs-pretty well everything, has coughed up a few unexpected bargains ie: the going rate for (bulk)Oz 0.50 cent coins (the round ones @ 80% AG or .3416 ozt) is $2.25.
So- doing the conversions, this equates to a Ag/oz price of US$3.76----- and in auch a recognised, tradeable form!!

Ya cant help but LOVE this stuff at these prices,

Bring on the WHEELBARROWS!

Black Blade

(05/20/2000; 04:58:44 MDT - Msg ID: 30881)

Major Auto Manufacturer to switch from Pd to Pt autocatalysts!

Apparent news release from GM. PGM supply mystery deepens?The price action in platinum yesterday appears to be related to General Motors (GM) plans to switch from Palladium to Platinum in is use for the manufacture of autocatalysts. The announcement came yesterday, however, I am still looking for printed confirmation or an official news release. It would appear that the drawdown from this auto manufacturers own stockpiles are prompting this change-over as the Russians are unable/unwilling to deliver Pd. Platinum rose $17.20 today, and I would expect that the price will continue to climb as trading continues on Monday. I made this speculation some time ago, as the price of Pd was climbing on the TOCOM. The subsequent default of Pd paper on the TOCOM sent a very clear signal that Platinum and Rhodium would have to be acquired to fill the void as PGM autocatalysts are effectively required equipment on internal combustion engine exhaust systems throughout the developed nations. Apparently some have begun to recently figure this out and have begun purchasing Pt. Reliance on Russian deliveries of Pd can be a critical error in the Auto industry at this time. There apparently has been a "very" minor delivery of Pd in Switzerland earlier this month, however, the major consumers have awaken to the fact that time is short, and that the necessary deliveries of Pd are not forthcoming. Some PGM producers have begun to develop plans for expansion at their various mining projects in anticipation of the developing PGM shortage, However, this will take a lot of time to bring into production. This should be an interesting week, especially if the other Auto manufacturers make similar announcements. I expect that the TOCOM market for Pt should be a good indicator at Mondays' open. As the PGMs are pulled along, so will Au and Ag follow? We shall see ;-)

Leigh

(05/20/2000; 06:04:10 MDT - Msg ID: 30882)

They're Really Desperate Now!

http://www.the-times.co.uk/news/pages/tim/2000/05/20/timfgnusa02005.htmlDive for Gems, Gold Shocks Crash Relatives - Insurers to Salvage Sunken Loot from Swissair Jet Wreck

Black Blade

(05/20/2000; 06:09:08 MDT - Msg ID: 30883)

Confirmation on PGM news!

Gold closes lower, platinum rallies on GM news

Reuters Company News - May 19, 2000 11:38

LONDON, May 19 (Reuters) - Gold slipped back within range on Friday afternoon, postponing any sudden moves until after Tuesday's UK auction of 25 tonnes, dealers said. Gold was set at $273.15 a troy ounce at the London afternoon fix, down from $273.75 in the morning, while spot closed at $273.40/$273.90, down from Thursday's New York close at $273.00/$273.55.

"Gold is holding above yesterday's lows but the upside will remain limited before Tuesday," a dealer said. Gold forwards were seeing lending which was keeping lease rates at lows around 0.3 percent. Dealers said gold was supported above $272.50 and capped at $275.00. Platinum gained on Friday on news that General Motors Corp. , the world's biggest carmaker, expected to increase its use of the metal in catalytic converters, which clean exhaust fumes.

GM would cut palladium use by 30 percent by 2002 through a combination of improved technology and increased platinum use, said David Andres, GM's purchasing director. "I can see platinum coming up about 10 percent from where it is," he said in an interview. Carmakers last year used about 5.9 million ounces of palladium, about 63 percent of all the metal purchased in 1999. A substantial amount was accumulated in inventories, according to precious metals refiner Johnson Matthey.

Platinum closed higher at $539.00/$544.00 from $530.80/$537.80 and palladium was steady at $570.00/$580.00 from $$569.50/$584.50.

Silver held on to $4.95 but struggled to make any headway on the upside, closing at $4.97/$4.99 from $4.99/$5.01.

Black Blade

(05/20/2000; 06:13:09 MDT - Msg ID: 30884)

PGM - Ditto! Goin Fishin' see ya'll Monday!

DETROIT, May 19 (Reuters) - General Motors Corp. , the world's No. 1 automaker, expects to cut its use of palladium by 30 percent by 2002 because of instability in supplies and prices of the precious metal, a company executive said on Friday.

GM will replace palladium, used in catalytic converters to cut down vehicle pollutants, through a combination of improved technology and increased platinum use, said David Andres, GM's purchasing director. "I can see platinum coming up about 10 percent from where it is," he said in an interview. In physical bullion markets, palladium fetched about $575 an ounce Friday morning. Platinum cost about $537 on Friday, after a sharp rally Thursday. Automakers last year used about 5.9 million ounces of palladium, about 63 percent of all the metal purchased in 1999. A substantial amount was accumulated in inventories, according to precious metals refiner Johnson Matthey.

Russia produced about two-thirds of the world's 8.06 million ounce palladium supply. But it has starved the market of exports for months because of delays in issuing annual export quotas, driving prices to record levels over $800 an ounce in February.

Black Blade

(05/20/2000; 06:56:36 MDT - Msg ID: 30885)

JP Morgan the Fence Sitter.

http://www.stockcharts.com/commentary/clive/clive20000518.htmlClive Roffey asks an interesting question. Check out the link above. This should provoke a bit of discussion I think. I heard the PGM news yesterday morning and finally found some confirmation. I think that this will be big news this coming week. Anyway, beer is loaded, fishing gear is in the truck, and hopefully fish are bitin'. I'm gone!

Leland

(05/20/2000; 07:44:32 MDT - Msg ID: 30886)

Leigh, Your Article, Salvage of Flight 111...

Reminds, respect to the grieving families is ignored. Let
us hope an unforseen circumstance prevents, at least for
another 100 years.

Peter Asher

(05/20/2000; 08:11:20 MDT - Msg ID: 30887)

Topaz msg#: 30880)

>>> a few unexpected bargains --- Oz 0.50 cent coins (the round ones @ 80% AG or .3416 oz) is
$2.25.
So- doing the conversions, this equates to a Ag/oz price of US$3.76 <<<<<

If your referring to Kennedy half dollars, those are 40% silver content which would be .2 oz. Silver, therefor $6.25/oz.

More realistic, yes?

canamami

(05/20/2000; 12:38:07 MDT - Msg ID: 30888)

Reply to MK - #30869

MK,

Some corrections :-)

Hockey contests are "games", not "matches".

The Rockies were a franchise in the 1970's, which disbanded circa 1980.

The current hockey franchise in Denver is the Colorado Avalanche (formerly the Quebec Nordiques). The Avalanche won the Stanley Cup (the gift of a long-ago Governor-General of Canada) in their first year of operation in Colorado.

TownCrier

(05/20/2000; 13:13:42 MDT - Msg ID: 30889)

Watching evolution in real-time

http://biz.yahoo.com/rf/000519/n19563285.htmlThe Fed is evaluating new methods to adjust the U.S. currency supply (done through their daily repos or matched sales with assorted collateral--Treasuries, agencies, and mortgage-backed securities) given the situation that the favored form of collateral--U.S. Treasuries--are seeing reductions in issuance or outright reductions through the planned buybacks of up to $30 billion by the Treasury.

Gerald Lucas, senior government strategist and director at Merrill Lynch, said in regard to the study that the Fed would "definately" continue its use of agencies and mortgage-backed securities for its daily market operations, but that, "When the time comes, they may expand in order not to favour one (type of collateral). What the Fed may very well do ... may be to include high-grade corporates also...."

Gandalf the White

(05/20/2000; 13:17:05 MDT - Msg ID: 30890)

More on Camamami's Golden FACTS

IF my memory has not totally failed me, The Stanley Cup (the gift of a long-ago Governor-General of Canada) was also won by the Seattle hockey team before the ice melted here in the Pacific Northwest.
<;-)

Gandalf the White

(05/20/2000; 13:22:09 MDT - Msg ID: 30891)

Question to TC

AT THAT rate, do you think that the Fed will ever accept "Beanie Babies" for repo type of collateral?
<;-)

TownCrier

(05/20/2000; 13:52:46 MDT - Msg ID: 30892)

Gandy, they've already looked into it...

but the current holders of the beanies effectively stopped the initiative when THEY wanted some form of collateral on the deal! It would seem that the Fed's provision of currency was not deemed to be adequate.

It's all relative, based on what side of the fence you're standing on.

HI - HAT

(05/20/2000; 13:57:06 MDT - Msg ID: 30893)

Town Crier Barron's Market Watch 5-22-00

MOGAMBO GURU _ Richard DaughtyMay 9 *[
The Fed gave the banks another $4.5 billion to play with last week. I wish someone would ask the venerable Alan Greenspan exactly where it is written in the charter for the Federal Reserve System that he is to provide constant, unlimited quantities of credit to the banks when it is not in responce to some actual crisis in the banking system.

Protection of the banking system from unforeseeable systemic problems is the purpose of the Federal Reserve System, not the current unholy and moral hazard-laden provision of unlimited, out of thin air liquidity to make an outright gift to the banks so that they can make a bigger profit.]

Yes Sir, we are EVOLVING away from Free Markets, and toward the higher forms of Capitolism by the week.

SHIFTY

(05/20/2000; 14:21:21 MDT - Msg ID: 30894)

Paper gold

Going through some stuff today I found 5,000 customs gold units from the Central Bank of China. Does anyone know about these bills? What is a Customs Gold Unit?
Any help would be swell!

$hifty

Leland

(05/20/2000; 14:35:42 MDT - Msg ID: 30895)

Shifty, You Just Might Have Some Collectables

Maybe someone has more info. Hope this helps:

"During the period from 1930 to 1950
when monetary situation was
unstable, Central Bank issued
Customs Gold Unit as a sole means to
pay for customs duty, while in
other times, we use normal currency
to pay for customs duty as most
countries do."

SHIFTY

(05/20/2000; 14:41:54 MDT - Msg ID: 30896)

Leland

All 5,000 are in one bill.!

Gandalf the White

(05/20/2000; 14:55:26 MDT - Msg ID: 30897)

SHIFTY

The Hobbits sure hope that you found this "note" in an old trunk in the attic ! That is the one they have been looking for all these years.
<;-)

Leland

(05/20/2000; 14:55:54 MDT - Msg ID: 30898)

Shifty, I Searched...It's a Mind Twister...

Any ADVANCED numismatics helpers out there?

Leland

(05/20/2000; 15:39:35 MDT - Msg ID: 30899)

The RAGE OF THE DAY

http://www.goldensextant.com/And, I liked this comment...

Hektor (Howe's Bombshell: Deutscher and Dresdner Bank) ID#402246:
-
are the ones who have been lying and leasing gold at a phenomenal rate, not the U.S.
government. The Germans, of all people! The Germans, who have experienced the
worst hyper-inflation in modern times! They have leased huge amounts of gold, keeping
the POG down, the euro down, and the dollar high. They are lying because they are
part of the Washington agreement and they have flagrantly violated it.

What might happen? Will they be forced by the ECB and the French to foreclose the
leased gold and put it all back in their vaults? Will they be forced to get their gold back
by the German people? Will this lead to more transparency, since now we know that
NOONE can be trusted? If they are forced to undue these leases, it will be explosive
for the market. If they are not forced to undo them, then, what? Nobody's word and
signature are worth anything?

SHIFTY

(05/20/2000; 15:53:35 MDT - Msg ID: 30900)

Leland

Funny you bring that up! I was looking for my 50 million German Marks from 1923, when I found my German Marks I also found my Gold customs units!

Cavan Man

(05/20/2000; 16:07:02 MDT - Msg ID: 30901)

Hello Trail Guide

The latest Howe commentary if true (and it appears he has done good homework) is quite a bombshell! What are your thoughts on this revelation? Many thanks friend....CM

PH in LA

(05/20/2000; 16:10:15 MDT - Msg ID: 30902)

Howe's latest commentary

Reg Howe has released his bombshell essay at www.goldensextant.com in which he details his discoveries relating to the disclosed bullion positions at Deutche Bank. His research is impressive, especially to someone like myself who doesn't pretend to follow all his figures and logic. He unquestionably gives an impression of knowledgeable and detailed analysis supporting his conclusions:

"...Why would Deutsche Bank participate in a cabal to cap the gold price, and far worse, continue to do so after the Washington Agreement? The Bundesbank is not only a signatory to this agreement, but also is rumored to have played a leading role in its adoption. For the Bundesbank to permit Deutsche Bank to act in this manner, with Dresdner Bank doing the same thing but on a smaller scale, suggests that long term monetary policy in the EA, particularly as it relates to gold, is in utter disarray, and that monetary cooperation between France and Germany is far more mirage than real.

"Indeed, the implications of the gold derivatives activities of these two big German banks in 1999 are so mind-boggling that further analysis must await another commentary. Their actions threaten not merely to sabotage the Washington Agreement, but also, and much more seriously, to jeopardize the euro itself. Those who believe in sound money look to the Bundesbank as a light in the darkness. For it to conspire against gold is as unthinkable as the act of the great baseball player that brought forth this plea from one of his young fans: "Say it ain't so, Joe. Say it ain't so.""

Since Howe has wondered aloud in the strongest terms if it has been the Exchange Stabilization Fund (controlled by the President and US Treasury) and/or the Federal Reserve conspiring to supress gold for political reasons. Now the suggestion that it has been the Bundesbank all along? I eagerly await his promised further commentary.

And I wouldn't mind hearing FOA/Trail Guide and/or ORO comment on this, either!

RossL

(05/20/2000; 16:15:10 MDT - Msg ID: 30903)

Wow

It's taking me all day to catch up on 4 days of posts!

Leland - Are your Morgans certified in the plastic slabs?

Topaz - old half dollars, 1964 and before are 90% silver. Kennedy halves from 1965-70 are 40% silver.

I will second MK's nomination of the John Doe post for the HOF if that is still necessary.

Leland

(05/20/2000; 16:28:50 MDT - Msg ID: 30904)

RossL

I read you loud and clear...Morgans should be slabbed...But!
how does one approach those GSA CC's in the little blue
boxes with the certificate signed by Nixon? I've never
figured this one out. Help!

HI - HAT

(05/20/2000; 16:35:31 MDT - Msg ID: 30905)

Cavan Mam : PH in LA Gold Market

And now this. Several weeks ago in a picque of frustration I posted a Rant to Trail Guide, wherein I stated I did'nt understand the gold market and the whole thing seemed rotten to the core. I'm felling my gut-level frustration was on to something !

HI - HAT

(05/20/2000; 16:54:47 MDT - Msg ID: 30906)

Cavan Man

CAVAN MAN. Sorry for mis-spelling.

RossL

(05/20/2000; 17:05:43 MDT - Msg ID: 30907)

Leland

You will have to make a decision on each coin. Is the coin worth more in a PCGS slab or in that gov't package? It depends on the coin. In my opinion, and from what I understand, the gov't packaged coins on average deserve approximately a MS63 grade. The better examples that can earn a higher number grade will best be moved into a slab. Look at them closely and discriminately with a high powered loupe. Better yet, get someone else to do it who does not have an "emotional attachment" to the coins that will bias the opinion. I can say that because in the past I have unrealistically overgraded my own numismatic treasures!

HI - HAT

(05/20/2000; 17:10:54 MDT - Msg ID: 30908)

Leland msg. 30899 Road Rage

I hope I live long enough to read the full History of the who, what, where, and why of this whole gold manipulation Saga.

It is going to be some Tale. Just think we have yet to see,further up ahead, the results of all this manipulation.

Leland

(05/20/2000; 17:14:45 MDT - Msg ID: 30909)

RossL

Your advice is VERY MUCH appreciated! Of course, I will
need an expert, expecially with that 1879 CC. And, while
I'm at it, the rest can be evaluated much more cheaply as
a group. Muchos, amigo!

Leland

(05/20/2000; 18:13:42 MDT - Msg ID: 30910)

Snips, Slaps, Exactly What Michael Doesn't Want Any of Us to do!

Thanks Michael, we will honor your site!

"Date: Sat May 20 2000 20:03
THC (BEWARE OF CENSORSHIP AT USA GOLD!!!) ID#375365:
In a recent post at USA Gold, I noted that the sell premiums on their "specially priced"
German 20 Mark coins was 20%. I then asked how much premium they would buy
them back for.

No response directly from USA Gold, but after a short discussion with other posters,
some posts were erased and my password removed, with NO warning.

BEWARE!!!

This begs the question ( which I was polite enough not to mention on USA Gold ) :

Is USA Gold a true discussion site, or a marketing site for coins?

Cheers,

THC"

Leland

(05/20/2000; 18:31:33 MDT - Msg ID: 30911)

And Then, why?, why? Should Someone Spread Something at Gold-Eagle? I Can't Imagine!

"@THC
(hh)
May 20, 20:21

I've always found USA Gold's slant to be overly
pro-physical to the exclusion of other means of precious
metal investment. While physical should obviously be a
portion of any PM portfolio, as insurance for a worst
case (low probability) scenario, it is certainly not to
be focused on to the exclusion of all others if a
substantial leverage and subsequent profit is to be
realized during typical (higher probability)
circumstances. Gold-Eagle provides a forum with a much
more balanced and open discussion. Welcome to the real
deal THC."

Elwood

(05/20/2000; 19:10:40 MDT - Msg ID: 30912)

Jigsaw Continued....

I think I might have got some edge pieces jammed in the middle somewhere.

If the leased metal never left the central bank vault that would change things. Anyone?

Cavan Man

(05/20/2000; 19:11:14 MDT - Msg ID: 30913)

PH, HI-HAT, TG

The rise in POG is imminent; I believe strongly. There are too many excellent reasons to own gold at this point in history in addition to the FOA thread. In sales, when a teriffic deal just lands on your doorstep one day, without you having done anything to get the business, we call that a "bluebird". The FOA/TG rationale is a "bluebird".

I am very much looking forward to hearing from FOA on this score. I'm sure he can explain. As regards his friends, although I am a very patient person as all gold investors must be, I do believe the time is nigh for them to "fish or cut bait" as we are wont to say in the midwest.

Does the Washington Agreement have any teeth?

TG: Where's the beef? Kind regards.....CM

JLV

(05/20/2000; 19:54:44 MDT - Msg ID: 30914)

What if.

I almost never post here. I read the postings often though, and have read Another/FOA/TG's thoughts for quite some time.

I hold gold bullion in the form of American Gold Eagles.

There is a question I never hear raised on this forum. It's such an obvious question.

I'm sure several here are familiar with the scientists, that a few years ago, spelled out the letters I B M in atoms on a piece of substrate.

My question is, what if? What if the United States, through its Star Wars (or other) research, has accompliashed the alchemist's dream.

What if the United States has discovered an inexpensive way to make gold. Is that far fetched for the year 2000?

Does it explain how they have acted with regard to gold?

How does it affect the Another/FOA/TG scenario/timeline?

I seem to remember a few posts some months back claiming a very large unidentified source of bullion.

Probably just a silly question.

Solomon Weaver

(05/20/2000; 20:03:23 MDT - Msg ID: 30915)

making gold

JLV

Making gold from lead was the dream of the European alchemists and this quest set the foundations for modern chemistry and physics...so we could say had the search for making gold (transmutation of elements) not been made...all of our modern lifestyle would never have happened.

As it stands, transmutation of elements does occur in nuclear reactors....but it seems to me with cash costs close to $200 an ounce, it is best just to stick with mining.

Poor old Solomon

Leigh

(05/20/2000; 20:15:39 MDT - Msg ID: 30916)

THC

Dear THC: I have just read through all of your postings on Kitco and Gold-Eagle. I can imagine that being banished is a shocking experience, and believe me, I feel for you.

The question you asked MK was a rather bold one, similar to going into a shop and asking the owner (in front of many other customers) how much he or she has marked up an item. If you really felt the need to ask it, wouldn't it have been more tactful to call or e-mail MK personally? He doesn't normally conduct business via the Forum (except for occasionally mentioning "specials").

Yes, it would have been nice if MK had given you an explanation for your banishment. He probably still would, if you were to contact him. An apology from you for your brashness might be appropriate, too. That's if you're in the mood to mend fences, rather than burn them down.

Leland

(05/20/2000; 20:39:34 MDT - Msg ID: 30917)

Leigh, I Think This was Really Intended for You...

Date: Sat May 20 2000 22:17
THC (Leland / USA Gold) ID#375365:
Copyright � 2000 THC/Kitco Inc. All rights reserved
Since you have posted some of today's posts at USA Gold, please also post this.



************



To everyone at USA Gold,



Let me first state that I have learned much through participating in the USA Gold
forum. I thank all of the participants and the host for taking the time to share their ideas.




I have learned much about the "risks of gold shares" and the "stability offered by
physical metal." I feel that this is an important message, one that more investors should
be aware of. Investors need to understand the risks/rewards of all metals related
vehicles.



BUT BUT BUT BUT BUT



I cannot imagine why I would be banned from the site for asking what I see to be a
common sense question.



For an asset to offer liquidity, one must be able to sell it, not just buy it.



Why was I banned for asking the very simple question: �gAt would premium would
the seller buy back the coins?�h



In any case, good luck and many thanks to all.



I would like to give an especially hearty thanks to **ORO**, whose posts and
innovative economic thinking I have enjoyed to no end!!!!!!!

Leigh

(05/20/2000; 20:46:50 MDT - Msg ID: 30918)

Leland

Not at all. Leland, however any of us feel about THC's banishment, MK probably wouldn't want us reposting his complaints. Just a thought.

Leland

(05/20/2000; 20:55:45 MDT - Msg ID: 30919)

Leigh, Your Point is Well Taken...

The ladies and gentlemen on this forum, please excuse me.

Solomon Weaver

(05/20/2000; 20:59:27 MDT - Msg ID: 30920)

How bad is the big bad wolf (Deutsche Bank)?

Regarding Deutsche Bank

Given that the books of BANKS are published and the books of trading houses are not is it not hard to determine where all these new Deutsche Bank gold derivatives are coming from??

Is this a plausible scenario?

1. DB initiates and supports the pro-gold stance which leads to the WA agreement.

2. The gold world is shocked when in the weeks after WA agreement, the POG surges and destroys two mining companies and untold numbers of bankers who were short.

3. In order to prevent massive cross cascading defaults from destroying the emerging Euro (and DB counterparties), DB strikes a deal with the Bundesbank to have DB be a buyer of last resort to keep the gold trade working...with the promise of a bailout if it does not fly.

What this article seems to confirm is that on both sides of the Atlantic, there has been a "pooling" of gold exposure into the hands of a few....thus setting us up for much smaller board room negotiations and insider deals....

The question which is still unanswered is when the currency wars unfold, will DB and JP Morgan play the same??? Like a game of dungeons and dragons...what are the actual tricks that each have in their bag (the real breakdown of all those notional values)?

JLV

(05/20/2000; 21:32:46 MDT - Msg ID: 30921)

Specials?

He doesn't normally conduct business via the Forum (except for occasionally mentioning "specials").

If 'specials' are promoted on the forum, doesn't MK open himself up to a full disclosure?

Kind of a fairness thing?

Elwood

(05/20/2000; 22:02:47 MDT - Msg ID: 30922)

Solomon Weaver (5/20/2000; 20:59:27MT - usagold.com msg#: 30920)

Excellent points you raise, Sol. Could they all realize now that we're headed for cash settlement? Maybe consolidating everything is a way of sorting out who will get the physical and who must settle for currency.

Remember the S&L crisis? They came up with something called the RTC: Resolution Trust Corp to settle up all that mess. Maybe that's what JPM and DT are doing. We're not supposed to know, otherwise we might go out, and try to buy some gold. MK, has my 20 mark order gone out yet? ;-)

ORO (05/19/00; 23:36:04MT - usagold.com msg#: 30874)
Oro, I re-read my post, and it sounded a little harsh the second time. Hope you didn't take it that way.

TownCrier (5/20/2000; 13:13:42MT - usagold.com msg#: 30889)
TC, liquidity problems abound for dollar assets. Treasury futures volume is dying. Summers is going hoarse trying to jawbone the business into the Treasury markets. The buyback is a joke among traders (or so I hear). It's a mess. Funny, but authorizing corporates for the Fed makes them look a little like the ECB, no?

lamprey_65

(05/20/2000; 22:11:22 MDT - Msg ID: 30923)

Elwood

Your idea about an RTC type setup could be very possible...they may have wanted to consolidate the problem in order to manage it more effectively.

By the way...watch the markets this week, there are several signs (low volume - no buyers, CSCO breaking the trendline established in the fall of '98 for the first time, many sectors continuing to deteriorate) leading me to believe the next leg down is drawing near. This is where things could get real ugly.

Analyzer

(05/20/2000; 22:24:12 MDT - Msg ID: 30924)

Banishment

As a very occasional poster and a regular reader of this forum, I have viewed the various 'banishments' of posters on this forum with some alarm. I have digested all of the arguments based on the idea that the proprietor if a private forum has a right to censorship and I suppose I agree, but I would also imagine that a believer in free markets and free currency systems might also have some belief in free speech, and some tolerence for even ad-hominem criticisms of his ideas. This latest banishment goes far beyond what I would consider a reasonable reaction (I read the original posts) and as a result I am withdrawing from any further participation in this forum. No doubt this message will also be deleted, but perhaps someone will read it before then and give some though as to what the ideals of the proprietor of this forum are, and what you might wish they were.

USAGOLD

(05/20/2000; 22:36:47 MDT - Msg ID: 30925)

THC

Normally, I wouldn't do this but since it caused such a controversy, here's what got THC kicked off:

THC (5/20/2000; 3:25:16MT - usagold.com msg#: 30879)
Solomon
This is the type of gold I like to accumulate:

http://cgi.ebay.com/aw-cgi/eBayISAPI.dll?ViewItem⁢em=328885129

It's hard to get at these prices (I lost this bid), but satisfying when you
do......

Cheers,

______________

Go to it and see for yourself.

Our prohibition #4: "4. Self-promotion; promotion of the company you work for; promotion of internet sites that
compete directly with USAGOLD/Centennial Precious Metals."

Further"

"However,
we reserve the right to delete any posting we feel to be in conflict with the guidelines, and/or the
spirit of the guidelines, listed below as PROHIBITIONS. We also reserve the right to deny
any poster access who either violates these prohibitions or their spirit."

Promotions are normally dealt with severely and quickly here, usually without warning. We have had a number of people get a code simply to publish a prospectus or the latest on hot mining prospect, or another gold web site. This isn't the first instance in which we've had to deal with promotions and a questionable agenda and it is unlikely it will be the last.

We have the right and duty to protect our own business interests. We do not sell advertising here. We do not offer the Forum by private subscription and the site as a whole by private subscription. Our only source of income from this site is by the gold buyers who come to us as a result of what they read not just at this Forum but throughout the site. Should we let our competitors have a free ride at this forum that we have worked so hard to build and maintain, not to speak of the cost in man hours and the rest?

THC violated the rules blatantly without so much as a thought what it might mean to the rest of us particularly the firm sponsoring the site.

elevator guy

(05/20/2000; 22:41:45 MDT - Msg ID: 30926)

Rules of Life

If you went into someones house, and just lit up a smoke without asking, wouldn't that be considered arrogant?

Of course it would.

MK is a business man, and he is entitled to compensation for hosting this site.

Why should MK have to lay all his cards on the table with regard to purchase and sell premiums? How do dealers of anything make any profit on the transaction? Do people who buy and sell have a right to deal the best they can, and so to stay alive?

Of course they do.

Life is a deal. Nothing is free. Business owners should not have to jump through a hoop any higher than anyone else.

Kind of reminds me of some people in California, who want (they may have succeded by now) to make it a law that gas stations must provide free compressed air.

Some people right away chant "Well, air is free, so why should I have to pay for it?"

But it costs money to compress the air, for electric power, and the reel gets worn, which requires maintenance, etc etc.

Why shouldn't the provider of a service be compensated for doing so?

OK, enough for now. Just my $00.02

elevator guy

(05/20/2000; 23:31:48 MDT - Msg ID: 30927)

Can I get an amen?

!

ORO

(05/20/2000; 23:40:53 MDT - Msg ID: 30928)

Elwood - thanks ; Howe comments

http://www.goldensextant.com/commentary12.html#anchor29020Elwood

Thanks for pointing out the error. Was in a hurry to post (as I usually am) and did not read it over or edit (nor run a spell check - which I rarely do anyway).

TC, Elwood - Fed does sound like ECB

Howe did a marvelous job of combing for data and running through the data.

The question is now a matter of who is long and who is short. I think it was Buffet who said: it is only when the tide turns that you see who was swimming without his trunks. So did Morgan give up its golden swim shorts so that Deutsche and UBS could get out of the water? Or are Deutsche and UBS also without cover and running with Morgan into deeper waters so as to avoid exposure as the tide turns? If they headed towards deeper waters, don't they think they will have to go out at some time? Surely the bus will leave them behind before the next day's tide comes no?

I am thinking through the possibility that the Deutsche and UBS positions are longs being used to cover their exposure from their gold banking businesses. Gold banking would obviously be a short gold position, with the offsetting position being in something other than gold. If these institutions knew what was happening, they would seek cover from price changes, but may think themselves immune to a bank run because of a deal cut with some of their larger gold account holders. The factors that point to this:
1. During Q2 99, Morgan's positions rose at nearly the same amount as BT levels dropped (BT was then purchased by Deutsche).
2. Credit Suisse has a strong physical business, and it is the bank that took the Fix seat, Deutsche and UBS would obviously have had at least a bigger paper gold business. Why did neither join in?
3. UBS eliminated nearly 1/2 its forwards positions in 1999 (3370 to 1810 tonnes, down 1560 tonnes). It raised its position in options from 3970 to 5000, which comes to a 1030 tonne increase. With such a decrease in gold forwards, it should be no surprise that the lease rates dropped back down.
The forwards are probably sheer shorts. The options may actually be long positions to offset some of the price exposure in the gold accounts.
Since both are in the EU block (Swiss gaining an indirect entry) I would assume Deutsche has the same problems that UBS had and found Morgan's manipulative hand across the water to be a godsend.
4. Euro prices of gold are at the same position they were in Feb 2000 and Oct 1999. They are actually a wee bit higher than Oct 1999. So Deutsche and UBS are showing good values on their Euro and SF books if they are long, while Morgan is showing good values on its US dollar books if they are short.

This works out to a situation where the currency markets (where currency can be borrowed into existence without limit, theoretically) give when gold pushes. Deutsche and UBS provide gazmillions in fresh Euro and SF to Morgan and Citi in return for paper gold cover. Morgan and Citi get to profit from the carry between Euro and SF rates and the dollar rate (now a 3% + spread). Everybody is now happy and we can wait for Morgan and friends to keel over a wee bit later - after the (possibly hostage) NY Fed "earmarked" gold is released.

What say you.

aunuggets

(05/21/2000; 00:57:50 MDT - Msg ID: 30929)

Analyzer #30924

I'll second your withdrawl.....

"Free Markets"......as long as you buy from me.

"Freedom of Speach".......as long as I agree.

"Freedom of Expression".........as long as you don't step on my toes.

Censorship is alive and well in America folks !

Don't bother to pull the plug MK, I'll let myself out.View Yesterday's Discussion.

YGM

(05/21/2000; 01:43:17 MDT - Msg ID: 30930)

Not a Knight of the Table Round Myself....

But I like it here....Censorship...NOI have experienced censorship on another site... And repeatedly til I PO'd the owner & got the boot....I've posted here freely for along time and it got to be like a second home.....I read & learn much more than I can repay w/ commentary and discussion.....But I've always been accepted for sharing finds and stirring up the stew...(GATA)

MK. is a good and generous host and this crew deserves credit for one hell of alot of time shared w/ novices like me, and this conversation is over for me..I'm going to my pillow.
I'm worn out from reading at 4 sites & catching up.....Ken

GO GATA, and GO PHYSICAL...........YGM.

Leland

(05/21/2000; 03:00:04 MDT - Msg ID: 30931)

"Dark Side of Stocks" ... "This is a Good Time to be Cautious"

Scott Burns: Stocks, funds
thirsting for cash flow

05/21/2000

By Scott Burns / The Dallas Morning News

How much money will it take to sustain stock
prices?

That question came to mind as I compared record
equity mutual fund cash flows to stock prices.

In April, a tough and volatile month for stocks, six of
every seven equity funds lost money. In the same
month, investors committed large amounts of new
money to equity investments. Some investors were
dollar cost averaging, some were "buying on the
dip." While the average domestic stock fund lost 3.9
percent for the month, losses of more than10
percent were common.

The encouraging news is that we are not easily
frightened.

Miseries of the last few weeks notwithstanding, most
people have decided that they are long-term
investors.

They will continue to buy stocks through thick and
thin. It is now a primary article of faith that stocks
are the best investment "for the long run."

Dark side of stocks

Unfortunately, the same information also has a dark
side.

Early estimates indicate that net new money invested
in equity mutual funds will be about $25 billion for
April.

Added to record inflows for January, February and
March, the total will be nearly $120 billion - almost
twice the $62 billion for the same period in 1999,
according to figures from the Investment Company
Institute.

This is a formidable amount. You can get some idea
of how vast $120 billion is by some comparisons:

It is equal to the net annual sales for the entire
industry as recently as 1991.

It is greater than the total assets of all equity funds
as recently as 1985.

In other words, in spite of record demand for
common stocks - at least in the mutual fund arena -
stock prices are uncertain, volatile and appear to be
trending downward. At the end of April, the average
year-to-date return for all equity funds was 0.42
percent.

Query: If it takes a net flow of $120 billion in four
months just to stay even, how much money will it
take to keep a bull market going?

And from what source will that money come?

Let's take a look.

Money exchange

One of the current sources of demand for stocks
isn't new investment money. It's exchanges from
existing funds that specialize in other areas.

What does that mean?

Simple. When an investor with an existing account
decides to redeem his shares, he can cash out or
exchange for another fund.

Most fund firms make it very easy to do exchanges
and it is usually cost-free if done within the same
fund family.

So far this year, people have exchanged money out
of hybrid funds (such as balanced funds), taxable
bond funds, municipal bond funds and money
market funds while they have exchanged money into
equity funds. The figures for March are shown in the
accompanying table. (I'll post the April figures to my
Web site when they are available.)

On the lookout

A broader look at the figures shows much the same:
All categories of mutual funds are in net redemption
except stock funds. Taxable bond funds suffered net
redemptions of nearly $20 billion in the first quarter
of this year and have been in net redemption since
last September. At that rate the entire taxable bond
fund sector, with $524 billion in assets, would be
liquidated in less than seven years.

Will it be liquidated?

No. But that isn't the point. What's important is that
equity investors are now supplementing savings from
income with cash from other investments.

It's not likely that the flow of money into equity
mutual funds will get much larger, and stocks still
look volatile and weak.

This is a good time to be cautious.

(Thanks to Scott Burns, THE DALLAS MORNING NEWS, And Fair Use For Educational/Research Purposes Only.)

Topaz

(05/21/2000; 04:50:18 MDT - Msg ID: 30932)

RossL: Peter A:

Thanks for caring Gent's,
The coin in question is a Australian $0.50 minted in 1966? and the specs are as listed.
The problem in communication arises when all too familiar abbreviations are used for more than 1 thing ie:
Oz= Ounce= Australian= Au= Gold.
I will try to be clearer in future.

DaveC

(05/21/2000; 04:55:45 MDT - Msg ID: 30933)

Farfel (5/19/2000; 11:20:50MT - usagold.com msg#: 30853)

"Kitco guru APH called for 252 gold today, and missed by TWENTY bucks."

GURU - Generally Unreliable, Relatively Useless.

DaveC

(05/21/2000; 05:06:34 MDT - Msg ID: 30934)

Tax Avoidance Twice Discipled (05/18/00; 08:19:06MT - usagold.com msg#: 30770)

Try calling American Rights Litigators in Mt. Dora, FL.
Ask for Eddie Kahn. 352-383-9100.

It has been two years since I met and spoke to Eddie. Very knowledgeable in how to exercise your rights and not pay taxes.

Canuck

(05/21/2000; 06:34:24 MDT - Msg ID: 30935)

Questions

From Oro, (30928)

"after the (possibly hostage) NY Fed "earmarked" gold is released."
-----------------------------------
Perhaps Oro or someone else can comment on a couple 'novice'
questions that I am having trouble with. TIA.

What does 'monetary' and 'non-monetary' gold mean? Does it refer to the ownership of the metal?

Who owns the gold in the NY Fed? Fort Knox? The 'buzzing'
lately of US gold exports; is this US gold sold or 'return'
of another nation's gold.

Why is there so much gold from other nations stored in the US? Any idea of how much? Is this a result of WWII?

What does 'earmarked' mean?

This 'export' business of late has stirred alot of controversy. Is it because of the question of US owned gold sold or non-US gold returned? The fact that the 'trade deficit' indicates an export implies US gold sold, does it not?

Does this line of questioning follow ORO's "held hostage"
comment?

Following the 'gold trail' is a confusing business. Is is me or why do I find so many comments and articles so contradictary? The latest Howe article is mind-boggling.
I sometimes surmise that since gold is the 'truest' form of money it leads the manipulating 'crooks' to be at their worst. Seems fitting that the powers of politics and finance
'manipulate' the truth to its fullest extent; IRONIC that these elite have this perversion of secrecy and distortion
with regards to the element that "speaks the truth, the whole truth and nothing but the truth, ....."

How will this end? What is the end in 'novice' language?

Anyone care to 'babble' a little on this fine Sunday morning
(Eastern)

Thanks for listening to my ramble.

Canuck.

Henri

(05/21/2000; 07:20:01 MDT - Msg ID: 30936)

Elevator Guy

Establishing say 4 regional currencies within the US boundaries to "compete with the FRN.

Hmmm, well it goes to what Aragorn III said responding to ORO that localized systems are not anymore superior to overbearing and mandated govt currency systems since they too have been found in time to succomb to the forces of greed leading to their rot.

With the establishment of the NAFTA protocol have we not done essentially this thing you suggest? The jury is still out on what benefit this has created.

I see that we have only removed the visible barriers of isolationism set up in the before time and have not removed any (and perhaps given more strength to) the invisible clutches of regional trade competition and unofficial embargo to impoverish our own trading partners. In effect a "Beggar thy neighbor" policy under the pretty wrapping paper of an allegedly expanded economic base.

Henri

(05/21/2000; 07:28:32 MDT - Msg ID: 30937)

ORO post #30818

Yes, I do endorse a governmental structure that will protect my right to own property and to guarantee a stable business environment relatively free from the predation of local "protection rackets". A business environment ( a system whereby a profiteer may conduct business and accumulate wealth) will never be free of the cost of security whether it be "payoffs" to local robber barons, or the benevolence of a "govt", they are birds of a feather.

What would you propose to be a better arragement that could conceivably free us forever from this pillage? Anarchy? A well regulated militia? (This one I find enticing). Without protections, the entire system would be subject to appropriation by a new Genghis Khan. No?

Leland

(05/21/2000; 07:31:02 MDT - Msg ID: 30938)

"Trading-Up" as an Inflation Factor

http://www.ardemgaz.com/today/biz/0G1bfed21.htmlTRADING UP
After an unprecedented nine years of economic expansion, the trend
toward higher prices makes sense. With incomes and wealth soaring, some
customers are turning less cost-conscious and more status-conscious. Beer
makers have been able to boost profits with higher prices this year in part
because, an Anheuser-Busch Cos. spokesman says, "consumers have been
trading up from subpremium to premium and above brands."
Computer buyers are also going for pricier models. Nearly 50 percent of
all PCs sold by Dell Computer Corp. are high-end products such as lap-tops
that sell for as much as $3,000. That's up from just 39 percent in that
category a year ago.
"No one wants to buy last year's model. ... You want the latest thing," says
CEO Michael Dell. "That means we're able to sell computers for roughly the
same average price, and often higher, than in previous quarters."
The average dinner check at Buca Inc., the Minneapolis chain of Buca di
Beppo restaurants, is up 4 percent this year after staying flat last year, as the
Italian eatery has successfully shifted customers to higher-priced specials.

HI - HAT

(05/21/2000; 07:44:30 MDT - Msg ID: 30939)

Canuck Bottam End

Who is there but Mankind itself to adjudge what is Divine Law.

There are no firewalls in reality that seperate the mundane from the sublime.

We are and will suffer greatly because of Artificial Wealth (Fiat) being upheld out of the barrels of guns by powers and vested interests (Bank Bums) in an anti-Divine Law (PARITY), that seeks something for nothing

Nature Debited ; Man Credited

Exploitation scheme of buying cheap and selling dear (DELL)=snake eating it's oun tail.

Canuck: What is the end in 'novice ' language?

The end is when Wealth of the land is withheld from artificial wealth and the economic structure eats itself and starves.

Rugen

(05/21/2000; 07:46:00 MDT - Msg ID: 30940)

Gold-Leasing

My opinion on the inner workings of Gold-leasing. As an example, an Investor or a Group have assets of 1 Billion, the largest Banks will lend 70 % of this value in cash. Our hypothetical Investor wants 1 Billion at better than commercial lending rates for project X. His ticket to salvation? Gold-Leasing. His costs are as follows. On 700 secured million of leased Gold, he pays the low lease rate of 2%
On the unsecured 300 Million of leased Gold, he will pay a much higher rate of perhaps 10% or 15%. In the overall scenario, he pays a lower rate of interest on the entire 1 Billion than he would have paid on just 700 Million at 5% or 6% commercial rate. A good deal for the borrower.
He proceeds with Goldmannischem advice at a cost of about 50 to 60 million dollars to sell 1 Billion in PAPER-GOLD.

The Banker will lease his gold with a 100-page legalese gobbledygook contract that specifies that the leased gold is earmarked for the client but is NOT allowed to leave the vaults of the bank. The Bank has to two areas in the same vault marked Bank-Gold and Leased-Gold.
The borrower gets a grade AAA letter of credit for 1Billion secured in gold to be used exclusively to facilitate the sale of PAPER-GOLD. If the borrower defaults on the sold Paper-Gold the lease is terminated and the gold is returned to the Bank that it has never left, just as in any Auto-Leasing contract; up on default the Auto is immediately repossessed. The Bank has not sold the Paper-Gold and washes its hands of all responsibility.
The Bankers is happy, he created 1Billion in interest bearing loans at a total exposure of 300 Million minus up front fees, assaying and earmarking the Gold outgoing and incoming BG to LG fees. Interest payment on the 300 Million in advance and misc. fees and loan points. The Bank of course would also attach project X sufficiently until his risk is reduced to zero on the 300 Million Dollars. This is of course, a simple short explanation of the Leasing mechanism, leaving out all the contractual nuances.
In the end The Borrower and the Banker are both happy at the expense of the Gold market. Yes no, comments!

JavaMan

(05/21/2000; 07:58:03 MDT - Msg ID: 30941)

Good morning all...

I am sure I am not alone in having watched the THC debacle unfold. While I don't usually get involved in these kinds of affairs I think this is one of those unusual times that I am inclined to do so as it parallels a personal experience I had just last week that I would like to share.

My son had his senior prom last week and his girlfriend came to visit from out of town for five days. Without getting into the "gory" details, suffice it to say that our son and his girlfriend don't share our sense of morality so my wife and I had decided that it would be best if, when bedtime came, our son would sleep at a friends house.

When our son, who found these arrangements to be less than satisfactory, informed his girlfriend of our "house rules", it "hit the fan". Our son and his girlfriend decided that these accommodations were absolutely not satisfactory and that if a "compromise" of our standards was not forthcoming, they would find alternative arrangements.

Ah the wisdom of youth! (oxymoron?) I responded with the suggestion that if our hospitality was inadequate, then he would have to also make arrangements for the two of them to eat somewhere else, as well as finding alternative transportation (as we would not feel inclined to chauffeur them around) and last, but not least, we mentioned that he would have to figure out where he was going to get the bucks to finance all of the expenses incurred during the week as he is pennyless. I went on to explain that one should consider all of the costs associated with taking a stand in protest of an issue and to fail to do so is usually the result of immaturity or ignorance or both. I also communicated that our "house rules" reflected our moral standards and we would, under no circumstances, compromise them and, of course "the obligatory" when you grow up and have your own home, you can set your own house rules and fully expect others to abide by them. Finally, after much hand wringing and telephone communication with his girlfriend, they acquiesced.

And now for the application. The "house (castle?) rules" are clearly stated. By posting here, it is implicitly acknowledged that each will respect them. Its that simple and, as is so often said in matters like this, when you grow up and host your own web site, you can make your own rules.

Unfortunately, all of this may have just been an careless oversight on the part of THC as I saw no reference in his lamenting indicating the content of the actual post that lead to all of this.

JLV in your msg 30921 you said... "He doesn't normally conduct business via the Forum (except for occasionally mentioning "specials"). If 'specials' are promoted on the forum, doesn't MK open himself up to a full disclosure?

JavaMan: Absolutely Not

JLV: Kind of a fairness thing?"

JavaMan: Yes, when the fundamental attributes of respect, good manners, common sense and knowing how to behave as a guest while enjoying the hospitality of another are abided by, there is fairness.

Henri

(05/21/2000; 08:09:20 MDT - Msg ID: 30942)

Thoughts for a Sunday - Global diversification and the Intrinsic Harmony of Lifeforce

The words of poster Sir John (Doe)and the subsequent discussion (nomination for HOF etc.) got me thinking about bioforce and the natural order of things. How it is in continual flux...the taking of momentary advantage and storing that asset obtained for use in during an inevitable peril. This is the essence of the lifeforce dynamic, from the smallest bacterial colonization to the largest forest. even fungi practice this mode of existence. To say that we have risen above this is blaspheme. The very delicate balance of nature was brought home to me many years ago when I stayed with my then fiance at Big Mama's beach resort on the island of Roatan off the coast of Honduras.

Big Mama had a slew of little bungalos behind her house/kitchen which she rented to tourists at the very reasonable price of near $0.50/day. She would also provide three squares for an additional $1.00/day per person. That brought our expenses to the incredibly low sum of about $2.50/day for this island paradise with one of the most beautiful coral reefs imaginable right outside our door. There was a communal well and flush toilet onsite. Showers were a bucket of cool well water doused overhead. Our neighbors ( a pair of young Australians chose to forego Big Mamas cooking and for the last 6 months had been living off the reef by means of a speargun and a small kerosene stove. Needless to say they had very little need for much else including a lot of clothes. They had no plans of leaving soon.

During our stay at Big Mama's, a large (maybe 15)scuba tour group came in from the US to stay at the hotel next door. We met them on the beach about two days after they arrived. We were astounded at how miserable they were concerning their accomodations which were screened in with nice rotating ceiling fans installed that ran off a rather noisy generator. What suprised us the most was that they were completely covered with insect bites! They were literally being eaten alive during the night! Yet we living not more than 100 meters away without the benefit of screens or motorized cooling, were virtually untouched by the apparent plague of mosquitos.

We went home perplexed to Big Mama's at dusk and asked our neighbors the Aussies what was up with that. With a knowing smile they took a small flashlight out and said come on we'll show you. They came to our bungalo and shown the flashlight up into the open eaves. Upon each was a whole collection of tiny lizards and chameleons assembled waiting for any mosquito fool enough to come within the reach of their talented tongues. The light also revealed the presence of a small but silent bat that circulated about the ceiling gobbling up anything that made it beyond the tongue fenced eaves and into the inner sanctum of our one room abode.

The aussies said that the reason the other hotel was so afflicted was because of their liberal use of pesticides. The voracious mosquitos were only momentarily deterred by the screening and even though copiuos quantities of coils were lit against the assault, it was all for naught.

We came to realize that we had one thing in common with the other hotel. In both cases, the humans were utized as bait for the mosquito population. The protection afforded at Big Mama's was far superior to that at that "other" place. It was not through Big Mama's doing but her "not doing" that the natural order of things was preserved. The defense against the onslaught merely descended upon us by the grace of God and by no other means. We, the bait, attracted the food for those our protectors and we all lived peacefully together. Well, maybe the mosquito population was reduced but then thats why they are so prolific I'd imagine. A gentle harmony established right in the middle of civilization!

I often reflect on this balance when I want to get in touch with the Great One.

HI - HAT

(05/21/2000; 08:31:49 MDT - Msg ID: 30943)

Rugen msg.#30940 Predatory Parasites

[In the end the Borrower and the Banker are both happy at the expense of the Gold Market].

YES

They are both happily being artificialy preoccupied with getting something for nothing.

ORO

(05/21/2000; 09:27:36 MDT - Msg ID: 30944)

Currency and specie

The currency game is prone for abuse, indeed all the currencies have been created for the sole purpose of getting something for nothing by whomever could achieve the making of his paper into currency. That something for nothing we call seigniorage.

Governments have allways attempted to obtain it. The single exception ever has been the "free" gold coinage system in the US where the government only minted coin out of private gold sent to the mint. The mint would charge for the cost of minting the gold. The earliest coins were an attempt by governments to issue a replacement for the gold or silver bars links sheets and certificates in circulation which contains less of the precious substance than the indications on the coin. In Roman times, the coinage went from low dilution to containing nearly no precious metal at all. This was part of the inflation.

The banker does his business in essesntially the same way as governments do, trying to sell each piece of metal a number of times through the issue of debt. In effect, the banker and government try to capture the same resources in the same way. The margin of value given to a circulating coinage material over its value in industrial use is about 80% of the material's market value. Governments and banks have attempted to capture this margin in part or in whole through the issue of substitutes.

The mechanics of Gresham's law show that the banker and the government can replace the whole volume of local circulation once over. Beyond that, the currency begins to be discounted at the border relative to its parity because all of the metal has been exported or hoarded, and the foreign trader will accept only the specie equivalent.

If there is no parity, the currency will have a much lower value outside the area of issue than within it. Essentially all of the demand for the currency outside the issuer's border would then be from foreigner's debt obligations denominated in the currency and from foreigner's needs for cash balances to purchase the goods coming from the issuer's country. The exception is that of a reserve currency system such as that of the pound sterling in the 1920s and 1930s, and the dollar in the 1970-2000 period.

In a reserve currency system, the development starts with the issue of a specie convertible currency of good standing produced by a major trading nation. The standardization and security of the notes and accounts adds a convenience relative to specie, and international traders hold large quantities of the currency for the purpose of trade with the major nation. It becomes the currency for denomination of international debt and of internationaly traded commodities. The issuing nation will inevitably issue increasing amounts of currency until the convertibility into specie can not be maintained. At this point convertibility is suspended and the currency suffers a period of devaluation relative to specie as excess cash balances are converted into specie within and without the nation. The denomination of debt in such currency, however, is maintained and a shortage of reserve currency maintains its value - or even increases it - as foreign debtors struggle to pay their debts after cash balances have been reduced. The debts are payed down in relationship to the size of the foreign economies that are indebted, and then the reserve currency loses its international value by 70-85%. With the US dollar, this is what we would expect to see once the foreign debt structure supporting it is destroyed.

In effect, the global single currency is what we had for most of the 20th century. The values of all other currencies were tied into the dollar through the reserve and trade policies of the issuers of other currencies.

When the currency system falls, there is a quick "monetization" of specie whereby its value as circulating medium and medium for holding cash balances is restored because of the elimination of competition from the failed reserve currency. A ten fold increase in terms of the reserve currency is the very least one would expect, a 30 to 100 fold increase is very likely during the extreme motions at the end of the road. In terms of purchasing power, it would be a 3 to 10 fold increase.

Leland

(05/21/2000; 09:52:07 MDT - Msg ID: 30945)

How so Very True!

http://www.gold-eagle.com/gold_digest_00/milhouse052200.html"The current gold market must be frustrating to bulls and bears
alike since it is steadfastly refusing to break in either direction. All
the evidence we can find, and we are not just looking for
confirmation of the bullish case, suggests to us that the next big
move in the gold market will be up. All the ducks except one � a
weakening US Dollar � are perfectly lined up. We don't expect the
final duck to keep us waiting much longer."

Steve Saville

Leland

(05/21/2000; 10:36:00 MDT - Msg ID: 30946)

Compliments to Ackerman!

http://www.gold-eagle.com/gold_digest00/ackerman052200.html"Any attempt to prop up the euro is therefore destined to fail.
It is weak not because Europe has pursued flawed policies, but
because it is part of a global money system that long ago
decoupled from anything whose value can be measured."

Rick Ackerman

YGM

(05/21/2000; 10:38:29 MDT - Msg ID: 30947)

Canuck....Good Morning

http://www.bank-banque-canada.ca/english/gold/gold97-4.htmEARMARKED Gold....I posted this some time ago ....
Some of your questions can be answered here, hope you find it as interesting as I did........Ken

Leland

(05/21/2000; 10:39:57 MDT - Msg ID: 30948)

Computers are new to me...I Apologize for the bad Link

http://www.gold-eagle.com/gold_digest_00/ackerman052200.html.

RossL

(05/21/2000; 10:44:35 MDT - Msg ID: 30949)

Rugen - msg#: 30940 - Gold-Leasing

Who buys the paper gold? What if they want delivery?

HI - HAT

(05/21/2000; 11:07:24 MDT - Msg ID: 30950)

ORO In Hand

Do you think that there is any validity or edge to the cash, "in hand", thing ala' Gary North. I am holding about 20% of net, as of now, in notes in hand. In "normal" time as well as disruption, the currency on deposit is still digital, no matter how severe the monetization or injections. I am conflicted on the notes issue, as the confetti cash in hand is technically only the true "Legal Tender", that banks have to legally recognize in the event one wished to pay off the house amidst any conflaguration.
Thankyou for any reply.

JavaMan

(05/21/2000; 11:25:09 MDT - Msg ID: 30951)

HI - HAT, you said...

"I am conflicted on the notes issue, as the confetti cash in hand is technically only the true "Legal Tender", that banks have to legally recognize in the event one wished to pay off the house amidst any conflaguration."

Isn't it the case that the banks would index any large loans so as to protect themselves from being victimized by the conflaguration, i.e. paid off in inflated dollars?

HI - HAT

(05/21/2000; 11:49:04 MDT - Msg ID: 30952)

Java Man Indexing

I was looking at it from what was "Legal Tender", at the time of funds transfer and signing.

A contract, is a contract, is a contract.

If someone little like me can be thwarted by the criminals using their oun game, I will go into GUILLOTINE manufacturing.

Peter Asher

(05/21/2000; 12:02:22 MDT - Msg ID: 30953)

Leigh, Javaman:

Both of you perfectly expressed the reality of this issue which surfaces from time to time as new waves of posters arrive, and some depart to Forums more suited to them.

I loved Java's "when you grow up and host your own web site, you can make your own rules."

Last time around, (Dec. 5th) I posted >>> Censorship is when the Government says no-one can produce anything with certain words or ideas in it. Rules are when an establishment says that it will not allow the production of whatever, on it's premises. The former is suppression of a basic human right. The latter is an exercise in the right of freedom belonging to the owner of the establishment.<<<<

I want to address, though, the content of THC's original statement that was thought to be the offending post; the consideration that there was a 20% "premium" on the German 20 mark coin above that of bullion coins.

A quarter ounce coin @ $76.00 comes out to $302/0z. A full oz. American Eagle at the moment is listed at $284.30. That would be a "premium" of only 6% over a full ounce bullion coin (For a smaller size numismatic) and only 10% over spot. Furthermore fractional ounces of even bullion coins sell at a higher price per ounce than the full ounce coins. I believe that currently a 1/10th oz. Eagle will be selling for about $34.00 ($340/oz.) Which would be a "premium" of 20% on a Bullion coin itself, by virtue of size alone!

It would seem that CPM's 20 Mark offer is a very good bargain!

So much for the accuracy of the original posting: One can only speculate as to the motivation.

Chris Powell

(05/21/2000; 13:00:25 MDT - Msg ID: 30954)

Is Deutsche Bank sabotaging the Washington Agreement

http://www.egroups.com/message/gata/463?Reg Howe reveals Deutsche Bank's huge
increase in gold derivatives, much as he
revealed J.P. Morgan's.

http://www.egroups.com/message/gata/463?


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

aunuggets

(05/21/2000; 13:12:51 MDT - Msg ID: 30955)

Peter Asher #30953 - THE REAL NUMBERS

The real figures are as follows:

German 20 Marks = .2304 troy ounce X $273 gold = $62.90 intrinsic value @ $76.00 = 20.83% premium.

The 1/10th ounce American Eagles are being sold regularly at $29.50 ea. @ $273 gold = 8% premium.

JavaMan

(05/21/2000; 13:26:59 MDT - Msg ID: 30956)

aunuggets...

and 1/10 oz Chinese Pandas are $35.00 so what's the point? I'd rather have a piece of history.

aunuggets

(05/21/2000; 13:39:18 MDT - Msg ID: 30957)

JavaMan

THAT is the point. If we're buying for bullion sake, get the lowest price you can find and take home the most gold. If you are buying for sentimental, historical, numismatic, or even asthetic value (or preference), buy what you like. To each his own. My purposes may not suit you, and yours may not suit me. I just happen to feel that the most gold for the dollars spent is the way to go because I also feel that the "fiat value" of that gold, either now or in the future, is a totally moot point if we stick by our convictions that gold weight is the ultimate goal. Bulk availability foreign gold coins are no more "numismatic" than bulk availability U.S. $10s and $20s, Maple Leafs, Krugerrands, Eagles, Pesos, and so on. When it's time to sell and the vast majority of coin dealers (bullion AND numismatic) will offer you only 98% of spot as their "standard offer", reality will set in all too soon.

JavaMan

(05/21/2000; 14:10:35 MDT - Msg ID: 30958)

aunuggets...

I agree with the point you make regarding bullion per dollar however, I see the purchase of the German 20 Marks from USAGold as more than a straight bullion play. To me, the coin will serve nicely as an instructional aid to family and friends as it provides the opportunity to discuss the tragic history that surrounds it. That history makes for a perfect segue into why anyone should even consider gold bullion as a play at all.

Secondly, I see the purchase of the German 20 Marks as a way to support the USAGold forum. Consider the forum and all that it offers as "value added" and it becomes obvious that you're no longer comparing apples to apples. When I'm looking for added value, I don't shop at Wal-Mart.

Al Fulchino

(05/21/2000; 14:33:47 MDT - Msg ID: 30959)

Good Judgement and Saving Pennies

If someone were to visit one of my gas stations or galleries and start shouting about a cheaper price at another business, my reaction would be to recognize that this person is mostly interested in hearing himself/herself talk. And also to elicit a reaction from others to draw attention to themself. It wouldn't last long I can tell you. Are my prices always better than the competitions? No. Are we ever better? Sometimes. We also have other things that might make up for the price. I would never state in another person's business that another business was better in front of their customers/guests. Would you say to Aunt Louise's house guests that they should have their Thanksgiving dinner at Aunt Camelia's house because she has a great apple pie? You might! BUT not in front of poor Aunt Louise. Not if you had some tact and you had any respect for her at all.

Back to the customer:Why would they be at the business in the first place? Maybe, they needed to be to save time etc. So the business had its value for that day anyways. I do not have a sign anywhere saying that you must refrain from speaking pro or con about my competition. Yet it would be in poor taste for a person to do so as long as my prices were stated clearly and you were purchasing of free will from my establishment. This site however, does have such a sign. So, advertising can come in different forms for another site or company and although it may have not been meant to be such it came out that way. Another way would simply to have respected the site's owner and ask a forum member to speak via private email to share your good fortune news.

As far as saving money goes. I didnt see MK advertise this is the best price, maybe just a good price. I also didnt see him state that you HAD to buy something from him. So why the need to say his apple pie wasn't the best price in town? If my customers want the best price around, they can shop. As can anyone here. And if MK doesn't sell many items, he will rethink his pricing policies as would anyone if they want to make any money. But if he was selling a boatload then why give them away?

I believe I made the point. I agree with no possible competitor advertising or where would it end?

want gold? buy some
want it cheap?, find it, then buy it
want to tell someone that your host doesn't have the best apple pie? do it on the Springer show where there is a larger audience

aunuggets

(05/21/2000; 14:50:20 MDT - Msg ID: 30960)

JavaMan - I AGREE...

There are many forms of "added value". Historical representation as you mention is but one of those forms, and could be a very important consideration outside the realms of a bullion play. I sometimes ask myself if "added value", i.e. giving up or paying on one end to receive on the other, is simply another view of savings, or receiving more for the fiat spent in the process. A custom taylored shirt may indeed fit and feel better than a Wal-Mart blue light special, and that may be perceived by some as "added value". On the other hand, having the ability to purchase 3 or 4 Wal-Mart specials for the cost of the single custom taylored shirt may be perceived as "added value" by others.

I was well acquainted with Sam Walton, who worked and lived just a few minutes from here in Bentonville, and I don't think any of us would argue with the man's success as a retailer, or that of offering "added value" for dollars spent in his establishments. After a rather severe stock market reversal in Wal-Mart stock in the early 80s, Sam once stated that "It's all paper....all except the gold of course". I will never forget those words.

I think the main point of the recent "debate" here on USA and other forums is that of a lack of apparent consistency in terms of advice, thoughts, and ideas surrounding the ideaology of gold in the long run. Having been a reader of this forum in particular almost since it's inception, I find it unfortunate that the general consensus of participants is to castigate the "sheeple mentality" of the various paper markets, and then presenting the apparent contradiction of chastizing those who refuse to go along with the formation of a new herd where certain "commercial gold coins" are concerned.

As I previously stated, buy what you like, for whatever reason or "added value" you perceive to be attached. However, labeling those who simply question premiums or buy and sell spreads as "immature", or otherwise "changing the subject" to take attention off of the real issues is not the answer to the problem. Most bullion dealers are very glad to quote buy and sell spreads, and there is a natural tendency to ask "why" of those who will not. Simple as that.

So whether you see "added value" as historical, asthetic, or otherwise, or see "added value" as more metal for fiat dollar spent, we each have our own personal objectives and should not be over critical of the other unless we are certain of our understanding of the other persons position.
True "added value" however, should be recoverable at some point in the future, should it not ? That does not necessarily mean monetarily, but could be of the instructional value you mention in your previous post. The VALUE of that "added value" is purely subjective from an historic, numismatic, or asthetic viewpoint, where it is much more objective when looking at it from the standpoint of "quantity".

Just a couple of thoughts......

Peter Asher

(05/21/2000; 14:50:43 MDT - Msg ID: 30961)

aunuggets (5/21/2000; 13:12:51MT - usagold.com msg#: 30955)

Thanks for reminding me about the Troy ounce factor. Gandalf already clued me in on that ignorance 2 weeks ago but my intermediate term memory is slipping. So, the net numismatic premium is 12% right? Sounds OK to me.

Thanks also for being humble enough to post again after last nights "Withdrawal" from the site.

aunuggets

(05/21/2000; 15:06:17 MDT - Msg ID: 30962)

Peter Asher

An occasional dish of Crow is good for the heart (grin). However, last nights "withdrawl" was meant as tongue in cheek sarcasm, and unfortunately, intent is hard to portray without visual expression.

aunuggets

(05/21/2000; 15:15:24 MDT - Msg ID: 30963)

Al Fulchino - "SAVING PENNIES" relative

"Saving Pennies" as you mention is actually a relative matter. If buying only a couple of fractional ounces here and there, that may be no big deal. If pure bullion play is the concern, involving perhaps hundreds of ounces at a time, then "pennies" take on a whole new meaning according to just how many pennies are involved. It's all part of the numbers game......."perception" if you will.

Journeyman

(05/21/2000; 15:16:09 MDT - Msg ID: 30964)

"Roofs" and other protection systems @Henri msg#: 30937, ORO

"A business environment (a system whereby a
profiteer may conduct business and accumulate
wealth) will never be free of the cost of security
whether it be "payoffs" to local robber barons, or
the benevolence of a "govt", they are birds of a
feather. What would you propose to be a better
arragement that could conceivably free us forever
from this pillage? Anarchy? A well regulated
militia? (This one I find enticing)." -Henri msg#:
30937

If you don't mind me inserting my 2 rubles worth, I was
working in Moscow a little over 2 years ago. I had a car,
driver, and security guard. The service was superb -- I had
reason to believe my security guard, Serge (pronounced
Sir-gay), who turned out to be ex KGB, would have taken a
bullet to protect me.

I didn't find out until a few days before I left, but I was
actually working for a Russian "roof," or as you would call
it, a Russian Mafia. The Australian with whom I had my deal
explained the set up. The Mafia took 10% of your take to
protect you and your business from, well, damn near
everything. Serge and Sasha (the driver) were both part of
the mafia, for example. They worked as a Better Business
Bureau (one that actually does something) too; they did some
of your due dilligence for you because their 10% might be
worth zero if you get in a deal with a deadbeat. And you can
break your contract with them for a reasonable payout, just
like downtown USA.

This all reminds me through John Doe's nominated post,
Henri's natural order mosquito protection service, etc. of a
presentation by economist, physicist, and
who-knows-what-else-by-now, David Friedman. David is Milton
Friedman's son, and Milton admits David got more brains.
Anyway, in the earlier years of the Libertarin Party, some
of us small l libertarians would hash over anarchy. It seems
that the major sticking point was protection service. In
normal businesses, competition keeps things in check, but
how in the world could you have competing protection
services? AA robs BB. BB calls his protection service to
make AA return his property. AA calls HIS protection service
to protect him from BB's protection service. Can anyone yell
SHOOTOUT!!

David Friedman took on the problem from an economic and
real-life perspective and "proved" that the shoot out
wouldn't occur because it would be uneconomic. Instead, he
postulated, there would be a trial or negotiation of sorts,
where evidence would be presented and the best judgement,
given the circumstances, would be rendered. (David pointed
out that there is no such thing as perfect justice in the
real world. If BB was unable to prove or convince
arbitrators that the stolen articles were his, AA would get
away with it.)

David did a great job presenting this theoretical support
for the notion of competing protection services, but for me
it was still theoretical. Untill my experience in Russia.
I'm reasonably sure very few of the Russian "roofs" ever
heard of David Friedman, let alone his defense of competing
protection services, but as it turns out, they handle
inter-roof disagreements just as David theoretically
suggested they would, by negotiation. They don't like it
much - - - it can be tedious and sometimes take all
afternoon. In rare cases it can take several days to work
out an equitable settlement, they told me. "We try to solve
problems without this meeting if we can."

Judge Judy, anyone? Consider the time and cost of a normal
American court case, and that as often as not in business,
these cases involve bogus damages claimed by an unwanted
third party to the transaction - - - a government. (The
Justice Department claims damage to individual consumers,
but any monetary damages assessed, as in the tobacco
blackmail, will go to the government, not those who may have
been damaged. Ditto Microsoft. Ditto gun manufacturers.)

Shoot outs? "You are joking. Very expensive to find good
replacement. Nobody want job if bullets is reason for
opening," Serge told me.

While I was, shall we say, stunned to discover I'd been
working for a mafia, in retrospect, I'd do it again under
similar circumstances.

Regards,
Journeyman

Journeyman

(05/21/2000; 15:17:29 MDT - Msg ID: 30965)

Maybe the OLD Genghis has been around too long? @Henri, ORO,

"Yes, I do endorse a governmental structure that
will protect my right to own property and to
guarantee a stable business environment relatively
free from the predation of local "protection
rackets." .... Without protections, the entire
system would be subject to appropriation by a new
Genghis Khan. No?" -Henri msg#: 30937

Normally a government puts tarrifs on "foreign" goods, thus
profiting the government and protecting "local" businesses
from "foreign" competition. In effect, this enables "local"
(domestic) businesses to charge higher prices because there
is less competition. Thus consumers pay higher prices and
governments and businesses split the take (businesses get
higher prices, government keeps the tarrif money).

The inter-state commerce clause to the U.S. Constitution was
put there specifically to prevent American states from
interfering with trade from other American states in this
manner.

Unfortunately, you can count on governments to pervert their
rules, whenever possible, and to a degree suitable only to
cartoons or science fiction movies:

The Supreme Court on April 25, 1995, ruled a
Congressional ban on guns within 1000 feet of
schools unconstitutional. Congress has been
passing such laws on the basis of the Fed's power
to regulate interstate commerce. The Supreme
Court ruled that guns near schools didn't affect
interstate commerce. This was the first time
since 1936 that the Supreme Court declared ANY of
these interstate commerce laws unconstitutional.
The Court even upheld a 1942 law which asserted
the right of Congress to regulate the wheat grown
by an individual farmer, even if grown in a
separate, private garden plot FOR HIS OWN USE.
The Court's reasoning: If he baked it into bread,
he wouldn't buy that bread from someone else and
this would impact interstate commerce in bread.
-The McNeil Lehrer News Hour, 27 Apr 1995

Do you think it's a bit of a streach to suggest that guns
within 1000 feet of a school zone affect inter-state
commerce? I certainly do. Consider that this was the FIRST
such law counting on the commerce clause as a basis to be
struck down since 1936. If they thought they could get away
with THIS perversion, imagine all the perversions they DID
get away with on the way! Beleive me, there are plenty.
The commerce clause was twisted so far into
unrecognizability, it has become by far the main foot-in-
the-door, camel's-nose-in-the-tent of our old Genghis Kahn,
USA Corp.

Quite clearly, the intention of the Founding Fathers in
including the inter-state commerce clause in the
Constitution was NOT to interfere with farmers' private
gardens. Clearly the intention was to prevent STATE
GOVERNMENTS from interfering in inter-state trade by passing
tariffs on goods from other states.

If "our" government has been able to distort what was
obviously a well intentioned, well thought out
Constitutional protection for free markets, into it's
grotesque opposite, how much do you want to trust such
institutions to protect you from anything?

Regards,
Journeyman

elevator guy

(05/21/2000; 15:54:33 MDT - Msg ID: 30966)

@Henri

Thanks for your answer to my "competing" curencies idea.

I know that it shows a lack of background in the discussions on this site, so I expected to get reamed.

I dont have time to read "books" on the web, and besides, such long winded posts are without pictures, and my tiny mind becomes quickly restless.

Did I stress that I thought the COMPETITION between regional currencies would force them to each be honed to a reasonable seniorage?

Well, I dont have any idea what I am talking about, so I'll quit now.

Here is another thought I've had recently, (undeveloped as it might be).

Walk with me now to an imaginary country, where each citicen has to pay to the big grabbit 10% income tax, sales tax, gas tax, property tax, excise tax, this tax, that tax, capital gains tax, sidewalk use tax, and air tax. (Not too different than where we live, huh?)

Every time each and every piece of currency changes hands, the grabbit collects that 10%, and a dime falls into a can. Then that piece of fiat currency (lets call it a GRN, or Grabbit Reserve Note) changes hands again, and with the transaction, another dime falls into the coffer. Now there is 20 cents in the can. Then that GRN gets traded for a good or service, and with each transaction, another dime falls in the can. By the time the GRN has changed hands ten times, there is one GRN worth of value (!) in the can. But the GRNs circulate much more than ten times, in fact they circulate thousands and millions of times. And with every transaction, more GRNs are collected. If any GRN circulates more than ten times, then more tax is collected on that GRN, than its face value is worth. eg- if just one GRN transacts 10,000 times, 1,000 GRNs are collected, on a note of only one GRN of value.

And so it seems, then, that in Big Grabbit Land, the GRN is a tool of extracting value out of the citicens, because the "cream" of their labors is "skimmed" off the top of the economy.

Each citicen can not see the crime, because they only see the 10% tax, and figure it is an unavoidable evil, and deem it tolerable.

Isn't it akin to a theif, who to avoid detection, steals only a small amount at a time, from only one place at a time, and thusly extends his "earnings"? Think of an apple theif, who instead of taking ten apples off of one vendors cart, takes only one apple un-noticed, or winked at, and then proceeds to the next cart, takes only one apple, and by the time he has made the rounds of Manhattan, he has accumulated hundreds of apples. And that is only one days take, for he will do it again tomorrow.

What a racket!

I heard this funny parady of the famous Paine-Webber commercial, in which the narrator, using his best erudite British accent says, " Here at ----- , we make our money the old fashioned way, we steal it"

Now, if I leave the silly stuff behind for a moment, I guess my question boils down to one basic thing,

How much money is actually collected in taxes? I have heard that if you take all the taxes an individual pays, including sales, income, property, etc, etc, and total it all up, it come to about half of one's earnings.

Half of everyones' earningss, amounts to a sort of a "forced partnership" on the part of various levels of government, imposed on its citicens. And with a variable value of the currency, oh I dont know, do you suppose, that the GRNs could have more intrinsic value (!) when they are collected, than when they are paid out?

So the taxpayer is no more than a sharecropper, and the grabbit is the landowner, and the pyramid shape of the world's hierarchy remains unchanged since day two.

Please excuse my ommissions, assupmtions, and general lack of education in these matters, for I am not an economist, nor is it even a hobby of mine.

Your thoughts?

JavaMan

(05/21/2000; 16:25:49 MDT - Msg ID: 30967)

elevator guy...

You left out the hidden tax, inflation. I think it may have been Jefferson who said something like "the loss of value through inflation is spread out proportionally among those according to how long they held the money." I may be incorrect as to the source as I have lent my resource out to a friend to read. I'm sure someone here can enlighten me if I am in error.

I thought I read somewhere that historically, when a society approaches a 60% tax, a revolution is soon to follow. Did I miss it?

elevator guy

(05/21/2000; 16:37:34 MDT - Msg ID: 30968)

@JavaMan

Thanks, thats a good excuse to encourage the wife to agree to that new car I want.

"Lets get it now, before our money gets smaller"

Ah, the things one learns in the Forum!

elevator guy

(05/21/2000; 16:46:23 MDT - Msg ID: 30969)

@JavaMan

Regarding the 60% tax revolt-

It amy be that if you keep a people well fed, (fat, dumb, and happy), they may not take alarm at a 60 or 70 percent tax rate, nor would they take alarm at the grabbit taking the gold teeth out of grandma, while she sits at the dinner table.

So if the US citcenry profits from the seniorage of the FRN, and the current system brings in value from overseas, which appeases our ever inreasing appetite for material wealth, it may be that we are lulled into complacency, and even complicity, with the order of things in the world.

And so it may be, that perceived need for a tax revolt is assuaged by the bribery of material wealth.

JavaMan

(05/21/2000; 16:52:09 MDT - Msg ID: 30970)

elevator guy, you said...

"Ah, the things one learns in the Forum!"

Exactly! That, sir, has been the point I have been trying to communicate today!

So your looking to get the new car while its still within your purchasing power?

I'm in a similar situation. We sold our house to relocate because of work in another state and purchased a very modest home until we got familiar with the area. So we have had substantial equity dollars sitting in the bank for the last year waiting to make up our minds about what to do.

Does it make sense to buy "big" now with the expectation of being able to pay down the mortgage with inflated dollars or will there be a devaluation of real estate that would represent a real bargain for anyone in a position to buy?

Opinions anyone?

Journeyman

(05/21/2000; 17:05:32 MDT - Msg ID: 30971)

Non-economists @Elevator Guy

For someone who has absolutely no knowledge or interest in economics, you sure come up with some super stuff. Competing currencies for example. A very good idea, one that recent historical studies have recently proven work very very well. Also your newest insight into taxation!

Perhaps we should replace Alan Greenspan with you.

High regards,
Journeyman

USAGOLD

(05/21/2000; 17:11:13 MDT - Msg ID: 30972)

All: Marketing Gold on the Internet 101

We ran into some unique problems with this our first foray into on-line marketing which we are doing our best to overcome.

First, as we all know the gold price can change rapidly. Since the German 20 mark coin is priced in accordance with movement in the gold price, how do you translate that to the computer screen, then the order form, and finally actual payment without having to take a hit on sudden movement in the gold price? The first inclination is to make the price high enough to cover movement against the seller in the gold price. We didn't do that. We decided to set the price up or down $1 for every $4 move in the gold price. Our starting price was $77 with a gold price of near $280 on the June contract. At a $276, we lowered the price to $76. If June gold goes to $272 we go to $75 etc. It just so happens that at $273 you are just one dollar away from seeing the price lowered another $1 per coin. We did this because there is no effective gold pricing software available for pricing gold items automatically. Since we were doing it manually, we had to make a compromise in the interest of time. What I just described was the compromise we decided on. At $273 dollars the premium is in the 20% range. At $272 it will drop to 19%.

Second, purchases on the internet are by credit card and that adds about 3% to our overall cost in charges from the credit card companies. We have not added these charges to the price for the sake of seeing whether or not people would buy over the internet using an encrypted safe channel -- a system by the way we had to buy from our vendor and substantial programming hours were devoted to establishing.

Third, we are offering various incentives as the buyer increases his or her commitment in order to induce larger purchases. At the 30 coin level, for example, we begin to absorb the $30 shipping and handling charge, plus throw in a 2000 silver eagle with a value of about $8.

With respect to the THC situation, you will note that his post on the German Mark coins was not taken off the board, only his pitch for the E-Bay competitor, and the backhanded slap at Centennial Precious Metals that preceded it. I don't know what causes this sort of attitude -- whether its envy or plain mean-spiritedness, but, folks, we have been in business for nearly 30 years. In that period of time, we have not had so much as a complaint filed against us at the Better Business Bureau -- not a single complaint. We did not come by that on-line approval from the Better Business Bureau because we are a problem -- quite to the contrary.

Aside: Most of the big clearinghouses are now selling the year 2000 Eagle gold coins and we are back to the old, mint generated pricing system. The client will be paying in the 12% to 13% range for his or her one-tenth ounce coins -- $30 to $31. That does not include applicable sales taxes, shipping charges, etc. So the 8% figure is a little low.

Someone last night quoted an unbelievable price of $11 lower than what USAGOLD was selling the same German 20 mark coin. Let's think about that for a moment. When we first began our program the gold price was in the $280 range, and we were selling the German 20 mark for $77. If you subtract $11 from that figure, you come up with $66. If one were to take $280 times the .2304 fine gold content of the German coin ,the melt value is $64.50 -- Their sale price then was an astonishing $1.50 above melt. Does the individual who posted this seriously think we are going to believe that someone was selling the German 20 mark at nearly melt value? Nothing in the pre-1933 European market sells that close to spot percentage-wise -- not even the French Rooster or Swiss 20 Franc, the two lowest premium pre-1933 European? Something's wrong with that claim.

I was tied up all week between getting the newsletter out, other writing projects (including assembling research sources on confiscation -- a compilation of writings from various sources for our clients) and keeping up with CPM client needs. I simply did not have time to sit down and write the answer THC's question would have required. I was hoping I'd have time to get to it this weekend. Then for whatever reason, THC decided to escalate his "query" on Saturday. The rest is history.

THC started out his conversation by saying that he was interested in buying some German marks so he wanted this explanation and/or answer to his question. 100% of the people interested in buying gold call our offices and talk to one of us, or they simply place their order through our encrypted links. He never called. It makes me wonder how serious the man really is what he is really out to prove.

That aside, and without getting into a major dissertation on the nature of spreads, and how they are affected by a wide range of market conditions, let me just say that we are paying $6 to $7 over melt for the coin depending upon daily market conditions. Since we are selling it for $13 to $14 over spot, we are making a whopping $6 to $8 GROSS PROFIT per coin. From that, you have to take the credit card costs (over $2), shipping where applicable ($1 on a 30 coin order) and the incentives. That of course does not cover the other expenses it takes to run this site and Centennial Precious Metals. In other words, our profit, as it is in everything we sell is modest and within competive parameters. We are using this item to test whether or not we can make the internet work effectively. We add the usual caveat that the premium quoted is what we are paying today. It doesn't mean we will pay that tomorrow, next week, and next year. That's at the moment.

I will give you a good example of what could happen in that regard. Last week the platinum price shot up due to the GM announcement. I got a quote for a client looking to sell: The clearinghouses were quoting $456 per ounce spot if you wanted to buy and $440 if you wanted to sell. If you paid 7% over for your platinum coins and sold them back last week the spread would be in the neighborhood of 12% - 15%-- and that's a bullion item.

Things change. The more volatile the market, the wider the spread. I didn't want to get into a major dissertation on how the market works. That's reserved for our paying clients not some unknowns on the internet, but I offer it here as a recent example to make a point. Spreads, commissions and the like are a fact of life no matter what you are buying or selling in the way of investments. The spread between buy and sell on pre European gold coins is somewhat larger than the spread on bullion, however, in our view the extra premium and spread is worth paying for the client concerned with confiscation. If you are not concerned with confiscation buy bullion and hope that there's not something squirrelly going on (like there was in early 2000) when you go to sell. Because the spreads are going to widen whether you like it or not -- the current platinum market is a good example.

Remember though that the market dynamics can radically swing that spread in either direction and it can happen overnight. The 98% figure quoted accompanied the Y2K selloff at the beginnning of the year. I have also seen bids at 5% even 10% over melt for pre-1933 items at the other extreme when demand was strong and the clearing houses need to buy. This of course is the reason for buy/sell spreads.

For the most part though, we haven't seen alot of gold selling. Gold is going to strong hands and it probably won't come out until we see substantially higher prices. My guess is that premiums will be strong when that happens, and most clients won't be as premium conscious at that point as much as they will be capturing their profits before the market goes against them. That's assuming there will be sellers. Economic crises have a tendency to drive gold deeper into hiding not bring it out in the open.

From the top to here, that is much more information than I intended to impart , but there it is for lurkers led astray by those trying undermine the credibility of a company with 30 years service to the industry, an effective tireless proponent of the yellow metal, and highly respected source of information and encouragement throughout the industry as well as our clientele.

Sorry to disappoint our detractors, but that's the story. At the same time, I want to thank those who supported us -- Peter, Elevator Guy, Al Fulchino, Java Man, YGM et al. It means alot. And if it weren't for people like you, I sometimes wonder if I would even go on with this Forum business. (This is a hell of way to spend a Sunday afternoon, isn't it?) Interesting that the support comes from the business owners and professionals.

This is all I'm going to say on the matter. I think you will agree its enough. Any client wishing further consultation on these matters is welcome to call anytime.

HI - HAT

(05/21/2000; 17:22:15 MDT - Msg ID: 30973)

Java Man -- Equity Dollars

[ Substantial Equity dollars sitting in bank[.

This is the tricky part I am trying to get insight from ORO about.

"Dollars in the bank and notes in hand are entirely two different things.

The notes in hand are "Legal Tender". Entries in C-D's, savings acct., money market, and checking are technically not legal tender.

Sure the bank deposits are converted and honored as legal tender when everything is going normal. Emergency measures can kick in new ball-game

In banking law currency in banks falls into a whole complicated affair.

ORO or Town Crier may perhaps be better at explaining it.

ORO

(05/21/2000; 17:28:44 MDT - Msg ID: 30974)

Henri, Journeyman, the seed of common law

Thanks, Journeyman for the posts. Wonderful stuff.

Henri, I hope Journeyman's comments help you see the point that there is little need for government proper but in the face of other governments. I will add that the territoriality of government, historically, is a result of the particular mafia familly managing to exclude the rest of the mob bosses out of the area. It is simply the fact that when the one mob has complete control in an area it has a monopoly enforced by violence. Once the monopoly is established, the mob calls itself "government" and jacks up its "fee", and starts calling it "taxes". It comes out with all kinds of claims to "legitimacy". The rare "republican" form of government comes from occasions such as the signing of the Magna Charta by the mob bosses and the big boss that could not establish a working monopoly and ended up signing a cartel and profit sharing plan; or the joining of people who had the ability to defend themselves in small groups into a larger one that has better economies of scale.

The common law was a result of such mob organizations joining together for the purpose of arbitration, as Journeyman described so eloquently of his second degree of separation experience. The mobs would use this kind of procedure for internal disagreements, and then progress to use these for trans organizational stress. The principles would be simple, the decisions show consistency, and the working concept of justice is established. When one mob gains the upper hand in a region, it has no use for common law because internal conflict is unlikely to destroy them, and the monopoly mob tries to construct a system where they control the results to their favor using a legal code instead of principle and process.

The legal code is used in order to cut deals with external and internal merchant and financial interests so as to provide the head monopoly mobster with a greater take than would otherwise be given. It would grant "charters" of monopoly to various merchants, trade groups, banks etc..

So... the great ideals with which we view government are the result of a century of government control of education, not related - even in the slightest way - to reality.

Journeyman

(05/21/2000; 17:37:12 MDT - Msg ID: 30975)

Nicely done! @USAGOLD #30972 (AU marketing on the Internet 101)

Journeyman

(05/21/2000; 17:42:35 MDT - Msg ID: 30976)

ORO kudos long overdue

ORO,

I just realized I haven't expressed my appreciation for the amazing stuff you post here. Guess I've been taking the quadruple A rating nearly everything you post deserves for granted.

Sorry!

Thanx & very high regards,
Journeyman

Sancho

(05/21/2000; 17:43:36 MDT - Msg ID: 30977)

JavaMan,Elevator Guy

My wife was reading your philosophy over my shoulder. Now she wants a new car. If everyone was trying to beat the rising money tide we would have runaway inflation in a matter of days. However, on the real estate end of things, the government has a rather noxious tendency to assess and raise prroperty taxes in step, if not prior, to expenses. People in financial travail have a concerted effort to gird up one's loins and not let a shekel, peso, or dollar pass. One's home may be relatively stable, compared to time shares, recreational land, and such dogs that will be an economic millstone. Apartments work in theory IF you can get paid.....

JavaMan

(05/21/2000; 18:06:01 MDT - Msg ID: 30978)

HI - HaT...

Thanks...

I recognize that my dollars in the bank are only as good as the FDIC which is only as good as "whatever".

The question is...what is the outlook for the purchasing power of those dollars over the next year?

HI - HAT

(05/21/2000; 18:46:39 MDT - Msg ID: 30979)

Java Man msg.#30978 No Dollars

The distinction I'm trying to make is that there is "no dollars", in the bank.

The scale of issuance "on the books", as debt or deposits dwarfs to the 10th power what actualy exists as legal tender "SCRIPT".

This goes beyond FDIC, but for sure falls into the Whatever category.

Journeyman

(05/21/2000; 18:47:18 MDT - Msg ID: 30980)

Money in the bank @Javaman, Hi - Hat, Elevator Guy, Sancho

If you're going to have dollar denominated anything during a period of economic crisis, it's best to have them in your hands rather than in the bank.

When the money's in the bank, legally you're an investor in the bank, which means if it goes belly-up, you get in the bankruptcy line with everyone the banks owes, including all the other depositor-investors.

Another trick the banksters use is to lock up your money in a CD or equivalent, promising to pay reasonable interest, but you can only get it out after a "reasonable" period of time - - - like two years. You may or may not actually be able to get the money in two years, but by that time, inflation has reduced your buying power by an enormous amount.

Had you had that money in hand, you could have participated in the "crack-up boom," buying something, anything, with your money before it became worthless.

Remember, though, predicting anything is chancy, let alone a crack-up boom in the world's "reserve currency." Timing's even more difficult -- ah, impossible.

Regards,
Journeyman

MarkeTalk

(05/21/2000; 18:52:02 MDT - Msg ID: 30981)

The times (and markets)--they are a changin'

Let's take a look at recent events and market reactions. Last month's PPI and CPI reflected inflation at about the 12% annualized levels. May's numbers came in lower because oil prices temporarily declined, just in time to coincide with the release of these two highly watched indexes. Isn't interesting how oil prices shot back up to over $30 per barrel once the lower prices were figured into the CPI. I wonder how they fixed that one!

Anyway, this past week we had the trade deficit number and it was close to a record. If we keep up this pace, our trade deficit will be around $360 billion per year or more than $1 billion per day. Translated into common everyday language: The U.S. Treasury needs to pull in over $1 billion per day from foreigners just to keep this whole game going. Now what better way to do this than to keep people invested in U.S. dollars by offering the highest real rates of return in the industrialized world while at the same time the S&P 500 and NASDAQ (and Dow to a lesser extent) are entering bear markets. By definition, the NASDAQ is already in a bear market, having declined by more than 20% from its March high. Alan Greenspan fears a collapse of the U.S. Dollar more than a collapse of the stock market. By hook or by crook, his job is to keep the funds flowing into U.S. debt instruments so America can continue its economic expansion which, in turn, fuels export markets and jobs around the world.

Now with accelerating inflation, rising interest rates and a declining stock market, how long before gold and silver respond? I have answered this question many times on the telephone with my clients here at Centennial. My answer: not long but neither I (nor anyone else) can give an exact date. What interests me is the confluence or synergy of various upcoming turning points. As some of you already know, I kind of like Steve Puetz' "eclipse theory" because it appears to be working again. I also watch the change of seasons (from spring to summer, summer to fall) and key U.S. holidays (Memorial Day, Fourth of July, Labor Day, etc.) for clues. Then I add in the spiritual/religious element of key Christian and Jewish celebrations. Taken together, I am looking for the following: stocks to decline until around June 2-3 (new moon) and then a rally before another vicious decline. Mult-year cycles in gold and silver are now bottoming in this time frame and precious metals could jump at any moment. (Remember how gold exploded $80 higher in one week last September?) I expect an acceleration of inflationary concerns to happen as early as Pentecost (Shavout) on June 9th and most likely after June 21-22 (summer equinox). Couple this with the real prospects for a drought in the U.S. which could equal that of 1983 or 1988 (which will put food prices through the roof) and you have the ingredients for a rip-snorting bull market in the precious metals this summer and through the election. Bottom line: it is time to buy gold now if you haven't done so. Add to your positions at these low prices if you have been thinking about it.

Al Fulchino

(05/21/2000; 19:27:23 MDT - Msg ID: 30982)

aunuggets (5/21/2000; 15:15:24MT - usagold.com msg#: 30963)

We are in agreement that everything is relative. Yet note this: In times past you could often see an unbranded gas station selling fuel for say 85 cts a gallon and a major brand might be anywhere from 89 to 1.02. Similar gasoline no doubt, except for proprietary additives, yet the majors often provide better locations, facilities,, lighting and other offerings. Not always but often. And note the percentages. Would you go to one of the major's locations and shout to everyone to go down the street? Doubtful. Not very tactful. Secondly if a sign was posted at the entrance of the station saying you may not advertise any other business while on premises...then you were notified. My point was that this site never said you had to buy the product from them, just that you could not in any way make an advertisement for another site/company. My view is that if the tact had been to comment on various mark up percentages existing period that would be kosher. I think even the owner of this forum would consider that fair game. Though I cannot speak for him.
I run the risk of being considered a hack for the owner, but the view I have taken is exactly how I would handle and see things.

PS One is always free to set up their own site and shout all they want. When I hear people decry free speech on this site, I am reminded that each of us could do just that and even come here and let people know that they exist at www.ihavesomethingtosay.com. I have seen it done.

HI - HAT

(05/21/2000; 19:40:54 MDT - Msg ID: 30983)

Journeyman, Java Man, ORO, All

Old Dollar ; New DollarO.K.. This is getting to the essence of the original qwestion.

Take individual bank bankruptcy and crack-up boom off the table.

Let's just say national systemic financial Federal "intervention".

The dollars on the books do not really exist. Only the actual legal tender cash does. Having it in hand could be a good thing.

If I may I'll amend the question to ORO. Is there an edge to have the legal tender notes in hand to satisfy existing contracts (mortgage), or go for the appreciating wealth, gold,.Even though the dollar as defined in the middle of an inflation crack-up, may not be the same "NEW DOLLAR", one would have to convert to from appreciated gold in order to pay debt.

In other words if you wait to pay off mortgage with old dollar the new dollar may be one where a hershey bar is 5 cents again. So mortgage pay-off then becomes quite dear.

Cavan Man

(05/21/2000; 20:22:29 MDT - Msg ID: 30984)

Nikkei

Looks like the beginnings of a bad hair day in Tokyo.

JavaMan

(05/21/2000; 21:19:17 MDT - Msg ID: 30985)

HI - HAT, J-Dude...

Sorry guys, I had to step away for a bit.

HI - HAT: "If I may I'll amend the question to ORO. Is there an edge to have the legal tender notes in hand to satisfy existing contracts (mortgage), or go for the appreciating wealth, gold,.Even though the dollar as defined in the middle of an inflation crack-up, may not be the same "NEW DOLLAR", one would have to convert to from appreciated gold in order to pay debt."

JavaMan: I'd like to see the answer to your question. In addition, I would venture that if one has the dollars "in hand" to satisfy a mortgage, then they should do it.

J-Dude, It looks like the choice to have dollars in hand might also mean having my wife on my back as she doesn't see things as I do quite yet.

Still, I wonder about the value of real estate in such an environment. Does it go up as more dollars chase a fixed number of houses or does it decline as more are laid off, fewer people are able to afford the associated interest rates, etc.?

Bad lightning storm developing. I'm outta here.

JavaMan

(05/21/2000; 21:23:45 MDT - Msg ID: 30986)

P.S. Sancho...

Sorry about that new car thing. Just tell her all this conversation comes with a disclaimer. (smile)

Henri

(05/21/2000; 21:27:36 MDT - Msg ID: 30987)

Journeyman and the "mosquito protection service", and ORO,Elevator Guy

Sir Journeyman
"...This all reminds me through John Doe's nominated post,
Henri's natural order mosquito protection service, etc. ..."

Ha Ha you anticpated my follow-up, I was just mulling over trying to erect a "natural order" monetary system. Can you guess my biggest stumbling block?

Do I cast the common man as the mosquito, or as the bait?

Yes the "old Genghis has been around so long I now consider his services a necessary alternative to an unknown new Genghis. Perhaps I should get out more. Moscow, yes to learn more how the similar structures are arranged elsewhere. I'm far to confortable at the game I think I may know but probably don't. And far too uninformed to be prognosticating new arrangements of the same old order as both you and ORO have been trying to pound into my head.

Nevertheless the engagement is stimulating is it not?

Sir Elevator Guy, I reread your regional currency post and my response and Yes, it does seem I "reamed" you a bit. So sorry, the idea is not without merit and I am guilty again of not following through with my thoughts of why it could be a good experiment along with my negative feelings about it. Each particular brand of currency would have its strengths and weakness (e.g., I would not want to be in the insurance business in the southeast.) It would be an interesting interplay and no doubt the process of the evolution would entail redrawing boundaries and even including Rhode Island or Delaware with Wyoming and Kentucky if only to give them a modicom of export/import exposure.

I do like the idea of an expanded free trade zone...sort of like a little Hong Kong here and there.

aunuggets

(05/21/2000; 22:20:38 MDT - Msg ID: 30988)

USAGold #30972

MK and others....

First, let me make clear that I do not and would not condone outside advertisers coming to this site or any other with the intent of undermining CPM or other business ventures. But it has been clear to many that the "spin" being placed on this debate continues to be aimed at thwarting the true issues. And now, in so many words, others are "liars" for sharing factual information concerning certain coin premiums, specificly those of like European pre-1933 gold coins at near melt. Anyone disputing that such is possible is more than welcome to contact me privately for the URL of that supplier, as I will not stoop to pasting it here. However, those coins were indeed advertised at less than one dollar over melt value within the past week. Whether the "same coins" as MK offers, I don't know, but pre-1933 European coins without a doubt.

As far as the 8% premiums on 1/10 ounce Eagle gold coins, those were 5-19-00 quotes. Prices also included shipping at minimum order levels....no added charges....the math is simple as pie.

The 98 percent buy-back figure quoted from those given by many dealers across the U.S. had nothing to do with Y2K sell offs as claimed. Those figures have been in place for many a year, and somewhat "standard" in the industry.

But in the end, all of this is really moot to the real concerns that some either haven't taken note of, or simply chose to ignore. MK himself hit briefly on just that issue in his last post.... "Credibility".

All of this started out, I believe, as a simple inquiry as to the "spread" on the coins in question. A legitimate question for anyone concerned with the "liquidity" of such an investment I would think. The "no outside advertising" policy of the forum should have been obvious to anyone familiar to any degree with the forum. Perhaps, however, better communication and handling of the "situation" might have been more in order than short-tempered banishment when such actions only tend to make things worse for all concerned. A natural instinctive reaction to to question "what do the parties have to hide", and that speaks not so well for both sides of the issue.

If openness, honesty, freedom, truth, and just as importantly, "accuracy of information" is either unwelcome or blatantly shunned, then of course there will be some who question the credibility of those involved. Who cares how much profit CPM makes per transaction, per coin, or per million ? That is no ones business but the owners, and as others have pointed out, no one is being "forced" into a purchase by any stretch of the imagination. What didn't set right with some was very simply the "perception" of not being quite aboveboard or shunning simple common sense questions by present or prospective buyers. And now, the off-cuff remarks as to the credibility of others who have only attempted to help fill in the blanks by providing "accurate" information to those who have asked certainly does nothing to improve on the credibility issue.

Perhaps the "support" MK mentions coming from the business factions is to be commended, as only those of us engaged in our own business truly understand the concerns of CPMs plight. However, I believe some of the same factions have been those asking the questions, and were simply frustrated by the lack of intelligible answers. THC's simple post giving attention to a particular coin on eBay may have been greatly exagerated out of context as a deliberate violation of forum policy, but I personally don't believe it was an intentional ploy at garnering publicity for any particular vendor. And again, quickly applied actions in the wake of what may well have been an unintended "flub" really brought about more questions than answers. Competition and propretary concerns aside, the real issue boiled down to open and honest information.

Marius

(05/21/2000; 22:35:52 MDT - Msg ID: 30989)

Journeyman & MK

MK,

You are a tolerant and genial host, and I sympathize with you feeling bad about having to put your foot down. Who can say why one of the herd occasionally goes loco? You did what you had to do. Don't indulge in letting a bad taste linger! The forum is worthwhile, and you don't need to defend your actions.

Journeyman,

Thanks so much for sharing your experiences with the Russian mob. You make an old outlaw smile. I love to trot this out at parties: what's the difference between government and organized crime? Organized crime doesn't insult your intelligence by claiming to act to protect you from yourself.

Fondly,

M

Elwood

(05/21/2000; 22:49:13 MDT - Msg ID: 30990)

Rugen (5/21/2000; 7:46:00MT - usagold.com msg#: 30940)

Gold Leasing Jigsaw Puzzle Part 2.

Central Banker leases to a Bullion Bank 1 tonne of gold. Instead of physical delivery the CB issues a gold certificate backed by its reserves. The tonnes and tonnes of leased gold that we've all been hearing about still sits in central bank vaults. It must be this way because it doesn't make sense for these central bankers to have delivered that much physical. The Euro crowd just isn't that naive. All or nearly all of the physical flow that we've seen from the Fed's earmarked accounts is from sales, either announced or not. The dollar forces delivered (sold) their physical in a losing game to defend the dollar. The few Euro Zone sales that went through the paper markets may have been "pump priming" to start/keep the game going.

The Bullion Bank takes the Central Bank's gold certificate, and sells it in the open market for cash or other marketable items. In Trail Guide's scenario the other marketable item is oil in the ground, and this whole system was set up to buy time for the establishment of the Euro and to further inflate the dollar (a "two-birds-with-one-stone" thing).

The Arab doesn't want the paper, but with physical supplies being so tight he accepts the paper and issues paper of his own in payment, the claim to oil in the ground.

Now, the Bullion Bank is on the hook for delivery of 2 tonnes of physical gold: 1 to the Central Bank in repayment plus interest and 1 to the Arab. The Arab will only deliver his oil if the physical gold is delivered. In this case the BB has only sold the gold once. In cases in which the BB sells the gold more than just the one time the paper trail becomes even more complex.

The Bullion Bank takes the oil receivables he got from the Arab and mortgages them in order to buy the future delivery of the gold miners. However, he also needs the gold miner to sell more than what the oil derivatives will bring since the bank needs physical to repay the original loan. So the Bullion Banker convinces the miners to sell gold call options to fund even more forward sale commitments. Recently, however, we've seen many miners stepping away from forward sales after they saw what happened to Ashanti and Cambior.

See how both the Bullion Banks and the miners are exposed to any rapid rise in the price of gold? The terms of the original central bank lease may or may not specify cash settlement under certain conditions, however, anyone who purchases the certificate must understand that the central banker does not have the authority to deliver that gold. Therefore, under any default situation they must understand that the CB will settle in cash. I think Trail Guide's view is that the Euro forces will use this cash settlement opportunity to expand the Euro currency and replace the dollar as the world's primary paper reserve asset.

With this huge paper float out there, it's obvious that most of them have been rolling over their gold receivables as they become due. Anyone ever seen that 1980-81 movie: "Rollover" with Jane Fonda and Kris Kristofferson?

Trail Guide, when you say that the WA agreement had no provisions for "gold to cover" on existing contracts, do you mean that the rollovers are ending? It seems that in the panic which followed the WA, much was, in fact, rolled over to longer terms.

When the game ends there will be 4 classes of gold "investors":

1. Arabs. These guys are in the best position possible. They are sitting on a valuable asset that can be traded for anything. They will have the choice of trading their certificates for gold or cash. The gold will come from that "fund" created by the Swiss and other sales. This is what Trail Guide means when he speaks of bringing oil to the Euro.

2. Physical gold advocates (us). We may not be sitting on assets piled as high as the Arabs, but almost.

3. Holders of Euro bank certificates. Non-oil producer buyers of these certificates won't get a choice, but they will get the best currency for their certificates. Seems there are some countries like China that hold these certificates (as well as more than their official physical) which will enable them to survive the destruction of their dollar reserves. They probably used some of those dollar reserves to buy the certificates.

4. Holders of Dollar bank certificates, that is, certificates issued by central banks that are not in the Euro Zone. These people will be in the same boat as traders of options and futures. They may get cash, but it will be dollars that will have little value.

The Washington Agreement was the signal to everyone that the gold-dollar expansion is ended. Now we're just waiting for someone to default on a gold payment. This will require someone else to refuse to roll over a paper commitment. When that happens the bullion banks and the hedged miners will rush to cover their short positions, and the moonshot will be under way. A question arises: Why didn't they just let it run when the WA was announced instead of helping the Americans deal with the crisis? Answer: They don't want to be seen as the ones who destroyed the dollar. They need to have the dollar forces default of their own accord. Wars have started over much less.

The whole game is being coordinated through the BIS and ECB. The Americans are in reaction mode. I believe that as long as the Americans find a way to deliver satisfactory amounts then it will continue. This amount appears to be in excess of the 80 to 100 tonnes per month they've been delivering since the WA panic. The rising price of oil indicates that Arabian oil is being withheld against some non-deliveries of physical gold. I used to be hung up on the question of what the Euro banks will do with their dollar reserves, but does it really matter? If your barn burns and your insurance company replaces its loss with a better one, are you better or worse for the fire over the long run? It's a sure bet that there aren't many emotional attachments to the dollar out there.

Trail Guide, are we getting warmer? Is the jigsaw picture taking shape? The image appears to me as something yellow and very valuable.

If all of this is true then, people, we are about to witness events of extreme historic significance.
Elwood

Solomon Weaver

(05/21/2000; 23:18:01 MDT - Msg ID: 30991)

A few thoughts on THCs banishment

MK (USA GOLD)

1st thought: I consider this site to be the private property of Centennial Precious Metals and that you are the ultimate authority.

2nd thought: As you mentioned in your Internet 101 post, there are interesting challenges to using this new media, not only to "openly discuss gold ownership", but also to sell gold.

3rd thought: The mention that THC made of eBay is for an "auction site" which does not compete with your company, and yet represents one of the most interesting pioneers in getting buyers and sellers together on all kinds of unusual items.

4th thought: To someone just beginning to buy precious metal coins, there is an immense amount of questions which can arise related to coin type (legal tender vs. commemorative), quality, rarity, acceptable premiums, actual content, historical price performance, etc. It also depends a lot on the number of dollars one wants to invest, and the "reasons" for investing. If your site is going to be an educational site on gold ownership, I think we need to feel that it is safe to discuss the way coins are priced, and perhaps that means an open discussion of where information about coin pricing is found on the internet.

5th thought: You are not typically promoting your products on the page, but by adding your German Mark promotion into the daily report, and having Town Crier highlight it as well, you brought this very issue onto the middle of the roundtable...and the roundtable tends to be a wild place sometimes...I saw THC as someone who was seeing too much the bullion side of the story and not enough the numismatic side...because the real message is that to someone who has been in the gold market a long time, it is phenomenal how low the premiums are on all pre-1933 European 20 Franc and Mark coins (compared for example to newly minted 1/4 oz gold Eagle).

6th thought: It is common behavior on the internet to post the URL for information purposes. One one hand, this is important because it creates credibility (allows readers to go back to the source of discussion). I do not personally believe that providing a URL should be equated with "promoting" a site. For example, THC will not personally benefit from anyone who visits the URL he posted. This is different than if I were to try to use your forum to get readers to notice a business I am involved in, particularly if it were a business selling PMs.

7th thought: Not knowing what "off site" emails have exchanged, I consider that THC should still be welcomed as a poster here.....perhaps it should be general that the "pricing details" and "product related questions" for your products are handled via direct email and should not appear as posts.

Seven is a magic number...so I think that's enough for tonight...

Best wishes....and sure appreciate what we all have here...

Poor old Solomon

Black Blade

(05/21/2000; 23:20:12 MDT - Msg ID: 30992)

Marius - Difference between Government and Organized Crime, Elwood

Marius, The only difference that I've seen between the Government and the Mafia is this: When you breaks the rules, the Government steals your possessions and puts you into a cage or uses you for prison (slave) labor, while the Mafia breaks your legs or whacks you. You pay protection money to the Government (taxes/extortion) and protection money to the Mafia (extortion). There you have it. Both enforce a set of laws, and both steal from you.

Elwood, Interesting post. However, I never saw the movie "Rollover". I just can't bring myself to watch anything starring "Hanoi Jane". She should have been tried as a traitor and either executed or imprisoned for life. She gave aid and comfort to the enemy, and is arguably responsible for at least 6 American POW deaths as a result of one of her visits to North Vietnam during the alledged "Police Action".

SHIFTY

(05/21/2000; 23:29:15 MDT - Msg ID: 30993)

FOA / Trail Guide

Looking foward to the next outing on the gold trail!

Peter Asher

(05/21/2000; 23:57:47 MDT - Msg ID: 30994)

JavaMan #985

Most people who buy new homes other than starters, already have a home that they live in. In a recession, they can stay put, if they don't get kicked out by forclorsure, that is. The only thing that crashes faster than the Stock market is the middle and upper-end home market. It's not so much of a price drop as it is a situation of NO BUYERS! The whole Real Estate world grinds to a halt. A year after the �87 crash, I heard that the Long Island North Shore Real Estate Offices had a 90% failure rate.

Now if you are a believer in a hyper-inflationary recession such as the �70's, then maybe a home would be a good value haven, BUT it should be in sound location that is not "Hot" due to the current "Easy Money"

Solomon Weaver

(05/22/2000; 00:05:35 MDT - Msg ID: 30995)

Leased at least

Elwood (5/21/2000; 22:49:13MT - usagold.com msg#: 30990)
Rugen (5/21/2000; 7:46:00MT - usagold.com msg#: 30940)
Gold Leasing Jigsaw Puzzle Part 2.

Central Banker leases to a Bullion Bank 1 tonne of gold. Instead of physical delivery the CB issues a gold certificate backed by its reserves. The tonnes and tonnes of leased gold that we've all been hearing about still sits in central bank vaults. It must be this way because it doesn't make sense for these central bankers to have delivered that much physical.
-------

Elwood, I would beg to differ slightly on the opening comments to your post. For a little more than the last ten years there has been a deficit of new gold vs. gold demand in the physical markets....certainly, a significant amount of gold has physically left vaults of Central Banks under lease terms.

For comparison, look at how almost 1 billion ounces of silver have been removed and consumed to the point where there is literally almost no silver left in reserve (now 100-200 million ounces when 800 million was the lowest ever since 1950) and yet the price of silver has not risen to meet this shortfall. The situation in silver is much worse than gold in the sense that not only is there a deficit each year which consumes inventory, and not only is there an open short position which is close to one years new production, THERE IS ALMOST NO STANDING INVENTORY REMAINING. IF silver were to try and TAKE ON A MONETARY ROLE again, it is impossible because there is literally no silver left!!!!!!

Using ONLY 100,000 TONS OF GOLD as the world's inventory this translates to 3 billion ounces of gold. And yet the world's silver inventory is officially about 200 million ounces or about 1/15th of the amount of gold. SILVER ABOVE THE GROUND IS MUCH MORE RARE THAN GOLD ABOVE THE GROUND!!!!
And yet some people consider silver to have a monetary potential???? Silver is a valuable "just in time" product, and there are banks and people all over the world who believe they are still the "owners" of 100s of millions of ounces of silver. How could they all have "sold" at historically low prices over the last 10 years?

This is because the system of leasing creates an artificial situation where "as much metal is available as needed at any price". And eventually this can mean "all metal sold at a very low price".

Since the metal is loaned out as gold...and should be returned as gold, the lease transaction is price independant. The seller of the gold into the market is only hurt if the price of gold in the future rises faster than his rate of return on the funds of the sale (carry trade).

This is the amazing "emporers chlothes" flavor of the story...the very fact that thousands of tons of gold and silver have been "sold" when the owners think they still own it, and the phenomenal stress this puts on the system when the "owners" want to have it back or sell it themselves, when understood fully, is so incredible that our reaction is "it doesn't make sense for these central bankers to have delivered that much physical."

In the end it will come down to the banal truth that my dear friend has told me before..."oh well, it's only money".

Poor old Solomon
View Yesterday's Discussion.

Rugen

(05/22/2000; 02:50:21 MDT - Msg ID: 30996)

RossL 30949

At the end of the chain apparently J.P Morgan.

WAC (Wide Awake Club)

(05/22/2000; 03:10:55 MDT - Msg ID: 30997)

Swiss Gold Deposit

http://uk.biz.yahoo.com/000522/124/a7rte.htmlZURICH, May 22 (Reuters) - The Swiss National Bank said on Monday its gold holdings and claims against gold lending operations had slipped by 136.6 million Swiss francs to 39,409.5 million francs in the reporting period to May 19.
Sight deposits increased by 2.1 billion to 3.81 billion.

(in millions of Swiss francs)

Latest Change since May 10

Domestic sight deposits 3,810.8 up 2,093.9

Notes in circulation 30,651.7 down 270.8

Government deposits 9,363.1 down 98.7

Gold and gold lending 39,409.5 down 136.6

Currency reserves 47,303.2 up 536.6

Outstanding repo lending 16,402.7 up 1,904.0

Swiss franc securities 4,880.5 up 13.6

Canuck

(05/22/2000; 05:40:20 MDT - Msg ID: 30998)

@ YGM

Thank you very much.

Incredible information; I will re-read and can I pose a couple questions your way afterwards?

Black Blade

(05/22/2000; 06:21:36 MDT - Msg ID: 30999)

Morning Wakeup Call! (PGMs set to sky-rocket?)

Source: Bridge News and ReutersAsia Precious Metals Review: Gold flat; profit-taking caps platinum
By Hiroyuki Fujiwara, BridgeNews

Tokyo--May 22--Spot gold hovered at about U.S. $274 per ounce amid sluggish trade in Asia Monday. Most players stood on sidelines ahead of the U.K. Treasury's gold auction scheduled on Tuesday, dealers said. Meanwhile, profit-taking capped platinum after Friday's rally in the U.S. market, they said. Gold prices stayed range-bound between $270 and $275 in the past few days, while some expect the prices to recover after the U.K. auction, dealers said. Short-covering--buying from players who had sold--might boost gold prices if better result come out at Tuesday's auction, they said. However, others said the gold's market sentiment still remains weak.

Black Blade: This says it all. No one wants to jump into the PM market ahead of the Brit auction. Interesting that PGMs are treading water after the GM announcement on Friday. Maybe today's action in the PGM markets might pick up on the US side of the pond as the news is digested and reality of the PGM shortage situation sinks in. Also we might want to watch PGM stocks such as Stillwater, Implats, and Amplats as they should serve as proxies for the PGM markets should interest develop later today and tomorrow. At least I have a few Koalas from Oz. I don't know how the US Mint situation on Pt eagles stands. The Mint is lining up ahead of other claimants pursuing action and recovery of PMs against Handy and Harmon which has filed chapter 11 bankruptcy protection. I'm not sure if they were involved with Pt blanks, but apparently they were involved with Ag blanks. The US Defense department also is pursuing recovery of Pt from scrap that was sent to Handy and Harmon for recovery. It was reported last month that the US Defense department (Strategic Stockpile) requested that the US Mint return the Pt that was sold/loaned(?). It looks to be as if physical PGMs are going to be very scarce soon. New production from US and SA mines aren't likely to be forth coming in the short-term. It could develop into an explosive supply and demand equation. Now with Pt likely to be used in auto catalysts (more Pt than Pd is required), along with new clean air standards, the price of Pt may even surpass that of Pd. The tougher standards will require a greater use of platinum group metals for catalytic converters. The change over could also put pressure on Rhodium as well since it is generally combined with Pt in the manufacture of auto catalysts.

Nissan reviewing use of precious metals
By Edwina Gibbs

TOKYO, May 22 (Reuters) - Japan's third-largest automaker Nissan Motor Co said on Monday it was reviewing the use of expensive precious metals after a recent surge in the price of palladium.The company also hinted it would cut its use of palladium in autocatalysts that clean exhaust fumes -- the metal's most common use.``We are reassessing the use of precious metals, of which prices have been skyrocketing lately,'' Nissan's Chief Operating Officer Carlos Ghosn told reporters. Ghosn said Nissan had a team working on a review of the use of precious metals and to consider substituting them with other materials.

Some decisions had already been made, but the automaker needed time to check conclusions, Ghosn said. He declined to comment further, citing the need for confidentiality. Honda Motor Co said it had not yet decided whether it would change the use of precious metals. Toyota Motor Corp declined to comment. The comments came after General Motors Corp.(NYSE:GM - news) of the United States, the world's No 1 automaker, said last Friday it expects to cut palladium use by 30 percent by 2002 because of instability in the metal's supply and price. Purchasing director David Andres said the target would be achieved through improved technology and increased platinum use. The news boosted platinum prices to three-month highs on Friday in New York, strengthening expectations for increased use of the metal by automakers to clean exhaust fumes.

On the Tokyo Commodity Exchange on Monday, benchmark April 2001 platinum futures jumped to a three-month high of 1,583 yen per gram. Platinum is the best catalyst for cleaning diesel engine emissions. Once favored in passenger cars, it has been displaced in recent years by more-efficient palladium because of tougher emissions laws. British precious metals refiner Johnson Matthey estimates carmakers last year used about 5.9 million ounces of palladium, about 63 percent of all the metal purchased in 1999, with a substantial amount accumulated in inventories. Due to robust demand and unstable supply from Russia, the world's largest supplier of the metal, palladium prices surged to a record high of more than $800 an ounce in February. Under a three-year restructuring plan unvailed last October, Nissan aims to reduce its purchasing costs by 20 percent by cutting off nearly half of its suppliers.

Black Blade: It's follow the leader now. The pieces are now falling into place. The other Auto manufacturers will soon follow (they have no choice!).

Trail Guide

(05/22/2000; 06:25:29 MDT - Msg ID: 31000)

Comment

Elwood (5/21/2000; 22:49:13MT - usagold.com msg#: 30990)
Rugen (5/21/2000; 7:46:00MT - usagold.com msg#: 30940)
Gold Leasing Jigsaw Puzzle Part 2.

Hello Elwood and ALL!

Elwood, your post was on target. I'll be giving a full comment on it in a day or two. Also will discuss the paper derivatives buildup at banks. How they are preparing to profit from a shutdown and crash in the whole dollar / gold / trading system. Indeed, here the largest financial players in the world are selling paper gold into the dirt while "paper gold bugs" are counseling investors to buy more gold substitutes! Guess which side understands Another's Thoughts the best (smile). Guess what form Another has his wealth in as all this plays out?

Also:

MK, there are few places on the internet (if any) that advocate physical metal investment as your company does. The investing universe is choked with brokers and such pushing 95% paper gold and 5% (or less) physical. By not offering any insight as to how that position could backfire on the
vast majority of people, they create a one sided illusion of the future. Your site and company does a tremendous service for the public. People are not just buying gold from your operation, they are buying a "physical understanding" about metal doing it from a team of professionals that won't run
away when the going gets tough! With that comes the strength for one to hold strong.

Anyone dealing with CPM will profit far more in the future from their purchase, than you will profit from the sale today. If your promotion places more gold in the hands of people, then miners, savers and the entire gold industry benefit from it.

Don't mind us, there is plenty to follow and talk about and lots of room here to do it in. We will fit our discussion above, below and on both sides of your offerings.

Thank you for all your efforts

Trail Guide

Black Blade

(05/22/2000; 06:35:18 MDT - Msg ID: 31001)

Trail Guide - Good point.

My question to MK and USA Gold and all, is this: Have you noticed any tightness in US physical supply yet? Are Gold and Platinum Eagles harder to come by? This should be interesting as the year progresses. It should also be noted that the US Mint will soon have to purchase Silver on the open market as official supplies are dwindling. If I get more time tonight, I hope to search out the US Mint production numbers. Obviously the markets haven't really accounted for tightness in physical supplies, or at least the very likely possibility that supplies are tightening - at least not YET! Gotta go and make FRNs now ;-)

BB

Cavan Man

(05/22/2000; 07:53:53 MDT - Msg ID: 31002)

Swiss $ EU

http://www.bloomberg.comSwiss Voters Agree To Bilateral Agreements With EU

USAGOLD

(05/22/2000; 08:14:56 MDT - Msg ID: 31003)

Today's Market Report: Sideways Ahead of BOE Auction

http://www.usagold.com/Order_Form.html5/22/00 Indications
�Current
�Change
Gold June Comex
274.60
nc
Silver July Comex
5.04
+0.01
30 Yr TBond June CBOT
93~22
+0~13
Dollar Index June NYBOT
111.47
+0.12


Market Report (5/22/00): Gold was sideways in the early going -- a typical Monday. Steady,
but subdued, activity in Asian and Europe markets ahead of the Bank of England auction
tomorrow kept the yellow in a range overnight with the open in New York a follow through to
already established trends. The volume of bids could be a determining factor to this week's
trading. Standard Bank reports that short covering came into the market at about $272 in London
trading taking the metal back to the $274 level.

Reuters reports that the Swiss National Bank has sold 15.4 tons of gold since early May. Our
sources tell us that the metal is being parceled out at the rate of about one ton per day. The Bank
for International Settlements is handling the sale, and simply hitting the bids of the major gold
dealers according to one trading source. It remains to be seen how the bulk of the sale will be
handled though. Gold analysts have raised the question whether or not these sales are little more
than gold loan bailouts of commercial bullion banks whose loans have gone sour. Bullion banks
act as guarantors on gold loans and, if a loan should go bad on them, it falls on the bullion bank as
the responsible counterparty to repay the loans. No matter where the gold is going -- which in
practicality might be a moot point -- the Swiss have said repeatedly that the sales will be handled
over the long term and in a way that won't disrupt the gold market.

The World Gold Council issued its quarterly Gold Demand Trends report today. International
demand stayed in the 800 ton range maintaining the record level recorded for the first quarter last
year. WGC CEO,Haruko Fukuda, said that "The continued strength of worldwide demand for
gold during the first quarter of this year encouraging for several reasons. It came in a period when
physical demand often experiences some seasonal weakness, and it was maintained despite both
price fluctuations during this period and the fact that the average price of $290 an ounce remained
well above the 20-year lows reached last summer." It looks like the stock market might be in for
another tough day. This week we have a pretty clean slate insofar as government reports go with
Durable Orders and Personal Income being released on Friday raising the possibility of elevated
inflation concerns entering the market towards the end of the week.

That's it for today, fellow goldmeisters. Have a good day. See you back here tomorrow.

Click above if you are interested in receiving an information packet that includes our monthly newsletter and just released Gold Almanac 2000

fox

(05/22/2000; 08:40:46 MDT - Msg ID: 31004)

Dow and nasduck

Almost time for the rescue team. RED alert.

Farfel

(05/22/2000; 09:23:46 MDT - Msg ID: 31005)

JUST WATCH THE MONEY FLOWS, IGNORE THE TECHNICAL GURUS!

We are in a totally new market, it is an equities BEAR market, a gold BULL market. Fasten your seatbelts! There is still no capitulation in the equities markets, we are going a lot lower.

As per the following post from Friday, I called this market almost PERFECTLY this month:
---------------------

Farfel (5/19/2000; 10:55:16MT - usagold.com msg#: 30851)
Fast recovery from gold losses!
Closed out a position in Cisco 60 dollar puts and made another good pile.

I am fast on the road to financial recovery. The thing that kept me afloat through all this misery: NO
Debt! Thank God for that or I'd have been bankrupt several months ago.

Now here's the latest: on Monday, another $40 billion of Nasdaq locked up stock begins to hit the
market.

I would expect another recovery in the Nasdaq of sorts (maybe today) but it can only be a sucker's
rally AGAIN. The next downturn takes the Nasdaq under 3000, it will be swift and hard and high
volume. Anybody expecting any kind of pre-election runup in the Nasdaq is dreaming, the new
Nasdaq bear market will last for years.

If the Nasdaq is not gaining strength by the end of the day
then you might have to dive in and pay the higher premium for short side action because it means
that the "Buy on the Dip" mentality is disappearing, a prelude to a panic dump.

Spoke with a fellow at an internet incubator and he expects a crisis in internet Etail stocks to break
out any day now. They are ALL running out of money, most having little more than three months
cash to operate their businesses.

As for gold, I honestly believe the only reason they've taken it down so low is to position
themselves for a full contrarian explosion in the price once the bonds, stocks, and US dollar are all
dropping together.

So be skeptical of any new developments in the gold sector that smack of manipulation to bring
down the price of gold or gold stocks. When hell hits in all three mainstream financial markets,
there is nowhere else to go but gold and the rise should be stunning.

Thanks

F*
---------------------

With the continued tumult in equities, we are poised finally for a gold/gold stock price explosion.

With the continued devastation in general equities, we will soon learn of yet more crises among various hedge funds. My guess: by Wednesday or Thursday but no later than Friday, MORE hedge funds in trouble.

Some of those very same funds have been very involved in the gold price suppression through their carry trade activities and with their decimation, gold will be unleashed, finally.

Today we are seeing some strength in bonds, hence muted strength in gold.. However as the US Dollar begins its slow but certain tumble, the bond market will go the same way as the stock market, with gold left as the sole flight to safety. The spike upward should be breathtaking.

My prediction: with new revelations of the latest hedge funds' problems, there will be yet another bond market panic with a concurrent gold price liftoff.

Thanks

F*

Buena Fe

(05/22/2000; 10:03:56 MDT - Msg ID: 31006)

Farfel (5/22/2000; 9:23:46MT - usagold.com msg#: 31005)

Gotta Love Yah Farfel!
Your eloquent revelling in your prosperity is infectious!
Go BOy GO!

YGM

(05/22/2000; 10:49:58 MDT - Msg ID: 31007)

GO Farfel...

Gold needs more Advocates as vocal....and dedicated as you have been for the long haul...My best regards for your efforts in this time of turmoil and truth seeking .......Ken.

Canuck...we sure can discuss it as long as I can look up the answers...(smile)..there's so much smoke & mirrors in the CB realm, it's tough to follow the Gold.....Ken

Trail Guide....You leave me as usual w/ anticipation of your next revelations....I'll be here waiting patiently....or impatiently, you also are among those deserving of gratitude........Thanks MK & Randy.....Ken

Journeyman

(05/22/2000; 12:13:58 MDT - Msg ID: 31008)

Mafias vs. Governments (and vice-versa) @Black Blade, Marius, Elwood, ORO, ALL

"Marius, The only difference that I've seen between the
Government and the Mafia is this:"
+
"When you breaks the rules, the Government steals your
possessions and puts you into a cage or uses you for
prison (slave) labor, while the Mafia breaks your legs
or whacks you. You pay protection money to the Government
(taxes/extortion) and protection money to the Mafia
(extortion). There you have it. Both enforce a set of
laws, and both steal from you." -Black Blade (05/21/00;
23:20:12MT - usagold.com msg#: 30992)

I just reread what I wrote -- ah, typed -- here, and I hope you will take it
primarily as an intellectual exercise. Currently I am.

Black Blade, my experience with the Russian mafia suggests mafias, at least
ones with competitors, may be significantly better to deal with than
governments. I'm far from an expert, but I became highly curious about
how all this works when I discovered I'd been working for a Russian mafia, and
that they pretty much operated as David Friedman had suggested private
competing protection services might some twenty years earlier.

Initially I had similar perceptions -- that mafias were primarily extortionists
and would break your legs or "wack" you at the least provocation. Since
doing some reading, even about so-called mafias in America, I'm convinced
much of this perception is related to propaganda, ill advised government laws
interfering with free markets (alcohol prohibition, etc.) and what my
colleague L. Reichard White calls "media's dramatic imperative." That is,
we always focus on what's interesting, which usually means controversial.
The media, a business counting on customers' money, gives us what we want,
often suitably exaggerated and embellished. Thus incidents of mafia drama,
exacerbated by government intereference (Elliot Mess & the "Untouchables,"
etc.) are what the media gives us. Where's the drama in a well-run protection
service with satisfied customers? Particularly since that image flies in
the face of law-and-order-industry propaganda.

As far as extortion goes, there are some mafias that apparently do this.
But most of them don't. They consider it immoral and bad business, only
indulged in by "roofs" that leak badly. The rogue roofs don't extort
businesses that have a legitimate "roof." Shoot-outs are uneconomic,
remember. Only governments (inherently mafias with territorial monopolies)
can afford things like Waco, Ruby Ridge, Kosovo, the holocaust, WWII, etc.

There are indeed cases of leg-breaking and wacking - - - but never for
such incredibly surrealistic things as "insider trading" or using unapproved
drugs, failing to fill out a form, etc. In fact, as logic dictates (and as
a couple mafia-service users patiently explained) it simply doesn't make
sense to kill someone, or even cripple them if you expect them to be able
to continue to do business with you or to pay you. Their tone of voice
suggested I must be under the age of eight --- or have an IQ well under
80.

Also, if you're not perceived as "just" by potential customers, they'll go
to another protection service. Image is incredibly important, just as in
other businesses, so all such cripplings and "wackings" are bad for business
and are thus avoided and frowned upon. Compare this to the regular
"wackings" performed in the states of Texas, Indiana (where 9 of 17 inmates
on death row were exonerated largely because DNA evidence proved they
couldn't have done the crime for which they were about to be executed) and
elsewhwere by governments.

In "mafias" apparently, such severe punishments are extremely rare and
usually reserved for very severe problems with internal personnel. And
even then, these are rare. Would YOU wack or otherwise cripple Uncle Joe?

In most cases, you're free to employ a "roof" of your choice - - - or not.
If you don't like your "roof's" service, you can leave and get another -- or
self-protect if you choose, and naturally you stop paying for services you're
no longer using.

Try that with a government.

Finally, while both mafias and governments "enforce rules" a very
important question is "which rules?" Where did these rules come from,
who invented them and who benefits by them.

Mafias, being businesses, have to cut expenses to the bone. They
simply can't afford such externalities as trying to control your private
life by proscribing pornography or arrogating to themselves the right to
tell you which particular drugs you are allowed to ingest, outlawing gold
ownership (as USA Inc. did in 1933) etc. etc. etc.

In this context, keep in mind that today the "Federal Mafia's" incredibly
stupid (except from power and money-grab perspective) anti arbitrary-
group-of drug laws cause at least 60% of the crimes against property. As,
logically follows, over 60% of the folks in jails and prisons are there
as a result of these moronic, unenforcable and anti-American "rules."

It seems to me that a general principle has evolved out of several of the
threads running lately here at USA GOLD. Variety is not only the spice of
life. The inescapable competition which results from variety leads to
results which are generally "good;" Concomitantly, "monocultures" generally
lead to results which are usually "bad" in the long run, and yet monocultures
attempt to maintain themselves at almost all costs against change and
innovation. This even applies to religious monocultures such as the Russian
Orthodox Church, etc. It applies to areas we don't normally percieve as
operating as a "monoculture" such as currencies and banking in the case
of central banks such as the Federal Reserve, and grabbits, such as USA Inc.
in the case of protection services.

Monocultures which gain forceable monopolies over geographical areas are very
effective at excluding competition to their goods and/or services and so such
territorial monocultures should, if possible, be avoided or dissolved.

Again, folks, this was largely an intellectual exercise. Sock it to me.
Show me where I went off the rails.

Regards,
Journeyman

schippi

(05/22/2000; 12:33:45 MDT - Msg ID: 31009)

XAU and HUI Gold Chart

http://www.SelectSectors.com/xauhui.gif XAU and HUI moving Up together,
which is always a good signal.

Wild Hare

(05/22/2000; 12:36:28 MDT - Msg ID: 31010)

Timing real estate purchase

http://www.unitedcountry.com/Mr. Asher,

Can you expand on your thought regarding real estate purchases in time of recession/inflation.

As you say - "Now if you are a believer in a hyper-inflationary recession such as the �70's, then maybe a home would be a good value haven, BUT it should be in sound location that is not "Hot" due to the current "Easy Money""

If i am a believer in the above scenario - is it prudent to act before we reach "critical mass" or will there be bargains to be had "after the fall". Let's play what-if.

My gut reaction is to act quickly while my modest land-savings still has perceived value. ie, convert the fiat currency to springs, hardwoods and orchards. However, acting quickly may not allow me to properly "try before i buy". Hopefully you see my dilemma.

Any information or direction you or anyone can lend is most appreciated.

Farfel

(05/22/2000; 12:44:06 MDT - Msg ID: 31011)

BOE Auction: Ignore ANY downside result!

Remember the important thing about the BOE auction tomorrow:

Although there have been rumors about some surprise bidders for gold tomorrow in which case the gold trigger could be pulled with an amazing upspike, nevertheless should the auction result be spun negatively and gold falls for any reason, then keep in mind that the BOE auctions are mere market interventions designed to keep the coming gold price explosion under wraps.

The BOE auctions are analogous to the bond market interventions by the Treasury. They are governmental attempts to keep those markets from going to their proper equilibrium points: in the gold market, that means a much higher price. In the bond market, much lower prices.

These artificial interventions are a hallmark of Clinton economics and served the markets well in the earlier part of the Nineties.

However, now with various markets so far away from natural equilibrium points, the various interventions are ultimately futile. They can work one or two day magic but that's about it.

When the markets move toward their natural equilibriums, they will do so in climactic severe fashion as always results when a spring is coiled for too long.

Thanks

F*

TownCrier

(05/22/2000; 13:08:00 MDT - Msg ID: 31012)

Hear ye! Hear ye! There is a new addition to the Gilded Opinion at USAGOLD!

http://www.usagold.com/gildedopinion/taylorpaulintrvw.htmlThanks go out to J Taylor for sharing his interview with Conressman Ron Paul (Texas) entitiled "In Defense of our 'Unalienable Rights.'" To whet your appetite for the full commentary found at the link above, here is a small taste...

Taylor: "Perhaps it isn't fair to ask a physician and a lawmaker for investment advice. But given your view that we are in a gigantic bubble, I must ask you what you think Americans should do at this stage to protect themselves from what could be a cataclysmic bubble bursting event?"

Congressman Paul: "Just recently in the early part of the year I did a floor speech dealing with a lot of political and economic issues in general. I believe I listed ten things that people ought to consider doing to preserve our liberties. But there were two things I listed that I think are very important.

"First, in political and economic crisis even the most basic rights, like personal safety are threatened. I happen to be a strong proponent of the second amendment just as the founders of this country were. Secondly, I think ultimately economic chaos will bring on--under today's circumstances especially--some currency crisis. So I am a strong believer in actually holding something of real value, not something that represents debt as does the U.S. Dollar and virtually all other currencies. So despite the argument that the holders of gold have not done well during the past ten or twenty years, I think people should ultimately protect themselves with gold. My job as a politician is to make sure those options needed for self-protection, namely to own a gun and buy gold, are available."

Canuck

(05/22/2000; 13:26:49 MDT - Msg ID: 31013)

BOE Auction (#6 I believe)

Nice bounce for the yellow today, and just before the dastardly sale, imagine?

I'm hoping for a good bid ratio (tonnes bid/25 tonnes); "show me the demand, show me the covering!!" Last 2 auctions were in the order of 2 and 3 bid ratio (if memory serves me well). The highest that I recall was either 6 or 8, in either auction #2 or #3. Would be nice to see a 6 or 8 tomorrow morn.

Any news of that 'crooked' rumour where the BOE dismissed 'unqualified' bids to bring down the bid ratio?

Beowulf

(05/22/2000; 13:28:05 MDT - Msg ID: 31014)

Farfel on BOE auction

Farfel,

I expect we'll see tomorrow similar action to that at the last two auctions. Minutes before the announcement of the results, right after the bids are due, the price will spike up maybe $0.20 - $0.50 then the bids will come out showing the purchase price below the spot price at the time. Of course they will be taking the spot price that was just pumped up after the bids had come in. Then we will see article after article proclaiming how bad the auction went because it came in below the spot price, event though it will be 2 or more times oversubscribed. But we know better know don't we. :)

I've mentioned to many at work about the supply of locked up stock coming into the NASDAQ, that you've posted about last week. I've also mentioned about the drying up of silver supply and large gold derivatives by the banks in the last year. Only one convert so far. He's resorted to selling his NASDAQ stocks into rallies and getting out. He too thinks something doesn't look right in the silver and gold market and now believes me an is looking for some of the best leveraged miner in platinum/silver/gold for the coming explosion.

Hey, one convert is better than none. :)
I've warned them, given them web addresses to look at for info, they can make their decisions now. I've quit pestering them about how a company can have a P/E of 150 and still look like a screaming buy to them. Let them take their lumps like the rest of us.

-Beowulf

ced_s

(05/22/2000; 14:23:47 MDT - Msg ID: 31015)

@YGM

Over the next few days I will compose another letter


This time I am sending it to the Governor of the State of Indiana, advising him of the manipulations of all the markets for political purposes. I will also suggest that he will end up with an impoverished state to govern or to bequeath to his successor. I will urge he press his US Senate and House Banking Committee members to launch a full scale investigation into the behavior of these markets in the last 10 years. For him to do less would be a disservice to the Soverign Citizens of the State of Indiana, and also to prevent any of the fall out of this scandal from besmirching his reputation.
One of our Senators, Richard Lugar is chairman of the Senate Agricultural Committee and has oversight of the CFTC and thru the Commodity Exchange Act governs the U.S. futures markets.
************************************************************

Do you think this might have any effect ??

************************************************************

To date, I have not purchased any metal from our sponsor, I
will remedy this as soon as I recover from last Mondays splurge. From what I read yesterday they have realistic premiums, and they do graciously offer us the use of this Forum.
Take care
Ed Stuart

SHIFTY

(05/22/2000; 14:37:23 MDT - Msg ID: 31016)

N.Y. PONZI

Nasdaq 3,364.21 + Dow 10,542.55 = 13,906.76 divide by 2 = 6,953.38 ponzi points.

SHIFTY

(05/22/2000; 14:38:40 MDT - Msg ID: 31017)

N.Y. PONZI

Nasdaq 3,364.21 + Dow 10,542.55 = 13,906.76 divide by 2 = 6,953.38 ponzi points.

DOWN 55.24 Ponzi points!

Sorry for the second ponzi post!

Cavan Man

(05/22/2000; 14:44:12 MDT - Msg ID: 31018)

Those market averages

Sure came back a ways today!

Canuck

(05/22/2000; 14:47:06 MDT - Msg ID: 31019)

Silver

Does anyone know or have information regarding uses for silver?

I talked to an elderly gentleman recently regarding silver use in photography. He is the owner of a large processing centre and retail store for photographic equipment. The mention of investment seemed to struck a nerve. He told me the photography industry uses some 50% of silver supply and with recycling of the silver nitrate and the advent of digital photography, demand for silver (at least in the photography industry) will fall off dramatically.

The man rambled on about being 'burnt' in the silver world some 10-20 years ago and said, "...the quickest way to loose money is to invest in silver..."

Is the old man simply cranky or is there some logic in his rationale?

Canuck.

Farfel

(05/22/2000; 15:19:07 MDT - Msg ID: 31020)

WSJ reveals: Goldman Sachs Screws its Partners in UPC Deal

It's certainly worth taking a glance at today's Wall Street Journal, specifically the article detailing Goldman's "going behind the backs" of its investment bank brothers, Merrill Lynch and Donaldson Lufkin.

In this particular case, Goldman surreptitiously maneuvered against these major Wall Street firms in grabbing the enormous bridge loan business provided to United Pan Europe Communications (UPC). As it turns out, Karma is striking Goldman badly now that UPC is floundering.

In my mind, the most notable aspect of this entire article is the revelation of further astounding deterioration in the once cohesive fraternity of major Wall Street investment firms.

There is a real cutthroat approach developing amongst these firms and I believe it stems from the huge riches gained by these various companies during the great bull bubble of the past decade. They have become "as rich as God" and when companies develop this type of obscene wealth, they often believe that the "old" rules no longer apply to them. Furthermore, such obscene wealth can lead them to believe that they no longer need any other partners and are better off destroying them so that the "wreckage victims" can then be absorbed for pennies on the dollar.

The entire UPC drama is CERTAIN to be a preview of the gold market as one of the carry trade partners-in-crime begins to cover very sneakily its gold short positions at the expense of those investment firms stupid enough to believe that the cohesive front against gold can be maintained ad infinitum.
If I were to lay bets, I would think that GS is the one most likely to screw the other bullion banks, with a little advice and assistance from former Treasury Sec., Robbin Robert Rubin.

Let us all hope that tomorrow's BOE auction proves to be the
nail in the coffin of bullion bank cohesion. After all, it is only a matter of time before one of the bullion banks breaks ranks and grabs as much gold as possible at any price in order to ensure that it is the lone survivor when the upcoming great gold short squeeze occurs.

Conversely, one can only hope that the major gold mining producers unite very soon to form a de facto cartel (excluding Barrick) and either bid together aggressively for central bank gold or else curtail gold production dramatically or a combination of the two. Imagine the delight these long suffering producers will experience watching Barrick scramble to cover its enormous physical gold shorts!

Wouldn't it be great if a bullion bank took a front seat at tomorrow's BOE auction and bid vigorously for the gold at any price, much to the amazement and chagrin of the other bullion banks? You know it is going to happen eventually, the only question being "When?"

When such an unexpected development occurs, then watch how quickly Britain suspends further gold auctions and reverses course, becoming a gold acquisitor instead.

Thanks

F*

Solomon Weaver

(05/22/2000; 15:38:38 MDT - Msg ID: 31021)

Canuck - And uses for silver

http://www.cpmgroup.com/silver.htmhttp://www.cpmgroup.com/silver.htm

"In emerging markets, investment demand for silver also is vibrant. However, in these countries, silver tends to be held in the form of jewelry, ornaments, and religious objects that are easily melted down and resold.

In terms of fabrication demand, silver possesses many physical characteristics which make it a key component in numerous products used on a daily basis. The main uses for silver are in jewelry and silverware, photographic films and papers, and electrical contacts and connectors. Silver is also used in mirrors, medical instruments, dental alloys, brazing alloys, silver-bearing batteries, and bearings.

The largest silver-producing country is Mexico, followed by the United States, Peru, and Canada. On a global scale, approximately 58 countries mine silver annually. From the late 1980s to the late 1990s the amount of silver extracted from primary silver mines fell, while silver mined as a co-product of copper, lead, zinc, gold, or poly-metallic deposits rose.

The steady growth in silver bearing products worldwide has also led to increases in the amount of silver recovered from scrap recycling. Most scrap comes from photographic materials, jewelry, and silverware."

By the way...it is true that the recovery of silver in photography is improving...but digital seems to drive total film use (for example Kodak has a new camera out that lets you see the photos you just took on a small screen and if you want it you "save" it to film!!!! Also, the entire world is growing into photo bugs....

Look at silver from a risk reward...the current market price for bullion is marginally above the cost of production...as I mentioned in my post at the start of the day...there is not enough silver to have it monetized again...in the event that investors start to want silver as a financial investment, demand will explode.

Poor old Solomon

RS

(05/22/2000; 15:38:49 MDT - Msg ID: 31022)

Canuck usagold.com msg#: 31019 re: Uses for Silver

Silver is commonly used to fabricate electrical contacts in many devices such as relays, switches, etc.
I have no figures on the volume of silver used annually in the electrical/electronics industries.

In general, silver is used because of its superior electrical conductivity and it's ductility.
Silver is alloyed with copper and/or nickel in varying percentages when used for this purpose.

Silver wire is used instead of common copper electrical wire in precision laboratory electrical instruments, whenever the application requires maximum electrical conductivity.

Very large amounts of silver wire are sometimes used for research projects such as super-conducting magnets and particle-accelerators.


Gold is used for electrical switches and contacts where very low-voltage signals must be reliably switched. Gold is the only way to manufacture many types of electronic devices because it combines superior electrical conductivity with the fact that gold does not corrode.
Corrosion (oxidation, tarnish, rust) interferes with conductivity in metals.

Precious metals are essential to the modern electrical and electronics industries and probably always will be.

Solomon Weaver

(05/22/2000; 15:46:38 MDT - Msg ID: 31023)

a good link for silver market statisitics

http://www.cpmgroup.com/vmnyssa.doc bit from this link.....


"As an example of the unpredictability of the silver market, the amount of physical silver that entered the market in February 1998 was surprisingly high. The sharp increase in silver to $8.00 per ounce in February 1998 brought out more silver in scrap form than we had expected, including, surprisingly, silver coin bags. This is surprising, since these bags typically can be used as collateral and swapped for good delivery metal more cheaply than they can be refined. These coins typically are not expected to be refined into good delivery metal until the physical market really is running out of silver bullion. Last year, we saw some of these silver bags, perhaps 10% of them, being melted down and refined for the first time in many years."

Solomon Weaver

(05/22/2000; 15:54:51 MDT - Msg ID: 31024)

an astute observation about the reasons for prices of silver

http://www.cpmgroup.com/vmnyssa.docAnd another interesting fact comparing real silver trading to paper trading.....

"This next chart illustrates the extent to which the silver market is awash with these "paper silver" assets. The first bar in this chart shows the physical flow of new supply into the market was around 629 million ounces last year. The second bar represents the activity in the futures and options markets, which totaled 26.2 billion ounces last year -- 42 times the amount of new supply. Finally, the turnover on the London Bullion Market Association is accounted for in the third bar of the chart, and amounted to 67.1 billion ounces.

In other words, a total of 93.9 billion ounces of silver changed hands in the major silver markets last year. Physical new supply accounted for less than 1% of this total number of ounces traded, and this was just in the major markets. Adding new supply (629 million ounces) and industrial demand (822 million ounces) together, the combined total of 1.45 billion ounces still accounts for less than 2% of the total amount of silver traded in the major markets in 1998.

It is this silver that is traded but never delivered that accounts for the vast majority of activity in the silver market. To try to explain the price of silver based on the one or two percent of total turnover that is related directly to annual physical supply and demand is to assure failure, since you are ignoring 98% or more of the reasons why people buy and sell silver.

The question that remains then is who is it that is trading the remaining 98%. These trades represent several different types of activity, including spread trading, futures, forwards, options, and dealer options. Included in this total is a massive amount of speculative trading by proprietary traders at banks, brokerage houses, and trading companies, who have persistently shorted the silver market."

Copliments to the author...

Poor old Solomon

Gold Explorer

(05/22/2000; 16:07:31 MDT - Msg ID: 31025)

Gold Explorer

Been lurking for a long time. Best gold site on the web thanks to USAGOLD.

I decided to purchase my gold from USAGOLD because of their effort and service providing this website. However, I almost considered cancelling my order of ten German 20 Mark gold coins after the shocking news of hearing of THC's banishment from this forum. In my opinion, THC was not only well informed, but also displayed some of the best manners of any poster on several of the gold site forums.

Without going into detail, he was in no way promoting the Ebay website. Everyone knows about the auction site and the questions he asked USA GOLD were legitimate. If he was crossing over the line, he should have been politely reminded and redirected to call the company for details.

Banishing THC was wrong and unfortunately casts a shadow over the management at USA GOLD.

As a customer of USA GOLD (no I don't mind paying a couple of extra dollars to help support the excellent commentary from this site), I would sincerely hope that management reinstate THC's posting priveledges.

HI - HAT

(05/22/2000; 16:33:08 MDT - Msg ID: 31026)

Journeyman msg. # 31008 Governance "R" US

I love the smell of "Common Sense" in the morning.

Patrick Henry...........,Hip Hip Hooray !

YGM

(05/22/2000; 16:37:55 MDT - Msg ID: 31027)

Give them an earful.....Ed, (ced_s)

Tell them short & sweet......We're all trading paper for Gold and we want Gold Exposure from Banks & GATA wants answers..... etc...I'm sure many here are doing their email part to reps but maybe a concerted effort such as the one ongoing at GE by Upon Roof and a few others might be a positive energy here.....not that there isn't already......Most efforts only require a ringleader right?.. Glad to hear you're getting involved........Regards....Ken

Al Fulchino

(05/22/2000; 16:44:59 MDT - Msg ID: 31028)

Rules vs NoRules

THC may be just the most wonderful person. I really don't know or have reason to believe he isn't. And if he and MK can work things out, fine, but why can't we all see that this is not a free speech issue. It is a personal property issue, as stated months ago by Peter Asher. The owner has chosen to have the whole issue of ads (and it was an ad, imagine if I were to tell you the price of my super unleaded right here and right now, the price would tell you whether to shop my stations or not) not be allowed here. It is his business as to why and he has spoken to it. It is not free speech issues we are talking here. As I have stated, if his (THC's) approach had been to ONLY speak of highs and lows of spreads that he has noted, without mentioning ONE SINGLE NAME, such as EBAY, in my mind he would have skirted the whole issue. But the minute someone mentions a name of another entity, then you have an AD. Lets take it a step down the road. Lets say the seller on EBAY was none other than THC himself (her? I don't know so I apologize). If it was THC, then what would you say? Now I sincerely doubt that it was THC. But how is MK to know? There is a whole new job that the THC defenders could take off his hands. Start checking who is a principal in any company mentioned even EBAY. Then if the EBAY site had gold we could know if it was THC's, his/her's spouse, relative, friend and so on. And then we could, being FULLY INFORMED, judge anything THC had to say.

Meant with malice toward none.

YGM

(05/22/2000; 17:01:03 MDT - Msg ID: 31029)

F.W.I.W. File...

CB Action...Russia Central Bank Says Swedish Court Freezes Assets


MOSCOW, May 22, 2000 -- (Reuters) A Swedish court has frozen foreign-held assets of the Russian central bank and other Russian organizations in a dispute to settle claims against the government, bank Chairman Viktor Gerashchenko said on Monday.

He told a news conference that the ruling did not affect the bank's foreign currency and gold reserves and that a central bank Paris subsidiary, Eurobank, would mount a legal challenge to the ruling.

The defense would show the central bank was not at all responsible for government obligations, Gerashchenko said.

Russian daily newspaper Kommersant reported that Swiss trading firm Noga SA had initiated the suit.

It said that 450 million French francs ($61.73 million) worth of Russian assets had been frozen in banks in France, Switzerland and Luxembourg.

Gerashchenko did not specifically refer to Noga regarding the new freeze, but he said the bank had been forced to defend itself previously against the firm.

Noga claimed about $279 million from Russia in a Luxembourg court in 1993, alleging Russian agencies broke contracts to deliver fuel in return for loans.

"This (the new court ruling) creates problems which are similar to those in 1994-1995, when Noga took such measures in Switzerland and Luxembourg," Gerashchenko said.

"We had to hire foreign lawyers who showed that according to current banking laws we do not carry any responsibility for the government. That agreement was made between the government and the company."

Gerashchenko said that the new freeze included a number of organizations, including Vneshtorgbank, a central bank subsidiary.

"On Thursday evening we learned that an appeals court had ruled, on the basis of a Stockholm court (decision) from 1997, to freeze assets of nearly 70 organizations active in Russia," he said.

He said the ruling was carefully written regarding assets of the central bank and Vneshtorgbank, as well as assets which could be used to satisfy claims against the government.

Central bank hard currency and gold reserves did not include such assets, he said.

He added that lawyers would make the case that no central bank assets should be used to pay government debts in this case.

"We have already asked a new legal firm be found, and it has been found, which will make a counter-claim that our inclusion in the list is not correct."

(C)2000 Copyright Reuters Limited. All rights reserved. Republication or redissemination of the contents of this screen are expressly prohibited without the prior written consent of Reuters Limited.

Leland

(05/22/2000; 17:15:31 MDT - Msg ID: 31030)

U.S. Silver Eagles!!!

Michael has a source, so If you have been holding off ordering because you thought they were no longer available,
don't wait...

"Happy Customer"

YGM

(05/22/2000; 18:02:52 MDT - Msg ID: 31031)

GATA...INFO IMPACT SITES......

Sorry for long scroll, but there are meets of major importance........
****** IF YOU PLAN ON ATTENDING ANY...of these conferences, as a Gold Advocate you should ask Chris Powell for some GATA info to pass out if GATA does not have a presence...Speak out & cause others to question the GATA mandate.......It all helps...Sincerely...Ken R.

PS: I'm sure this help would be well rec'd by those 3 or 4 overworked souls, Bill, Chris etc.....
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
� � � World Silver Survey 2000 London & New York 24th May
2000

Gold Fields Mineral Services
+44 (0)20 7539 7820
GFMS

� � � � International Mining & Metallurgy Congress
Ankara, Turkey 24th � 28th May 2000

Chamber of Met. Engineers
+90 312 425 4160
Metaloda

� � � � International Precious Metals Institute 24th
Annual Conference Marriott Hotel, Williamsburg, Virginia 11th �
14th June 2000

International Precious Metals Institute
+1 850 476 1156
IPMI

� � � � MB Automotive Materials Conference Cologne,
Germany 11th � 13th June 2000

Metal Bulletin
+44 1277 633753
Metal Bulletin

� � � � International Derivatives Conference The Savoy,
London 19th � 21st June 2000

Futures Industry Association
+1 202 466 5460
FIA

� � � � MB E-Commerce & Metals World Conference New York
22nd � 23rd June 2000

Metal Bulletin
+44 1277 633753
Metal Bulletin

� � � � CPM's PGM Survey 2000 Briefing New York 11th
July 2000

CPM
+1 212 785 8320
vmotto

� � � � Diggers & Dealers Forum 2000 Palace Hotel,
Kaalgoorlie 24th � 26th July 2000

Suzanne Morrin
+61 8 9021 5144
diggers

� � � � FT Gold Conference Intercontinental Hotel, Paris
26th � 27th June 2000

Financial Times Conferences
+44 (0)20 7873 3375
FTconferences

� � � � Argentina Mining 2000 22nd � 25th August 2000

Editec
R Cortes

� � � � China Gold & Precious Metals Conference Int.
Convention Centre, Shenzhan 31st August 2000

RNA Holdings, Hong Kong
+44 (0)20 7539 7820
RNA

� � � � 3rd Annual Platinum Group Metals Seminar New York
September 2000

CPM
+1 212 785 8320
vmotto

� � � � Las Vegas Investment in Mining Conference Las
Vegas, NV 6th � 7th September 2000 � � � � KAZMIN
2000 Almaty, Kazakhstan 6th � 8th September 2000

ITE Exhibitions
+44 (0)20 7596 5213
Dan Thurlow

� � � � GFMS Precious Metals Seminar London 13th
September 2000

Gold Fields Mineral Services
+44 (0)20 7539 7820
GFMS

� � � � NYMEX Platinum Dinner New York 14th September
2000 � � � � GFMS Precious Metals Seminar New York 15th
September 2000

Gold Fields Mineral Services
+44 (0)20 7539 7820
GFMS

� � � � Mining 2000 Melbourne, Australia 19th � 22nd
September 2000

+61 8 9485 1166
Mining2000

� � � � 7th China Metals Conference Beijing 20th �
22nd September 2000

Metal Bulletin
+44 1277 633753
Metal Bulletin

� � � � LME Dinner The Grosvenor, London 10th October
2000 � � � � Goldfields Mining Expo Kalgoorlie, WA
Australia 18th � 20th October 2000

+61 8 9021 2970
GMexpo

� � � � CPM's Gold Survey 2000 New York 31st October
2000

CPM
+1 212 785 8320
vmotto

� � � � GFMS Precious Metals Seminar London 13th
September 2000

Gold Fields Mineral Services
+44 (0)20 7539 7820
GFMS

� � � � NYMEX Gold Dinner New York 1st November 2000 �
� � � Annual Investing in African Mining Perth, Australia
1st � 3rd November 2000

Australian Journal of Mining
+61 2 8235 5300
Claudia Linkert

� � � � Global Mining Opportunities Vancouver, BC Canada
13th � 15th November 2000

Randol
+1 303 526 1626
Hans

� � � � Moscow International Mining Exhibition Moscow,
Russia 21st � 24th November 2000

ITE Exhibitions
+44 (0)20 7286 9720


� � � � GFMS Update Launches Cape Town & Toronto 10th
January 2001

Gold Fields Mineral Services
+44 (0)20 7539 7820
GFMS

� � � � Mexico Mining 2001 Puerto Vallarta, Jal 14th
� 16th February 2001

Randol
+1 303 526 1626
Hans

� � � � LME Dinner The Grosvenor London 23rd October 2001
�

TownCrier

(05/22/2000; 18:14:37 MDT - Msg ID: 31032)

Thought this e-mail reply to one from aunuggets might be of general benefit to the forum...

By way of introduction, you might be more familiar with me as TownCrier. I have just now gotten off the phone with Michael, and my understanding is that, coming from the original supplier, the coins that were offered through [*another venue*] were worn, circulated coins (that seemingly met their fate in the melting pot) hence, the "clearance" level prices that were apparently being offered for a time on those ill-fated pieces.

By way of contrast, Michael had secured only the available brilliant, uncirculated coins from the supplier, and they were priced accordingly. Apples and oranges, so to speak.

It would seem that feelings may have been trampled on both sides of this discussion, but I hope this is now water under the bridge, and that hindsight may allow all parties to avoid similar problems in the future. As I am not among the office staff who handle orders, you can be sure that my perspective is such that I do not see the forum as a reasonable or satisfactory substitute for calling MK's office for pricing issues due to the many variables intrinsic to the sale of limited-quantity items in an ever-changing market.
Kind regards, R. Strauss Sitemaster, USAGOLD.com

TownCrier

(05/22/2000; 18:34:54 MDT - Msg ID: 31033)

EU Agrees to Spur Tax Cuts Without Widening Budget Deficits

http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=AOSllMxUZRVUgQWdyEuropean Union finance ministers agreed to new rules that are intended to provide means to cut taxes where appropriate to stimulate economic growth "without jeopardizing budgetary discipline".

The European Commission said, "The only way to generate a real growth dividend is by tackling head on the underlying reasons for the high tax burden, that is to introduce the necessary reforms to reduce and restructure public expenditure."

Canuck

(05/22/2000; 18:43:12 MDT - Msg ID: 31034)

@ Solomon Weaver

Excellant information on silver, thank you. Can you provide clarification on a couple points. A mere 2% of total silver trade is silver mined and consumed correct? I believe the author is saying 98% is paper. I think want I'm not grasping is the effect of the paper trade on the POS. I thought futures and options etc. was a net zero game. How does paper trade bring down the price; simply more 'bets' on the price going down than up, therefore the price is driven down? The paper price overwhelms the natural supply and demand price? At a ratio of 49:1, the paper price is whats driving the POS, yes? Is the ratio of paper gold vs. physical gold as bad? When does this paper madness stop? I am guessing that when the paper pushers realize that the physical supply/demand price is radically out of line with the POS/POG then inherent risk playing the game becomes too great? Am I getting warmer or still in the 'novice' leagues?

Thanks for your patience,

Learning,

Canuck.

Cavan Man

(05/22/2000; 18:51:43 MDT - Msg ID: 31035)

THC Debate

Two maxims to consider as they might apply to subject:

1. This is a business not a charity.

2. There's no such thing as a free lunch.

Sorry if I take liberty MK. This is the best site. They don't take shots at #2. Really, MK and George as FOA and Another?! Give (US)AGOLD a break.

PS: Thanks to MK et al, I'll be taking the pledge (Libertarian) also. Kind regards....CM

TownCrier

(05/22/2000; 18:55:33 MDT - Msg ID: 31036)

ECB's Welteke Says Euro Doesn't Reflect Fundamentals

http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=AOSmQ2hVwRUNCJ3MgIn a speech at the University of Cologne, Bundesbank president and ECB council member Ernst Welteke said the euro was undervalued against the dollar by 20 - 30 percent based on economic growth rates and subdued euroland inflation.Welteke reminded his listeners that the euro's value "may move away from the fundamental data for some time, though currency markets won't be able to overlook the euro region's favorable internal price stability after all."

When asked about the ECB's concern for exchange rates, Welteke said, "it's not our aim to stabilize the euro's exchange value, but rather its internal value." He said pressure for governments and companies to restructure has been increased through introduction of the euro, and called on governments to intensify their reforms at cutting budget deficits and reducing public debt.

Bloomberg reports that in response to a question on "creating a centralized banking supervision system, Welteke said such an institution isn't necessary as long as different banking structures prevail among euro members."

TownCrier

(05/22/2000; 19:06:06 MDT - Msg ID: 31037)

Here's one for our wandering Sir CoBra(too)

http://quote.bloomberg.com/fgcgi.cgi?ptitle=U.S.%20Economy&s1=blk&tp=ad_topright_government&T=markets_fgcgi_content99.ht&s2=blk&bt=blk&s=AOSlC7xWdQXVzdHJpHEADLINE: Austria Says It's Hopeful EU Boycott Will Be Lifted Next Month

Finland, Ireland, Denmark, Italy, Spain and Greece indicated that they favor an ending or modification of the current diplomatic freeze. Austrian Foreign Minister Benita Ferrero-Waldner said of an EU summit in Portugal next month, "we would hope it would come to a lifting of these measures. It makes sense especially given the important issues Europe is facing right now."

jinx44

(05/22/2000; 19:06:14 MDT - Msg ID: 31038)

Wizard of Oz

I clipped this from TB2000. It gives a good overview and definition of terms that Mr. Baum wrote about.
**********************************************************

For those interested in L. Frank Baum's "The Wonderful Wizard of Oz" (1900) as a populist novel, the following translation table and discussion are helpful:

Meaning in the Wizard of Oz
-------------- ---------------------
Oz= ounce (oz) of gold
Dorothy= "Everyman"
Tin Woodsman= industrial worker
Scarecrow= farmer
Cowardly Lion= William Jennings Bryan, populist
Munchkins= the "little people"
Yellow Brick Road=gold standard
Toto= a dog

"In the story, Dorothy is swept away from Kansas in a tornado and arrives in a mysterious land inhabited by `little people.' Her landing kills the Wicked Witch of the East (bankers and capitalists), who `kept the munchkin people in bondage.'

"In the movie, Dorothy begins her journey through the Land of Oz wearing ruby slippers, but in the original story Dorothy's magical slippers are silver [a reference to the bimetallic system advocated by W.J. Bryan]. Along the way on the yellow brick (gold) road, she meets a Tin Woodsman who is `rusted solid' (a reference to the industrial factories shut down during the depression of 1893). The Tin Woodsman's real problem, however, is that he doesn't have a heart (the result of dehumanizing work in the factory that turned men into machines).

"Farther down the road Dorothy meets the Scarecrow, who is without a brain (the farmer, Baum suggests, doesn't have enough brains to recognize what his political interests are). [Shades of Marx's critique of peasants!] Next Dorothy meets the Cowardly Lion, an animal in need of courage (Bryan, with a load roar but little else). Together they go off to Emerald City (Washington) in search of what the wonderful Wizard of Oz (the President) might give them.

"When they finally get to Emerald City and meet the Wizard, he, like all good politicians, appears to be whatever people wish to see in him. He also plays on their fears.... But soon the Wizard is revealed to be a fraud--only a little old man `with a wrinkled face' who admits that he's been `making believe.' `I am just a common man,' he says. But he is a common man who can rule only by deceiving the people into thinking that he is more than he really is.

"`You're a humbug,' shouts the Scarecrow, and this is the core of Baum's message. Those forces that keep the farmer and worker down are manipulated by frauds who rule by deception and trickery; the President is powerful only as long as he is able to manipulate images and fool the people. [Politics doesn't change, does it?]

"Finally, to save her friends, Dorothy `melts' the Wicked Witch of the West (just as evil as the East), and the Wizard flies off in a hot-air balloon to a new life. The Scarecrow (farmer) is left in charge of Oz, and the Tin Woodsman is left to rule the East. This populist dream of the farmer and worker gaining political power was never to come true, and Baum seems to recognize this by sending the Cowardly Lion back into the forest, a recognition of Bryan's retreat from national politics.

"Dorothy is able to return to her home with the aid of her magical silver shoes, but on waking in Kansas, she realizes that they've fallen off, representing the demise of the silver coinage issue in American politics."

TownCrier

(05/22/2000; 19:25:16 MDT - Msg ID: 31039)

Is the U.S. Dollar to lose an element of support?

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Economies&s1=blk&tp=ad_topright_econ&T=markets_fgcgi_content99.ht&s2=blk&bt=blk&s=AOSjtIBYnQk9KIERpHEADLINE: BOJ Discussed Consequences of Ending Zero-Rate Policy

Minutes from the April 10 policy board meeting of the Bank of Japan kicked around the idea of raising interest rates for the first time in 10 years. According to minutes of the meeting, central bank Governor Masaru Hayami said, "The time was approaching to reexamine the compatibility of the zero-rate policy -- an unprecedented policy -- with developments in the real economy," and that the termination of the zero-rate policy would have to be sufficiently forewarned so that it "would not be a surprise to the market." And according to Bloomberg: "Hayami's been dropping plenty of hints."

One wonders if Japan isn't evaluating means to preserve the yen in the face of prospects that the dollar might take a sizable tumble. What are the odds of additional forex operations (in which they buy dollars to weaken the yen-dollar exchange rate) after such a decision to raise yen interest rates?

ced_s

(05/22/2000; 19:48:55 MDT - Msg ID: 31040)

(No Subject)

@YGM, I have read your posts at Gold Eagle and now here. What do you think??Sorry for the long post.

Frank O'Bannon
Governor of the State of Indiana

As Governor of this state, I am sure you hold the welfare of the greatest number of your people to be of paramount
importance. What I wish to say to you is difficult to for me as I am an ordinary citizen of the State of Indiana, I am
not a trained financial or political personage. There are a growing number of people who daily see the governmental manipulations of the supposed "Free Markets" for political purposes. All of the markets are involved, the commodities, precious metals and stock markets are the most visible ones. Daily more and more people see this although it is never reported in the media of the U.S., what is presented is dis-information or if bluntly untruths are presented to the American people.
You may ask what this means to you, as you are a Governor of Indiana, not a banker, broker etc:. If something isn't done to bring this to a head, you may be Governor of a state in total dis-array. The Government in Washington is doing a juggling act to keep the markets from crashing, the metals and commodity markets down and obedient, and a systemic collapse in banking from occuring. All of this for political purposes and gain for the favored banks.
If you ask for hard evidence of this, I am enclosing a letter I wrote and it was published in the Columbus, Indiana
newspaper The Republic. In that letter I am discussing manipulation of the gold market. I would also request you
have one of your astute staff members contact the Gold Anti-Trust Action group. They have a pile of evidence they have recently turned over to the Senate and House Banking Committees. New evidence is brought to light every week. The most recent being the total of gold financial derivatives by major banks is now in excess of two hundred billion dollars ($ 200,000,000,000). Gold now is at it's 20 year lows, this is in most cases below the cost of production. Great hardship is imposed in the gold mining industry, simply so the banks can benefit from gold leasing, forward selling and hedging. Goldman Sachs has been identified as the bank that caps all rallies in the gold market. I have E-Mailed Senator Lugar on this both last year and this.
This same machination devistated the American Farmer these past several years. Former Secretary of the Treasury Rubin was head of Goldman Sachs Bank. They by the way are rapidly losing their credibility in the foreign markets. Rubin was also described by President Clinton as "my friend also". Hillary Clinton was investigated for insider trading in the cattle market. I wonder who gave her the information! Lucky no, perjurer yes. If the American Farmer were to subpoena the futures market records for the last ten years, there would be a forceable eviction of several of the current residents in Washington.
Last month, April 15th I believe the NASDAQ was down six hundred and breifly seven hundred points, the DOW was not far behind. The S&P and Dollar Indexes were also down. At exactly 1:20 EST all of these indexes begun a turn around. The word from the futures pits said it was the FED. The next day the story of the Saudi Billionaire was in our ewspapers. Saudi Billionaire was another case of dis-information. There have since been governmental intervention to stave off a big market slide, today was one of those days. The "talking heads" at CNBC feed the public garbage to cover the intervention however. They keep reinforcing the "buy the dips" that the public has been educated to believe. They have to keep the average investor pouring more money into the giant slot machine that the equities markets have become. Money that the average investor couldn't afford to lose. If Greenspan can achieve a "soft landing" the average investor will still lose a great amount of money, if he doesn't we are looking at a nation bankrupted. The best we could then hope for would be deflation and recession, the thought of a depression is too horendous to visualize.
Our markets need to be removed from the grasp of government and the banks with their low trillions of assets and
thirty or more trillion in financial derivatives. Or Governor O'Bannon should warn the people of the State of Indiana that these markets are no longer free, but are manipulated with the welfare of the extremely wealthy and the banking community as benefactors. If nothing is done, then more Hoosiers will go down the tubes with the markets when they ultimately do go down. This prosperity is an illusion, it has been produced at a great cost to the farming and mining industries.
thank you
Ed Stuart

***I will then include a copy of that letter published in the newspaper***

Elwood

(05/22/2000; 20:36:01 MDT - Msg ID: 31041)

Solomon Weaver (5/22/2000; 0:05:35MT - usagold.com msg#: 30995)

Sir, I know about the tight supply. You know about the tight supply. Isn't it reasonable to assume that the Euro central bankers also know about the tight supply? For them to deliver into such a market just doesn't make sense. They would never see their gold returned, and I think they realize that. They've been inflating the paper dollar with paper gold. When it's time for the coup de grace the world will revalue their physical gold and destroy the dollar.
Any leased gold that was delivered has to be from a non-Euro bank, and will never be returned. It is the same as if the bank sold it.

If this were not the case, then the BOE sales would be the BOE leases. That is, if the UK believed that their gold could be returned, even at a date far into the future, they would not be selling, they'd be leasing.
Regards,
Elwood

Chris Powell

(05/22/2000; 20:48:09 MDT - Msg ID: 31042)

GATA continues making Washington contacts

http://www.egroups.com/message/gata/464?A report 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

YGM

(05/22/2000; 20:54:10 MDT - Msg ID: 31043)

ED...Lets just hope...

he reads it and then is inspired to look deeper..........the copy to the newspaper will draw heat and attention and that's all that counts....I have no right or interest to be doing the email to reps thing as a Canadian, but I do inform Gov't Opposition here to little avail.....All we can do is what we are (as you have done) and spread the seeds of doubt as to the honesty of the Gold Markets in others...Thanks for asking my opinion but I'm far from a scholarly letter writer,,,,I think you covered many bases,......insurmountable odds maybe, but it feels good to fight back, yes!........ ..Ken

YGM

(05/22/2000; 21:09:00 MDT - Msg ID: 31044)

TC...

TownCrier (5/22/2000; 19:25:16MT - usagold.com msg#: 31039)
Is the U.S. Dollar to lose an element of support?


***TC....this being another one of the many dominoes in the "Great Unwinding of Paper"....when the dam breaks the outflow of US dollars will boggle the average American mind....not to mention the tide of Gold Short covering trying to outrun the surge of paper being (they may try too late) converted to Physical......Ahhh! What a tangled web we weave...........Well lets see them unweave this without the default of the entire PM futures markets....IMO....Ken

Go Coins, Physical and GATA for real investment, real money, and real results......

Solomon Weaver

(05/22/2000; 21:49:36 MDT - Msg ID: 31045)

Elwood....you are probably closer to right than I thought...and I will agree that Central Bankers are not fools.....

Elwood

I will agree with you that the European Central Banks have certainly played their hands more wisely, and are "probably" less exposed to lease defaults.....just consider however that this leasing story has gone on for many years...and even the best of them may not have understood what it would build into.

We have some very interesting times ahead my friend.

Poor old Solomon

TownCrier

(05/22/2000; 22:03:13 MDT - Msg ID: 31046)

Gold Demand Remains Strong

World Gold Council NEWS RELEASE

LONDON: 22 May, 2000 - Gold demand remained strong during the first quarter of 2000, the World Gold Council said today. Total demand of 795.2 tonnes maintained the level of the first quarter of 1999, when demand went on to set a record for the full year, according to the World Gold Council's quarterly survey Gold Demand Trends, published today.

Demand for jewellery was 701 tonnes, 7% above the first quarter of 1999 and a record for the period. Consumption was buoyant in many countries, helped by the improving global economy. The volatility in the gold price prompted consumers in some countries to defer jewellery purchases, but improving economic prospects should support healthy demand over the remainder of the year.

There were outstanding gains in jewellery consumption during the first quarter of the year in the following areas:

* Turkey, up 79%
* South-east Asia, up 59%
* Brasil, up 45%
* Mexico, up 22%
* United Kingdom, up 18%

The demand for gold as an investment was 94.2 tonnes, 29% below the level of a year ago, with a sharp fall in sales of new coins in the US accounting for almost all the decline. US coin sales last year were exceptionally high on Y2K concerns. Elsewhere in the world, investment demand was virtually unchanged.

[TownCrier note: It would seem that the typical American investor has become the last clinger upon the puckered rim of a paradigm shift which gave birth to this thing they've proudly named "New Economy." If gold consumption may be used as an indicator, the rest of the world is not so eager to kiss this "baby."]

Miss Haruko Fukuda, Chief Executive Officer, World Gold Council, commented:
"The continued strength of worldwide demand for gold during the first quarter of this year is encouraging for several reasons. It came in a period when physical demand often experiences some seasonal weakness, and it was maintained despite both price fluctuations during this period and the fact that the average price of $290 an ounce remained well above the 20-year lows reached last summer."
--------
In a separate presentation to launch this quarter's report, George Milling-Stanley indicated that while investment demand for gold (coins and bars) in China remains small compared to China's jewelry demand for gold, the investment demand in China during this first three months in 2000 exceeded the entire year 1999 total by 50%. The beginning of a serious trend, maybe? He went on to say:

"Progress toward liberalisation of the gold market in China continues. The government maintained its control of both the supply and the price of gold at all points along the chain of distribution, from mine production right through to the retail consumer. However, the People's Bank of China has indicated its agreement in principle with the three-stage programme of deregulation outlined in a report sponsored by the Council late last year."

SHIFTY

(05/22/2000; 22:06:21 MDT - Msg ID: 31047)

Asia / Pacific Markets

http://financeyahoo.com/m2?uIt's a sea of red tonight my friends!

SHIFTY

(05/22/2000; 22:08:15 MDT - Msg ID: 31048)

Asia / Pacific Markets

Sorry for the bad link below. Im workin on it.

SHIFTY

(05/22/2000; 22:10:05 MDT - Msg ID: 31049)

Asia / Pacific Markets

http://finance.yahoo.com/m2?uLet's see if this works!

SHIFTY

(05/22/2000; 22:11:34 MDT - Msg ID: 31050)

Asia / Pacific Markets

http://finance.yahoo.com/m2?uThat's the one!

Solomon Weaver

(05/22/2000; 22:14:21 MDT - Msg ID: 31051)

Canuck...more on paper silver...

http://www.gold-eagle.com/gold_digest_00/butler050800.htmlCanuck (5/22/2000; 18:43:12MT - usagold.com msg#: 31034)
your request for more info goes a little over my head...I think that someone like ORO will do better than I .....

What I do understand is that in a normal healthy commodity market, it is GOOD when there are a large multiple of paper trades over physical...this provides the market with a much higher daily liquidity and helps it correct and fluctuate...obviously, the trades are primarily balancing out..

In the link above, Ted Butler tells the layman who has $25,000 to invest the recipe for buying a COMEX silver inventory certificate...It is a very educational article because the same all holds true for gold.

------On a side note....I just got an email from my stock broker and she seems frustrated to see me with 50% of my account in cash and the rest in mining stocks...she implored me to invest on "facts" not "assumptions"...ha ha.

Poor old Solomon

Black Blade

(05/22/2000; 22:26:51 MDT - Msg ID: 31052)

US Mint Bullion Production

http://www.usmint.gov/bullion/annualsales/sales2000.cfmThe link has totals of bullion production on a monthly basis for Au, Pt, and Ag Eagles. There are totals for Au and Ag Eagles so far this month, however, either the Pt Eagle numbers haven't been posted or else there hasn't been any Pt Eagle production so far this month. Hmmmm..........

SHIFTY

(05/22/2000; 22:51:16 MDT - Msg ID: 31053)

Cavan Man

You said " Those market averages sure came back today." I was having fits today as the steering column in my wife's Ford truck went out sunday morning ,and my well pump went last night! I was not able to watch much market action today, but I had seen that the Nasdaq and Dow were both down about 200 points at one point.I thought the ponzi was going to be way down tonight. I was suprised to see how far back the PPT was able to manipulate the market back up. After I posted the ponzi, I had to pick up my wife at her office. I read the fourm (backwords) from the top down and saw your post when I got down to the ponzi. I was not sure if your post was directed at me. Things sure did come back today.

SHIFTY

(05/22/2000; 23:08:10 MDT - Msg ID: 31054)

Lemetropole cafe

http://wwwlemetropolecafe.comAnnouncement!! The changeover from the old Cafe to the new Cafe can occur at any time!

SHIFTY

(05/22/2000; 23:10:27 MDT - Msg ID: 31055)

Lemetropole cafe

http://wwwlemetropolecafe.com/Announcement!! The changeover from the old Cafe to the new Cafe can occur at any time! Sorry again! This is why I don't post much.

SHIFTY

(05/22/2000; 23:11:43 MDT - Msg ID: 31056)

Lemetropole cafe

http://www.lemetropolecafe.com/Announcement!! The changeover from the old Cafe to the new Cafe can occur at any time! Sorry again! This is why I don't post much.

Voyager

(05/23/2000; 01:17:07 MDT - Msg ID: 31057)

Chris Powell

I really enjoy reading your posts by Bill Murohy & GATA. Please continue posting them. Mr. Murphy certainly is a man to be respected for his courage & determination. View Yesterday's Discussion.

Topaz

(05/23/2000; 01:32:35 MDT - Msg ID: 31058)

SHIFTY:

G'day Shifty,
Try following the instructions re COPY/PASTE below the message box- (works for me) and saves trying to remember all the gory details--------- enjoy your efforts!

Usul

(05/23/2000; 01:49:48 MDT - Msg ID: 31059)

Another one bites the dust!

http://news.bbc.co.uk/low/english/business/newsid_759000/759504.stm* Second UK net firm collapses *

The beleaguered technology sector has suffered another blow with the collapse of internet company Net Imperative.
The news follows hot on the heels of the fall of e-tailer, boo.com, which ceased trading last week after running out of money.

- BBC News Online: Business Monday, 22 May, 2000, 18:02 GMT 19:02 UK

Another one bites the dust
Another one bites the dust
And another one gone and another one gone
Another one bites the dust
Hey I'm gonna get you too
Another one bites the dust

- Queen (The Game album, 1980, Elektra)

TownCrier

(05/23/2000; 01:58:27 MDT - Msg ID: 31060)

Sir Solomon Weaver, if I may, let's kick the tires on Mr. Butler's investment vehicle...

http://www.gold-eagle.com/gold_digest_00/butler050800.htmlThese comments are offered on the commentary found in this link you provided in your message "Solomon Weaver (5/22/2000; 22:14:21MT - usagold.com msg#: 31051)"

Upon reading the link you provided, I was struck by a few things...which in itself is remarkable, seeing that this Tower-top location affords good security against almost all things but lightning. :-D


First of all, I am not well-versed in the true supply-demand market forces exerted upon silver by the real economy. I therefore gladly bow in deference to the opinions held by the likes of you and Mr. Butler in that regard.

Next, it must be said that I do not operate with a trading mentality, nor do I employ a trading strategy in regard to my own real wealth...I simply acquire my various assets for the anticipated perfection with which they may serve their purpose. While it may be seen that others buy and sell their houses or cars principly for the cash-profit motive (and they are certainly free to do so,) my purchases of such items would be influence by motives of reliable shelter and transportation. As such, my gold (no silver, sorry) is held for its enduring and worldwide liquidity and acceptance in payment (directly or via currency swap) for goods and services.

Due to his principle focus on silver, I am not well-versed in Mr. Butler's "lore", nor am I in tune with his personal investment philosopies. No matter, as my purpose here is not to pass judgement or to offer advice. I am only going to kick the tires, so to speak, and chat about the weather until my time here is up.

With that in mind, the first thing that struck me is that although his philosophy appeared to be that of a physical metal advocate at the outset of his commentary, my perception changed when I arrived at this portion of the commentary:

<<<<"By owning the warehouse receipt, and having established a commodity futures account, other possibilities come into play. For instance, just like happened in NYMEX April Platinum a few weeks ago, if a spike in the delivery month occurs in silver in the future (a good bet in my opinion), you could switch out at the higher spot price and into a new futures contract, and start the process all over. (I'm not talking of considering doing this for pennies per ounce, but dollars per ounce. This is not a recommendation, just an observation - the risk, of course, is you may never get your certificate back. The point is to highlight the possibilities.)">>>>>

Again, that is just an observation, as I hold no opinion toward the virtue or vices of individuals who place their bets on the paper-chases of futures trading. However, it is an important observation in light of the whole picture, and whether a true "physical advocate" would want to trust to such an investment vehicle as these COMEX warehouse receipts to deliver their wealth safely into the future.

Let's now move to another tire...

Mr. Butler makes no bones about the necessary entrance requirements...saying, "How do you go about securing these receipts? ... The first thing you need to do is establish a commodity futures trading account. ... By opening the commodities futures account, you are not required to trade commodities wildly, but you must first purchase a COMEX silver futures contract, in order to get delivery of a warehouse receipt."

Sure, that's all fine...just hold onto the position until the arrival of the contract month (and with it the delivery window) in which you can engage in an exchange of futures positions for physical--the warehouse receipt. At this point, Mr. Butler advises "You may leave the certificates on deposit with your broker. You must keep the commodity account open, in order to sell someday."

So, just to review the condition of the tires our toes have visited thus far, in order to obtain the "best silver investment vehicle in the world" (as touted by Mr. Butler,) we must begin by taking a "long" position (covered by our full payment in cash, of course) in a COMEX silver futures contract. In time, based on the contract you've taken in open interest, you will receive your warehouse receipt...a piece of paper that is "good as gol_ ...er, silver." To be sure, Mr. Butler describes them like this:

<<<<"COMEX silver warehouse receipts are at the center of the silver universe. They are the core upon which all worldwide silver trading is based. They are the antithesis to derivatives, yet they are what all silver derivatives emanate from. They are the real deal. No other certificate can make that claim. ... COMEX silver receipts are bonded warehouse certificates covering 5,000 try ounces of .999 silver, give or take 10% weight variance. They cover five 1000 oz bars of silver, with the serial numbers separately recorded.">>>>

In fact, so strongly does he believe in the superiority of these certificates that earlier in his commentary he suggests in regard to all big-league ($25,000+) silver investors that for them "not to switch to COMEX silver receipts immediately, could amount to financial heartache later." Let's just see about that.

On to the next tire...

Mr. Butler is certainly more knowledgeable than most, and correctly recognizes an important market phenomenon/reality...but first, this prologue. In deference to Mr. Butler's long and patient studies, I shall accept that a silver shortage is on the horizon as he says one is. He further says that "when the shortage of silver becomes obvious to all, the shortage will revolve around COMEX warehouse receipts," which he regards (rightly or wrongly) as solid proxies for metal in hand. (To which I immediately wonder aloud what the policy is during a general COMEX default lock-down...similar to the fate of deposits when a bank fails? I simply do not know.) Nevertheless, Mr. Butler has the astute understanding of a very important market reality, that awareness being that even when the metal shortage becomes obvious, in his correct words, "there will be no shortage of futures contracts, option contracts or any other piece of silver paper. How could there be a shortage of paper contracts? There will be a shortage of the real deal..." (which he again intimates is the warehouse receipts, being in greatest demand owing to their shortest supply.) He continues, "Paper contracts can be created at will, COMEX warehouse receipts can only be created by bringing in real metal."

Now, WITH THAT IMPORTANT MARKET FACT IN MIND that the number of futures contracts can be created at will, let's visit the next tire and figure out how to "capitalize" (garner a cash profit) from our savvy position in COMEX silver warehouse receipts...

Mr. Butler seems to punctuate the manipulative and price-depressive reality of the unlimited potential of short contract postions driving the market by saying: "the mirror image of the best silver investment in the world, COMEX receipts, is the worst silver investment in the world, a short physical position." So how does he reveal that we are to eventually cash out of our warehouse receipt? You guessed it...with the "feel good" prospect of joining these cursed short sellers (fully covered, of course, by our own warehouse receipt). In his own words, "The sale is the opposite of the buying transaction, you sell a futures contract and then make delivery."

Let's get the itty-bitty spare tire out of the trunk, and kick that one too...just a little...

In light of the information that new futures contracts can be created without limit even in the face of real metal shortages, how promising does that exit strategy appear to you all...that you exit by selling right along with the paper pushers? In such an environment, any hopeful long certainly won't want to risk his wealth on the crapshoot that he is the lucky one-in-a-thousand that may get a contract capable of delivery. No, more likely the value of these paper futures postions offered for sale will be discounted by the market even further. And if/when COMEX is locked up, what settlement arrangements will be made, and what price will you receive for your warehouse receipt that was last represented by your sell contract having a bid price of exactly zero?

As I see it, being simply a wonderful industrial metal, there is no fundamental reason for silver to be manipulated lower as we have surely seen (and as Mr. Butler will agree has been done); except for ONE reason. Based on its past monetary associations with gold, it would simply NOT be credibly possible to manipulate the gold prices lower as we have seen within any environment in which silver was throwing up red flags in a race to higher ground. Clearly, on the international monetary scene, gold IS the big prize, and silver is simply the victim of collateral damage during this precarious time. I do not doubt that the day will soon arrive that PHYSICAL silver (not paper receipts that must await adjudication) will be priced much much higher, but on such a day, physical gold will properly reflect the great wealth of the ages.

And that's the view from here in our outpost Tower, having kicked some tires as we while away the time until the UK auction to be held in a few hours. Just some casual conversation to help you see all possible sides of the issues... I should also add that the views from The Tower here on the edge of the wilderness do not necessary reveal the same perspective as those available from Michael's chair through his own high window in "The Castle" -- as I like to refer to the CPM offices.

TownCrier

(05/23/2000; 03:04:45 MDT - Msg ID: 31061)

Yawn...the stars look crisp, but the air up here is definately crisper

Speaking of crisp, here is quite a little comment offered by Bloomberg (without any context) in their "ECB Roundup"

ECB President Wim Duisenberg said yesterday (5/22): "Cooperation between competent authorities needs to be further stepped up in order to ensure the effective supervision and preservation of financial stability."

Ouch. I wonder what the context was, and which national official may have been in mind as failing to pass muster as a "competent authority"...

In light of the ever-swelling U.S. trade deficit, we wonder if euroland is somewhat incredulous that the U.S. (as embodied in SecTreas Summers and FedChair Greenspan) seems somewhat willing to let market discipline deliver the harsh lesson of a lifetime...or is it euroland with that attitude? At any rate, it seems that all players are watching the teetering vase in slow motion, each one preparing to say "I didn't bump it" even as the pieces are still scattering upon the floor.

The topic being currencies, not stocks, you see.

Leland

(05/23/2000; 03:15:10 MDT - Msg ID: 31062)

Is a Comparison to 1969 Appropriate? I Think it is. Here's a Fine Article...

by Levi Folk
Investment.com

Friday, May 19, 2000

You probably don't remember what the US
Federal Reserve Bank was up to back then or
how the Dow Jones Industrial Average
performed but lets just say that the narrow
group of investors in 1969 had another name for
the Summer of Love.

Most similar to today's investment climate, 1969 was a bad trip
for investors. That year saw inflation creep up from a low of 1.3%
in December of 1968 to a high of 3.7%--exactly where US inflation
is today-- in August of 1968. Of course, the Fed proved a real
downer for equity markets by hiking rates to stave off inflation
much the same as they are doing today.

The Fed hiked rates from around 6% in late 1968 to a high of 9%
by late 1969. Most interestingly, the first few rate hikes by the
Fed were rather benign much like today's rate hikes because
inflation was already on the rise.

What really matters to the economy, and to the Fed, is the
inflation-adjusted interest rate because that reveals the true value
of money. For instance, over the past six months, the Fed has
hiked interest rates by a whole percent to 6.5%. However, inflation
has also gone up by more than a percent over this six-month
horizon, so the real cost of borrowing has fallen. More formally,
monetary policy is looser now than six months ago--not tighter. A
nearly similar story unfolded in 1969.

As mentioned, the Fed hiked rates even more throughout that
year to bring the inflation-adjusted interest rate up in order to
choke off inflation. And boy did equities get crushed: the Dow
went from a high of 952 in October of 1969 to a paltry 744 in
January of 1970.

In case you missed this lesson the first time in favour of, say,
"breakfast in bed for 500,000" at Woodstock, lets learn from
history especially if its destined to repeat itself.

(Thanks to INVESTMENT.COM, and Fair Use For Educational/Research Purposes Only.)

Netking

(05/23/2000; 03:55:57 MDT - Msg ID: 31063)

The 'Key' Driver

The pending gold rally is likely to be driven primarily by U.S. dollar
weakness rather than by general strength in commodities.
Shalom
Netking

Netking

(05/23/2000; 04:08:01 MDT - Msg ID: 31064)

@Solomon Weaver(31023/4)

Solomon
Great links on Silver.
Based on current PHYSICAL consumption (lets foreget the other 98% right!) how long would it take for current stock piles to be used up?
Shalom
Netking

Hipplebeck

(05/23/2000; 04:34:16 MDT - Msg ID: 31065)

debt

Whenever I get doubtful about my perceptions of the economy, I remind myself of the US government debt, the fake surplus that is barely chipping away at it, and the looming obligations of social security. There is only one way out of this dilemma, and that is to inflate their way out. They must make 5 trillion dollars seem like a small amount.

Canuck

(05/23/2000; 04:56:07 MDT - Msg ID: 31066)

@ Solomon Weaver @Town Crier

Solomon,

Thanks again for your words of wisdom. A 'side' to your sidenote; co-incidentally I'm about 50% cash and 50% precious metal invested. (about 50/50 physical/stock)

T.C.,

Also from Butlers article,
"If you decide, or have decided, to invest in silver (the actual metal, on a cash basis), what's the best way? Yes, I'm implying there can be only one best way. For a total investment of, arbitrarily say $10 to $20 thousand, or less, the choices are many. Rounds, bars, bullion and junk coins are available for personal possession"
---------------------------------------------
I think Butler is a proponent of physical. I have 300 oz. of silver ($1,500 US) and already it is becoming cumbersome.
My wife asked recently if I 'opening a mine'. What is the best way to invest in silver over $10 - $20 thousand? Switch to gold!!! Ha, Ha!!!

SteveH

(05/23/2000; 05:34:26 MDT - Msg ID: 31067)

Auction

www.kitco.comDate: Tue May 23 2000 07:31
Frustrated (H M Government Gold Auction Result: 23 May 2000 ) ID#341290:
Copyright � 2000 Frustrated/Kitco Inc. All rights reserved
The Bank of England announces that the gold on offer ( approximately 25 tonnes or 803,600 ounces ) has been allotted in full at a price of $275.25 per ounce. Details of the result are as follows:

Amount of gold on offer ( approx. ) 803,600 oz
Amount applied for 2,134,400 oz
Times covered 2.7 times
Amount allotted to bidders 803,600 oz
Allotment price $275.25
Scaling factor at allotment price 73.7000%

All accepted bids which were made at prices above the allotment price have been allotted in full at the allotment price. Valid bids made at the allotment price have been allotted an amount of gold equal to the amount bid for multiplied by the above scaling factor and rounded up to the nearest 400 ounces.

By close of business in London today, applicants whose bids have been successful in whole or in part will be notified by the Bank of England of the exact weight of the gold bars allotted to them and the amount payable in respect of their purchase. Payment must be made in US dollars to the Bank of England's account at the Federal Reserve Bank of New York, no later than 12 noon New York time on 25 May 2000.

Notes for Editors

On 3 March 2000, HM Treasury announced that, the Bank of England, on behalf of HM Treasury, is to sell approximately 150 tonnes of gold from the Exchange Equalisation Account in a programme of six auctions of around 25 tonnes each in the financial year 2000/2001 on the terms and conditions set out in an Information Memorandum which was published on 3 March 2000. This is the first auction in the programme of six. It is intended that the next two auctions will be held on Wednesday 12 July and on Tuesday 19 September 2000. The remaining auctions will be held on dates to be announced in November 2000, and in January and March 2001.

Black Blade

(05/23/2000; 06:29:38 MDT - Msg ID: 31068)

Morning Wakeup Call! One more UK auction down.

Source: Bridge NewsAsia Precious Metals Review: Gold stable after overnight gains
By Hiroyuki Fujiwara, BridgeNews

Tokyo--May 23--Spot gold was stable on Tuesday in Asia after making overnight gains in the U.S. market. Prices recovered to the key level of U.S. $275 per ounce, after hovering yesterday at about U.S. $274, but dealers said players were hesitant to boost prices ahead of the U.K. Treasury's gold auction later Tuesday. Meanwhile, profit-taking capped platinum after overnight gains in the late U.S. market, they said. Short-covering--buying from players who had sold--underpinned spot gold after prices dipped from the overnight rally, the dealers said. However, the absence of fresh buying kept prices in a narrow range ahead of the U.K. auction, they said, adding that the U.S. dollar's sluggish activity did little to fluctuate gold prices. Some expect further short-covering might boost prices if better results come out at the auction.

Black Blade: Slow ahead of the UK auction, not much improvement after either. Yawn. BTW, the UK peso is still lower since the Au auctions began and will eventually approach parity with the US dollar.

SWISS GOLD: SNB gold reserves down by 9 tons May 10-19

Zurich--May 22--The Swiss National Bank Monday published its balance sheet indicating 136.6 million Swiss francs' worth of its gold reserves, or roughly 9 tonnes at current market prices, were disposed of between May 10 and May 19. The SNB refused to confirm the figures, stating as before that it will not provide precise information as to the amount of gold sold. Market watchers warn that the gold may have only been lent to the markets and not actually sold.(Story.13976)

Black Blade: Shhhhh��, don't tell anyone, but they're selling gold! It's a secret ya know.

SHIFTY

(05/23/2000; 06:52:57 MDT - Msg ID: 31069)

Topaz

Yes I need to learn to cut and paste. Sounds like a pre-school assignment. I need to spend some time reading my computer manual. When I right click it's never an option. Sorry for all the posts. Lets hope the roof repair I have to do today works out better! LOL $hifty

elevator guy

(05/23/2000; 08:21:42 MDT - Msg ID: 31070)

@Any forum member with an answer!

After relating the whole gold carry trade and paper gold price suppression to my wife, she stumped me with the following statement-

"What could make the game stop, since they have been playing it so well, so long?"

Me- The Washington agreement, which capped gold sales, remember the big breakout last year?

Her- And where is the price of gold now?

Me- Uh, well, um, about $275.

Her- So if they can play the market like a fiddle even after the Washington agreement, even with the gazillion ounces of gold loans outstanding, whats to stop them from doing so indefinitely?

Me- Saying nothing, but thinking of putting on some tights and a cape, with a big GATA emblem accross the chest...

Well, it seems to me, (first I read Farfel, then I think of it), that the US dollar, the bond market, and the stock market will all have to go down together, before gold really gets it legs.

Assuming what I heard is right, the only missing piece of the scenario is a weak US Dollar. IF the paper gold market is used to show the dollar strong, then something must happen to the paper gold market, before gold will soar.

Which makes GATAs efforts right on target.

Unless, of course, we want things to continue as they are.

Wow, it really is scary, these time we are in.

Feels like something big is just around the corner.

Or maybe not?

elevator guy

(05/23/2000; 08:23:58 MDT - Msg ID: 31071)

@Sancho, Henri, JavaMan, Journeyman

Thank you for your responses. At this time, I have nothing further to add to what was said.

Nice to know that some will respond on this board.

Cavan Man

(05/23/2000; 08:48:59 MDT - Msg ID: 31072)

elevator guy

By Jove! I think you've got it!

That's the game we play; a waiting game. Too bad investors in PM must seemingly hope for disaster in order to realize "returns" on their investments. I really believe that very few of us are "disaster mongers" and paranoid gold bugs. We are simply people who believe in and enjoy having and holding hard assets. The investment world around us is quite different. Too bad the investment universe lacks any degree of balance. Why must we continually court disaster? It is part and parcel of the human condition to be, irrationally exuberant!

The POG always finds a way to rise. NATURAL LAWS ARE NOT IMMUTABLE. Good day to all.....CM

Hill Billy Mitchell

(05/23/2000; 09:15:56 MDT - Msg ID: 31073)

Official release

http://www.bog.frb.us/releases/H15/update/Hill Billy Mitchell (05/18/00; 15:28:01MT - usagold.com msg#: 30791)
Official release
http://www.bog.frb.us/releases/H15/update/

Official: Federal Reserve Statistical Release

Release Date: May 22 2000

Rates For Thursday, May 18, 2000

Federal funds 6.49
Treasury constant maturities:
3-month 5.92
10-year 6.56
20-year 6.66
30-year 6.24

upside-down spread FF vs long bond = (.25%)

Hill Billy Mitchell

(05/23/2000; 09:18:48 MDT - Msg ID: 31074)

Official release

http://www.bog.frb.us/releases/H15/update/
Official: Federal Reserve Statistical Release

Release Date: May 22 2000

Rates For Friday, May 19, 2000

Federal funds 6.51
Treasury constant maturities:
3-month 5.89
10-year 6.51
20-year 6.64
30-year 6.22

upside-down spread FF vs long bond = (.29%)

USAGOLD

(05/23/2000; 09:32:51 MDT - Msg ID: 31075)

Today's Gold Report: Aurophobia Afflicts Press, Wall Street

CLICK HERE TO RECEIVE AN INFO PACKET ON GOLD5/23/00 Indications
�Current
�Change
Gold June Comex
274.70
1.50
Silver July Comex
5.04
nc
30 Yr TBond June CBOT
93~24
-0~07
Dollar Index June NYBOT
110.70
-0.28


Market Report (5/23/00): Gold was down in the early going with the Bank of England auction
results being described as "neutral" by Reuters, and having "attracted reasonable prices" by FWN.
Today's action reinforces the view we've had for quite some time that these auctions have declined
in importance and the gold price is looking beyond -- to external factors. We should be as well.
These sales will continue to have an effect and the anti-gold press will continue to trump them up
in order to do their part in keeping gold checked, but the effect is waning and the public is
becoming more inured both to the sales and the anti-gold rhetoric. Note that yesterday's gold price
run-up completely ignored the fact that the BOE auction was in the works the next day. That
speaks volumes. Gold instead became one of two primary beneficiaries to the weak stock markets
-- the other being bonds. We may get to the point that bonds lose their luster along with stocks in
this interest rate laden market leaving only gold standing.

Note also today that the dollar continues to weaken. The euro registered a strong performance
yesterday and is doing well today in the early going. The yen is also in an uptrend against the
dollar as rumors circulated that the Japanese central bank appears to be laying the psychological
groundwork for an interest rate increase. It is also interesting to note as the BOE loaded the gold
on the pallets to be shipped to parts unknown, the British pound was taking a hit in forex markets.
FWN quotes a gold broker saying, "The auction seems to have passed without much incident, so
gold prices could rebound after slipping last week as the auction approached." He said that the fact
shorts are heavily dominant on COMEX could trigger a sharp short-covering rally if the price does
start to rise." That view pretty much aligns itself with ours (doubly so with the stock market weak
again today at the open) and we are going to end on that note.

Have a good day, fellow goldmeisters. See you back here tomorrow.

USAGOLD

(05/23/2000; 09:34:50 MDT - Msg ID: 31076)

Looks My Link Didn't Work: Please Click Below for an Info Packet Which Includes "GOLD ALMANAC 2000"

http://www.usagold.com/Order_Form.htmlThank you.

Leigh

(05/23/2000; 09:55:37 MDT - Msg ID: 31077)

Another Gem from Golds Revenge

Posted on Kitco this morning:

Golds Revenge (God's Revenge is Gold's Revenge) ID#249267

Gold's Revenge is God's Revenge

I received an
Invitation to
Fly to England
And
Bid for gold
They tempted me
With fantasies of buying
Gold
For a price
That would be a steal
But I would not fly
Across the ocean and
Join those men
Those robbers of gold
Because one thing I've
Learned in this life of mine is
That no man really ever robs
Gold
Instead
Gold robs men of their very
Souls

Leland

(05/23/2000; 10:29:05 MDT - Msg ID: 31078)

Some new Headaches for ATM's, Bill Changers....

New-look $5 and $10
bills ready for release

Tuesday, May 23, 2000

By DAVID VOREACOS
Staff Writer

Like Andrew Jackson, Ulysses S. Grant, and
Benjamin Franklin before them, Abraham Lincoln
and Alexander Hamilton are getting face lifts.

As part of the federal government's battle against
Computer Age counterfeiters, the Federal Reserve
will begin shipping redesigned currency Wednesday
with larger portraits of Lincoln on the $5 bills and
Hamilton on the $10 bills.

The bigger portraits and other security features
embedded in the bills represent the final retooling of
the $535 billion in U.S. currency, and are similar to
earlier steps taken to overhaul the twenties, fifties,
and hundreds.

Don't worry: Those $5 and $10 bills now in your
billfold, mattress, or pocket still will be honored.

And George Washington's visage on the almighty
dollar will remain the same: "It's not counterfeited,"
said Bob McCarthy, public affairs manager for the
Federal Reserve Bank of Philadelphia.

As with the larger denominations, the U.S. Bureau of
Engraving and Printing in Washington, D.C., the
agency that prints the nation's paper money, has
made changes both dramatic and subtle to the new
greenbacks.

The image of Lincoln, the nation's 16th president,
looks out more directly from the new $5 bill, while
the sawbuck's Hamilton, the first U.S. Treasury
secretary, has a more pronounced set of curls.

No longer will they be in the center of the bills, their
place since 1929. Rather, the images are set slightly
to the side, like Andrew Jackson's on the new $20
bill, Ulysses Grant's on the $50, and Benjamin
Franklin's on the C-note.

The shift allows room for distinctive watermarks of
each man's face -- another device to foil
counterfeiters.

The new dough also includes embedded nylon
threads with the words "USA FIVE" or "USA TEN,"
and tiny lettering visible only with a magnifying glass.
This will not show up when a bill is reproduced on a
color copier.

The view of the U.S. Treasury building on the back
of the $10 bill will be from the front, rather than the
side, while the Lincoln Memorial on the flip side of
the $5 bill will be more pronounced.

New $100 bills released in March 1996 were the first
to feature new portraits, but the government had
begun incorporating anti-counterfeiting devices
several years earlier. These represented the start of
its push to stay a step ahead of the technology of
counterfeiters.

Using laser printers, color copiers, and ink-jet
systems, the creators of funny money were making
strides in the United States. But the worst damage
was being done overseas, where foreign
governments such as those of Syria, Russia, and
North Korea were suspected of flooding Europe and
Asia with billions of dollars in bogus $100 bills.

Because two-thirds of the $535 billion in U.S.
currency is overseas, the Federal Reserve feared for
the integrity of its money. And with $100 bills making
up two-thirds of the cash supply, the threat from
overseas governments was real, officials said.

Government officials claim the new currency has
done its job. They estimate that only 3/100ths of 1
percent of existing money is bogus.

"The new bills have proved effective, but nothing is
counterfeit-proof," said Jan H. Gilhooly, special agent
in charge of the U.S. Secret Service office in
Morristown. "I'd venture to say that within a week,
we'll see people counterfeiting [the new $5 and $10
bills]."

Gilhooly said that his office, which covers New
Jersey's 14 northern counties, seized $1.4 million in
fake money last year. Nearly half of that came from
Colombia, he said.

Like their already redesigned counterparts, the new
bills may not glide smoothly at first through vending
machines or turnstiles at train stations, officials say.

In fact, existing ticket machines at the PATH
stations in New Jersey and Manhattan will reject the
new bills, said Steve Coleman, a spokesman for the
Port Authority of New York and New Jersey.

Coleman said the authority, which runs the PATH
train system, has ordered new scanning equipment
for the turnstiles and expects to install it in the fall.

Meanwhile, he said, "We'll put up notices to alert
people so they don't put in the new bills."

For several months, the Bureau of Engraving and
Printing has been preparing manufacturers of coin
changers and vending machines for the switch.
Representatives from the bureau met in December
with industry officials and gave them 1,000 bills of
the new currency so that they could make changes in
sensors driven by computer software.

"We're not anticipating any problems," said William
P. Donahue of Magner Corp. in Durham, Conn.,
which makes coin and currency counting devices.
"The Federal Reserve system has made more of an
effort to work with the manufacturers over the past
few years."

Thanks to the BERGEN RECORD, Fair Use For Educational/Research Purposes Only)

TheStranger

(05/23/2000; 10:49:29 MDT - Msg ID: 31079)

Inflation Update

Abridged from today's WSJ:
May 23, 2000

Economists Boost 2000 Inflation Estimate
________________________________

New Survey Projects 3.1% As Doubts Rise on Fed
Keeping Prices Down
_________________

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

WASHINGTON -- Growing numbers of economists are boosting
inflation
estimates for the year, suggesting widespread skepticism
about the success
of the Federal Reserve's campaign to restrain price
increases.

Analysts surveyed by the Federal
Reserve Bank of Philadelphia now
expect inflation of 3.1% this year
and 2.7% in 2001, as measured by
the consumer price index. In
February, analysts expected inflation
of just 2.5% for the remainder of this
year and 2.6% in 2001.

The new numbers, contained in a
quarterly report released Monday,
are in line with an array of inflation
forecasts that have been revised
steadily upward in recent months.

.... the increasingly pessimistic forecasts underscore
the fears of many
economists that factors that have long helped to restrain
inflation have all
but disappeared. "It's becoming much riskier to bet that
inflation will abate
significantly in the months to come," said Diane Swonk,
president of the
association. "The surer bet is that inflation will
stabilize or continue to
accelerate."

But in recent months, import prices have risen as the
global economy
continues to recover, and many companies report that wage
and benefit
expenses are increasing more rapidly as they struggle to
recruit and retain
workers. Also, many managed-care companies have raised
premiums,
hurting companies' bottom lines and increasing pressure
to raise prices.

The inflation forecasts highlight doubts about whether
the Fed's campaign
to cool the pace of economic growth and keep a lid on
inflation is working.
The central bank has raised interest rates six times
since June, including an
aggressive half-percentage point move last week. Fed
officials hint that
further increases lie ahead.

"We're in a period where inflation risks are very real,"
Fed Vice Chairman
Roger Ferguson said Monday after an appearance before the
Independent
Community Banks of America. "It's important for us, as we
continue to
focus on long-term price stability, to do what we're
supposed to do -- to
try to keep those risks from becoming reality."

While the interest-rate sensitive housing sector has
shown some indications
of beginning to slow in the face of the Fed moves, there
are few other signs
that the economy's torrid pace is cooling. The Philly Fed
survey, in fact,
found that many analysts boosted estimates of
inflation-adjusted growth in
gross domestic product for the year to 4.9% this month
from 3.8% in
February.

TheStranger's note:
We goldbugs sometimes expect great turmoil in the economy and the markets. But economists tend to go the other way. Nobody wants to be out on a limb in making predictions for fear of looking like a fool if they are wrong. Furthermore, very few seem to be catching on yet to the mechanics which underlie this return to long dormant inflation. For these reasons, forecasts will require more upward revisions as the year goes on. 5% or higher is already in the bag.

All of this implies, of course, that the bond market has not bottomed, rates have not peaked, high PE stocks have further declines ahead, mortgage rates are headed higher, etc. As for gold, take a look at the chart of Newmont Mining. Newmont is known by institutional investors to be the one unhedged (or slightly hedged) miner with a float large enough to accommodate big traders. This stock was up 40% last year and is up about 5% already this year. This comes amidst a stock bear market and a decline in bullion prices.

No, this is not an ad for Newmont Mining. What it is is a reminder that there is evolving a nascent ground swell of interest in gold which is already many months old. Before this is over, I believe it will spread to the metal itself as well as to the rest of the gold mining industry.

Aside to Jon - I saw your Saturday morning post, which mentioned me in a complimentary way. This is not your first vote of confidence in my commentaries. I thank you for that.

JCTex

(05/23/2000; 10:54:02 MDT - Msg ID: 31080)

elevator guy

These wives are merciless. Mine asks the same kind of questions. Embarrasing, isn't it.

Of course, they [manipulators] are good at it; they do not have to obey the same laws that we do.

Bill Murphy and GATA seem to be only ones out there with the balls to step up to the plate and take a whack at it.

Galearis

(05/23/2000; 11:04:21 MDT - Msg ID: 31081)

@Netking re silver

You said:
Based on current PHYSICAL consumption (lets foreget the other 98% right!) how long would it take for current stock piles to be used up?
***************

A difficult question to answer given several unknowns and purosefully misleading data from ostensibly pro-pms sites. Another factor is the status of Buffett's silver purchase - some of which at least seems to have been transported back to COMEX as registered stocks. Ted Butler seems to think that "they" are controlling the price with physical leasing from the Buffett hoard. (But why would he do this at 600 year low POS for a measly 3-4% physical interest when a bull market would net him many multiples of this? In other words, which side is he on now?)

At present a loose number for above ground stockpiles is 150 million oz. Of this (perhaps?) 24 million of it consists of unregistered bullion held at COMEX. One problem with this latter number is that an unknown percentage of this is likely impure silver (sterling). The numbers are also subject to change as COMEX consistantly moves in supplies in order to give the appearance of ample silver on hand - COMEX figures are keenly scruitinized. Where they get this from is always a mystery. (Buffett?)

So to answer your question exactly is very difficult. But present consumption of silver runs at 12 to 15 million ounces per month. Divide into the total above ground supplies and one would have a rough estimate for a TOCOM move at COMEX and the maximum probable time for the silver market to explode.

Maybe.

I hope this helps a little.

PH in LA

(05/23/2000; 11:18:53 MDT - Msg ID: 31082)

HAS "IT" STOPPED?

FOA (9/30/99; 7:05:31MDT - Msg ID:14963)
Comment
Why did it stop?

It didn't!

Part of the process of buying "real gold" is in the waiting for allocation. Be it actual delivery of metal, receipt of certificates for "real vault deposit" or just clearing out the cash settlement of trades gone bad. This all takes time, especially when such a large segment of the market has just been "cleaned out" financially. On the surface, new traders continue to put up their $2,000 or so of margin money and trade the Comex for some paper cash. Underneath it all, a mad scramble is going on to find gold to meet all the failed commitments. For many of the major trade houses (and BBs), they now must use their own capital to carry the dead positions of others. Most of them will (or already have) covered their financial (read that cash) positions in the paper markets. However, they must still process the real nature of the trade, "find new real gold to replace what was lent". Like this: "We sold the gold and lent the money to a fund to trade with. If that fund cannot put up more capital to back the loan (because the price of gold has gone so far against him), and pay the higher rental rate (now in effect) when his 1 to 6 month loan comes due; We will attach his assets and sell them off to buy the gold back ourselves."

This whole cat and mouse game can take a while as everyone sweats the outcome. Right now, many of those funds are so far under water on their "financial trades" (example: short Yen at 125), that a sell off of their "book" leaves little. SO, the bank has to borrow gold against it's own capital and pay the new "lease rate" as it "fully allocates" (returns) the gold position to the lender (mostly private entities). The gold owner (and lender) cannot and will not just sit there and watch the collateral (the trading book of the hedge fund) for the loan go up in smoke. Especially if the lease rate is skyrocketing from an "obvious major world shortage of gold"! Even if the bank is successful in borrowing gold, they still must one day buy in the open market to refund the second gold loan. They can go round and round, borrowing gold to replace the "last" deal. All the while driving the lending rate higher and higher as more and more lenders back out at any lease rate offered...

...All of this takes time as it slowly unwinds (fails). Without major official gold supplies, this gold market is going to grind to a complete halt. The day traders (that currently run in and out) will one day find the entire system "force major" and their margins frozen. Of course, they will be settled in cash, but only after the "street gold" price runs into the many thousands.




FOA/Trail Guide:

Please consider your post above, written shortly after the Washington Agreement was announced.

Can we agree that now "it has stopped"? That the POG is once again being effectively "managed" for the "good of all"? (Especially the bullion banks with their overhanging short positions?) Do Central Banks once more "stand ready to lease gold into the market to forestall any price rise" as Greenspan so famously stated way back when?

Should we conclude that the provision that we thought would severely restrict Central Bank leasing is either: (a) not having the desired effect, (b) being undermined by German Central Bank derivitive activity as alledged by Reg Howe? Or is there some other explanation?

What exactly was the Washington Agreement statement on leasing that caused so much excitement? Was it not something about an agreement not to "increase" leasing activity? Which might just as well been stated to the effect that "current levels of leasing will not be curtailed"? If by that it is meant that "current levels of leasing necessary to "manage" the POG downward will be allowed just as long as the rate of decline is not increased", we might not realistically expect to see much change in the current status quo until central banks stop "standing ready to lease gold into the market to forestall any price rise".

So just where are we "on the trail"? Has "it" stopped?

Are we lost in a semantic wilderness? Is Reg Howe correct, that the Germans really are pursueing a very different policy than what we thought was meant in the Washington Agreement?

Al Fulchino

(05/23/2000; 11:34:09 MDT - Msg ID: 31083)

Counterfeit $$$

Leland (5/23/2000; 10:29:05MT - usagold.com msg#: 31078)
Some new Headaches for ATM's, Bill Changers


Did you know that their is metal in some of the ink in our money? aside from the usual ways to check for funny money, ie the threads, watermark, the text band running through the bill and using the marker to check the bills, a device is available that when you place the bill over the unit, will light up if the metal ink is present in the appropriate places. Just thought someone might like to know.

beesting

(05/23/2000; 11:35:23 MDT - Msg ID: 31084)

Comments on 2 Great Posts!

First one:
TownCrier # 31060 5/23/2000 01:58 MT(KICKING THE TIRES)
Sir, Great educational post on the inner workings of the PAPER markets.To show my agreement all I can say is:

RIGHT ON BROTHER!!!

Second one:
SteveH # 31067 5/23/2000 05:34MT
Excerpts:

>

Am I jumping to conclusions,or is the BOE Gold being sold actually held at an account in New York U.S.A.???
And if so how would these Gold sales show up on U.S. export balance sheets? Elwood are you out there?

It would also be nice if we could ever find out who todays BOE Gold buyers are.....beesting.

Leland

(05/23/2000; 11:53:41 MDT - Msg ID: 31085)

@Al Fulchino

"A device ", was very interesting.

Could I have the maker's name, or the trade name of the
device? I'd like to do some research. Thanks!

Voyager

(05/23/2000; 12:14:19 MDT - Msg ID: 31086)

(No Subject)

--------------------------------------------------------------------------------
SIGHTINGS
--------------------------------------------------------------------------------




It's Amazing What One
Has To Believe...To Believe
In Gun Control
By Michael Z. Williamson
c. 1999, 2000



That the more helpless you are, the safer you are from criminals.

That you should give a mugger your wallet, because he doesn't really want to shoot you and he'll let you go, but that you should give him your wallet, because he'll shoot you if you don't.

That Washington DC's low murder rate of 69 per 100,000 is due to gun control, and Indianapolis' high murder rate of 9 per 100,000 is attributable to the lack of gun control.

That "NYPD Blue" and "Miami Vice" are documentaries.

That an intruder will be incapacitated by tear gas or oven spray, but if shot with a .44 Magnum will get angry and kill you.

That firearms in the hands of private citizens are the gravest threat to world peace, and China, Pakistan and Korea can be trusted with nuclear weapons.

That Charlton Heston as president of the NRA is a shill who should be ignored, but Michael Douglas as a representative of Handgun Control, Inc. is an ambassador for peace who is entitled to an audience at the UN arms control summit.

That ordinary people, in the presence of guns, turn into slaughtering butchers, and revert to normal when the weapon is removed.

That the New England Journal of Medicine is filled with expert advice about guns, just like Guns and Ammo has some excellent treatises on heart surgery.

That one should consult an automotive engineer for safer seat belts, a civil engineer for a better bridge, a surgeon for spinal paralysis, a computer programmer for Y2K problems, and Sarah Brady for firearms expertise.

That the "right of the people peaceably to assemble," the "right of the people to be secure in their homes," "enumerations herein of certain rights shall not be construed to disparage others retained by the people," "The powers not delegated herein are reserved to the states respectively, and to the people," refer to individuals, but "the right of the people to keep and bear arms" refers to the states.

That the 2nd Amendment, ratified in 1787, allows the states to have a National Guard, created by act of Congress in 1917.

That the National Guard, paid by the federal government, occupying property leased to the federal government, using weapons owned by the federal government, punishing trespassers under federal law, is a state agency.

That private citizens can't have handguns, because they serve no militia purpose, even though the military has hundreds of thousands of them, and private citizens can't have assault rifles, because they are military weapons.

That it is reasonable for California to have a minimum 2 year sentence for possessing but not using an assault rifle, and reasonable for California to have a 6 month minimum sentence for raping a female police officer.

That it is reasonable to jail people for carrying but not using guns, but outrageous to jail people for possessing marijuana.

That minimum sentences violate civil rights, unless it's for possessing a gun.

That door-to-door searches for drugs are a gross violation of civil rights and a sign of fascism, but door-to-door searches for guns are a reasonable solution to the "gun problem."

That the first amendment absolutely allows child pornography and threats to kill cops, but doesn't apply to manuals on gun repair.

That a woman in a microskirt, perfume, and a Wonderbra, without underwear, is a helpless victim, but someone getting paid $6 an hour to deliver the cash from a fast food place to the bank at the same time every night is, "asking for it." And you won't allow either of them to carry a gun.

That Illinois' law that allows any government official from Governor to dogcatcher to carry a gun is reasonable, and the law that prohibits any private citizen, even one with 50 death threats on file and a million dollar jewelry business, is reasonable. And it isn't a sign of police statism.

That free speech entitles one to own newspapers, transmitters, computers, and typewriters, but self defense only justifies bare hands.

That with the above, a 90 lb woman attacked by a 300 lb rapist and his 300 lb buddy, has the "right" to kill them in self defense, provided she uses her bare hands.

That gun safety courses in school only encourage kids to commit violence, but sex education in school doesn't encourage kids to have sex.

That the ready availability of guns today, with only a few government forms, waiting periods, checks, infringements, ID, and fingerprinting, is responsible for all the school shootings, compared to the lack of school shootings in the 1950's and 1960's, which was caused by the awkward availability of guns at any hardware store, gas station, and by mail order.

That we must get rid of guns because a deranged lunatic may go on a shooting spree at any time, and anyone who owns a gun out of fear of such a lunatic is paranoid.

That there is too much explicit violence featuring guns on TV, and that cities can sue gun manufacturers because people aren't aware of the dangers involved with guns.

That the gun lobby's attempt to run a "don't touch" campaign about kids handling guns is propaganda, and the anti-gun lobby's attempt to run a "don't touch" campaign is responsible social activity.

That the crime rate in America is decreasing because of gun control, and the increase in crime requires more gun control.

That 100 years after its founding, the NRA got into the politics of guns from purely selfish motives, and 100 years after the Emancipation Proclamation, the black civil rights movement was founded from purely noble motives.

That statistics showing high murder rates justify gun control, and statistics that show increasing murder rates after gun control are "just statistics."

That we don't need guns against an oppressive government, because the Constitution has internal safeguards, and we should ban and seize all guns, therefore violating the 2nd, 4th, and 5th Amendments of that Constitution, thereby becoming an oppressive government.

That guns are an ineffective means of self defense for rational adults, but in the hands of an ignorant criminal become a threat to the fabric of society.

That guns are so complex to use that special training is necessary to use them properly, and so simple to use that they make murder easy.

That guns cause crime, which is why there are so many mass slayings at gun shows.

That guns aren't necessary to national defense, which is why the army only has 3 million of them.

That banning guns works, which is why New York, DC, and Chicago cops need guns.

That the Constitution protects us, so we don't need guns, and can confiscate them, thereby violating the 5th amendment of that constitution.

That women are just as intelligent and capable as men, yet a woman with a gun is "an accident waiting to happen."

That women are just as intelligent and capable as men, and gunmakers' advertisements aimed at women are "preying on their fears."

That a handgun, with up to 4 controls, is far too complex for the typical adult to learn to use, as opposed to an automobile that only has 20.

That a majority of the population supports gun control, just like a majority of the population used to support owning slaves.

That one should ignore as idiots politicians who confuse Wicca with Satanism and exaggerate the gay community as a threat to society, but listen sagely to politicians who can refer to a self- loading small arm as a "weapon of mass destruction" and an "assault weapon."

That Massachusetts is safer with bans on guns, which is why Teddy Kennedy has machinegun toting guards.

That most people can't be trusted, so we should have laws against guns, which most people will abide by, because they can be trusted.

That a woman raped and strangled with her panties is morally superior to a woman with a smoking gun and a dead rapist at her feet.

That guns should be banned because of the danger involved, and live reporting from the battlefield, which can keep the enemy informed of troop deployments, getting thousands of troops killed and perhaps losing a war, is a protected act that CANNOT be compromised on.

That the right of online child pornographers to exist cannot be questioned because it is a constitutionally protected extension of the Bill of Rights, and the claim that handguns are for self defense is merely an excuse, and not really protected by the Bill of Rights.

That the ACLU is good because it uncompromisingly defends certain parts of the Constitution, and the NRA is bad, because it defends other parts of the Constitution.

That a house with a gun is three times as likely to have a murder, just like a house with insulin is three times as likely to have a diabetic.

That police operate in groups with backup, which is why they need larger capacity magazines than civilians, who must face criminals alone, and therefore need less ammunition.

That we should ban "Saturday Night Specials" and other inexpensive guns because it's not fair that poor people have access to guns too. That guns have no legitimate use, but alcohol does, which is why we issue cops beer instead of guns.

That police and soldiers are the dregs of society who were unfit to get any real job, which perfectly qualifies them with the high moral standards and keen intellects to handle these complicated tools and be our guardians. _____


Copyright 1999, 2000 by Michael Z. Williamson. Permission is granted to copy in part or in total for non-profit purposes, provided due credit is given.




SIGHTINGS HOMEPAGE
http://www.sightings.com


This Site Served by TheHostPros

Holtzman

(05/23/2000; 12:28:58 MDT - Msg ID: 31087)

EU/China concord involves OIL

http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3APOIPF8C&live=true&tagid=ZZZC19QUA0C⊂heading=asia%20pacificHoltzman here,

I tried transmitting this last Friday but somehow it failed to arrive at your end of things.

--------------
EU/China concord involves OIL
--------------

Have a glance at this ridiculously complex but eye-opening URL [above].

And I quote... "The main concession won by the EU was a promise to end its monopolistic system for oil imports. An EU official said that non-state Chinese traders will be eligible to buy up to 20 per cent of China's oil imports after Beijing joins the World Trade Organisation (WTO). The percentage is set to change with time."

This would seem to confirm some of what FOA/Trail Guide has been anticipating.

If the goal is to transform China from a totalitarian danger into a safe neighbour, it first necessitates our acting as safe neighbours ourselves. The only thing Americans have to fear right now is that their elected leaders may unwisely choose not to extend the hand of commerce.

To-day's world of 200+ independent nations is in many ways akin to to-day's market of many-yet-tiny gold mining companies. Consolidation, both in nations and in mining concerns, seems quite likely going forward. As I've said previously, I expect the world will gradually come to comprise about half a dozen continentally-focused superstates plus "Other." That world can either be a place where the superstates distrust one another, or it can be a place where the superstates themselves are loosely associated by friendly trade across the oceans and mountain ranges. I prefer the latter. And so, evidently, do the current leaders of both the EU and China.

--------------
Americans in Europe
--------------

To Perplexed regarding (5/9/2000; 8:59:23MT - usagold.com msg#: 30173), please be assured, I do appreciate American selflessness (both U.S. and Canadian) in rescuing Europe from three nightmares in the twentieth century. Rome left harsh monuments warning of its military might wherever its armies had alighted. Americans left a very different sort of monument all across Europe: fields of white headstones as far as the eye can see, evidence not of military menace but rather of individual fathers and sons who were willing to lose their lives in order to put the world to rights. One cannot help but be moved by such sacrifices.

Even today, we react differently to the sight of uniformed Americans as opposed to uniformed Europeans. Perhaps it's the difference between the constabulary and the fire brigade. An approaching constable may well be intent on assisting you, but then again he may be intent on making your life unpleasant. By contrast, an approaching fire-fighter has no intent apart from saving your life.

Your U.S. Army uniform gave you the same grace that an imperial passport (later a commonwealth passport) gave us. One could travel round the world from one British possession to another, and at each port of call simply display the passport and be properly welcomed. Were one to cross into non-British possessions, of course, one would quickly encounter the sort of distrustful presumption of guilt you were often witness to. No doubt your experiences would have been different had you travelled within the Russian sphere of influence whilst wearing your same uniform.

--------------
Marks to Market
--------------

TownCrier, I'm impressed by the presentation regarding the German 20 Marks, and I'm pleased with the way you've incorporated my words. Oh, and by the way, my thanks for the tip-off to the new Lord of the Rings movies in production. The only part that bothers me is the pointed ears on Legolas. He's an elf, not a Vulcan. Ah, well. It's more than compensated for by the vision of 15,000+ soldiers of the New Zealand army serving as extras during the Battle on the Pelennor Fields. My Stars, I'd love to be onsite the day they film that! Haradrim, Rohirrim, Orcs, oh my!

Yours,
I.V. Holtzman

Netking

(05/23/2000; 13:10:19 MDT - Msg ID: 31088)

@Galearis - 31081

Mr Galearis - Thanks for your reply - much appreciated Sir.
regards
Netking

Journeyman

(05/23/2000; 13:14:49 MDT - Msg ID: 31089)

Seidman on inflation @Stranger, ALL

-Caller: ~"What's wrong with an economy growing at 10%. So what if there's a little inflation?" ~"A little bit of inflation is no longer possible. We know from experience that once it starts, it's very difficult to stop. It goes like the wild-fires in New Mexico. If inflation gets out of control, that's the end." -CNBC Chief Commentator Bill Seidman, 18-May-00, 11:25:54 AM

Seidman is the guy who administered the "Resolution Trust Corporation," which more or less cleaned up the savings-and-loan debacle.

Regards, J.

Netking

(05/23/2000; 13:17:23 MDT - Msg ID: 31090)

@Holtzman/Town Crier

(As an 'Golden aside') Re your:"my thanks for the tip-off to the new Lord of the Rings movies in production"

H/TC - I've seen sneaks of this & the backdrop/landscape is just as awesome on film as it is in real life(but then I would say that!)...will be worth the wait for the big screen, Peter Jackson's bringing it together well.
Regards Netking

TownCrier

(05/23/2000; 13:32:33 MDT - Msg ID: 31091)

Not exactly a freefall, but that wide-brimmed hat ain't slowing it down much...

http://finance.yahoo.com/q?s=^IXIC&d=1yWith two-month losses taking approximately 37% away from the Nasdaq Composite highs seen in March, how many still believe the bull market is intact, or even that this is "just a correction?"

Cavan Man

(05/23/2000; 13:57:51 MDT - Msg ID: 31092)

Holtzman 31087

and Trail Guide.....Why should China accept USD for their oil? Why not accept the Euro.

TG: Is this potentially the epiphany of your initial "basket settlement" concept? Thanks...CM

Cavan Man

(05/23/2000; 14:00:41 MDT - Msg ID: 31093)

Cavan Man 31072

Please accept my apology for the "Berraism". Should read:

NATURAL LAWS ARE IMMUTABLE.

Yogi's from these parts. It must be something in the Budweiser. CM

Al Fulchino

(05/23/2000; 14:05:34 MDT - Msg ID: 31094)

(No Subject)

Leland (5/23/2000; 11:53:41MT - usagold.com msg#: 31085)
@Al Fulchino
"A device ", was very interesting.

Could I have the maker's name, or the trade name of the
device? I'd like to do some research. Thanks!



Leland, Just bought two for myself, and saw it arrive today, email me at fulchinos@prodigy.net and I will let you know if it works dependably, and worth the purchase. Also this is not an ad for a product that could in any way compete with USA GOLD

Beowulf

(05/23/2000; 14:06:20 MDT - Msg ID: 31095)

TheStranger

In regards to your inflation post. How can inflation be higher when the price of Gold is falling?

Heh, Heh, I think we know that answer. :)

Farfel

(05/23/2000; 14:21:06 MDT - Msg ID: 31096)

Watching the tech funds flows

Nasdaq still performing as I predicted, the bottom is still nowhere in sight.

However, I would not be surprised to see a strong jump tomorrow that might even sustain through Friday, after which another collapse is in the works. If we do not get a jump tomorrow, these financial markets are in grave danger of a very early panic sell.

Here are the key dates where we might see great Nasdaq devastation caused by new expirations of lockups with the concomittant sale of millions of dollars in stock:

May 29

June 5-7

The Nasdaq will settle well below 3000, I believe its short term bottom is somewhere between 2400-2500, unless things get completely out of hand, in which case I will not say where I think it can go.

Meanwhile gold is poised to rocket as more resources are directed to stemming the mounting panic in the Nasdaq, that will ultimately contaminate the Dow and the bond markets, culminating in a huge dump in the US Dollar, which will trigger the gold price explosion. Essentially the Fisher Team assigned to protect the markets cannot act effectively in several markets at one time.

With respect to gold stocks, I think the coming gold rocket will save several companies already written off by long suffering investors, in much the same way that certain Nasdaq stocks long believed to be invincible will be in bankruptcy court soon.

Thanks

F*

Strad Master

(05/23/2000; 15:02:40 MDT - Msg ID: 31097)

Farfel

Small-time Tech playersI read with GREAT interest your predictions. As a corollary to what you've been writing, I want to add that I was listening to Bob Brinker's "Money Talk" show whilst driving around this weekend and heard several glum-sounding small investors call in to ask WHEN will the tech sector turn around? There are a lot of people out there who invested in some worthless tech stock without doing any due dilligence whatsoever, instead doing so just on the recommendation of their bartender, pool cleaner, or gardener. (Shades of 1929!) Now, they are grimly clinging to the hope that these worthless techs will bounce back, magically enabling them to exit with a minimum of financial damage. To his credit, the guest host (I forget his name) did not give them much in the way of solace, preferring to imply that it is going to be a long, hard haul in the short run for anyone invested in ANY sector of the stock market right now. It was really pathetic to hear the caller's desparation. It is far worse when one stops to consider the huge margins that now exist coupled with the staggering debt people have incurred just to be in the stock markets at all. If your scenario comes to pass, it won't be pretty when the chickens come home to roost. Today's selloff was just another nail in the coffin. I'm glad I have a little gold and no stocks.

Fond regards to you and Mrs. Farfel from all the Strads.

BTD

(05/23/2000; 16:01:57 MDT - Msg ID: 31098)

I just sold my Krugerrands and bought futures contracts

Two weeks ago I sold 300 Krugerrands and transferred the funds into my commodity trading account and bought 3 gold futures contracts. This is my preferred way to hold gold. In my trading account, I invested the margin funds in 6-month treasuries (earning 6.05% interest), and used these treasuries as margin to buy 3 gold contracts (unleveraged). In this way, I earn interest on my money, yet still retain full exposure to movement in the gold price (I have my cake and I'm eating it too). Barring a collapse of the Comex or the world as we know it, this is a very low risk investment. In fact, in some ways, one can consider this as lower risk than holding physical gold: futures contracts require a low commission (with the right broker) while physical purchases and sales cost a high premium charged by the dealer; I earn interest on my treasuries, while the holder of physical "loses" the interest he could have earned. If I wish, I can add more long gold positions if I'm willing to use leverage. If the price of gold makes a nice dip, I'll probably double my position and still only be leveraged 50%, which is still a rather low-risk trade considering the current low price of gold. Yet, even though I'm fully invested in both treasuries and gold, I can still trade other commodities with the bulk of the funds in the account. I'm also currently long 10 July silver contracts hedged with 10 July silver 500 puts.

The reason I'm telling you all this is to provide an alternative perspective to the bulk of the posters on this forum. I enjoy this forum and all the theories posited here, but I thought a variant opinion might be useful. I anticipate I'll be condemned as a "trader" (Farfel doesn't like traders), and many will probably assure me that the world is coming to an end (per FOA/Trail Guide) and that paper gold will be driven into the ground while physical gold skyrockets. Well, I AM a trader, and I don't believe FOA/Trail Guide can foretell the future any more that the $5.00/minute psychics on late night TV. Trail Guide is a very articulate and thoughtful commentator, but his ideas are just theories like everyone else's.

The reason I'm making these comments about Trail Guide is not to criticize him, but to point out the danger of assuming that anyone can predict the future. Here are some of my experiences:

1. I grew up in a church that predicted the world was going to end within "the next 5 or 10 years". It didn't happen. I still believe it will, some day, but the church leaders could not predict when. I made a lot of bad decisions over the years based on their predictions and I'm paying the penalties for those decisions now.

2. I thought Nick Guarino, who publishes The Wall Street Underground newsletter, was right when he said the stock market was extremely overvalued and due for an imminent collapse. His logic was compelling and he warned us to sell our stocks immediately. I did so and got out of the market in December of 1994, just as the stock market began the most incredible bull market ever. Oh, and where did this sage suggest putting the money? Into German marks, because the dollar was going to keep falling for the foreseeable future. Well, apparently the future was not so foreseeable, because the mark shortly began falling and I lost 25% of my money.

3. Gary North, Jim Lore, et al, presented overwhelming evidence that the year 2000 computer bug was going to be a huge problem. They had numbers, facts, statistics and they "knew" what the future held. I had begun to wise up by this time, however, so I did not sell everything I own and move to backwoods Arkansas like North advised. I decided to take precautions, but in such a way that if nothing happened, I would not have burned my bridges. So, though I now have 200 pounds of beans and grains, these are things I eat regularly anyway. I just bought some extra groceries in advance (from a co-op for a very reasonable price � under $200, all organic). I feel sorry for the people that have $3000 worth of freeze-dried food that will constipate them if they try to eat it for more than 2 days in a row. But the year 2000 computer fear did cost me dearly in my investments. I was long 10 gold contracts with an average price of $255. I got 5 at $257 and 5 at $253 (the very bottom). I was perfectly positioned and rode the price spike all the way up last September. But I believed the future-tellers when they told me that the nation's economy and infrastructure, including the currency, were going to collapse come year 2000. Gold was all that would retain its value, they assured me. The sky was the limit, the move in September was just the beginning, I reasoned. So instead of selling at the top and taking my profits in cash, I held on and rode it all the way back down. Actually, I added to my position at the top and ended up taking a substantial loss on the whole thing. Because I believed these men could predict the future.

4. On my bookshelf I have a book entitled "Silver Profits in the Eighties" by Jerome F. Smith, copyright 1982. This author had previously accurately predicted the huge jump in silver prices of 1979-1980. In this book he predicted, "There will be another, more fervent, scramble beginning in 1982 that will carry the silver price to the $100 to $200 range by 1985." He presented chapter after chapter full of demand and supply statistics that presented a seemingly inarguable case to support his prediction. The only problem is that he was completely wrong. There were no "silver profits in the eighties". Silver did pop up to the mid-teens briefly in 1983, but then it plunged to the $5.00 range and stayed there for the succeeding 17 years. A far cry from the "$100 to $200 range by 1985".

5. In December of 1999, Harry Schultz, "the highest-paid investment advisor in the world", predicted crude oil would go to $50/barrel by early 2000 due to the Y2K bug. Because I believed the future-tellers about the coming Y2K computer crisis, I also decided to believe that Mr. Schultz could foretell the future. After all, he was "the highest-paid investment advisor in the world". I accordingly bought $2000 worth of out-of-the-money crude call options, which proceeded to expire worthless when it turned out that Mr. Schultz could not foresee the future better that anyone else.

I bear full responsibility for all these decisions. There was a lot of stupidity on my part in these events, so you don't really need to point that out. I acknowledge it. However, let me reiterate the lesson I've learned: NO ON CAN PREDICT THE FUTURE! There is a chance that Trail Guide's scenario will come true, but he does not know the future any more than I know whether a coin I flip will come up heads or tails. The tenor of this forum often seems to assume that his scenario is pre-determined fact. My hard experience has taught me that no event is determined until it happens, and no matter how learned and documented a hypothesis is, it can still prove wrong as easily as it can prove right. This is why economics is an art and not a science � and why economists can look at the same data and come up with opposite conclusions.

The other lesson I want to share is that if you bet on a collapse of the foundational paradigm, you are almost certain to lose. Paradigms do change, but so infrequently that you may as well play the lottery as bet on it. I don't consider gold coming back into favor as the collapse of a foundational paradigm. I would consider the following to be the collapse of foundational paradigms:

1. America collapsing into social chaos and martial law being imposed.
2. A banking collapse where all the banks close and depositors lose all their money.
3. The US federal government defaulting on its debt.
4. All the computers in the world crashing due to a computer date problem.
5. The return of Jesus Christ.
6. A 1929-1932-style stock market crash.
7. A 1930s-style great depression.
8. President Clinton canceling the elections and staying in office after his term expires.
9. Silver going to $100 to $200 per ounce.
10. Gold futures contracts being sold into the ground while the price of physical skyrockets.
11. The US currency completely collapsing like the German mark did in the 1920s.

Any of these events could happen, and many probably will at some point, but I propose that trying to bet on the timing is a losing proposition. All the numbers on a roulette wheel eventually come up, but the odds are 37 to 1 against you.

Now to placate the physical fanatics among us, let me close by saying that in my safe deposit box I have retained another 400+ Krugerrands that have not bowed their knees to Baal.

beesting

(05/23/2000; 16:06:45 MDT - Msg ID: 31099)

Congressman Paul apposes NEW China trade bill.

http://www.house.gov/paul/press2000/pr052300.htm
FOR RELEASE:
May 23, 2000

Paul Sees Last Minute Changes to China
Bill, Announces Opposition
New Government Commission/Managed Trade Principles Included in Rule

Washington, D.C. - Reacting to a proposed House rule allowing the so-called Bereuter
language, and other changes, to the bill on normal trade relations with China, Congressman Ron Paul
today announced he would vote against the legislation if the substance of the rule's changes were
included in a vote on final passage.
Paul said, "I have consistently voted year-in and year-out for normal trade relations with
China, but now we have a situation where the House leadership has decided to cave-in to the liberal
Democrat demand for more and more government. I cannot support that."
For months, Paul has said he would support permanent normal trade relations with China.
Last week, a version of the bill (HR 4444) was put forward by Phil Crane, a Congressman who,
like Paul, strongly advocates free markets and free trade. However, when the President was unable
to convince his own party to support him, he and the House leadership cut a back room deal aimed
at securing the votes of liberal Democrats.
"This Congress has been repeatedly criticized by the very people who elected us," said Paul.
"Time and time again, I have heard it said that we are not doing the job we have been elected to do.
Time and time again, we have given in to President Clinton and the liberal minority in the House.
Enough is enough. These last minute changes have created a PNTR bill that introduces a new
government commission and put our taxpayers on the line for millions in so-called 'technical aid' to
Communist China. Apparently, the administration believed that left-wing members of Congress
could be convinced to vote for freer trade and freer markets just so long as we will give more
foreign aid to our Communist Chinese adversaries."
Paul concluded by stating that managed trade features of the legislation now being discussed
also disappointed him.
Paul said, "It is tiresome to continue hearing about free trade from the very people who are
trying to cut off free trade. For example, this last minute language included so-called 'anti-surge
protections'. How in the world can any serious person suggest that is free trade? The changes made
to appease the liberals made this bill the very opposite of what it claimed to be trying to accomplish.
"As so often happens with large bills in Washington, PNTR became a vehicle for big
government, managed trade, foreign aid giveaways and the creation of new government
commissions. I could have supported a clean bill that simply meant lower tariffs. But this bill, and the
means by which these changes were brought about, cried out for rejection of the legislation and the
entire process."


Press Releases
Complete Archive
Project FREEDOM
Home Page

beesting

(05/23/2000; 16:11:57 MDT - Msg ID: 31100)

Correct Spelling "opposes"

http://www.house.gov/paul/press/press2000/pr052300.htmSheeeessse....Sorry.

goldhunter

(05/23/2000; 16:31:11 MDT - Msg ID: 31101)

BTD, Good Going...

http://www.usagold.comBTD, you have done a great job...you have come up with a trading plan, and you have put it into force...

Your plan is a very good one, with limited risk of dollar-loss...if futures stay the same, you simply roll forward, and you earn a T-bill return while you are waiting...

I see this as safe, wise, and PROFITABLE when the "gap-up" arrives(eventually)...I offer that your return on invested capital will be exactly the same as your 300 coins seed money in any rally...and you can add/subtract easily...
GOOD JOB! Developing and putting your plan into action is more than most will do for themselves.

Good luck, and get ready...The evidence seems to be getting more bullish.

I wish more of my clients traded like you are trading...

RossL

(05/23/2000; 16:38:48 MDT - Msg ID: 31102)

BTD - "I just sold my Krugerrands"

BTD said: (I have my cake and I'm eating it too)

You don't have the cake!

Al Fulchino

(05/23/2000; 17:03:11 MDT - Msg ID: 31103)

BTD (5/23/2000; 16:01:57MT - usagold.com msg#: 31098

BTD, Often I wonder when I write if any of it is worthwhile to read. So in turn I write to thank you for sharing your post with me and others. Your thoughts and actions are interesting and thought provoking. Thanks again for sharing.

Elwood

(05/23/2000; 17:42:42 MDT - Msg ID: 31104)

BTD (5/23/2000; 16:01:57MT - usagold.com msg#: 31098)

http://www.mises.org
BTD, I think I was the one who bought your Krugerrands. Thanks. If I might suggest something...you may have been reading the wrong people. Try some von Mises at the above link. Elwood

TownCrier

(05/23/2000; 17:55:56 MDT - Msg ID: 31105)

Greetings, Sir BTD, thanks for offering your useful and balanced post

http://www.usagold.com/goldenchalkboard/gc_turkey.htmlThe point of the link I have provided is not for the commentary that you will find there, but for the instructive price graph located at the top. This is offered simply as an objective counterpoint to your observation of the appealing nature of your described investment strategy:

"I earn interest on my treasuries, while the holder of physical "loses" the interest he could have earned."

The chart I have offered is only one specific example of a great many similar charts for a great many national currencies...the euro included.

From the chart, and those similar, would you be willing to admit that there are gold owners in the world that are not what we might exactly call "overly concerned" about their foregone interest earnings on retained currency. Take euroland. The "performance" of this "sterile asset" known as gold has far outpaced the sub-five percent rates you would earn on interest bearing notes. (But for that matter, you could certainly entrust your sterile krugerrands from the safe deposit box into the hands of a bullion bank through which you could have hope of earning real metal as the interest you surely desire, and also hope to ever claim your deposit again when you want it.) (Not to be taken as a recommendation.)

Is it possible that you are, like those many others before you, currently embarking upon a prediction of the future that may not play out as expected? That is to say, is it possible that you are attempting to "see" into the future through eyes that are influenced by a distinctly dollar-based and dangerously temporal perspective?

What is to say the U.S. currency won't also fall into a pattern similar to these many others? What isn't to say that even as you are earning interest on your treasuries, you are also taking a net capital loss at the same time through falling bond prices? And meanwhile, climbing price inflation on real goods would erode the value of the dollar interest you eventually receive if you hold to maturity.

What I have tried to do--and it might be fair to say that Trail Guide fits this category also--is not to attempt "predicting the future" per se, but rather offering commentary and analysis to explain the market forces which have largely been responsible for our past and present conditions. Then, by monitoring the steady or evolutionary nature of these forces, we may all draw natural and reasonable conclusions for the most likely course of the road ahead.

In the simplest example, we see the price-setting futures markets to continue to be sold ever lower, even in the face of fundamental reasons for real gold to be priced ever higher. To fail to recognize the nature of the beast for what it is is to blindly (and futilely) expect a future change in behaviour that the qualified and undeniable past could not bring. Do you find it that inconceivable that under present conditions, the gold futures contracts could continue to be sold lower until that specific marketplace folds from discredit? So you see, we must all remain vigilent...not only do economic conditions change, but marketplace rules and regulations can change (or terminate) also.

Good luck in your efforts, and don't please don't let this "counterpoint" dampen your enthusiasm toward sharing your additional thoughts and perceptions.

HI - HAT

(05/23/2000; 18:03:16 MDT - Msg ID: 31106)

Voyager msg.#31086 No Subject

The dominant theme of our time is UNREALITY.

aunuggets

(05/23/2000; 18:19:04 MDT - Msg ID: 31107)

BTD - "BRAVO"...well, sort of:

Have you ever noticed how the true wisdom of many posts is contained in the very last sentence or paragraph, or even very shortly thereafter ? (grin)

Other considerations......falling AU prices, margin calls, the default of future contract writers, government default or devaluation, inflation above and beyond the received interest rates, ad nauseum.

It's all paper.....It's all debt. Anything you do not control is beyond your control. Short of the remaining 400 Krugerrands, which portion(s) of your stated investments do you retain 100% control over ?

Nick Guarino was obviously right, but his timing stunk !

Y2K ? I guess we of the skeptical crowd (and experienced with Gary North fortune telling ala the 1970s-80s) still believe the Y2K "catastrophy" was nothing more than another scare monger ploy to bilk many more millions (billions ?) from the sheeple of the world ready and willing to absorb more bad news. Or was it a simple multi-decade "plan" of the computer elite from the beginning ?

Fortune Tellers (Technical Analysts ?).....your observations I totally concede.

But perhaps RossL said it best......"You don't have your cake".

HI - HAT

(05/23/2000; 18:22:50 MDT - Msg ID: 31108)

BTD msg.#31086 Blood Sport

The "Foundational" paradigm HAS collapsed.

A Deer shot in the heart continues to run, because it does not know, it's supposed to be dead.

SHIFTY

(05/23/2000; 18:30:21 MDT - Msg ID: 31109)

N.Y. Ponzi

Nasdaq 3,164.55 + Dow 10,422.27 = 13,586.82 divide by 2 = 6,793.41 PONZI
Down 159.97 It's an all time Ponzi low!! I think they are getting the hang of it.
How low can they go?
$hifty

TownCrier

(05/23/2000; 18:38:19 MDT - Msg ID: 31110)

Sirs Netking and Holtzman, and beesting

Netking, thanks for passing along the encouraging personal insights into the quality of the sets. It's gonna be a looooong three-and-a-half years.

Holtzman, thanks for the pat on the back regarding the assembly of the German 20 Marks page. I trust you discovered the link to your full commentary and attendant personal disclaimer.
On Legolas and ears...yes, I made the same silent observation ("Gads, they've sharpened their ears!" I thought to myself.) And then I wondered if, in fact, the character in question was in the role of Legolas at all, and not perhaps just an odd camera angle producing pointy ears upon the likes of Eomer. The blond hair was my hitch. I carry a distinct impression that Legolas had black hair, whereas blond (GOLD) hair would only be found principly upon the heads of Finarfin's decendants, Galadriel herself being among them. Can you confirm whether Legolas indeed had hair of gold to match his heart? The scene in question was surely Helm's Deep, wouldn't you say?

Beesting, I'm pleased you found merit in my post this morning. You might find my most recent offering to BTD to be nearly a sequel along a similar theme, but touching on much wider elements.

HI - HAT

(05/23/2000; 18:55:09 MDT - Msg ID: 31111)

Holtzman........................The Robe Please

Might you not don your Machiavellian Robe, and treat us to more of the Shark - Dolphin type axiom. :- ) .

Elwood

(05/23/2000; 18:57:42 MDT - Msg ID: 31112)

beesting (5/23/2000; 11:35:23MT - usagold.com msg#: 31084)

Yes, it's a pretty good bet that the BOE gold is coming out of the Fed.

I think that "today's" buyers are yesterday's sellers. This stuff is headed to Arabia, you can just about bet your last dollar on that.

Just got the word on March outflows from the Fed: 44 tonnes.

Canuck

(05/23/2000; 19:22:32 MDT - Msg ID: 31113)

CRB

Page snapshot Tue 23 May 2000 21:17 ET
Description Last Change Percent Change
Bridge CRB 225.2 +0.4 +0.18 %
--------------------------------------

Oil over $29/bbl.

The CRB was below 210 just a few weeks ago.

@ Stranger,

Excellent 'inflation' post today.

BTD

(05/23/2000; 19:48:58 MDT - Msg ID: 31114)

TownCrier msg#: 31105

Before I address your post, TownCrier, let me thank you and the others who have responded to my post (goldhunter, RossL, Al Fulchino, and Elwood, HI-HAT, aunuggets).

TownCrier, please don't think that my post was a criticism of you or Trail Guide. I may not agree 100%, but I enjoy the insight of both of you - that is why I have been a daily reader of this forum since last summer. My main objection is that so many in this forum seem to have put Trail Guide on a pedestal and have accepted his predictions as inevitable. I guess it is none of my business if people want to do that; it's just that I have placed different market gurus on the pedestal many times (as I documented in my prior post) and I have paid some heavy penalties for doing so. When we stop thinking for ourselves, we may as well stop thinking.

You point out, via the link to the chart, the danger of a depreciating currency and the benefit of owning gold in that circumstance. You asked me, "would you be willing to admit that there are gold owners in the world that are not what we might exactly call "overly concerned" about their foregone interest earnings on retained currency?" Absolutely! But don't forget that though I am earning interest on my treasuries, I am also using those treasuries as margin in order to hold a significant long position in gold futures. So I am earning the interest AND benefiting from the move in the gold price. And if I leverage some, I can benefit even more from a move in the gold price than if I held the physical. I am not in any way denigrating the benefits of holding gold in an inflationary or chaotic economic environment. It's just that you see it as an either/or proposition: either earn interest on your money, or hold gold. I'm trying to point out to people that it is possible to do both (even if RossL says I don't have my cake). The risk is that the futures market will stop functioning properly � and I feel that the odds are heavily against such an occurrence. Such an occurrence would be a change in a "foundational paradigm" as I stated in my prior post. I have spent my whole life betting on changes of foundational paradigms, and I have been wrong every time. If I have learned anything in my trading experience, it is to always bet with the odds, not against them.

You asked me, "Is it possible that you are, like those many others before you, currently embarking upon a prediction of the future that may not play out as expected?" The nature of any investing requires one to try to predict the future. So, yes, of course I am trying to predict the future in my trading. But I am making my own predictions of the future, not relying on someone else's. I will profit or pay for my predictions � but I will not give advice to anyone else, lest I have to pay for my predictions twice when they prove wrong and I am blamed. Another rule I have in my trading is to make the trade with the highest odds, then plan for it to go against me. That way I either hedge myself or get out quickly. I rarely "expect" a trade to play out as expected.

You continued your query with, "That is to say, is it possible that you are attempting to �see� into the future through eyes that are influenced by a distinctly dollar-based and dangerously temporal perspective?" I'm not sure I understand what you are asking. I am influenced by my experiences and my studies of history, of course. I think you're asking if I think the dollar will continue as the strong medium it currently is. I do not. I think it will fall, and fall hard. That is why I am long 300 ounces of gold via futures, 400+ ounces of gold via Krugerrands, 50,000 ounces of silver via futures, as well as $11,000 of retirement funds in gold mutual funds. But do I see the Comex collapsing? Probably not, but that's why I am still hold some Krugerrands, just in case.

You asked, "What is to say the U.S. currency won't also fall into a pattern similar to these many others? What isn't to say that even as you are earning interest on your treasuries, you are also taking a net capital loss at the same time through falling bond prices? And meanwhile, climbing price inflation on real goods would erode the value of the dollar interest you eventually receive if you hold to maturity." If the U.S. currency falls significantly, I'll profit from my long gold and silver futures. I won't take a net capital loss on falling bond prices, because my treasuries are 6-month maturities that I will hold to maturity. And climbing price inflation would certainly erode the value of the dollar interest I receive, but that will be compensated for by the increase in the value of my long metal futures contracts.

You wrote, "In the simplest example, we see the price-setting futures markets to continue to be sold ever lower, even in the face of fundamental reasons for real gold to be priced ever higher. To fail to recognize the nature of the beast for what it is to blindly (and futilely) expect a future change in behavior that the qualified and undeniable past could not bring." I think I differ with you on this point. I agree that the futures markets are being sold lower in the face of bullish fundamentals, and that eventually the laws of supply and demand will win out. But you see the price of physical eventually breaking loose and increasing dramatically while futures continue to be sold lower. I, in contrast, see the price of physical eventually breaking loose and increasing dramatically and dragging the futures up kicking and screaming with it. This has been the historical nature of the beast. If physical gold breaks up and the shorts try to continue selling futures lower, the arbitrageurs will slaughter them. The Comex may freeze up if prices get too high (ala the Hunt brothers and silver in 1980 or the Tocom palladium contract recently), but I think it is unrealistic to think that the two will diverge as you propose. That would truly be a change in behavior of the beast that is without historical precedent, as far as I know. Can you give an example of a futures market where the futures and the physical diverged in the manner you are predicting?

You asked, "Do you find it that inconceivable that under present conditions, the gold futures contracts could continue to be sold lower until that specific marketplace folds from discredit?" I won't say it is impossible, but I really can't conceive it happening in this fashion. You continued, "So you see, we must all remain vigilant...not only do economic conditions change, but marketplace rules and regulations can change (or terminate) also." I agree that changes happen and we must be vigilant, but I still maintain that betting on an unlikely, once-in-a-lifetime "foundational paradigm" change, against heavy odds is not the wisest bet.

Your post did not dampen my enthusiasm. I knew I was voicing an opinion that flowed against the current of thought of this forum, so I expected disagreement.

goldhunter

(05/23/2000; 20:09:38 MDT - Msg ID: 31115)

TownCrier #31105

http://www.usagold.comSir, your position may be in error, as the TBill in question that holds margin for underlying futures is short term instrument that yields positive real rate of interest...

Given this instrument (short term by definition) equity will always increase faster than inflation erodes purchasing power, and the holder is therefore better off.

As for your assumption that futures and physical trading opposite directions...up to today, futures at various exchanges domestically and world-wide are prime price-discovery instruments for all MAJOR world wide traded contracts(commodities)...cash and futures trade (almost exactly) together day and week in and out...

Will it or can it change? Possibly...But futures seem to lead up and down...physical is (usually0 priced from futures...

I thought he had a good plan that "should" reward him, and I told him so...Over time, his Tbill income could really add up, over time his gold could REALLY ADD UP too.

Chris Powell

(05/23/2000; 20:15:09 MDT - Msg ID: 31116)

PPT, gold manipulators running out of gas

http://www.egroups.com/message/gata/465?Latest from GATA's Bill Murphy.

http://www.egroups.com/message/gata/465?


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

Henri

(05/23/2000; 20:16:00 MDT - Msg ID: 31117)

PH in LA Msg.# 31082 and Trail Guide

PH in LA you wrote:
SNIP
"...Can we agree that now "it has stopped"? That the POG is once again being effectively "managed" for the "good of all"? (Especially the bullion banks with their overhanging short positions?) Do Central Banks once more "stand ready to lease gold into the market to forestall any price rise" as Greenspan so famously stated way back when?

Should we conclude that the provision that we thought would severely restrict Central Bank leasing is either: (a) not having the desired effect, (b) being undermined by German Central Bank derivitive activity as alledged by Reg Howe? Or is there some other explanation?

What exactly was the Washington Agreement statement on leasing that caused so much excitement? Was it not something about an agreement not to "increase" leasing activity? Which might just as well been stated to the effect that "current levels of leasing will not be curtailed"? If by that it is meant that "current levels of leasing necessary to "manage" the POG downward will be allowed just as long as the rate of decline is not increased", we might not realistically expect to see much change in the current status quo until central banks stop "standing ready to lease gold into the market to forestall any price rise".

So just where are we "on the trail"? Has "it" stopped?

Are we lost in a semantic wilderness? Is Reg Howe correct, that the Germans really are pursueing a very different policy than what we thought was meant in the Washington Agreement? ..."
UNSNIP
__________________________________________________________
The german banks being accused of running foul of the WA are not the "Central bank" of Germany (which is Bundesbank) I believe, they are Deutsche Bank mostly and Dresner Bank to a lesser extent.

Deutsch Bank as you recall bought out the Federal Reserve Bank member "Bankers Trust" and is now fully infected with their henchmen which were all paid a hefty sign-on bonus (Hush Money?). I'm thinking in Europe they are still taking credit for being a Fed Reserve Bank as "Bankers Trust" (and as such may still be able to trade Federal reserve gold certificates out the back door for the Clinton machine thereby circumventing the US gold window closure of 1971...but as a foreign agent they are forbidden to act as agents of the US govt...oops I forgot, duh, the Fed is not a US govt agency) and in America they are taking credit for being a foreign bank with no reporting responsibility whatsoever. It may be that they (Deutsche Bank) are acting directly as agent for the secretive Exchange Stabilization Fund (ESF) run directly by the President and the Secretary of the Treasury with no accountability to Congress.

So far I do not see any evidence that they are "Selling or Leasing any gold or writing any new leases which was what the WA was about...their activity is in the realm of gold derivatives...not exactly the same thing. It is not clear if the wholesale dealing in gold futures options is against the Washington Agreement or not...my guess is its a loophole.

Got Gold? Get More!

Cavan Man

(05/23/2000; 20:46:21 MDT - Msg ID: 31118)

Nikkei

Tokyo index looks poised to take out 16K.

Cavan Man

(05/23/2000; 21:07:43 MDT - Msg ID: 31119)

Welcome BTD

Excellent thoughts! Please post more often. I admire your trading savvy but pour moi, that type of strategy would make me quite nervous given the very different nature of the current gold market. To each his own eh?

Regarding TG, can you be certain his ideas are jsut theories? Also, IMHO, TG is not making predictions but rather, he is writing from a frame of reference unkown to most with the singular objective of encouraging others to view the world through his particular type of looking glass.

Post on Sir BTD!

Elwood

(05/23/2000; 21:10:07 MDT - Msg ID: 31120)

BTD (5/23/2000; 19:48:58MT - usagold.com msg#: 31114)

BTD,
Does your home pay interest? Of course it doesn't, yet, many choose to purchase a home. Why? Because it has a use value greater than the alternative uses of the currency with which it was purchased. If the dollar fell to zero value, would you sell your home to realize your "gain"? In another sense, why have you not sold your home and placed the proceeds in REITs that will earn you income?

The Krugerrands you sold are the same today as the day they were minted. They will be the same 1,000 years from now. Yet a dealer presumably offered you less currency than you paid for them. You were told that they "depreciated," yet how could that be when they haven't changed? Their use value is the same today as it was 1,000 years ago and as they will be in the hands of my children's grandchildren many years from now.

It makes no difference if the dollar is hyper-inflated or not. It makes no difference if TG/FOA/Another is right or not. The use value of the gold is the same in exactly the same way that the roof over your head will be the same whether or not the dollar goes to nothing.

You state: "When we stop thinking for ourselves, we may as well stop thinking." It is you, sir, who has depended on the thinking of others to tell you where you should place your savings. You stated as much in your original post.

Once again, I thank you for allowing your Krugerrands to find a home where their true worth is recognized, and I wish you the best of luck trading with the proceeds you received from their sale.
Elwood

Solomon Weaver

(05/23/2000; 21:10:26 MDT - Msg ID: 31121)

Town Crier - hope you didn't get silver on your boots.

TownCrier (5/23/2000; 1:58:27MT - usagold.com msg#: 31060)
Sir Solomon Weaver, if I may, let's kick the tires on Mr. Butler's investment vehicle...
...............................
Hey TC....great tire kicking job....to tell you the truth, I too tend to see the value in things as what they are worth to me...not simply as investments...

Simple example, last year I spent about $500 of hardware and a solid day of my own labor to install an oldfashioned long handled well pump on an old well at the back of our lawn..it was basically a y2k fallback. But now, when out strolling our land, I always enjoy the few minutes it takes to draw up a good charge of water and take a nice cool sweet swig of clean water....ahhhhhhh.

Anyway, all of my silver is in solid form. It's really funny when you buy a $1000 face value box of junk coins and it comes in the mail...the postman is bound to ask "what the heck is in there?" My pat answer is "buckshot - save when you buy it in bulk".

But Ted Butler does allude to an important aspect of being a silver investor...suppose...just suppose....that you are rather wealthy and want to put $1 million into silver...you really do have a problem considering how you will store 7 tons of silver.

The way I see it, of all the "paper" options available in silver, the COMEX certificate is the most solid....and for someone with a lot of money who simply wants to make quick capital gains in silver (even in a defaulting silver market), that route should be the best.

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

Concerning both gold and silver there are three aspects:

1.Industrial and utility demand (including jewelry, etc.)
2.Investment demand (private gold hoards in coins and bars)
3.Monetary demand (bank reserves).

In the gold world, the bears would have us believe that demand 1 is moderate...demand 2 is feeble...and demand 3 is a barbaric relic...the truth of course is that all 3 are strong with demand 3 being hidden behind the mask of "central banks selling their gold" (to eachother).

In the case of silver it is obvious that demand 1 is very strong but 2 and 3 are very weak. The practical and psychological demonitization of silver is much stronger than for gold. Who "invests" in silver anymore...and what nation would even consider putting it in a coin or using it as a reserve asset? So, "if" either of these demands were to increase, we could see significant silver shortages/ price rises.

Think of this....almost every kid between the ages of 7 and 13 in the USA has "convinced" their parents (or used their allowance money) to buy "at least" $10 worth of Pokemon cards (some cards are now "worth" over $50!!!!). Would it be so far fetched in such a nation to see 50 million families "jumping into" the silver craze????

It is probably a reasonable guesstimate to say that more than $2 trillion worth of the worlds fiat money exists in the form of coin and bills (remainder digital). In a "chronic" currency crisis (and in one where the anchor dollar is shifting dramatically) what would happen if a few smaller countries came to the realization that they could "stabilize" their currency some by minting silver coins (or silver alloy)...even trying to replace a simple 1% of fiat bill face value circulation with a silver coinage would put a $20 billion dollar demand on silver (at today's prices only about 4 billion ounces (remember estimated reserves are in the range of 200-500 million ounces). America would never do this, but in the same way that FOA claims that gold backing is strengthening the Euro (in due time), a small country like Thailand or Viet Nam or Phillipines could easily consider minting a silver coinage which would give their people a form of money which was not open to international currency speculators. Even an "announcement" that "any country" was seriously planning to "remonitize silver" could drive the silver market bonkers.

More so than gold, silver was the money in the hands of all people...the poor man's gold as I like to say....if gold returns to being money, then silver will not stand on the sidelines!!!!

Poor old Solomon

Rod

(05/23/2000; 21:17:10 MDT - Msg ID: 31122)

BTD message # 31114

Thank you, thank you, for a most refreshing post. You mirrored my feelings exactly. I've been lurking for years and this is my first post to this forum, so you know that what you have said was important. Also, thanks to all the other posters for giving me the much needed food for thought.
Regards to all, Rod

Rod

(05/23/2000; 21:26:48 MDT - Msg ID: 31123)

BTD make that message #31098

your message about no one being able to predict the future.
Thanks again, Rod

TownCrier

(05/23/2000; 21:43:47 MDT - Msg ID: 31124)

Excellent reply BTD, and thanks again for providing a balanced view

You have done us all a service with your words, "When we stop thinking for ourselves, we may as well stop thinking."

It is in that interest that I implore no-one to accept my own offerings at face value, but rather to subject them to a fair litmus test of logic and credibility in the light of current and past events and market news. Please don't get the impression that I am attacking or failing to approve (like you would care, want, or need MY approval) of your strategy. I am just talking through the scenarios out loud so that we all might see where benefits and where pitfalls both may be found.

I am glad you concur that your strategy may be held in different regard from the perspective of many currencies that are not currently enjoying what the dollar has going for it at this time. Similarly, I see the attractive aspect of your sitution, as you've described: "I am earning interest on my treasuries, I am also using those treasuries as margin in order to hold a significant long position in gold futures. So I am earning the interest AND benefiting from the move in the gold price."

However, my cautionary note remains intact...that your T-bills are at risk to rising interest rates (reflected as falling T-bill prices), and your "gold" is at the same risk against receiving delivery when you want it in a fashion similar to that as described earlier today with regard to silver warehouse receipts. (And admittedly, such a scenario would reflect a changed "foundational paradigm" as you've called it...but more on that shortly.) Further, while you've suggested that you might tap further into the leverage potential to "double down" on further declines in the contract price, should these declines continue, you will have thrown away your original 300 K-rand position in margin calls simply due to the nature of these financial derivatives having expiration dates.

You expressed a good caution, "I have spent my whole life betting on changes of foundational paradigms, and I have been wrong every time. If I have learned anything in my trading experience, it is to always bet with the odds, not against them."

You see, based on that comment, we are truly on the same page...or at least I feel I am on your page, if you would prefer not to be viewed as being on mine. As I explained in my prior post to you, to bet that the gold futures will turn around and command higher prices is to be betting AGAINST the odds. My personal expectation is that the futures will be sold lower and lower, even as past events could not meaningfully bring about a "foundational paradigm shift" to sustained higher prices that you are once again betting on...yes?

A fair question many have asked before is: Where is the gold coming from to feed the world's voracious and record appetite during this times? They want to know where the gold is coming from even at these lower prices. Well, dear BTD, you have provided yourself to be the perfect case study. Thanks to your efforts and method of moving into a "paper gold" position, the physical market has been fed with 300 real ounces. Your contentment in the paper form being a reasonable substitute or equivalent for the metal is exactly what has helped this phenomenon continue for as long as it has. As soon as metal fails to reach the hands of those who want it, the physical price and market will have to adjust accordingly, no matter what prices are being paid for COMEX gold futures. More on this later, as you address it in your conclusion also.

In response to my question about the potential for losses in your brokerage margin account from a general market selloff in Treasuries (yes, even the short-term T-bills) that would be the expected outcome of expectations of inflation and higher interest rates, you said:
"If the U.S. currency falls significantly, I'll profit from my long gold and silver futures. I won't take a net capital loss on falling bond prices, because my treasuries are 6-month maturities that I will hold to maturity. And climbing price inflation would certainly erode the value of the dollar interest I receive, but that will be compensated for by the increase in the value of my long metal futures contracts."

That sounds well reasoned. It also all is founded on the premise that gold futures will somehow be bid higher where they haven't before. (The post Washington Agreement price explosion last Sept.-Oct. was just a panicky knee-jerk reaction. As soon as the principle players looked around and evaluated that there was no fundamental change where COMEX type futures markets were concerned, they promptly resumed "business as usual"...leapfrog selling of the nearby price-discovery futures immune to delivery. This was done and continues to be done today even in the face of the post-WA environment of tightening physical availability. So again, we thank you for your generous contribution of 300 real ounces into the physical market.

Certainly, as you say, IF (a big if) futures paper trades higher, you will perhaps come out on top as you have planned, but will you receive a cash settlement at such a time, or will you be able to reclaim your gold? To reclaim you gold would be to ask for delivery during expiration of you contracts, and that would entail the selling of your Treasuries to meet the contract price. Thus, you would not be able to hold them until maturity, and may in fact take a bit of a cash loss on the deal.

A worse case scenario involves the futures contract prices continuing to move with my expectations (lower), against your expectations (higher). In such a scenario, aggrevated if you have "doubled down" you contract postions, you will get margin calls, and will thereby be forced into selling your T-bill prior to maturity...possibly into lower prices. As such, you would have losses on top of your contract losses. An effective way to turn your original 300 ounces of gold into vapor...all because you gave up on the luxury of having TIME on YOUR side. By buying into time-dependent instruments, you put others in the drivers seat, or at least, you take yourself out of it.

Certainly, the risk/reward is yours to evaluate...a personal decision.

You wrote:
"I agree that the futures markets are being sold lower in the face of bullish fundamentals, and that eventually the laws of supply and demand will win out. But you see the price of physical eventually breaking loose and increasing dramatically while futures continue to be sold lower. I, in contrast, see the price of physical eventually breaking loose and increasing dramatically and dragging the futures up kicking and screaming with it. This has been the historical nature of the beast. If physical gold breaks up and the shorts try to continue selling futures lower, the arbitrageurs will slaughter them."

On your view that given such a price separation as I have warned against, you suggest that in the end the physical price will necessarily be dragging the futures higher. Well, ok, isn't that enough there to show that the leadership position will be the physical, and those in paper will be playing catch up? But no, I don't see that as guaranteed. Even as you suggest, as have others, that the arbitrageurs will guarantee higher futures prices, I have already weighed in on the issue many days ago (I may be dead wrong) that in a battle as such, the victory will go to the determined shorts. Why? Because the arbitrageurs don't care which direction the price moves, so long as the two ends meet within mathematical acceptibility. And there is no end to the volume of contract shorts that can be written if the purpose is to keep the futures postions from running away. The mentality of the primary shorting participants is to protect their total book value against market losses, preferring instead to take their chances in settlement when the thing has crashed and the rules are changed during arbitration or whatever.

As I see it, long paper serves little noble purpose, and accordingly, the markets were not devised for them to have their day. The markets are currently behaving as they were crafted to. It is a short sellers paradise until it comes to its predictable end on an unpredictable timeline. That is why I personally continue to acquire gold regularly, not waiting all in cash until the price reaches my preferred target which may not come in a deliverable market environment. When it breaks, there will likely be no organized physical market for some time, until the price is appropriately established beyond any of our expectations.

It's like this...maybe. You are apparently comfortable with a personal postion in 700 ounces, otherwise you would have more or less, accordingly. You physically have 400 still, but your 300 ounces as a long contract is technically a fiction. And just think of the thousands of people that have their own comfort level of gold based upon paper fictions. In a busted market, not only would you continue to have the existing physical demand, but those who previously sought comfort in paper forms of gold will also be competing for the real stuff. And as your case demonstrates, the supply made available by the exchange of metal gold for paper gold will dry up, further aggrevating the balance.

In repeating your doubts that such a diversion of futures contracts and the actual good could realistically occur, you asked, "Can you give an example of a futures market where the futures and the physical diverged in the manner you are predicting?"

Sure. How about the ultimate case of termination...in the spring of 1993, for example, the London International Financial Futures Exchange ceased trading futures contracts altogether in U.S. Treasury bonds due to lack of interest in them. How hard is it to imagine no interest in buying long gold paper?

In conclusion, I simply shall reiterate that given ALL that we have seen, it is the expectation of sustained higher prices on futures contracts that seems to be the unlikely paradigm shift. A continued selloff until the market locks seems to be the odds on favorite. In any event, with physical gold, time is on your side, and however it all plays out, you will own the winning horse.

Thanks again for giving me an opportunity to explore these various nooks and crannies. Although you said you expected disagreement, please rest easy on that account. This whole thing in no different than you saying, "I plan on having a hot pastrami sandwich for lunch, and chips, too, are in my sight." How can I, or anyone, possibly dare to "disagree"? These are safe halls, my friend.

Solomon Weaver

(05/23/2000; 21:49:13 MDT - Msg ID: 31125)

(No Subject)

BTD

With 400+ Kruggerands I would say that you have a very decent "lifeboat". I would also agree that with your "structure" you will have more "dollars" early in the game (meaning when that "real" gold bull get's here) than someone holding only gold metal.

FOA makes an interesting point (which I am still not sure how much I believe, but keep in the back of my mind) that there is a "possibility" that in a major "dislocation" which causes a lock up in the paper markets, and a serious collapse of the dollar, it may become so difficult or impossible to liquidate yourself out of "contract investments" at a price (gain) which you could have had without headache had you simply held metal.

Absurd??? Simple example....in the middle of a gold banking crisis, POG looking like the 1999 NASDAQ (even better) when everyone wants a piece of the action (or sees that only gold is holding value against anything) will a buyer be willing to pay more for a one ounce Krugerrand or for a piece of paper which is "title" to the same Krugerrand?

If there is $100 billion dollars worth of gold default hitting the futures market, who do you think will get their in the money contracts paid out first, Morgan Stanley or your broker?

The amount of liquid wealth in the world today can be compared to the amount of water in a hand held water balloon...in a systemic crisis which destroys a lot of savings and capital, the amount of wealth remaining is like the amount of water which remains in your hand when the balloon pops...

The danger I see (and I believe FOA would agree) is that as a wealth asset today, gold is rather insignificant. So, the chances are low that a suddenly rising gold price would lead the world into default...the chances are much higher that the world experiences dramatic currency volatility, and capital reallocations, causing a systemic crisis where much is defaulted, and in the act of "rebuilding" from the storm (or like getting hit with an asteroid), the world recognizes that gold must lead (i.e. the multi-thousand dollar POG)....by then your futures contracts could be worthless as well as your T-bills.

Don't give up your "lifeboat" and keep having fun with your paper...hope it works in your favor.

Poor old Solomon

Solomon Weaver

(05/23/2000; 21:49:42 MDT - Msg ID: 31126)

(No Subject)

BTD

With 400+ Kruggerands I would say that you have a very decent "lifeboat". I would also agree that with your "structure" you will have more "dollars" early in the game (meaning when that "real" gold bull get's here) than someone holding only gold metal.

FOA makes an interesting point (which I am still not sure how much I believe, but keep in the back of my mind) that there is a "possibility" that in a major "dislocation" which causes a lock up in the paper markets, and a serious collapse of the dollar, it may become so difficult or impossible to liquidate yourself out of "contract investments" at a price (gain) which you could have had without headache had you simply held metal.

Absurd??? Simple example....in the middle of a gold banking crisis, POG looking like the 1999 NASDAQ (even better) when everyone wants a piece of the action (or sees that only gold is holding value against anything) will a buyer be willing to pay more for a one ounce Krugerrand or for a piece of paper which is "title" to the same Krugerrand?

If there is $100 billion dollars worth of gold default hitting the futures market, who do you think will get their in the money contracts paid out first, Morgan Stanley or your broker?

The amount of liquid wealth in the world today can be compared to the amount of water in a hand held water balloon...in a systemic crisis which destroys a lot of savings and capital, the amount of wealth remaining is like the amount of water which remains in your hand when the balloon pops...

The danger I see (and I believe FOA would agree) is that as a wealth asset today, gold is rather insignificant. So, the chances are low that a suddenly rising gold price would lead the world into default...the chances are much higher that the world experiences dramatic currency volatility, and capital reallocations, causing a systemic crisis where much is defaulted, and in the act of "rebuilding" from the storm (or like getting hit with an asteroid), the world recognizes that gold must lead (i.e. the multi-thousand dollar POG)....by then your futures contracts could be worthless as well as your T-bills.

Don't give up your "lifeboat" and keep having fun with your paper...hope it works in your favor.

Poor old Solomon

Solomon Weaver

(05/23/2000; 21:50:41 MDT - Msg ID: 31127)

BTD's LIFEBOAT

BTD

With 400+ Kruggerands I would say that you have a very decent "lifeboat". I would also agree that with your "structure" you will have more "dollars" early in the game (meaning when that "real" gold bull get's here) than someone holding only gold metal.

FOA makes an interesting point (which I am still not sure how much I believe, but keep in the back of my mind) that there is a "possibility" that in a major "dislocation" which causes a lock up in the paper markets, and a serious collapse of the dollar, it may become so difficult or impossible to liquidate yourself out of "contract investments" at a price (gain) which you could have had without headache had you simply held metal.

Absurd??? Simple example....in the middle of a gold banking crisis, POG looking like the 1999 NASDAQ (even better) when everyone wants a piece of the action (or sees that only gold is holding value against anything) will a buyer be willing to pay more for a one ounce Krugerrand or for a piece of paper which is "title" to the same Krugerrand?

If there is $100 billion dollars worth of gold default hitting the futures market, who do you think will get their in the money contracts paid out first, Morgan Stanley or your broker?

The amount of liquid wealth in the world today can be compared to the amount of water in a hand held water balloon...in a systemic crisis which destroys a lot of savings and capital, the amount of wealth remaining is like the amount of water which remains in your hand when the balloon pops...

The danger I see (and I believe FOA would agree) is that as a wealth asset today, gold is rather insignificant. So, the chances are low that a suddenly rising gold price would lead the world into default...the chances are much higher that the world experiences dramatic currency volatility, and capital reallocations, causing a systemic crisis where much is defaulted, and in the act of "rebuilding" from the storm (or like getting hit with an asteroid), the world recognizes that gold must lead (i.e. the multi-thousand dollar POG)....by then your futures contracts could be worthless as well as your T-bills.

Don't give up your "lifeboat" and keep having fun with your paper...hope it works in your favor.

Poor old Solomon

PH in LA

(05/23/2000; 22:08:18 MDT - Msg ID: 31128)

To: Henri and BDT

Henri:

Thanks for commenting on my post to FOA. Your clarification on Deutsche Bank is appreciated. Especially interesting; your observation that Deutsche is a hybrid entity with ties to both sides. Actually, I was picking up on Reg Howe's remark that the Bundesbank must be at the very least, looking the other way while Deutsche and Dresdener do whatever they are doing. Which Reg Howe agrees cannot be perfectly ascertained without more detailed data. I still would like to hear FOA's comments if he has knowledge of such details.

BDT:

Reservations such as yours about FOA/Trail Guide seem to appear here on a regular basis. But they almost always have the exact opposite effect as intended, and end up revealing more about the person voicing their feelings, than they do about FOA/Another's line of reasoning.

In face, FOA, himself is always the first to encourage each reader's own thought processes. And since his identity is so secret, he would have little reason to cultivate the kind of faith you profess to see reflected here.

Your comment that no one knows the future is well taken but deserves further thought. Yes, the future is unknowable. Yet, we humans make assumptions about it every moment of our existence. Just getting out of bed implies assumptions about the future, doesn't it? In fact; we constantly make our best effort to divine the future...and our success rate is often determined by the quality of our reasoning. The fact is, as you mention, FOA supplies a very generous helping of reason in his commentary. This is why we look forward to and follow his posts so closely. The predictive element is always based on reasoned argument and each one of us must draw our own conclusions and act upon them, ourselves.

Nevertheless, if you had followed his advice and bought physical gold at the prices you mention, you would still be ahead. And even with lower prices, you would still not lose until you sell at such a lower price...with no time constraints to worry about in the meantime...

Enjoyed your posts!

BTD

(05/23/2000; 22:16:37 MDT - Msg ID: 31129)

A response to Elwood msg# 31120, and thanks to goldhunter and Rod

A response to Elwood msg# 31120, and thanks to goldhunter and Rod

First, thanks to goldhunter and Rod for you supportive posts in response to my posts today. I felt that there were sure to be others lurking here that feel as I do and it was for your benefit that I posted. A contrary opinion has been known to be shouted down here sometimes, so I thought I'd wade into the fray.

**********************
Elwood, you asked me, "Does your home pay interest? Of course it doesn't, yet, many choose to purchase a home. Why? Because it has a use value greater than the alternative uses of the currency with which it was purchased." What is the use value of your physical gold holdings? Unless you are making jewelry or pounding out gold leaf, its ultimate use is to buy things. However, barring a complete collapse of the currency, your gold must be converted into currency in order to buy things. I doubt that you will condemn yourself when you finally make that conversion in order to purchase something, yet you question me for doing it now. Perhaps you just object to my timing? Or are you telling me that under no circumstance will you ever convert your gold into currency? What if it comes to the point that you have no other asset with which to feed your family? Will you insist on paying in gold Krugerrands (or whatever form you hold)? If you accept change it will likely be in some sort of currency and you will then be guilty of the same "sin" as I am.

You quoted my statement, "When we stop thinking for ourselves, we may as well stop thinking." Then you followed it with the following observation: "It is you, sir, who has depended on the thinking of others to tell you where you should place your savings. You stated as much in your original post." I guess you missed what I said in that original post, after I described all the times I let others do my thinking for me. Since you missed it the first time, I'll quote myself: "I bear full responsibility for all these decisions. There was a lot of stupidity on my part in these events, so you don't really need to point that out. I acknowledge it." Thanks for pointing it out anyway. I listed my stupid mistakes in hopes of helping others avoid similar errors. I have recognized and acknowledged my stupid mistakes, so you don't really need to tell me that I made stupid mistakes.

You closed with the statement: "I thank you for allowing your Krugerrands to find a home where their true worth is recognized." At the time I sold them, they were "worth" exactly what I could get for them. You and I both feel they will be "worth" more in the not-to-distant future. But basic economics tells us they are currently only "worth" what someone will pay me for them (whether in dollars, euros, pesos, sheep, cattle, guns, ammunition, silver, grain, or anything else). I traded them for cash, then traded the cash for something of equal "worth" � 3 Comex futures contracts. I agree with you that the gold price probably cannot be held down forever � I'm placing some heavy bets on that. But until the gold price moves, no one will pay more for Krugerrands, because they are not "worth" more.

TownCrier

(05/23/2000; 22:18:23 MDT - Msg ID: 31130)

Sir Solomon Weaver, and poor man's gold

You suggested "a small country like Thailand or Viet Nam or Phillipines could easily consider minting a silver coinage which would give their people a form of money which was not open to international currency speculators."

What you've described could certainly happen...a shift in the "foundational paradigm" as Sir BTD might call it. One might first ask if such an action would be deemed as likely given the current economic and political backdrop, or is there an evolution of developments underway that would cast such an event into likely development? It is possible, certainly, but...

I know this has been touched on before at the forum, but where would the line be drawn for ever poorer folks? Gold for us, silver for them, copper for you guys over there, iron for ones in mud huts, etc.

I guess at the end of the day, what is important is whether a poor man is better off taking the value of his very few excess/investment dollars and exchanging it for a current equavlent value in gold, or doing the exchange for the current equivalent value in silver. Which metal, as a whole world of probable events play out, will provide the superior wealth value in exchange for other assets (or currency) in the future?

In my book, the market's failure to recognize gold's current role/importance in the monetary world provides the prime opportunity to benefit when perceptions receive their overdue reality check. Having said that, I have no doubt that silver owners will see a handsome dollar profit, but will silver possibly gain as gold would in its relative value against other real goods? Money/currency has a unique ability to take on "additional value" due to its role. Just look at the value found in Federal Reserve Notes. Were they not to find use as currency, their value would plummet.

For that reason, I would place my weight behind gold over silver, because as you have nicely shown, gold already has its foot firmly in the monetary door...or should I say it is fully inside the bank and is taking a nap on the couch?

TownCrier

(05/23/2000; 22:32:55 MDT - Msg ID: 31131)

Sir Solomon Weaver, I forgot to mention the most important part...

I envy you your cold running water to be enjoyed under the conditions you've describes.

Ahhhhhhh...

BTD

(05/23/2000; 22:49:19 MDT - Msg ID: 31132)

TownCrier, Solomon Weaver, and PH in LA

Thank you TownCrier, Solomon Weaver, and PH in LA for your reasoned responses. You and many others here are very persuasive. I will think on the views you expressed. But there is a danger in listening too much to one side of the argument: everyone reinforces each other and it is easy to come to the conclusion that this is the only possible scenerio. I made this mistake with Y2K. I read only those who documented the dangers (with extensive facts and figures) and completely dismissed the "pollyannas" who said it would not be a problem. I did not see how it could possibly be anything but a crisis. (Let me repeat for Elwood's sake that that was MY STUPID MISTAKE).


PH in LA, you are 100% correct in this statement: "Nevertheless, if you had followed his advice and bought physical gold at the prices you mention, you would still be ahead. And even with lower prices, you would still not lose until you sell at such a lower price...with no time constraints to worry about in the meantime..." But it is the nature of trading that one makes mistakes and takes losses. I could go on and on with "if onlys". Hopefully I'm learning as I go - and I'm learning from you guys even if I don't agree completely.

Boy, I kind of stirred up a hornets' nest today, huh? I hope everyone enjoyed the excitement. I'm going to bed...goodnight.

elevator guy

(05/23/2000; 22:56:14 MDT - Msg ID: 31133)

What is my motivation?

Honestly, when I came into the Forum about last August, my only motivation was profit. And it still is, for the most part. And whats wrong with that? Are we here to save the world, or preach the evils of paper? I dont think the "lost" souls of dot.com hang out in here to listen. (But if the FRN, bond market, and stock markets tank, they might)

Now it seems that to be on the side of gold, one must shun all paper interests, or at least according to some highly respected poster(s) of the Forum's inner circle. To be in paper investments, and physical gold simultaneously, is tatamount to being internally corrupt, devoid of integrity in heart and deed.

Well, isn't that special!

Why are we here? Just waiting for the dam to break?

Dont hold your breath.

If the dollar doesn't go through a major and sudden paradigm shift, and gold is allowed to reach an equilibrium price, one could profit tremendously from paper investments. It would seem likely that a shift away from the FRN as a viable reserve currency will take some time, seeing as it is interwoven into the economies of the European Common Market nations, (among others) and with whom there is billions of dollars worth of trade. For the dollar to sink, the Euro, (main rival to the FRN, and contender for the crown of world domination), will have to sink with it, at least temporarily. And this wont happen in a flash, so dont worry about blinking, you wont miss it.

Are not the above timeframes for a paradigm shift in the FRN just as possible as theory of a sudden drop? The current that will wash away all dollar based securities and investments will have to start with a trikle, before it can rush into a torrent. You cant stop the world from turning in an instant. Trains take a half a mile to stop. And a reserve currency like the FRN will not take a sudden dump like the baht, ruble, peso, or Weimar Republic d-mark. Those are "sattelite" currencies to the dollar, and more easily affected by outside forces. And dont forget that those evil gold shorts and the cabal are still quite adept at maintaining the status quo. Just look at how easy it is for them to hold the paper POG at $275. They're not even breaking a sweat. Yet. Hey, that rhymes!

IF the dollar isn't rapidly devaluing, and gold is appreciating against the dollar, then the profit leverage of futures and options is unequalled against the relative profit one would make from just holding physical.

Now lest some wish to break my sword over their knee, rip the medals off my chest, and banish me to walking aimless in the desert, I will address the flip side.

There is the possibility that TPTB dont want to pay out, and close trading to protect their short buddies. But the default of a US market seems like a long bet. Not something I would want to bet on.

Note that this post is not a value judgement about the relative worth of holding physical, because as we all know, there is no better place to store hard-earned value. Come hell or high water, come sleet, snow, and driving rain, you cant beat real, physical gold. It is really worth something, no matter what happens in the world.

Having said that, I must also say that the theoretical scenario of making more value by the multipication of paper leverage, (given certain market conditions) is no less likely a theory than maintaining relative worth by holding physical when all hell breaks loose. (Also given certain market conditions)

But now I have no satisfaction, for paper is not working, nor is the POG going up. Sigh!

elevator guy

(05/23/2000; 23:12:20 MDT - Msg ID: 31134)

@all

I see there are many great thinking posts, that have appeared on the screen since I started mine. (I was interrupted by a phone call)

Lets let my 2 bits sit for tonight unitl I can think about Town Criers' points of reason. A great post like that, and the others, deserves consideration before reply or disscussion can be fairly made.

Good night.

TownCrier

(05/23/2000; 23:13:14 MDT - Msg ID: 31135)

Sirs Goldhunter, BTD, and Henri

Goldhunter, true enough, the short life expectancy on the T-bills mentioned certainly mitigates the potential for experiencing a loss of principle, though it is not beyond possibility, given herd mentality in a greed/fear driven market that has given way to fear. Most objective appraisals of risk and reward, however, would deem the T-bills to be better than a non-interest bearing margin account. Certainly. Yet, that does not change the fundamental risk I was attempting to point out with my post. On another note, I am pleased to find we are in agreement that "physical is (usually) priced from futures"...a drum I have been beating here for some time, and continued to use as my primary point throughout today. That being the case, a person might make a grave error were he to expect the futures prices to broadcast a breaking point being reached with the physical market. The most favorabe acquistion opportunity will be past before anyone can react.

On the Henri and BTD debate on the value of gold:

BTD said to Henri "What is the use value of your physical gold holdings? Unless you are making jewelry or pounding out gold leaf, its ultimate use is to buy things. However, barring a complete collapse of the currency, your gold must be converted into currency in order to buy things. I doubt that you will condemn yourself when you finally make that conversion in order to purchase something, yet you question me for doing it now."

Certainly we should all recognize that the purpose of any form of savings, whether it be gold or currency, is to spend it when in need. I think the reason Henri might be wringing his hands is the reason given for BTD's gold savings spending spree, that being, in BTD's words, "I traded them for cash, then traded the cash for something of equal "worth" � 3 Comex futures contracts."

It really comes down to each person's individual faith in the performance of contracts or managed currencies. While his faith has led BTD to comfortably swap the tangible wealth of gold for government securities that act as the coverage for three tickets in a highly organized wagering system on the future price of gold, Henri is clearly bemoaning the situation that, in Henri's eyes, good ol' BTD has been systematically and ceremoniously duped by the dubious siren song of real wealth growing out of paper substitutes for the original wealth.

As they say in the investment business: "The house made money. The broker made money. Hey, two out of three's not bad."

Journeyman

(05/23/2000; 23:48:21 MDT - Msg ID: 31136)

Predictions are unavoidable @BTD, Elevator Guy, TC, ALL

Predictions of some sort are unavoidable. Either you expect the dollar to be OK and that you can make money, even after the tax take (if you are still volunteering to pay a business excise tax) in some dollar denominated vehicle, or else you expect some version of a significant dollar drop.

The dollar CAN drop quickly, by the way Elevator guy:

- The dollar at its low was down 11 yen, at 120.3 yen per
dollar from 132 yen per dollar yesterday. This is better
than an 8% drop in the dollar, the bulk of this happening in
about three minutes in the middle of the night. This is an
"astounding drop" in the world's largest currency. -MSNBC
etc., 7 October, 1998 -"This is the biggest one day dollar
drop in 25 years." -Kathy Jones, Prudential Securities, 7
October, 1998


Good post on the dangers of prediction, BTD. Kudos!!!

Regards,
Journeyman

Topaz

(05/24/2000; 00:28:42 MDT - Msg ID: 31137)

Shifty: Solomon

http://www.murabitun.org/WITO/intro.html
Shifty,
I never thought I'd be giving comp instructions! ME! (a tech imbecile) anyway- here goes:
You open the page you want to link to (in the case of the link for Sol above it's an Islamic Monetary site)
Then LEFT click to highlight the address in the location box.
LEFT click on EDIT (up top) & a little box comes down- one of the selections is COPY- click on that.
(it just hangs around in cyberspace until you)-
Go to the "Link (see instructions below)" box and click on that- your little cursor doover will show up in the box,
then go back to EDIT and click on PASTE- VOILA!

Solomon:

Iffen you're lookin fer a few hours readin re: Ag coins and life in general sans Western influence try the link above.
View Yesterday's Discussion.

SHIFTY

(05/24/2000; 00:45:23 MDT - Msg ID: 31138)

GOLD

( GOLD ) It's worth it's weight in gold!

Good Night

$hifty

Topaz

(05/24/2000; 00:46:22 MDT - Msg ID: 31139)

BTD

Welcome Sire,
I must say- given your (self-admitted) financial stupidity in the past,you appear to be travelling just fine in the present
Good luck to you!

SHIFTY

(05/24/2000; 00:50:08 MDT - Msg ID: 31140)

Topaz

I will try it tomorrow! Need to get some sleep. I just printed your post. Thank you.

$hifty

Hill Billy Mitchell

(05/24/2000; 00:50:29 MDT - Msg ID: 31141)

Official release

http://www.bog.frb.us/releases/H15/update/
Official: Federal Reserve Statistical Release

Release Date: May 23 2000

Rates For Monday, May 22, 2000

Federal funds 6.52
Treasury constant maturities:
3-month 6.01
10-year 6.44
20-year 6.58
30-year 6.18

upside-down spread FF vs long bond = (.34%)

Hill Billy Mitchell

(05/24/2000; 00:56:55 MDT - Msg ID: 31142)

Temperature Inversion

I promised some solid facts concerning the current inversion situation. Be patient. I have been pulling historical records from the Fed. It has been very time consuming. I have yet more work to do before I post any results or definite thoughts concerning what I think the Fed is up to.

Let us continue the present situation. Looks more and more like the real thing. If so we have time. Remember what we see today will produce results as much as a year or more from now.

hbm

Elwood

(05/24/2000; 01:38:04 MDT - Msg ID: 31143)

Bullion Banks, BTD

Here's something to think about: What if American bullion banks figured out a way to cash-settle their short positions in dollars, while collecting their longs in Euros?

*****************

BTD, your reference to thinking for oneself was written of others in the context of placing a certain person who posts here on a pedastal.

The use value of gold as wealth is obscure to most until it becomes time use it. Then its use value is obvious to all because its currency value has changed. Yes, I will never sell my gold unless I need to, then I'll trade it for whatever it is that I need.

I don't object to your timing. What's offensive is your public display of guilt and pathetic need for reassurance from others that you've done the right thing. To obtain that you've come here and attempted to damage those who are perfect strangers to you and have harmed you in no fashion. I have nothing more to say.
Elwood

Netking

(05/24/2000; 02:44:01 MDT - Msg ID: 31144)

@Sir Solomn Weaver & Sir Town Crier

So given your arguments in the dicussion of Gold & Silver, and Gold V's Silver is not the propensity for percentage increase still greater(much) for Silver than Gold even if the currency (USD) takes a hit & we see the fundamental change of the currency link & store of value aspect(for Gold)?

Goldsun

(05/24/2000; 05:55:13 MDT - Msg ID: 31145)

Prediction Predilection

Predicting the future is simply a symptom of internalizing the notion that the future exists, which in itself becomes a prediction of the future. As is the prediction that the future will exist without our having been able to predict it.
I predict this post will appear on the forum.
Goldsun

Black Blade

(05/24/2000; 06:48:41 MDT - Msg ID: 31146)

Morning Wakeup Call! (A case of the shrinking Brit Peso!)

Source: Bridge NewsAsia Precious Metals Review: Gold stable after overnight slip
By Hiroyuki Fujiwara, BridgeNews

Tokyo--May 24--Spot gold was stable near U.S. $274 per ounce with sluggish trade on Wednesday in Asia after overnight slips following the U.K. Treasury's auction, dealers said. Platinum was supported by short-covering--buying from players who had sold--and massive speculative buying despite profit-taking capped price early in the morning, they said. Gold market sentiment was weaker as relatively less subscription at the overnight U.K. auction discouraged players from buying gold, dealers said. The Bank of England announced Tuesday it sold around 25 tonnes of U.K. Treasury-auctioned gold at U.S. $275.25 per ounce with 2.7 times subscription. The results failed to trigger short-covering in the seller-dominated market, while prices are unlikely to decline below the key $270 in the near term, they said.

Black Blade: Asia action was a dud. But the Brit Peso is down.

Europe Precious Metals Review: Gold quietly holds below $274
By Gavin Maguire, BridgeNews

London--May 24--Gold prices slipped and held mainly below the U.S. $274 per ounce mark Wednesday morning in light trade after having eased below there overnight amid sluggish Asian trade. Dealers said spot metal was expected to continue lurking near current levels until "some news or aggressive action takes us out of the current range." Silver and platinum were unchanged from overnight levels in thin conditions. Sources said although the price achieved at Tuesday's Bank of England gold auction of 25 tonnes was more or less in line with market expectations, the low level of subscription seen--2.7 times--"could be deemed as bearish by those constantly on the lookout for bad things to say and think about the gold market," said one. However, he added that the results were "obviously too neutral to prompt anything other than a slight blip in the price and business is as usual today." "That goes to show how little significance the auctions are now to the overall scheme of things, and how stuck in its ways gold is at the moment. The problem is the longer prices stay range-bound like this the less interest is shown in the market by the bigger players--and obviously the fewer bigger players means the harder it is to break out of this range," he added. Dealers noted the southbound 10-day moving average around $274.40 this morning, and suggested that indicator had the capacity to cap trade in the near term. Silver trade continued to be subdued in a $4.96-5.00 range and spot
metal is expected to remain quiet around those levels in the near term, sources said. Platinum and palladium were virtually untraded at overnight levels.

Black Blade: Europe action was a dud. At least the Brit Peso is still sinking, did I mention that? Platinum appears to have gained momentum to the detriment of Palladium. The GM and Nissan announcements have sparked speculation that Pt will be the big mover.

John Henry cuts gold exposure, temporarily eliminates silver

New York--May 23--Giant US managed futures fund John W. Henry & Company, which has around $2 billion under management, said that its financial and metals portfolio has reduced gold exposure to 60% of average position size to address liquidity issues. It has also temporarily eliminated trading in silver since the market has seen lower trading opportunities and reduced liquidity. (Story.18335)

Black Blade: Why play a losers game when the market is manipulated. Hopefully C. Powell's GATA post last night will signal the death of the manipulation game (outta ammo!). Did I mention that the Brit Peso is significantly weaker?

BOE's George: Gold sales part of sensible portfolio shuffle

London--May 23--Governor of the Bank of England, Eddie George endorsed Tuesday the philosophy underpinning the Treasury's decision to sell some of its gold reserve. He rejected claims that the government had lost money switching some of its holdings from a stable asset into the struggling euro, and said that he thought it was part of a "sensible" portfolio diversification. (Story .14907)

Black Blade: Yes, so sensible that he and Tony are under investigation over this mess. Could be a scandal in the works. Did I mention that the Brit Peso is sinking? Hmmmm���..

UK gold auction in line with S African analysts' expectations

Johannesburg--May 23--Tuesday's gold auction by the Bank of England was in line with local analysts' expectations, but opinion is divided on the prospects for the bullion price in the short term. "It's pretty much a case of ho-hum," said Angus Auchterlonie, gold analyst at SG Securities, of the sixth auction of 25 tons of gold by the UK central bank. (Story .18574)

Black Blade: The anti-gold pundits are having a tough time keeping interest in the gold sales. Did I mention that the Brit Peso is still tanking?

Indonesian minister says Freeport has agreed to cut production

Jakarta--May 24--PT Freeport Indonesia has agreed to cut production at its Grasberg open pit gold and copper mine by around 30,000 tonnes a day, according to Indonesian State Minister for Environment Soni Keraf on Wednesday. The mining company has been under fire for allegedly causing environmental damage. (Story.10774)

Black Blade: Yet another producer cuts back production! This time for a different reason. BTW, Did I mention��.., Oh never mind!

JCTex

(05/24/2000; 07:10:47 MDT - Msg ID: 31147)

TownCrier (5/23/2000; 21:43:47MT - usagold.com msg#: 31124)

TC, good post. You raised a particularly good point when you said, "How hard is it to imagine no interest in buying long gold paper?" You just defined me.

I would not trade anything on the COMEX, for any reason. They condone manipulation or they would have straightened all of this out a long time ago. I just let a bucket-full of options expire; that is what I get for trading in a rigged [permission granted] paper market.

I hold my physical gold, and it will be a very, very cold day in hell before I sell it. It is there for the inevitable change, crash, correction [whatever you want to call it] that is coming.

My point: FOA and ANOTHER are right. How many people "out there" are like me?....won't buy paper, will buy physical. COMEX must collapse under it's own b.s. because the public will leave this market, and physical will rise because that is where we are going. To hell with them and their manipulated markets.

I will trade the grains, cotton, turnips; but I won't try to trade gold, again.

Trail Guide

(05/24/2000; 07:33:47 MDT - Msg ID: 31148)

Comment

Hello ALL:

I'll have some replies / comments soom. Just not yet.

I've been closely following (involved) the progress of the new iX pan European market. What a convoluted thing this is turning into. It still looks good and will ultimately transform the world stock trading arenas. Especially in that it will further along London's move into the Euro Zone sphere. We follow this very closely because once this Britain Euro link passes the (mental / political) half way
mark of no return, it will also start a frenzied rush away from dollar based gold trading. Actually it will only make clear to many what has been in progress for some time. Stranding anyone, including governments, power brokers and the like into holding depreciating gold paper. This is all part of an extremely broad based transition from a dollar world. So, this is where my energy has been focused these many weeks.

BTD, I was wanting someone to present a position such as yours so everyone could follow it. In fact, I'll place your position way up on a "pedestal" "for all to see" (SMILE).
Here's what I did:

I'm not too different from that fella Armstrong. You know, the one in trouble for being a big gold bear while he in fact had a lot of bullion himself! I think he kept in a hall way closet. Well, I'm not a bear on Physical gold, but am very bearish on paper gold. Who knows, maybe he was just acting out the very same premise myself and a few fellow banks are also doing? In fact now, today, is going to prove a very good time frame for this little exercise.

So, after reading BTD's post I decided "not" to think for myself, but just follow his lead (smile)! I got up, went down my hall way and opened up the closet. Oh lord, I forgot how many Krugerrands were piled up behind that door! After opening it, they all slid out and just covered me up so as to almost crush me (huge smile). Three hours later, after digging out from under it all, I counted out 300 K rands, just as BTD did.

Then I went down and sold them for $270 each (a rough fair, average price in today's market). Then I placed $81,000 in T-bills and placed these in a margin account. Then brought 3 - 100 ounce comex futures contracts. Boy this is fun after all! I purchased the Dec 2000s at $383.30. So, come Dec. I can pay #383.30 in full and have 300 ounces of gold. All the while earning some interest.

Now, I don't know how long some of you have been around this market, but it seems we all learn a little something every now and again. But, any of you trading futures know just how hard it is to beat the "priced in interest" of a forward paper position. Much less beat out a full paid up physical
holding ounce for ounce. Ha! Ha! I remember when there was no gold futures and how exciting the prospect was to have one. Some old dude, huh?

Anyway, my brand new BTD trade is up and running and I'm counting on him to update and guide me (us) on his success. Oh, rest assured, I'll keep my trade "on the table" until this all play's out! In fact, it's going to be posted on a "trail marker" on the gold trail. Just in case some lose their way.

Also:

BTDs post #31098 said:

------ I enjoy this forum and all the theories posited here, but I thought a variant opinion might be useful.-------

BTD, your position (opinion) is not in any way "variant" from typical Western thought. I bet 99% of the gold bugs employ your strategy, mostly in a much more leveraged form. What is "variant" here is our "new" future view of gold in the political world.

You say:

---------and many will probably assure me that the world is coming to an end (per FOA/Trail Guide) and that paper gold will be driven into the ground while physical gold skyrockets. -----

My friend, it would only be the end of the world for paper gold traders. Indeed, if comex stays intact, I bet my physical will match your contracts ounce for ounce (smile). Something that cannot be said for a reverse situation I see coming. You see, our position is leveraged for a worse case,
while yours can only keep up with mine in your good case!

Of course, you could employ major leverage in the futures and gold shares and take the same major percentage paper hit such a position has had over the last few years. But then, we would never hear of it, would we. It seems the whole internet is full of gold stock owners (and future traders) that never lost money over the last 10 years, but suddenly brought their position "at the stock lows" recently (frown). My record is very clear and "unchanging" I might add. I have been buying physical gold all the way down from $360 through $280 and continue to do so. Indeed, a very large bulk of that was taken last year (around the spring) at $283+/-. I made several posts then as to why a combination of good supply (for large traders) and the $280 price for delivered
physical made it an opportune time. Nothing has changed that position. Also, please check the rest of my posts to see that gold is not my only holding.

You say:

------Trail Guide is a very articulate and thoughtful commentator, but his ideas are just theories like everyone else's.---------------------------

Well, my friend, I know you trade on facts alone. Your riches prove that, right (smile). For myself, I agree, theories are like "mouths", everyone's got one! Problem is, I never got anywhere investing in what others said. My position comes from following what a few people are "doing". The question is "do they know what they are doing?" Oh, they better! Because your wealth and lifestyle depend on it! Whether you know what you're doing or not!

"In the Footsteps Of Giants"

Trail Guide

elevator guy

(05/24/2000; 07:41:51 MDT - Msg ID: 31149)

@Journeyman, 31136

Thanks, J-man, I didn't know that. I was not paying any attention to these matters in 1998, and so was completely oblivious to that event.

So did the largest drop in 25 years make any signifigant changes in the US?

It must have made Japanese goods in the US more expensive, which would hurt the Japanese economy, so maybe they hurriedly made adjustments to keep Japan stable?

I remember when I was in the Marines in Japan in 1980, or was it 82, the Yen was about 220 to the dollar, and some were complaining at how the dollar had slipped!

Some of us were taking Levis over there, and selling them. They were commanding $100 a pair to the willing, even back then.

Cavan Man

(05/24/2000; 08:29:45 MDT - Msg ID: 31150)

Hey there Trail Guide...

Whenever I travel abroad I strongly believe in taking "guided tours" whenever there is something significant to see or important to be learned. Here's to you from one who is glad to be in your company.

Cavan Man

(05/24/2000; 08:36:00 MDT - Msg ID: 31151)

Regarding TG

It is the manner in which he responds to challenges such BTD's that serve to further endorse his authenticity in my mind. I am glad we can share his contribution courtesy of MK.

goldhunter

(05/24/2000; 08:38:04 MDT - Msg ID: 31152)

FOA futures

http://www.usagold.comSir FOA...you probably "bought Dec. Gold at $283...not $383"

or else you need a new broker...give me a call...

goldhunter

(05/24/2000; 09:03:31 MDT - Msg ID: 31153)

Physical vs futurea : FOA's example

http://www.usagold.comI just called MK's "store" to inquire about a Purchase price for the K-Rands...$282 per coin...

Apples to apples applies here folks...Buy the physical today for $282 or buy Dec futures $283.30 and "earn" the TBill rate (3.25% for one half year)

If we are going to compare we are going to compare fairly...

Adjust your figures and "walk on"

BTD

(05/24/2000; 09:05:23 MDT - Msg ID: 31154)

Elwood msg# 31143 and Trail Guide msg# 31148

Elwood, you said of me, "What's offensive is your public display of guilt and pathetic need for reassurance from others that you've done the right thing. To obtain that you've come here and attempted to damage those who are perfect strangers to you and have harmed you in no fashion." I apologize for whatever I have said that offended you so much. That was not my intent. Nor was it my intent to damage anyone. I'm not sure who you feel I was attempting to damage, unless it is Trail Guide. If that is your perception, then I am guilty of not being very clear in my writing. Trail Guide is an excellent thinker and commentator. I have no criticism of him, though I disagree on some of his predictions. My motivation was to help - to stir the discussion with an alternative (to this forum) viewpoint and perhaps to let people learn from my prior mistakes. As to your comment about my feelings of guilt and my "pathetic need for reassurance", I'm trying to figure out what you think I feel guilty about. And why would I seek reassurance from a forum where I know 90% of the posters disagree with me? That would be curious motivation, indeed.

**********************************

Trail Guide, thank you for your response. I want to repeat what I have tried to emphasize throughout my posts: nothing I have said was intended as a personal attack on you, but as a commentary on the veneration some in this forum accord your views.

You wrote, "Anyway, my brand new BTD trade is up and running and I'm counting on him to update and guide me (us) on his success. Oh, rest assured, I'll keep my trade "on the table" until this all play's out! In fact, it's going to be posted on a "trail marker" on the gold trail. Just in case some lose their way." I think this will be a very constructive and useful exercise. I commend you for undertaking it. Regardless of which of us may prove correct, it should be educational.

You said, "Of course, you could employ major leverage in the futures and gold shares and take the same major percentage paper hit such a position has had over the last few years. But then, we would never hear of it, would we. It seems the whole internet is full of gold stock owners (and future traders) that never lost money over the last 10 years, but suddenly brought their position "at the stock lows" recently (frown)." I think you pre-judge me harshly. If you re-read my original post, you will notice that though I got in near the bottom and rode the September spike all the way up, I also confessed that I increased my position at the top and rode it back down and took a substantial loss. So I don't think it is fair to lump me in with those who trumpet every winning trade and never mention their losing ones. The temptation is always there to brag about one's successes, granted. But I, too, noticed early in my trading experience the hypocrisy of the braggarts. For this reason, I generally do not mention either my wins or my losses. It is a humbling experience to brag about a big win and then take a big loss. When this first happened to me, I realized that it was probably happening to everyone else but they weren't telling me about their losses. I determined at that point to keep my trade results to myself. The only reason I gave details in my original post was to illustrate the points I was making. If you are going to track a trade similar to mine, I see no reason to post my trade results here. I don't want to expose myself to ridicule if I am wrong, so I will forgo the gloating if I am right.

Henri

(05/24/2000; 09:17:19 MDT - Msg ID: 31155)

Town Crier msg 31135, BTD, Elwood, et. al.

I believe you will find that it was not I that had engaged Sir BTD, but Sir Elwood. Henri wrings his hands for no man, but thank you for being so kind as to presume to be able to read the intent of a mind that was not my own on my behalf :-).

Now that you have drawn me into the fray, (although I hesitate to call it that since it seems to have been quite civil so far), I will engage it.

Sir BTD, May I commend your courage in bringing forth your honest contention that what the future holds for us is unknown to all (and that all that is apparently held here in this forum in apparent reverence may all be just so much hogwash). Eccentric as I am in my beliefs on the illusion of time I found myself running with you on the unknown nature of what is to come. I likewise believe that what we think we may know of the "past" is equally unknown as the information with which we evaluate it (History if you will) is itself constructed of only those pieces that someone or some group who may have had an agenda or just as bad someone who was convinced that their interpretation of events is the only proper one to the exclusion and probable discard of information to the contrary. Wow, talk about run-on sentence structure.

I also commend the courage of those your supporters who weighed in with you immediately. So often we have witnessed here the bashing of those running against the current "trail" mentality. We certainly need some more "openess" here and the exchange you incited appears to me to have been a marvelous example of how truly open minded and engaging this forum can be. I wish you well on your US dollar denominated strategy.

If you recall, it was I that posted that gold should never be sold into currency, but instead, if need be to utilize its intrinsic worth, should be placed in escrow as collateral for a currency credit line. In this way you could have maintained the control over your original 300 Kruggies and performed the same actions that you did albeit the entire 300 would have to have been considered as wealth "at risk". Should the entire position have collapsed, then your legal entity formed to trade the position would have been subject to the margin calls on the doubled down position and then it would be your own moral hazard as to what to do in this case. Should the position profit handsomely, the principle minus carrying costs could disengage the escrow account, and the "profit" could be used to purchase more physical for the next go round.

When considering the moral hazard, if ones own integrity is on the line (a circumstance no doubt preferred by your broker), that is you are trading in your own name, you have little choice in the matter but to forfeit the principle (escrowed gold) and to pay out the difference (margin) for exiting the long positions from another source should they go south of the excellant cover you have provided. Should you have traded in the name of a corporation, no different in many ways than the cabal trades, your moral hazard guide would be modeled by the actions of the cabal. If it is no shame for such a large BB to declare a bad trading position as insolvent and walk away, surely it would also be appropriate for you to follow suit. Since the escrowed wealth was a separate engagement not attached to the trading activity, your excess cash that you would have used to cover your margin and exit could then be used to unencumber the original asset since that debt was created first and must be settled first. Result? You still have your original 700 Kruggies out of a position that is attachable and your personal interity is intact. Meanwhile the credibility of your corporate entity that engaged the trade is in the same position as the many and much more substantial organizations that played the same game and lost...insolvent. If you think that anyone member of these organizations has not yet already extracted value from being employed by their organization and removed that value from attachment, you would be indeed naive. Now let's say you knew as a heavy player in the gold arena that your short positions would eventually eat you and that you could not exit without causing that very event. What would be your strategy to escape unscathed and even profit from the circumstance? Take your private corporation public and transfer the risk to the new stakeholders while you sell out your remaining stake in the venture. Leave a couple newbies who think they rule the world in charge and pump them up to believe it then head out the back door? (Goldman Sachs scenario?)

Given this arrangement and the shenanigans to come would you really feel any remorse or moral hazard for having been forced into insolvency by the acts of entrenched entities that have gone down as well? Do you think the well heeled, the wealthy banking families ever lose their principle? Their objective is as mine, to create more wealth not lose it. Sure no one can read into the future least of all me but there is something to be said for pre-arranging the playing rules such that there is no real loss.

Should I have done as I have indicated, I would not have taken long futures as the means of prospective currency gain. My strategy would have been to create a "reverse straddle". This is basically like the common straddle which is constructed using "out-of-the-money" options, one above the current price and one below. When the price of gold moves either up or down, one of the two positions comes "in-the-money and assuming a sharp move will recover the risk in the failed option side of the trade and profit as well.

The "reverse straddle" is almost the same except instead of sitting on the horse facing its head, you are facing the horses a**. That way you can see what is coming up from behind to boll you over and prepare for the impact. In the current trading environment the POG moves in a range from $290/oz to $270/oz it may move down to test the previous low around $250. When it moves down purchase "in-the-money" calls they become cheaper the closer the strike is to market. Within their valuation is cash value which can be discounted as the actual risk premium. Premiums are usually lowest when volatility abates. Failing this (an environment of high volatility)one must pay higher premiums for the options. When the price moves back up to the $290 level purchase "in-the-money" puts. If the market stays within the trading range at expiration you still have two in-the-money positions which can be liquidated for the spread value. You will have lost the premium but are not subjected to unlimited up or downside risk. If the price moves sharply up or down, You have at least one option that is way in-the-money.

Shorting gold futures is a game for those who have gold in hand to forfeit should the price rise. Long futures is for those who have lots of cash to cover their bet if gold falls. The big boys do neither. They know when push comes to shove they can blame their insolvency on unanticipated events and may even get "bailed out" by a lender of last resort. They see each entry into the market on either side as an opportunity to take someone elses hard won capital. Do you really want to be in a race with such a crowd?

I think I would just keep the 700 kruggies under my pillow since that is certain and accumulate more slowly in a more commercial and less risky endeavor.

USAGOLD

(05/24/2000; 09:35:51 MDT - Msg ID: 31156)

Today's Report: " Gold Will Take No Prisoners"

5/24/00 Indications
�Current
�Change
Gold June Comex
274.10
-0.60
Silver July Comex
5.01
-0.03
30 Yr TBond June CBOT
93~28
-0~02
Dollar Index June NYBOT
110.90
-0.15


Market Report (5/24/00): Against a backdrop of equities markets plunging globally, gold
appeared essentially sidelined in Europe and Asia and awaiting direction from New York's
COMEX. The worldwide equities markets sell-off began on Wall Street yesterday when NASDAQ
shed almost 200 points and the Dow 120 points. Tokyo was down as much as 2.7% at one point
yesterday before closing down 1.7%. Hong Kong,Singapore, Taipei, Sydney -- all followed suit.
Europe didn't fare any better with Frankfurt down 1.6% and Paris down 1.9%. Technology
stocks led the retreat with brokers worldwide complaining about a herd mentality at work. It seems
that herds have this unpredictable tendency to run in either direction. "It's pretty crazy," said Louis
Bernstone, European fund manager at Baring Asset Management Ltd. "Everyone's now saying, 'I
don't know what's going on, but I'm going to sell it.' It's capitulation."

So far, we've had good volume at Centennial Precious Metals, as the stock market has weakened
over the past 30 days, with many investors deciding to shore up their sagging portfolios with
gold.

For months this website and others have implored investors to stay out of the gold paper markets
-- options, futures and other derivatives -- so as not to serve as cannon fodder for the short- selling
financial firms and hedge funds. It appears that this strategy is beginning to have an effect, not just
because we and others have attuned investors, but because it has become apparent that something
strange is going on in the gold market, and has been for some time.

Bridge News reports this morning that "Giant US managed futures fund John W. Henry &
Company, which has around $2 billion under management, said that its financial and metals
portfolio has reduced gold exposure to 60% of average position size to address liquidity issues. It
has also temporarily eliminated trading in silver since the market has seen lower trading
opportunities and reduced liquidity." One doubts seriously that John W. Henry was long the gold
and silver markets. Note the reference to "liquidity issues." One always needs someone to sell to
in order to make a short position a reality -- thus the reference to lack of liquidity. In other words,
the gig is up.

On another subject, Bridge also runs this sketch on the Bank of England auction yesterday which
elicited knowing chuckles in certain quarters:

"The Bank of England announced Tuesday that it sold 803,600 ounces of U.K.
Treasury-auctioned gold at $275.25 per ounce. The bank received bids for 2,134,400 ounces of
gold but allotted only the expected 803,600 ounces,or around 25 tonnes, at the "lowest accepted
price" as planned."

Good plan.

Only the Blair government could find solace in selling an important reserve asset at the "lowest
accepted price." If Britain's plan had been in reality to sell its gold and put the proceeds into euros
and dollars as it publicly announced, then they could have done it in one or two sales based on the
heavy response from the first auction on (note yesterday's auction was nearly three times
oversubscribed). But they have dragged it out for reasons only Gordon Brown and the rest of the
Blair government truly understand. Eddie George, Governor of the Bank of England, clung to this
near-ridiculous proposition yesterday endorsing the auctions as a "sensible portfolio
diversification." What he failed to mention is that the euro has plummeted roughly 20% since the
sales began and Britain began replacing gold with that currency for its reserves. During the same
period the price of gold in pounds has risen comfortably as well -- so much for the "sensible
portfolio diversification" argument.

The World Gold Council, known for its general equanimity as the gold wars rage on,
uncharacteristically slammed the aurophobic UK government for the sales saying "[the policy]
suggests a degree of arrogance on the part of the British government in that it is now clearly flying
in the face of majority wishes." The Council points to polls that show only 12% of the British
public supports the sales, and 48% are opposed.

Prominent gold analysts like Reg Howe of the Golden Sextant and John Hathaway at
DeToqueville are researching the theoretical possibility that these recent central bank sales are little
more than bail out operations for financial firms which have already defaulted de facto on gold
loans and need the gold to pay back demanding creditors. With the British and Swiss sales, we are
seeing to what lengths central banks are now willing to go in fulfilling their lender of last resort
function. In simple terms the theory goes like this: If one of the commercial banks in your system
is in trouble on gold loans, you are required to bail that bank out even if you can't print yellow
metal. You are required to do that in order to forestall a rolling default which might cripple the
entire national banking structure. So because you can't print gold, you raid the national treasury to
provide the liquidity, the commercial bank is saved from default, the system limps on floating in a
sea of paper derivatives hoping against hope a gold-buying herd running in the other direction
doesn't overtake it, and make it impossible to rectify the situation.

Just as an aside: If you back to the Daily Market Reports written when the British first announced
their auctions, the theory outlined above was offered then. The weakness in the theory is that all
we have is circumstantial evidence. We can smell the powder, but we don't have the gun. The
strength of the theory is that it makes the most common sense under current market conditions,
and that should be of value to current and prospective gold owners.

So what does all this mean for the ordinary gold owner? It seems that creditors (both central bank
and private) are fed up with running the risk of the gold carry trade. They have essentially been
sold a bill of goods on gold loans. The argument that you can make a return on a moribund asset
proffered by the bullion banks, does not hold water when you are in danger of losing your asset in
a default because the speculating borrowers went overboard ala Long Term Capital Management.
The Washington Agreement is probably aligned to that realization. As a result, it is unlikely that
the lease pool will be growing any larger. Gold carry trade/forwarding departments are being
closed down in financial firms around the world as reality sets it. It won't be long until investors
small and large catch on that the greatest impediment to a rising gold price -- the gold
carry/forward trade -- is in retrograde. Gold demand will increase markedly starting first with the
big financiers who smell blood in the water and then spreading to the general public. The investor
who gets in now by purchasing the physical metal itself without the trappings and dangers of
leverage runs ahead of the crowd, and will be the most likely to benefit from the run-up when the
carry trade is finally unwound. The other side will not give up easily. The building positions at JP
Morgan are just more evidence of that. Stay away from futures, options -- gold derivatives of any
kind. Own physical. Sit back and watch the show. It won't be long until the JP Morgan portfolio
committee will be looking at the same set of criteria which caused John W. Henry to close down
its operation. It may take some more time but gold will have its revenge. As a Rothschild
spokesman recently said, "Gold will take no prisoners." That applies to Morgan as much as
anybody.

Have a good day, fellow goldmeisters. See you back here tomorrow.

Journeyman

(05/24/2000; 09:58:04 MDT - Msg ID: 31157)

Predictions and blips @elevator guy #31149, BTD, TC, Trail Guide, ORO, ALL

I wasn't paying attention to the effects of that 8% over-night dollar drop. DURN it! Lucky to notice the reporting on that blip at all! If such a currency movement persists, however, you see all the classic effects of currency devaluation. But that's another topic.

The only point of that part of the post was to point out that in today's mega-byte world:

"As I testified before this committee in the
midst of the Mexican financial crisis in
early 1995, major advances in technology have
engendered a highly efficient and
increasingly sophisticated international
financial system. ...But that same efficient
financial system, as I also pointed o

USAGOLD

(05/24/2000; 09:58:14 MDT - Msg ID: 31158)

Correction to Daily Report

Near the end of the artcile I should have said:

"It won't be long until the JP Morgan portfolio
committee will be looking at the same set of criteria which caused John W. Henry to 'radically reduce'
its operation."

Henry is not closing down its gold operation. It is reducing it to 60% of the former position.

Sorry

Journeyman

(05/24/2000; 10:08:16 MDT - Msg ID: 31159)

Predictions and blips @elevator guy #31149, BTD, TC, Trail Guide, ORO, ALL

Elevator guy, I wasn't paying attention to the effects of that 8% over-night dollar drop. DURN it! Lucky to notice the reporting on that blip at all! If such a currency movement persists, however, you see all the classic effects of currency devaluation. But that's another topic.

The only point of that part of the post was to point out that in today's mega-byte world:

"As I testified before this committee in the
midst of the Mexican financial crisis in
early 1995, major advances in technology have
engendered a highly efficient and
increasingly sophisticated international
financial system. ...But that same efficient
financial system, as

Journeyman

(05/24/2000; 10:15:27 MDT - Msg ID: 31160)

Predictions and blips @elevator guy #31149, BTD, TC, Trail Guide, ORO, ALL

Elevator guy, I wasn't paying attention to the effects of that 8% over-night dollar drop. DURN it! Lucky to notice the reporting on that blip at all! If such a currency movement persists, however, you see all the classic effects of currency devaluation. But that's another topic.

The only point of that part of the post was to point out that in today's mega-byte world:

"As I testified before this committee in the
midst of the Mexican financial crisis in
early 1995, major advances in technology have
engendered a highly efficient and
increasingly sophisticated international
financial system. ...But that same efficient
financial system, as I also pointed out in
that earlier testimony, has the capability to
rapidly transmit the consequences of errors
of judgement in private investments and
public policies to all corners of the world
at historically unprecedented speeds." -Alan
Greenspan to House Banking Committee, 16
September, 1998

Thus, if you are PREDICTING that the dollar MAY crash, you need to realize a major portion of the crash can occur so fast you won't even know about it till it's over. Especially if it happens in the middle of our night when over-seas folks are working, which seems to be the norm:

The South Korean Won has depreciated 40% in
the last four days, down 10% in the first
three minutes of trade last night... and it
is predicted that the won will likely drop
another ten percent, the limit, again
tonight. -CNBC, December 11, 1997

If you're PREDICTING, either explicitly or implicitly, that the dollar WON'T crash significantly, you're still predicting, and - - - trust me here, THE ONLY RATIONAL WAY TO HANDLE ANY PREDICTION IS TO PLACE A _PERCEIVED_ PERCENTAGE ON YOUR PREDICTION.

BTD, your honesty in laying out your "mistakes" should be VERY useful for those here who "have ears to hear" - - - or I guess now days, "eyes to read." From my standpoint as a professional gambler, and realizing at least two decades ago that the way most people "play" the stock market makes them gamblers who don't know they're gambling (they think they're "investing"), it occured to me that the habit of realizing two things would stand these stock/paper gamblers in good stead.

1. Prediction is very difficult, especially of the future (Yogi Berra [Sir Hill Billy, gonna stick with this version for now -- took me awhile to decide]) or as von Mises puts it, "The future is always hidden from acting man."

This means we can NEVER, NEVER, NEVER legitimately claim we are 100% sure of the outcome - - - - of ANYTHING. EVER. Often in retrospect, we think we were certain before hand, but we're only fooling others and perhaps ourselves. Which brings me to "rule" 2:

2. To remind yourself, and keep your actions in line with the reality of 1. above, ALWAYS attach a PERCEIVED percent probability to any prediction. It's only a PERCEIVED probability because even the outcome of the best researched and calculated probability is ALWAYS "hidden to acting man" - - - until after the fact. This applies to ALL anticipations of the future, even that the sun will rise tomorrow. One day in the (hopefully) very distant future, it won't.

One final tip: Many of the predictions we act on are not seen as predictions. Part of this is because they are often called by other names; forecasts, expectations, prognostications, etc. BUT the most dangerous predictions are those which are purely subliminal, unspoken, implicit and thus unrecognized.

Good luck to all!

Regards,
Journeyman

Please disregard the partial posts of this message below. New ISP problem, I think.

Solomon Weaver

(05/24/2000; 10:29:25 MDT - Msg ID: 31161)

Topaz , thanks for reminding me of the Islam money link

Yes Topaz, I am familiar with the initiative to gring islam back on to a metal standard...with coins in circulation. The problem is, unless they have secret reserves of silver, there is no way to get enoung silver to introduce a serious program for Dirhams (at least not without driving the price of silver way above it's long term equilibrium value against gold.)

Snippet from the link you gave:

The Islamic Dinar is a specific weight of gold equivalent to 4.3 grams.

The Islamic Dirham is a specific weight of silver equivalent to 3.0 grams.

Umar Ibn al-Khattab established the known standard relationship between them based on their weights: "7 dinars must be equivalent to 10 dirhams." (in weight that is).

Best wishes, Poor old Solomon

Al Fulchino

(05/24/2000; 10:54:37 MDT - Msg ID: 31162)

TH/BTD/goldhunter

Thank you all for your exchange the last two days. It serves a wonderful purpose to match the trails side by side.

Strad Master

(05/24/2000; 11:39:51 MDT - Msg ID: 31163)

USA Gold

Huh???Could you clarify what is meant by the "lowest accepted
price"?? I always thought that at an auction the winner was the "highest bidder". Is this a "Through The Looking Glass" situation where the winning bid is the lowest? That can't be, can it? (Shows how weird things have gotten when I can even entertain such a bizarre notion, eh?) I'm pretty smart but I just can't figure out what they mean by that in the context of an auction.

TownCrier

(05/24/2000; 12:21:47 MDT - Msg ID: 31164)

Sir Strad Master's question on the UK auction

Hello, good sir! It all becomes clearer when you first are told that the auction is not your typical open outcry auction where participants can outbid each other in full view.

It is a closed auction process whereby they submit written bids for a quantity of gold desired and their price. Knowing that there is a limited quantity of gold available at the auction, the incentive is to bid the price somewhat higher, because the highest price will be awarded all of the gold he bid on. If any gold remains, it goes to fill the next lower bid, and so on until the gold supply is exhausted.

In the interest of fairness, with each party receiving their gold at the same time, the auction arrangements are that every successful bidder will be awarded their quantity of gold at the bid price that took the last remaining gold from the table...known as the lowest accepted price.

One might be inclined to think that with the confidence that an ultra high bid will only secure the desired gold for a party, but wouldn't actually be paid by the top bidders, the psychology of such an auction arrangement could tend to produce favorable auction results for the selling party...each one bidding just a wee bit higher than they otherwise would.

What is continuously interesting to me, is that the lowest accepted bid at these auctions has been consistently higher than the London morning gold fix price quoted shortly before. Why, I ask, would someone hassle with an auction process to pay HIGHER prices than could have theoretically been obtained at spot prices just moments before on the open market? I think the key term is that the gold on the open market could only be gotten "theoretically".

Canuck Gold

(05/24/2000; 12:24:55 MDT - Msg ID: 31165)

Strad Master (5/24/2000; 11:39:51MT - usagold.com msg#: 31163)

The term "Lowest accepted price" is derived from the fact that the gold is sold to ALL successful bidders at the lowest price bid for gold that is still on the table after higher bid quantities have been allocated.

For example, if there are bids for 10 tons at $290, 10 tons at $285, 3 tons at $280, 1 ton at $277, 2 tons at $275, 2 tons at $274, 5 tons at $273, 10 tons at $272, 10 tons at $271 and 10 tons at $270. The 10 tons at $290 are allocated, then the 10 tons at $285 are allocated, then the 3 tons at $280 are allocated and the 1 ton at $277 is allocated. That leaves 1 ton on the table to be pro-rata shared between the bidders for 2 tons at $275. The rules of the auction state that ALL the gold (even that for which a higher price was offered) will be sold at the "lowest accepted bid". Hence all the gold will be sold for $275.

Normal auctions accept the prices offered but in the case of gold, that would have resulted in the average price per ton being $285.68, which is significantly higher than $275. Those rules were obviously designed to drive the price of gold down.

CG

TownCrier

(05/24/2000; 12:31:39 MDT - Msg ID: 31166)

Sorry Sir Henri, and right you are....

It was indeed Sir Elwood I meant. Scrolling back I can see where I made the mental switch...there had been a post by PH in LA that mentioned both BTD and Henri in the subject line, driving out my own intent to craft my post to BTD and Elwood. Thanks for the good catch!

Henri

(05/24/2000; 12:37:11 MDT - Msg ID: 31167)

Help?

I would like to get a good reference for the material presented a few days ago about the amount of non-monetary gold leaving the US since the WA. I think it was an artical by Howe or Venroso but I can't seem to locate it. Was it posted on this forum? A link? TIA

Henri

(05/24/2000; 12:39:42 MDT - Msg ID: 31168)

Town Crier its Kismet!

I recall having done a exactly similar thing to you a week/month ago which you caught. My how the illusion of time runs apace! Could a month have gone by so quickly?

Strad Master

(05/24/2000; 12:59:09 MDT - Msg ID: 31169)

Town Crier and Canuck Gold

ThanksThanks, good knights, for your kind and prompt reply. Now I understand, but it still makes little real sense to me. Why don't they all just bid $1? (That's what I'd do.) If the last remaining bidder bids $1, even if all the others bid $30,000 would they all receive the gold at $1? I know that sounds preposterous but I am just trying to comprehend what, to me, seems a very peculiar way of conducting an auction.

Clint H

(05/24/2000; 13:02:55 MDT - Msg ID: 31170)

PPT, can they do it?

Well it looks like the PPT has had to step in four times today, so far. 10:00, 1:00, 1:45 and 2:15. It is getting difficult to hold all the markets up at once.

Elwood

(05/24/2000; 13:06:47 MDT - Msg ID: 31171)

Henri, Gold Exports

http://www.geocities.com/goldtango/analysis1.htm

See the above link updated for latest figures to March 2000. The Excel 97 file that holds the data is at:

http://www.geocities.com/goldtango/goldxports.xls

Elwood

Henri

(05/24/2000; 13:35:06 MDT - Msg ID: 31172)

Elwood

Thanx for da linx!

TownCrier

(05/24/2000; 14:51:51 MDT - Msg ID: 31173)

Sir Strad's question, and other comments to all

While it is true that the entities eligible to bid at the UK auction are principally members of the LBMA, and therefore potentially able to engage in some form of collusion to bring about the $1 bid as you've suggested, the BOE reserves the right to reject the bids as it sees fit to do so. But also, because bidding is conducted in a closed and secretive manner, the potential for double-crossing or one-upmanship exists among the would-be conspirators, not to mention the left-field effects of bids by other qualified participants such as CBs and other BOE depositors with bullion accounts.

In the end, gold remains available today at these prices thanks to the ability of paper substitutes to satisfy a portion of the investor demand, or to effectively draw forth future gold to satisfy today's demands. The prevalent complaints voiced against Barrick gold are a case in point, as are the actions or preferred strategies as voiced recently by BTD and goldhunter.

As goldhunter would seemingly have it, everyone would be well-advised to be an Amway distributor directly, and forego the benefits of the actual products.

As I see it, the dollar has been set up as a paper substitute for gold. But where that has failings which causes people to still seek the benefits of gold, yet another paper substitute was set up as a diversion: gold futures--the necessary partner of the dollar for an all paper world. Dollars could be used for currency needs, whereas gold futures would satisfy the unwary individuals' impulses to hedge their currency value for any potential collapse against gold. Unfortunately, these people do not realize that their strategy, while looking good on paper, remains in the long run to be one hamburger patty shy of a cheeseburger. Where's the beef?

I'll tell you. While Americans have historically been notoriously experimental with banking and paper schemes to gain riches without effort, the rest of the world hasn't bought into this. Real gold remains in its role as real wealth and real money, and they are taking advantage of the U.S. disinterest, or should I say distraction, with the paper substitutes. (Hopefully you saw the post I provided recently on the World Gold Council's latest gold demand figures. On top of that you have the continuation of mind-numbing gold export numbers each month from the U.S.Dept. of Commerce.)

If you come to gold with a mind to protect yourself against a failing of the dollar, how can you possibly hope to survive using a paper position that is in bed with that very same paper dollar system?

Of course, if you are simply looking for a way to make easy profits with the premise of the continuation of a fully functioning strong dollar, then you would be wise to see early on precisely what true role is being served by the advent of these gold derivatives. You will find that your paper games are more fruitfully played (for paper profit) elsewhere in this wide economic world of options and opportunities.

Paper contracts in any form (currency or futures) are the antithesis of gold, and to think that you (being any person in general) have locked in the ture benefits of solid gold ownership through an alternative use of a paper system (futures) is naive beyond my ability to comprehend.

When real gold no longer comes to the table from the supply currently in weak hands, you will find that your gold futures contracts are no stronger than the dollar that denominates them. A tough lesson, to be sure, and yours to learn the hard way if you choose.

Hill Billy Mitchell

(05/24/2000; 15:47:03 MDT - Msg ID: 31174)

Official release

http://www.bog.frb.us/releases/H15/update/
Official: Federal Reserve Statistical Release

Release Date: May 24 2000

Rates For Tuesday, May 23, 2000

Federal funds 6.47
Treasury constant maturities:
3-month 6.01
10-year 6.45
20-year 6.58
30-year 6.17

upside-down spread FF vs long bond = (.30%)

HI - HAT

(05/24/2000; 15:56:52 MDT - Msg ID: 31175)

DOLLAR EMPIRE

They're bringing on the HEARTACHE

Oh can't you see ; Oh can't you see

SHIFTY

(05/24/2000; 16:45:27 MDT - Msg ID: 31176)

N.Y. Ponzi

Nasdaq 3270.61 + Dow 10,535.35 = 13,805.96 divide by 2 = 6,902.98 Ponzi

Up 109.57 Ponzi points

The ppt ( Ponzi Protection Team ) was busy today!!

$hifty

goldhunter

(05/24/2000; 16:55:50 MDT - Msg ID: 31177)

TownCrier:31173

http://www.usagold.comHey Mr. Crier...Amway Distributor...that's a good one...

I'll wager that when all is said and done...Pick your gold price and will give it till Dec1, 2000, and we'll visit the shop for a quote to sell our physical Krands and we'll take the Comex close that day...

I'll wager that my futures "pencil" is sharper than your tongue...Oh yes, do not forget to add "interest" on to the Futures profit...

Farfel

(05/24/2000; 16:59:47 MDT - Msg ID: 31178)

The Naz bounced upward today as I forecast yesterday

As per my post here yesterday, I expected today's Nasdaq bounce on account of this China WTO scam.

I call it a scam because it has been expected now for several months and discounted into the market time and time again. What's more, the Chinese are notorious for pirating technology so good luck in getting them to pay for American tech products.

In fact, why should investors even care about China? WHen China announced it would allow citizens to buy gold, the gold price did not react positively whatsoever, despite a potential billion new customers.

The whole China WTO thing represents another great opportunity to get the small investors excited, pop up the Nasdaq, then sell another $40 billion of ipolockup stock into the euphoria.

The Nasdaq is in full bear market mode and the proof is that
for the last 15 minutes of trading today, the tech averages simply stagnated. Contrast that to any other time where the market races up some 200 points in an hour or so. Normally, in the old bull, the market simply continued racing upward right past market close. However the stagnation at the end occurred because pros were sellling into the "China expectation."

It seems today's push job by the MM's to attract investor interest apparently failed.

THe Naz might have some rally tomorrow but if it fails, then
the next dump will be very dramatic. Monday is the next disaster day with another huge bundle of lockup stock ready to hit the market.

Bonds were weak today, the dollar remained strong however.
Not for much longer though.

All this means the gold suppression efforts of the Wall Street Establishment will soon end as their attention will soon be directed exclusively to protecting the stock market bubble

Thanks

F*

TownCrier

(05/24/2000; 17:03:07 MDT - Msg ID: 31179)

Reply to Sir Netking's morning question...

You asked:
"Sir Solomn Weaver & Sir Town Crier: So given your arguments in the dicussion of Gold & Silver, and Gold vs Silver, is not the propensity for percentage increase still greater (much) for Silver than Gold even if the currency (USD) takes a hit & we see the fundamental change of the currency link & store of value aspect (for Gold)?"

I've got to come back to my comments offered yesterday, in part: >>>Which metal, as a whole world of probable events play out, will provide the superior wealth value in exchange for other assets (or currency) in the future? In my book, the market's failure to recognize gold's current role/importance in the monetary world provides the prime opportunity to benefit when perceptions receive their overdue reality check. ... Money/currency has a unique ability to take on "additional value" due to its role. Just look at the value found in Federal Reserve Notes. Were they not to find use as currency, their value would plummet.<<<

In hypothesizing an answer to your question, I would start by making liberal use of Occam's razor (cutting away wild or fantastical possibilities) and building simply upon as few variables as possible. Once we have established such a basic projection (hypothesis, outcome, what-have-you), you are free to fold in whatever other elements you deem necessary to cover the bases for variants.

With your starting point that the U.S. dollar "takes a hit", one might reasonably expect that the prices of everything would go up together and proportionately. That assumes that the dollar is uniformly devalued or discredited. Gold and silver would be in the same boat, and rise together...along with everything else. (In this sense, holding either one would maintain your purchasing power.)

If the "hit" it takes is on the foreign exchange markets, then the prices of imported goods could be expected to lead the march to higher prices. Are gold and silver in the same boat? Well, as commodities, you can check our domestic production and use along with our import and export figures for the basis of a conclusion for short-term leadership. In the long run, however, the domestic-weighted prices will be pulled up to match the international (import)-weighted prices. But in reality, given its capacity as a monetary asset, gold would in either case react at light speed to reflect a falling dollar on the international exchange, and would lead the way to reflect higher prices.

Each tradeable "good" finds its relative market value based on its use; and the demand for that use, when balanced against its supply, will result in the establishment of an appropriate price relative to all other things.

So here we come down to the mental exercise. Given a general discrediting of the U.S. dollar, how will the local and global economy be effected, and what will be the subsequent demand and use for silver then compared to now and relative to the demand for all other things?

Similarly, what will be gold's (new?) role at such a time? Real monetary demand among those "with eyes to see" will ensure that at the end of the day, not only will gold maintain its ratio above silver at a future higher price for both as quoted in any given national currency, but gold would in such a time greatly outpace silver based on gold's unique monetary role for all the world to see...Chicago and New York brokers included among them.

You asked for the thoughts from The Tower, and there you have them. Salt not included. You will want to season them to your own taste preference.

goldhunter

(05/24/2000; 17:21:17 MDT - Msg ID: 31180)

Profit Vehicals...

http://usagold.comFunny thing happened last couple days...A gold fan sold some physical, bought some gold futures (Comex) and the "Home Team" ganged up on him...(or her?)

I gave a sort of pat on the back for a plan being instituted, a "well-done" if you wish...because the person took an idea to get ahead, and acted on it...

What some should consider is thst we are all "team-mates" not opponents...We all care to see gold rise (it will)...and we are trading, buying, or positioning to profit from that increase in gold price.

The "challenge" seems to be "whos' is bigger" and that isn't the point...All "longs" want to see the price rise...period.

The investment vehical of choice seems to be the issue that bothers some...paper (futures) or physical (coins)...

The commercials,& speculators big and small deal in both, and one or the other isn't right or wrong for EVERY case...

We can all follow our FOA's example...Krugerands @ $292 ea.
Or Dec. Comex futures @ $293.30 ...(today's prices...check it out)

You will be surprised at the end...The difference will be tiny (in favor of futures, my bet)...and some will learn, some already know, and some won't believe nor care...

We come to help each other...for profit...and when gold moves we will have profit...get ready. The Bull is coming.

Disclosure:I am a futures broker. (I have bought more Eagles than most lately.)

R Powell

(05/24/2000; 17:24:19 MDT - Msg ID: 31181)

Trading vs Possession

I enjoyed reading of both BTD and Trail Guide's decisions to invest/speculate/trade in the futures market. To those who condemn all futures and options trading, I submit that if enough long positions are bought, the price (currency price)of physical will rise.
BTD explain his position very well. Trail Guide has taken the same position with (I believe) the intent of examining the financial returns of the COMEX position vs holding the same amount of physical. Please correct me Trail Guide if this is not correct. However, simply buying and holding a futures position is not trading (meaning action concerning one's position to make money). If this is the intent then buying and taking possession of physical gold makes more sense, no? I haven't the capital to take a similar position but do own gold call options which I trade. I buy near the money (current POG) calls and place orders to sell higher calls (further out of the money calls) for about the cost of my near the money calls. When the POG goes up my orders are filled and I regain my investment and still stand to make money on the difference in price between what I own and what I sold. Enough of this. My point is that trading on the COMEX and physical gold in hand are two entirely different animals. Physical possession is of course desireable for a multitude of reasons while trading futures or options is a business investment/speculation (mostly short term) and one most often meant to be "played" or traded. Even the American farmer might sell and repurchase the crops growing in his fields many times over between planting and harvest. The market offers him a longer time frame in which to secure a good price for his crop. Imagine the price of corn if every farmer sold at the same time just after harvest? Good for the baker but the farmer would go broke.
I believe owning gold and/or silver is extremely smart and trading futures/options can be extremely profitable and great fun. Precious metals investment can also be done through funds that invest in futures, mining stocks And physical. The three are related but not the same and IMHO not at odds with each other as some seem to feel. All of this is simply one man's opinion and should be recieved as such. GO GATA!!

Leland

(05/24/2000; 17:27:07 MDT - Msg ID: 31182)

From Our British Cousins

Hooked on the Net


Gamblers
Anonymous in the
UK

GamCare

Gambling charities are finding that a large number of
'day traders' are in need of help. Teresa Hunter
reports

BRITAIN'S two largest gambling charities report a surge in desperate pleas
for help from people suffering from a compulsive urge to buy and sell shares.

Gamblers Anonymous and GamCare revealed last
week that they are seeing the first cases of
distraught "day traders" - people who endeavour
to make a fortune through a rapid turnover of
shares - who are unable to kick the habit as losses
mount. Although new to the UK, the practice is
well-established in the US, where guessing the
market wrong has resulted in murders and suicides.

The charities fear that the recent sharp rise in
internet trading will lead to an increase in
incidences of people who, having already lost
every penny they can beg, borrow or steal, are
unable to resist one last punt because this time they
know they've picked a winner. According to GamCare, which specialises in
researching gambling disorders: "The numbers so far are very small. But, oh
yes, it's started."

Gambling on the stockmarket is no different from any other form of betting,
says a spokesman for Gamblers Anonymous. "The difference between a
compulsive gambler and an ordinary one is that when they make a loss, they
just can't walk away."

The numbers of people potentially at risk are rocketing. More people bought
and sold shares in Britain this year than went to football matches, according
to the Association of Private Client Investment Managers and Stockbrokers.
Over the past three months internet trades soared by 150 per cent and now
account for a quarter of all execution-only business.

Overall, private individuals struck 6.3 million deals - 50 per cent more than
in the previous quarter and by far the biggest volume yet seen. The internet is
cited as the principle reason.

According to APCIMS, online traders deal much more actively than
conventional investors, which puts them at a greater risk. Furthermore, six in
every 10 internet traders have invested at least 60 per cent of their portfolios
in volatile stocks - the type that, according to conventional wisdom, should
be reserved for a tiny part of your overall investment strategy.

Justin Urquhart Stewart of Barclays Stockbrokers said: "It's got nothing at
all to do with investment. It's just gambling and getting turned on by the
thought of getting something for nothing."

Jeremy Batstone of NatWest Stockbrokers said: "The tragedy is that it
becomes like a drug for some people. It stops being about making money
and gets to be about the buzz, the high you get every time you strike a deal.
And the truth is that's a feeling that money can't buy."

Howard Davies, chairman of the Financial Services Authority and Britain's
chief financial policeman, has already warned that 70 per cent of day traders
in the US lose money. So why do they do it?

Technically day trading involves buying and selling shares within a day, which
could include holding a position for as little as 30 seconds. At the end of the
day, the books are cleared.

In the US it is endemic, and not uncommon for people to abandon careers in
the hope of making a fortune on the Net. It has been slower to catch on in
the UK, largely because technology has advanced less rapidly, but also
because deals over here are subject to 0.5 per cent stamp duty. This means
you have to make a 0.5 per cent turn before you see any profit.

Stamp duty is hardly a huge disincentive when it comes to a "10-bagger" a
share which rises 10-fold in a short space of time and is every trader's
dream. In Britain, day trading has come to mean aggressive internet trading
that also takes in futures and spread betting on indices or stocks.

So far, spread betting is throwing up the biggest problems, but it has been
around longer. It involves betting on where a chosen stockmarket index or
individual share price will be by the end of the day or in a few days' time.

Spread betting is a two-way gamble. If you get it wrong, you may lose not
only your stake but also a lot more money besides, depending on how
wrong you were. And these losses can ratchet up at an alarming rate.

The most notorious day trader of our time is George Soros, the man who
nearly broke the Bank of England. A self-confessed gambler, he once
boasted: "I play the game better and bigger than most." He pocketed �600
million on Black Wednesday by betting correctly that Norman Lamont
would be unable to shore up the pound.

But day trading is not strictly a new phenomenon. In 1815, Nathan
Rothschild received advanced warning of Britain's victory at Waterloo, upon
which he began selling Government stock as fast as possible. The rest of the
market followed him like lemmings, believing that Wellington had been
defeated. When the stock finally hit rock bottom, Rothchild placed a
massive buy order and made a fortune when news of victory broke and
prices soared.

The advent of the internet has upped the stakes and increased the perils,
intensifying as it does the speed - and the thrills - with which this kind of
operation can be pulled off. It has also brought trading to everyone's living
room.

The biggest problem is that the internet has helped to blur the distinction
between investing and gambling, says David Cohen, the psychologist and
author of Bears & Bulls: The Psychology of the Stock Market. He said:
"Five years ago, there was a defining line between people investing and
those who were gambling. The internet has changed that."

Dr Mark Griffiths, GamCare chairman, head of psychology at Nottingham
Trent University and one of the country's leading experts on gambling
addictions, agrees. He said: "The arrival of spread betting pushed back the
boundaries between investment and speculation. The big difficulty with the
stockmarket lies in the scale of the exposure. When you buy a lottery ticket
you know exactly what your loss will be; with the stockmarket you don't."

Those at greatest risk are newcomers who start trading when the market is
rising. He said: "People don't engage in behaviour that they get nothing out
of. They do it because of the rewards - initially, at least. It makes them feel
good. They get a rush of adrenalin. Their heart races. Their self esteem
improves."

Urquhart Stewart describes the feeling as the "walking across Galilee factor".
The young "electronic Henrys" who get a buzz from the internet started off in
a rising market, he says. Some made a lot of money. He said: "But, unlike
those of us who have been around a bit longer, they've never seen the
downside." And once they become hooked, they need bigger and bigger
fixes to create the same sense of euphoria. They have to bet higher and more
dangerously.

According to Mr Cohen, extroverts are the most vulnerable. He said: "It's all
to do with the biochemical constitution of the brain. People literally can't help
themselves. Extroverts are inherently sensation seekers who thrive on risk.
Introverts are much more cautious."

These people need a stockbroker to keep them under control. Mr Cohen
said: "A decent broker will stop you doing crazy things and say: 'No, that's
not a good idea'. They will do their damnedest to stop you making huge and
disastrous mistakes."

Financial advisers tell of 80-year-old widows and other normally cautious
investors who recently started calling up with instructions to "sell everything
and buy the internet". Margin trading, where investors borrow against the
value of their existing portfolio to buy more shares, can only fan the flames.
Killik & Co is the sole stockbroker to provide margin trading accounts at
the moment, but American and Canadian-owned execution-only brokers are
planning a big push in the UK.

There is some evidence that recent setbacks in the US market coincided
with banks closing in on debtors. A wave of margin calls also sparked much
of the enforced selling that led to the 1929 Wall Street crash, and the
ensuing global depression that lasted throughout the 30s.

But that, as they say, is history.

(Thanks to the TELEGRAPH, And Fair Use For Educational/Research Purposes Only.)

R Powell

(05/24/2000; 17:33:29 MDT - Msg ID: 31183)

Physical and speculation

Just want to add that "playing" in the futures market while sometimes profitable and fun can also be risky business and very costly. I know this from experience. And this is probably the biggest difference between physical in hand and leveraged speculation. I love both!

TownCrier

(05/24/2000; 18:02:23 MDT - Msg ID: 31184)

Sir goldhunter's 31177 wager...

You said: "I'll wager that when all is said and done...Pick your gold price and will give it till Dec1, 2000, and we'll visit the shop for a quote to sell our physical Krands and we'll take the Comex close that day...Oh yes, do not forget to add "interest" on to the Futures profit."

Whether you realize it or not, you have now aptly discredited your siren song by your very distinct sounding of notes out of tune with a REAL world in which we must all live. That is quite a feat for such a brief post! How did you do it, you ask?

You suggested your strategy's vindication would come "when all is said and done", at which you promptly offer a specific date (Dec 1, 2000) as the proving ground! HA! I nearly pitched over the back of my chair and fell off The Tower!!

I laugh indeed at your little ploy, and suggest that my position is not one to be fully appreciated on a randomly selected or knowable date (such as Dec 1, 2000), but truly at such a time "when all is said and done".

You strike me as a futures broker trying to round up prospective clientele from among this convenient crowd that have gathered here on the close path of understanding the interplay of these various paper currencies and the closely related futures acting as the very necessary paper substitutes for real and reliable wealth to preserve the current system. The sooner your futures business dries up and the distraction of gold substitutes is no longer seen to satisfy the American appetite for gold in their portfolio, the sooner the real relative value of gold will become apparent to all...through much higher prices. This will happen with or without American investors (though sooner with) as the balance of the world is taking real gold off the table.

You know exactly how futures contracts are priced--having no necessary connection to real gold availability, but rather the supply and demand of the contracts themselves. And if you can't lure the innocents into your shearing house to maintain the illusion of a viable instrument, the game is over and only physical positions will carry the day. And you KNOW it. And when is that day we speak of? "When all is said and done."

Netking

(05/24/2000; 18:05:26 MDT - Msg ID: 31185)

R Powell Re; Futures(31183)

Doesn't W.D.Gann's track record just make you so mad!..... "one day Roger Phipps!..."

PH in LA

(05/24/2000; 18:16:51 MDT - Msg ID: 31186)

Reposts

Rare glimmerings of rational thought from that other forum today. Why don't these two guys move over here and save us the disagreeable task of wading through so much nonsensical rubbish to find their posts?

Date: Wed May 24 2000 19:15
rhody (LEASE RATES: lease rates dropped across the board today,) ID#410367:
Copyright � 2000 rhody/Kitco Inc. All rights reserved for all pms. Gold tightened the most, with spreads between short term and long term lease rates narrowing to .82%. The pattern is and has been the one month rate falls, but less than the one year rate. So, we slowly tighten, even as leasing itself dies. The quicker fall of the one year rate indicates a drying up of producer forward selling. All of this is bullish long term. An end of leasing/forward selling is what will set the pm market free. Next will come the death of options trade as the longs decide to exit this rigged market. Then with the first default, we do a TOCOM in gold or silver, and the fun begins. Bullion bank failure follow failure as owners of gold certificates show up for their metal, and find there is none. I wonder how many of those things have been printed for every ounce of gold in the vaults.


Date: Wed May 24 2000 19:53
ted butler (@Rhody don't lose that number, you might use it when you get home) ID#370209:
I'm a sucker for a well-turned phrase. In the grand "hedge fund in drag" tradition, where a simple phrase explains so much, Rhody goes down in history for...... drumroll,,,,,,,,,,,,,,,"do a TOCOM" Just perfect.

Netking

(05/24/2000; 18:17:42 MDT - Msg ID: 31187)

Sir Town Crier(31179)

TC - Thanks for sharing your wisdom, as usual it's worth it's weight in Gold.
I long for a repeat of 1980's price of $500+, a gain of 1,000% up on current price levels.
Cheers
Netking

HI - HAT

(05/24/2000; 18:32:40 MDT - Msg ID: 31188)

TRUST

I have been buying and holding gold and silver for 26 years,
because, I don't trust the Federal Government, I don't trust the Law, I don't trust paper, I don't trust the markets, I don't trust the I.R.S., I don't trust the System.

I do trust the buried "CORE" gold and silver.

Buried Treasure......Pirates have more fun.

Canuck

(05/24/2000; 18:39:39 MDT - Msg ID: 31189)

BOE Auction

@ T.C., Canuck Gold, Strad Master

The part of the auction that I have never followed is if I was really (desparate) short physical why couldn't I bid $325 (say $50 over spot for discussion sake) for 24 tonnes to ensure 'allotment' knowing (or hoping) that the next and last tonne was at or near spot. This example is probably far-fetched but since we can never know the bids who can say what happens.

From T.C.,

"While it is true that the entities eligible to bid at the UK auction are principally members of the LBMA, and therefore potentially able to engage in some form of collusion to bring about the $1 bid as you've suggested, the BOE reserves the right to reject the bids as it sees fit to do so. But also, because bidding is conducted in a closed and secretive manner, the potential for double-crossing or one-upmanship exists among the would-be conspirators, not to mention the left-field effects of bids by other qualified participants such as CBs and other BOE depositors with bullion accounts"
---------------------------------
This is what I alluded to Tuesday morning just before the auction. The bids can be managed to present a ratio that
that doesn't rock the boat. Convenient that the bid ratio was 2.7 at a stinking 'nickel' over spot isn't it?

Do you guys recall the article "2 Bills and a Scandal" (I think it was Howe). Imagine if Bill Gates (through correct channels) presented ten 25 tonne bids at a $100 over spot.
Far-fetched and I am sure the bid would be allowed....not.

The BOE auctions represent the imagination of the scum sucking vermon of the earth. I will find the article if anyone is having trouble.

goldhunter

(05/24/2000; 18:40:15 MDT - Msg ID: 31190)

"Rounding up" the truth

http://www.usagold.comSir Crier...There is no rounding up clients here...no ulterior motives...honest, ethical people need none.

We will see the true value of each "position" Dec 1, 2000...a 6 month "profit window" to see clear profits...a fair period for each...If you're not up to the challenge...?

Remember...it's not win or loose...it's just another vehicle to make profits...

By the way, an opinion that futures (gold or otherwise)has no connection with "cash" is non-sense..."believe it"

Canuck

(05/24/2000; 19:00:09 MDT - Msg ID: 31191)

(No Subject)

http://www.goldensextant.com/commentary8.html"In any event, anyone -- friend or foe -- with a spare $300 million who cares to bid $370/oz. for the full amount of the next British auction could more than likely crash the gold banking system with consequences far more serious than those threatened by the failure of LTCM. Not long ago Marc Faber publicly suggested to Bill Gates the investment merits of switching his almost $100 billion of Microsoft shares into gold."
---------------------------------------------------------

Go Billy Go, smoke the BOE!!!!!!!!!

Canuck.

Cavan Man

(05/24/2000; 19:04:06 MDT - Msg ID: 31192)

goldhunter

Sir,

You are talking about apples and many are speaking of oranges. Truly, both positions hold promise for profitable resolution.

You apparently are not concerned with the monetary argument for physical gold ownership at this point in market history. That's OK. I for one am glad to have the choice between vanilla or chocolate.

Post on! (good luck)

Al Fulchino

(05/24/2000; 19:33:16 MDT - Msg ID: 31193)

(No Subject)

HI - HAT (05/24/00; 18:32:40MT - usagold.com msg#: 31188)

"I do trust the buried "CORE" gold and silver.

Buried Treasure......Pirates have more fun."

AF/ Hi Hat..where do u live??

Al Fulchino

(05/24/2000; 19:43:06 MDT - Msg ID: 31194)

correction

I wrote:
Al Fulchino (5/24/2000; 10:54:37MT - usagold.com msg#: 31162)
TH/BTD/goldhunter
Thank you all for your exchange the last two days. It serves a wonderful purpose to match the trails side by side.

should have been TG (Trail Guide) not TH... one needs to be clear if he is going to post...yes I should.

SteveH

(05/24/2000; 19:54:59 MDT - Msg ID: 31195)

First things first...

Natural gas is going ballistic. There, I said it. All oil and gases are up tonight. Gold is limp. Same with silver. Euro came back a bit, but is holding for now. The Duck (NASDAQ) and DOW brought to Moneyline tonight the question, "Is the downside over?" Not by a long shot, baby! One analyst said he thought that the Duck wouldn't drop below 2900 (but if it did, that would be bad). Unfortunately for him, I have this nagging sense that he is suffering from the syndrome of wanting one thing and will bet getting another, as we gold bugs have been so infested with.

Now, if you ask any true blue American what they think of gold you are likely to get a laugh and a shrug, "It's dead, man."

Could it be this negative sentiment is the result of a disinformation campaign to take the consumer out of gold and keep them out? Certainly, the Brits and the ESF involvement in the gold market that is getting more and more visible thanks to Bill Murphy and the rest of us is just to small of a market to have the "people" involved. Somehow someone said once, "Let's trade gold between countries and keep the common folks out of it. To do that, we are going to have to create some small exchange where we can control the price but trade the big stuff behind the scenes. Then, we will put out the 'bad' word on the street that gold is dead and now just a commodity. That will accomplish what we want, yes indeedy." That this farce is allowed to continue while we all thought the game was fair, is a tad irritating. Since we have to watch it happen and even verbally complain from time to time, at least we can enjoy it. Before the intenet (BI), we would never had a clue all this was going on, until it was old news. Not any more. All that is now changed. Pull up a seat, things are just starting to heat up. Popcorn?

R Powell

(05/24/2000; 19:55:49 MDT - Msg ID: 31196)

Futures markets and manipulaters

The futures markets as an industry provides a means of discovery for fair market value of a certain quanity and quality of a particular item at a certain time. It's a means of providing a market for the seller and a place to buy for the buyer. Speculation for profit in these futures provides the opportunity to the buyer or seller to transact business at any time. The market CAN be manipulated but is NOT the cause of manipulation. If a radio reports bad news, do you hate the radio? The radio is the means of communication not the cause or origin of the bad news. Futures markets are not going to dry up and cease to exist. What will happen is that the market will adjust when the manipulation ends and it will do so IMHO violently. Indeed, it may be the market itself that sends POG much higher, not the end of the market that does so. Again, one man's opinion. GO GATA!

Cavan Man

(05/24/2000; 20:02:35 MDT - Msg ID: 31197)

SteveH

No butter for me and I do prefer sea salt please.

I'M here for the full length feature. Why am I thinking (just now) of Lawrence of Arabia? TG is Peter O'Toole--no way! (when you smile the whole world smiles with you).

Something's rotten in Denmark....CM

Al Fulchino

(05/24/2000; 20:17:18 MDT - Msg ID: 31198)

REPOST REPOST but well worth it

Why are banks against gold? -- Larry Parks
(GOLD.com) May 24, 19:28

"Increasing gold prices threaten the financial sector's unearned profits: What does this have to do with gold? First, as noted above, if there were a link between gold
and our monetary unit, the central bank and the FDIC would not be able to implement the subsidies and the unearned profits/revenues described above would not be possible. Those who profit from the creation of fiat money understand this and share a commonality of interests in suppressing gold.

Second, gold is a dagger pointing at the banking system's heart because virtually all
Wall Street professionals, the establishment news media, and academia use the price of gold
as a leading indicator of inflation. Money creation (a.k.a. bank credit expansion) and the
profits that flow from it depend on interest rates staying low. An increase in the gold price
would signal imminent inflation initiating a chain of events that would be very detrimental to the
banking system:

� Interest rates would be bid up;
� Business relationships that were entered into based on lower interest rates, e.g., almost the
entire U.S. home mortgage market is now linked to variable interest rates, would begin to
unravel;
� Bank assets would become impaired;
� Derivative leveraging and the mismatching of assets and liabilities, which is the essence of
commercial bank credit creation, called "fractional reserve lending," would unwind;
� And, the profit bonanza would come to a screeching halt.
Simply put, if the gold price goes up, the fiat-money-induced bonanza for commercial banks and for Wall Street firms, who garner transaction fees on the fiat-money creation and who also engage in subsidized gambling, will go away. In my view, this is what Federal
Reserve Chairman Alan Greenspan was alluding to when, before the Committee on Agriculture, Nutrition, and Forestry, U.S. Senate on July 30, 1998, he testified: ". . . central banks stand ready to lease gold in increasing quantities should the price rise."

Larry Parks
Executive Director - FAME
Foundation for the Advancement of Monetary Education

R Powell

(05/24/2000; 20:17:33 MDT - Msg ID: 31199)

Good, honest coverage of COMEX gold trading

http://www.swiss-financial.com/cotton_market.html Goldhunter, as you have identified yourself as a future's broker I thought perhaps you might know of a link where we could get blow by blow reporting of the floor trading of the gold market similar to what the above site provides for cotton. We'd love to know just who is buying/selling and when and how much. This link's coverage varies day to day of course but has stated (and named the buyer of ) that 500 Dec. calls at $0.63 were recently purchase in this market. Wouldn't we love to have similar insight into just who is buying/selling and for what months and how much etc. Does this type of reporting exist for the precious metals markets?

TownCrier

(05/24/2000; 20:25:04 MDT - Msg ID: 31200)

Snake oil...

Sir goldhunter, you have now offered the comment that "an opinion that futures (gold or otherwise) has no connection with "cash" is non-sense"

What is it that you are calling "cash"?

To be clear, in my (msg#: 31184) I said, "You know exactly how futures contracts are priced--having no necessary connection to real gold availability, but rather the supply and demand of the contracts themselves. And if you can't lure the innocents into your shearing house to maintain the illusion of a viable instrument, the game is over and only physical positions will carry the day."

And in your own (msg#: 31115) you do indeed show that it is the futures contracts that lead the way on price discovery, saying yourself that "physical is (usually) priced from futures".

To which I concurred, and made the following remark in (msg#: 31135) "That being the case, a person might make a grave error were he to expect the futures prices to broadcast a breaking point being reached with the physical market. The most favorable acquistion opportunity will be past before anyone can react."

Further, in your (msg#: 31190) you said with the coolness of a cucumber, "Remember...it's not win or loose...it's just another vehicle to make profits..."

You seem to discount the principle reason most people take a position in gold, that being a bastion against turmoil in currencies and general default against obligations. Gold, it must be admitted even by you, stands its own ground and is not the liability of another person. The same CANNOT be said of your futures contracts which come with a counterparty risk firmly attached, and the prospect for changes in rules mid-game.

So, Mr. Futures Broker, what are we to do...buy a couple K-rands, and then flock to your door in want of futures contracts so as to bring about the higher COMEX prices so many people continue to look for in vain so that their K-rands gain in value? Better still is to sell our gold in order to have more money with which to bring to bear on the COMEX long positions. Surely THAT will be enough to send the determined shorts home with their hat in their hands. Give me a break. There is no force that can be brought to bear against any such determined short sellers save for breaking the credibility of the market altogether with the unavailability of real gold at these COMEX-determined prices.

In your (msg#: 31180) you said "I gave a sort of pat on the back for a plan being instituted, a "well-done" if you wish...because the person took an idea to get ahead, and acted on it..." And in your first post yesterday (msg#: 31101) you also said to that individual "you have done a great job...you have come up with a trading plan, and you have put it into force...GOOD JOB! Developing and putting your plan into action is more than most will do for themselves."

You imply that those of us who see the benefit in using our strong dollars to take ever more gold off the table as it remains available are somehow not to be similarly congratulated for coming up with our plan, putting it into force, and acting on it.

You further said to this person, "Your plan is a very good one, with limited risk of dollar-loss...if futures stay the same, you simply roll forward, and you earn a T-bill return while you are waiting...I see this as safe, wise, and PROFITABLE when the "gap-up" arrives(eventually)..."

Here is where the harsh slap of reality would surely set your head back among the land of the living. Where was your caution about COUNTERPARTY RISK while you were sending sunshine up his nether regions and whispering sweet nothings in his ear???! That very same "gap-up", were such a thing to actually happen again, could very well end up teaching your flock a tough lesson about counterparty risk. It is undeniable that the mini "gap-up" following the Washington Agreement created much termoil, and many traders complained of poor trade executions and adverse spreads. And yet, the determined shorts prevailed, and here we are today. They have surely learned a lesson that against even the most remarkably bullish bombshell, they can keep their cool, and keep selling futures into the ground. What has changed, or what will change in that regard? Only the day where your paper is discredited and physical is king.

And finally, in your (msg#: 31190), you are quick to assure us all that "There is no rounding up clients here...no ulterior motives".

Yet, let's review your path of breadcrumbs, and decide whether or not a pattern in taking shape and a foundation is being laid...

In your (msg#: 31101), you said, "I wish more of my clients traded like you are trading..."

Then in (msg#: 31152), you do more spadework with the "all-in-good-fun" comment: "Sir FOA...you probably "bought Dec. Gold at $283...not $383" or else you need a new broker...give me a call..."

And then, in your recent (msg#: 31180) you provide the disclosure "I am a futures broker." (*gasp*! can it be true? I had no idea!)

How many more posts will it be before we all know where to contact you so that we all might be further beguiled by your charms, separating us from our sure and steady path of truth, not to mention our hard earned accumulation of wealth?

A final question. In your disclosure, you said in full, "I am a futures broker. (I have bought more Eagles than most lately.)"

Why do you have these Eagles, when you are so clearing on an inside track for executing the same paper position for yourself that you so strongly supported for Sir BTD?

As for me personally, I do not so much care what choices a person makes with regard to their individual investment dollar. What I do take exception to are sales pitches that lead people away from following a path toward truth, particularly when it is done not to someone already hopelessly lost, but to those already on the path. You should seriously consider pitching your wares at the internet stock chat sites. Given their performance lately, you will likely be able to drum up lots of customers, and thus keeping the COMEX market viable at least until the real gold runs out.

Cavan Man

(05/24/2000; 20:32:14 MDT - Msg ID: 31201)

Nikkei

UP. Sucker's rally based upon the trade accord with China? How does this accord benefit the US? The Chinese will buy technology produced here with both hands. Are they buying our steel also? Does this open the US market ever wider for Chinese companies exporting here? I don't get it. The "made in Japan" of the 70's is, "made in China" today.

What can we sell that nation that will even come reasonably close to balancing trade?

Al Fulchino

(05/24/2000; 20:43:00 MDT - Msg ID: 31202)

TownCrier (05/24/00; 20:25:04MT - usagold.com msg#: 31200)

TC, we need people like goldhunter here. I do not feel he has attacked anyone. Whether you like his comments or not, he does extol a method of investing. It may be contrary to many who are here, but I do not mind that he is a future's broker and watching you examine his line of thinking is wonderful and I look forward to his responses to you and TG because it bares, for all to see, each sides thinking. He is critiquing popluar thought on this forum, but that is useful to all who read here.

SHIFTY

(05/24/2000; 20:46:12 MDT - Msg ID: 31203)

Topaz

http://www.drudgereport.com/VOILA!! You were right! I thank you ! No more multi-post/multi-links from $hifty!

$hifty

BTD

(05/24/2000; 21:02:40 MDT - Msg ID: 31204)

TownCrier msg# 31184

TownCrier,

Wow! You are starting to get a little strident in your zeal to support your position. In reading your posts and thinking about them today, I have come to realize what the deal is. You have an almost religious faith in the Comex/physical price divergence scenario. The Comex has never before had such a divergence, yet you have absolute faith that such an event will occur. I understand this attitude because I, too, have an absolute faith in something not seen, and in events that have never occurred but are prophesied to occur in the future. But my faith is in God, not gold. (Shall we call it the "big G" as opposed to the "little g"?).

Let me document my case. Here is the performance of the active futures contract during the most recent dramatic price jumps. I don't have the numbers for spot gold prices to compare, but I assure you prices and physical did not diverge as you prophesy they one day will.

Dec 1999 contract (closing prices):
Sep. 20 $255.80
Oct. 5 $326.00 (after hitting $338.00 as the high of the day)

Apr 2000 contract (closing prices):
Feb. 1 $285.40
Feb. 10 $318.70

I rest my case on this and 25+ more years of evidence. Your case rests on your faith in the accuracy of your prophecy. Let me say of you, "whether you realize it or not, you have now aptly discredited your siren song by your very distinct sounding of notes out of tune with a REAL world in which we must all live."

You said to goldhunter, "You suggested your strategy's vindication would come �when all is said and done�, at which you promptly offer a specific date (Dec 1, 2000) as the proving ground! HA! I nearly pitched over the back of my chair and fell off The Tower!! I laugh indeed at your little ploy, and suggest that my position is not one to be fully appreciated on a randomly selected or knowable date (such as Dec 1, 2000), but truly at such a time �when all is said and done�.

Since you feel comfortable applying your belief system to goldhunter, let me apply my belief system to you. You also have a shortsighted view. For when it is really all said and done, your physical gold and silver will be worthless. Witness the prophet Ezekiel:

Ezekiel 7:19
�They will throw their silver into the streets,
And their gold will be like refuse;
Their silver and their gold will not be able to deliver them
In the day of the wrath of the LORD;
They will not satisfy their souls,
Nor fill their stomachs,
Because it became their stumbling block of iniquity.

Perhaps you will object to my hypothesis, since you may not share my belief system. You may say gold will always retain value because it always has in the past. Likewise, goldhunter and I object to your hypothesis because we do not share your belief system. We say that the Comex and physical will not diverge because they have always moved together in the past. You cannot comprehend how we cannot believe what you do. That is the nature of true faith. A person with true faith believes absolutely in something that cannot be seen, and he cannot understand why others do not share his belief.



"When all is said and done", gold will be worthless. In the meantime, I'm trying to increase my wealth in the most efficient manner. You are prophesying an event to happen in the vague and nebulous future. I have to deal in the very real present. All you offer me as evidence of your prophecy is your faith, and your zeal is admirable. But I will base my actions on concrete evidence. The only prophesies that I believe are those that come from God.

Goldhunter proposes a concrete test of the two opposing theories. You ridicule him ("I nearly pitched over the back of my chair and fell off The Tower!! I laugh indeed at your little ploy") for even daring to consider such a thing. Apparently you feel you are right, even if the event never happens in your lifetime, goldhunter's lifetime, or any of our lifetimes. There is no way we can prove you wrong; you can just say, "It just hasn't happened yet." As I said in my earlier posts, I will plan on those things which have the high probability of occurring, not the far-fetched ideas that have no historical precedent.

I'm sorry if this post seems a little harsher than my prior efforts, but I was offended by your uncalled-for attack on goldhunter. You accused him of trying to solicit "innocents" into his "shearing house" of futures trading � when he has solicited no one and has been voicing reasoned and rational views that others of us share. You wished upon him a collapse of his business ("The sooner your futures business dries up�"). And yet yesterday you assured me that "Although you said you expected disagreement, please rest easy on that account. This whole thing is no different than you saying, �I plan on having a hot pastrami sandwich for lunch, and chips, too, are in my sight.� How can I, or anyone, possibly dare to �disagree�? These are safe halls, my friend" (message #31124). Suddenly the halls no longer seem so safe for those who who lack the faith.

As a final illustration of the religious nature of your belief system, let me quote your message #31200: "What I do take exception to are sales pitches that lead people away from following a path toward truth, particularly when it is done not to someone already hopelessly lost, but to those already on the path." If that's not the line of a pastor defending his flock, I don't know what is.

SHIFTY

(05/24/2000; 21:03:55 MDT - Msg ID: 31205)

cut and paste test

This is a test .

If you put a match to it , and it goes up in flames " it ain't gold!"

$hifty

goldhunter

(05/24/2000; 21:35:15 MDT - Msg ID: 31206)

Mr.Crier...Mr.Crier

http://www.usagold.comFeeling a little testy are we? First, I solicit no one here.

Second, Sir FOA either hit the "3" key by mistake when he posted $383.30 or made an honest mistake...my humoros reply was as said...you may mean $283... or you need a new broker...Humor...otherwise you need a new broker...give me a call...(maybe for you I should have said:"smile" so you would get the intended "funny"

Third, My gold eagles...I buy them because of what I have learned here ...partly.Also I do believe that both "cash"gold, Eagles, bars, Krands etc. AND futures are both vehicles that will profit from the coming bull market.

Last, It seems odd that IF YOU DISAGREE with another "professional's" opinion you would try and show him (ME) the door...not very hospitable of you...

I will stay however...you, Mr. Crier will not be let off the hook...our 6 month "test" stands for all to watch.

Goodevening.

SHIFTY

(05/24/2000; 21:46:01 MDT - Msg ID: 31207)

BTD

BTD: I have not wanted to get into this paper gold discussion, but your quote of Ezekiel 7:19 brought this thought to mind.

Ezekiel 7:19
" They will throw their silver into the streets and their gold will be like refuse; Their silver and their gold will not be able to deliver them in the day of the wrath of the Lord.
They will not satisfy their souls , nor fill their stomachs because it became their stumbling block of iniquity."

The reference to " They and Their " could be in reference to people that hold Paper metal .

You know how the Prez told us it depends on what the definition of " is " is. Well...........

Just a thought.

$hifty

Solomon Weaver

(05/24/2000; 21:46:23 MDT - Msg ID: 31208)

Did someone say "silver"?

TownCrier (5/23/2000; 22:18:23MT - usagold.com msg#: 31130)
Solomon Weaver (5/23/2000; 21:10:26MT - usagold.com msg#:

Town Crier...you are cordially invited at any time you plan to come to the Finger Lake region of New York to enjoy a bit of water from that well....

I will heartily agree with you that gold is the premium money.

Given the modern concept of portfolio diversification, I believe that silver physical represents an interesting option along with physical gold. You see, as much as we like to theorize, neither of us can predict the Au/Ag relationship at any point in time.

As I mentioned yesterday:

Concerning both gold and silver there are three aspects:

1.Industrial and utility demand (including jewelry, etc.)
2.Investment demand (private gold hoards in coins and bars)
3.Monetary demand (bank reserves). Also we should consider a coin minted for real circulation as monetary.

The point which I was trying to make yesterday was that whereas physical gold has a distributed demand in all 3 aspects, physical silver is primarily demanded only in aspect 1. Thus, in a contrary analysis, silver has even more recovery potential in demand.

In a flight to quality in assets, gold is certainly king but silver has many of the same qualities. There is hardly enough gold in the world to remonitize most trade with gold backing (without POG going to $20,000)and that is 4 billion ounces of gold...but there appears to be less than 1 billion ounces of silver and the price is 1/50 that of gold...or about 1/200 dollar value....i.e. from an asset "market cap" silver is less than 1% that of gold. That is the SUPPLY....price is "usually" a relationship between supply and demand.

To see the picture clearly and not believe that silver could see a higher percent gain than gold (in a midterm PM bull)is not rational. To believe that gold demand and the end of leasing etc. will allow gold to skyrocket but that the same "setting free" of silver will not let silver skyrocket any faster than gold is being emotionally partisan to gold.

As a matter of fact, given the small size of the silver market next to gold, and the fact that the insider cabal in silver is much more concentrated, I believe that silver could default and be set free faster than gold....meaning that the "silver launch" could precede the "gold launch"...in this event, wouldn't it be good to own some silver too?

Let's think this through...let's say silver went from $5 to $15 (about 300%) and caused 1 billion ounces of shorts to settle in cash at that level to "save the banking system". Ticket price for the bailout is $10 billion....

Now let's say that gold went to $1,000 (also about 300%) and caused 10,000 tons of shorts to settle at that level in cash to "save the banking system" Ticket price for the bailout is $200 billion.

The way I see it, silver could run to $30-40 before "force majeur" is claimed....but gold breaking $600 would break the banks if the current paper structure is still in place.

Actually, in the silver paper markets there is a large amount of paper (investment demand) and leasing. As a matter of fact, if one compares the dollars traded or contract sizes traded in the gold paper markets vs. silver markets on sees that the little silver market (500 million oz x $5 = 2.5 billion) moves quite a bit of money (about 1/10 of the gold volume, and about 1/2 of the average contract size)...compared to a gold market which at 100,000 tons x $ 10mio/ ton = $1 trillion or about 400 times the value of the gold markets.

Another funny thing is that if you look at the vault stocks of silver and gold in the COMEX over time...there is usually a dollar amount of silver which is in the same order of magnitude of dollar amount of gold...i.e. 1/2 or 1/4 but rarely less than 1/10. Whereas less than 0.1% of the worlds gold is in COMEX vaults at any given time, in recent times as much as 25% of the worlds remaining silver has been in COMEX.

It is my opinion that most traders on COMEX who trade gold and silver believe that the world probably has about 1/10 the dollar value of silver vs. gold....because they extrapolate from the usual vault ratios. They are unaware of how extremely thin the market is outside the COMEX...and that there is a much larger percentage of paper trading over the metal than with gold.

The following numbers are estimates:

Gold paper trading 1000 tons per day about %1 of the total physical. ($10 billion daily trading volume)

Silver paper trading about 200 million ounces per day or about 50% of the total physical. ($1 billion daily trading volume).

In a way, it seems that "hyperinflation" has advanced much more in silver paper than in gold paper.

In the eyes of the modern traders gold and silver are fairly similar markets. In the eyes of many world citizens and politicians silver is simply a cheaper form of gold. When buying numismatic coins is once again a "good investment", I seriously believe that the price of of gold will be so high that silver will have to do for most people.

You made a joke about gold for the rich, silver for the middle class and copper for the poor...but in truth you are right on the mark. The rich man will find gold an attractive place to set aside savings...the middle class might still afford silver..and the rest will have only fiat options.

Mr. Town Crier, you must forgive me for continuing to return as a silver advocate on this most esteemed gold table.

And do not believe that I would sacrifice gold ownership for the sake of silver...I see them more like a right and left hand.

Poor old Solomon

onlychild

(05/24/2000; 22:14:43 MDT - Msg ID: 31209)

RE: Solomon Weaver (05/24/00; 21:46:23MT - usagold.com msg#: 31208)

POS (Poor Old Solomon, not price of silver) Is the 1bn oz of silver you refer to the total supply on the planet? How does one arrive at a figure like that? If silver is four times as precious as gold, why is it not reflected in the price? Does Warren Buffet still hold a massive position in silver? OC

Elwood

(05/24/2000; 22:24:57 MDT - Msg ID: 31210)

BTD (05/24/00; 21:02:40MT - usagold.com msg#: 31204)

"The Comex has never before had such a divergence, yet you have absolute faith that such an event will occur."

Better check your history again there. While it may be that the "Comex" never experienced this, that's not the same thing as saying it's never happened. The Comex has an extremely short history. Try 1869 New York, 1873 New York, 1931 London, 1933 New York/USA, 1968 London, 1971 Everywhere. That's just a few off the top of my head. Care to go further back? Rome?

You people seem to think we're discussing the end of the world. That's not the case. What's about to happen to the dollar has happened many times before to many different currencies, but you're right. Of course, the Comex will honor all contracts when the time comes, because that's what they've always done. Those guys in New York will always take care of their customers first even if it means a loss to them. The bank clerks that were took out and hung in 1869 were all just victims of a terrible mis-understanding.
Elwood

TownCrier

(05/24/2000; 22:44:54 MDT - Msg ID: 31211)

BTD and Al Fulchino

First, Sir Al:
Al Fulchino (05/24/00; 20:43:00MT - usagold.com msg#: 31202)
"TC, we need people like goldhunter here. I do not feel he has attacked anyone. Whether you like his comments or not, he does extol a method of investing. It may be contrary to many who are here, but I do not mind that he is a future's broker and watching you examine his line of thinking is wonderful and I look forward to his responses to you and TG because it bares, for all to see, each sides thinking. He is critiquing popluar thought on this forum, but that is useful to all who read here."
---END quote---------------
I agree completely with everything you've said. And as you've said, regarding the usefulness of examining all sides of thought on these various methods of investing, I have endeavored this evening to provide commentary to further the comparison. Perhaps I should have said nothing at all.

But as I said in my previous post, it is the clear appearance of an effort toward self promotion, a laying of groundwork to solicit business interest at this (advertisement-free, no-cost) forum that has resulted in more vigorous counter-commentary on my part than would have otherwise been the case. If a someone such as beesting or Solomon Weaver or ORO were to suddenly find the need to share their own investment strategy and advice on the forum which turned out to be exactly this same trade, I may or may not offer a kind word about remembering to factor in counterparty risk, but that would be it. I'm not in the gold selling business, that is what MK does at Centennial--the company the pays the electric bills here. I'm just a lackey who mans the watchtower here on the fringe of the wilderness for the purpose of passing along news of gold, and making needed improvements to the design and content of this USAGOLD website. Granted, I could provide my feeble service to any particular business in nearly any sector of the economy. The very fact that I do it right here is testiment to my monetary philosophy and expectations for the future.

I don't want to scroll back through to find the exact post, but I recall that Sir R Powell said he was a trader/broker?? If that is true, then R Powell is a model of how to discuss the issues here without a hint of self-promotion. I believe TheStranger is another example of an investment profesional who has also shown himself to be a model poster in this regard in these days of late. So, Goldhunter is more than welcome, in fact, encouraged to talk about the dynamics of the gold derivative markets, and also to speak of factors he sees coming to bear that will make either John Q. Public or America, Inc suddenly gain sway over the determined shorts which have established a most impressive track record. He can warn us of counterparty risk, or educate us about the institutional safety nets that are in place to catch us all when we fall. Something approaching a sales pitch, however, is contrary to the ground rules that were established with the creation of this branch of the USAGOLD website. But to reiterate, Al, I agree with your comments that it is useful to air every side of the gold industry, warts and all.

Sir BTD, your 31204 post puts me at a loss for words...(certain to be a relief to all.) I do not have, what you call, "religious faith in the Comex/physical price divergence scenario." I do, however, have every confidence that we are currently working through a buildup of market forces not unlike a good old fashioned run on a bank as seen back in the days of gold coinage. However, given the international dimension of the current gold market, the "run" that is sure to come will be a doozy...far surpassing the impact of such related precursor events as the 1933 gold-confiscation banking holiday or the 1971 U.S. gold default. Regarding the "divergence" scenario, I rather doubt that COMEX futures prices will calmly march ever lower while physical gold prices (spot plus premiums included) calmly march higher. What I would expect "when all is said and done" (meaning that the market psychology has reached the threshold "bank run" stage) is a general lock up, massive counterparty default, or sweeping rule change to affect COMEX gold trading and the value of your COMEX contracts. Personally, I don't find the interest to be earned on T-bills to be worth the risk to be separated from my core position in gold with a paper gold substitute. If you are at ease with your current investment strategy, then clearly, 400 ounces is seemingly an adequate position for your personal comfort level. There is no shame there. But given what you and goldhunter have said, are you so confident in the suitability of COMEX contracts to function as proxies for real gold that you will put those other 400 ounces to similar good use, and earn the T-bill interest as frosting on the cake?

Why do I speak of "truth" as I do? Because I am not here to make a sales pitch to help Michael capture your investment dollars in preference over other business. I see my efforts as a mini- (and perhaps pathetic) version of GATA. But rather than trying to expose deep levels of corruption or conspiracy, I endeavor with my time and energy to expose people to the realization of the shockingly inadequate monetary education they were (not) exposed to in high school or college.

And with that, I shall blow out the candle up here and retire from the cool night air.

Simply Me

(05/24/2000; 23:14:06 MDT - Msg ID: 31212)

The New Rumpelstiltskins...or How to Spin a Bear into a Bull

http://www.bloomberg.com/feature.htmlDon't Worry About a Bear Market
"By David Pauly

(Commentary. David Pauly is a columnist for Bloomberg News. The opinions expressed are his own. Published in the June issue of Bloomberg magazine.)

New York, May 24 (Bloomberg) -- Delete ``bear market'' from the vocabulary of the stock trade. The lightning speed at which share prices move has rendered it obsolete."

At the link, you'll find the whole article.
Can the New Paradigmers SPIN a Bear into a Bull by pretending the Bear doesn't exist anymore? When my children were babies, they used to make scarey things go away by covering their eyes and pretending they didn't exist. At about 6 they found out that didn't work.

My two cents on the paper vs. physical debate:
I think the paper pushers are assuming that we all believe the old adage, "Make your money work for you." A stock broker probably came up with that line. In the real world, that dog won't hunt. You work (ie: provide a service or a product) for the money. Then you work to keep what wealth you've earned.
Over the long haul and in times of real need, the best store of value is physical gold. History says so, banks say so, national governments say so. Holocaust survivors, Depression survivors, and The Fall of Saigon survivors say so.
I think I'll place my bet on their wisdom.
Who says the markets are better? Stock brokers?
I'm not looking to put my money to work. I work for my money. All I want is a store of value that will be available to me and my family when times are hard. (I'm not a Democrat, so I'm not depending on Uncle Sam's hand outs. His price is too high anyway.) Physical gold (and some silver) is it. That's my savings. My "investments" are in me, my family, our home and our abilities.

simply me

TEX

(05/24/2000; 23:28:42 MDT - Msg ID: 31213)

Slow Death

Big time lurker and a small time poster. As always,great discussion and posts day after day. However, why do I have this awful feeling that my physical investment is being slowly put to death via the old Chinese water torture......i.e. one little drop at a time?

elevator guy

(05/24/2000; 23:29:13 MDT - Msg ID: 31214)

A little joke in this "vein" of gold disscussion.

A man dies and goes to see the Peter at the gates of heaven.

Peter asks "What it is that?" the man is dragging with him.

The man replies that "These are gold bars, which are worth something forever."

Peter shakes his head in amazement, and sighs "Why did you bring pavement?"

For those without a clue as to why this is slightly humorously ironic, it is reported in the Bible that the streets of heaven will be paved with gold.

Black Blade

(05/24/2000; 23:36:01 MDT - Msg ID: 31215)

Elevator Guy

When my times up, I'm gonna be buried with a jackhammer! It's the miner in me and old habits die hard. Who knows, I might be assigned to the DOT ;-)

elevator guy

(05/24/2000; 23:42:41 MDT - Msg ID: 31216)

(Smile)

Gotta sleep, 'nite all. :^D

WAC (Wide Awake Club)

(05/25/2000; 00:25:37 MDT - Msg ID: 31217)

@Farfel - ...so good luck in getting them to pay for American tech products.

http://www.worldnetdaily.com/bluesky_dougherty/20000524_xnjdo_free_trade.shtml One mistake we all seem to make is that because there a 1+ billion in China, this automatically implies a large market. Chinese on a renumeration of 3 cents/hour, the disposable income does not actually exist, hence no marginal propensity to spend. The 'wages' of the average chinese is just for sustenance. China is just one large slave camp for the USA and less so for Europe. This is really most excellent for the American people, because you don't have to ship them in this time, they are enslaved right there on there own land.

I remember the words of Henry Ford, saying that he wishes to produce a car that ALL his workers could afford to buy. Wouldn't it be wonderful if Nike could say that they wish to pay the chinese workers a wage that would enable them to acquire a pair of Nike shoes. One can but dream.

I blame not the American people for this dilemma. The question as to be asked, why do the leaders in China allow their own people to be enslaved?

So, let's forget this idea that because china is heading for the WTO, that there's suddenly going to be a big nex export market. I suspect Finland and/or Denmark is probably a bigger market. View Yesterday's Discussion.

SHIFTY

(05/25/2000; 00:25:46 MDT - Msg ID: 31218)

The New LeMetropole Cafe Open!

Looks good !

Good night all
$hifty

WAC (Wide Awake Club)

(05/25/2000; 00:51:51 MDT - Msg ID: 31219)

Dollar Coins Being Hoarded

http://news.efc-inc.com/#524005By C.G. WALLACE .c The Associated Press

SALT LAKE CITY (AP) - Millions of the new Sacagawea golden dollar coins are in circulation.

Really.

Trouble is, normally spend-happy Americans are squirreling away the coins instead of using them as pocket change.

``People are hoarding them. They get them in change and because they haven't seen them before, they'll save it,'' said H. Robert Campbell, president of the American Numismatic Association and owner of All About Coins in Salt Lake City. ``They are almost spellbound by the coins.''

Customers are snapping up uncirculated dollar coins that Campbell is selling at his store for $2 each.

The golden-colored coins were introduced in January. It depicts the young Shoshone Indian woman who accompanied explorers Meriwether Lewis and William Clark to the Pacific Ocean in 1805.

Within its first four months of existence, 500 million Sacagawea coins were in circulation, U.S. Mint officials said. By this summer, shipments of the new Golden Dollar coins are expected to exceed 1 billion, with 6 million new coins being minted each day.

ThaiGold

(05/25/2000; 01:38:43 MDT - Msg ID: 31220)

Dot.Com's and EURO's: All going Down the Drain.

Two Interesting NewsItems: (See links below)...
..
.
To ALL:

This is an interesting NewsItem about USA Internet companies
downsizing considerably, or just plain going belly-up:

"From boom to bust in just two clicks"

http://www.telegraph.co.uk:80/et?ac=000124036011016&rtmo=3mYxAKAM&atmo=99999999&pg=/et/00/5/25/wdotty25.html

And this next link, is a NewsItem about the EURO's sorry state:

"Bundesbank sounds alarm over euro"

http://www.telegraph.co.uk:80/et?ac=000124036011016&rtmo=3mYxAKAM&atmo=99999999&pg=/et/00/5/25/weuro25.html


ThaiGold
ThaiRanch@OperaMAil.Com
===================================================================

Netking

(05/25/2000; 02:21:11 MDT - Msg ID: 31221)

Sir Silver Solomon(31208)

Maybe we sound a litttle like the 'Lone Ranger' here talking about Silver at this golden table but hey remeber the horses name right!.
What do the "Silver Guru's" think of Buttlers 'going to the moon in a stageIII rocket' plan for Silver? There is two years supply left right?(at the most), what happens then?

Will 1980's $500/Oz be blitzed as Silver goes to 'Warp 9' speed & sets a record of consecutive limit moves?

Shouldn't every gold bug that's done the sums contact MK & buy some Silver? Forget silver paper (aka Tulip Bulb bonds), Comex silver will default faster than a Turkey at your Thanks Giving season.

Gold Trail Update

(05/25/2000; 02:54:41 MDT - Msg ID: 31222)

The Gold Trail Discussion has been Updated

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

Netking

(05/25/2000; 02:59:29 MDT - Msg ID: 31223)

Ammendum

Sorry I should have referred to 1980's $50.00/Oz not $500.00/Oz in the previous post. Mmmmmm, now maybe that was a prophetic number for silver inspired by The Lord.

HI - HAT

(05/25/2000; 04:39:05 MDT - Msg ID: 31224)

Trail Guide

Everything Is The Opposite Of What It SeemsThe Lord is a vast lake of fire. The purifier burns off that which one does not really have.

The Hell seeks to freeze the status-quo, [ bondage ]
The innocents twist in a web of stupifying complexity.

What must compel the Living is to stand humbled before the tears and blood of an ancient procession walking silently,
now, towards a golden truth.

Thanks to you and Another for a link to the Trail that has no ending.

goldhunter

(05/25/2000; 05:05:29 MDT - Msg ID: 31225)

Trail Guide Mkr #1

http://www.usagold.comSir Guide...Apples to apples I do repeat...

You can say you sold your Krands for $270.00 (a fair value?)
for the day...Is that ALL you could get?...I read your post yest. in response to BTD, but to be FAIR, the "local price" from the vault was "$282.00 per coin" as I checked with CPM Inc. right after the store started for the day...

Here in lies the Small problem...You could only "get" $270 but a comparison "purchase" costs $282...

Is it not more truthful to have "bought both" yesterday AM.and see how the dust settles in the future on a total equity worth basis? I offered Dec1 as a practical window of time...

Once again, The "buy" price of our physical contrasted with the "buy" price of our futures will give a fair and honest comparison of the two (in my opinion, related)"investments.

You try and stack the deck in your favor by using the "sell price" of $270...and then using this as your "basis"...That isn't right for this comparison...

goldhunter

(05/25/2000; 05:14:01 MDT - Msg ID: 31226)

Mr Crier...

http://www.usagold.comAgain you try and cloud the issue with REPEATED hogwash about hidden agendas about soliciting or advertising or other...
An issue has come up, plain and simple and some of us will discuss it and "learn" about it...Isn't that why you're here? It's why I came...

You go on and on, more smoke and more, like you need to protect someone from something, I'm not really sure...It's not attractive nor necessary...

I promise NOT to steal one "soul" from you or whomever signs your checks...You promise to act professional, fire the "Amway Dist", and enjoy the road...

We really are on the SAME TEAM...Helping others make profits...

Black Blade

(05/25/2000; 06:03:33 MDT - Msg ID: 31227)

Morning Wakeup Call!

Asia Precious Metals Review: Profit-taking caps platinum By Hiroyuki Fujiwara, Bridge News Tokyo--May 25--Massive profit-taking capped spot platinum on Thursday in Asia after prices reached February's high of U.S. $570 per ounce overnight, dealers said. Gold was stable between $273 and $274 with sluggish volume on a lack of fresh incentives, they said. Platinum has been overbought in the past few days, the dealers said. On the Tokyo Commodity Exchange (TOCOM), roughly 70% of speculators have been buying platinum futures contracts recently, they said. Speculative buying and short-covering extended overnight platinum's rally early in the morning, however, the dealers said prices slipped after the absence of follow-through buying capped prices in the afternoon.

Black Blade: Ho Hum. Not much new here.

GFMS says Chinese government silver sales hit 61 mln oz in 99 New York--May 24--Sales of silver from Chinese stocks jumped to 61 million ounces in 1999, up sharply from the 12 million ounces seen the year before, said Gold Fields Mineral Services in the World Silver Survey 2000, which was released Wednesday on behalf of the Washington, D.C.-based Silver Institute. (Story.15820)

GFMS: 99 silver fabrication use exceeds supply by 156 mln oz New York--May 24--In 1999 the silver market saw a structural deficit as world silver fabrication demand exceeded supply by 156 million ounces, said GoldFields Mineral Services in the World Silver Survey 2000, which was released Wednesday on behalf of the Washington DC based Silver Institute. It said that world silver demand was up 5% in 1999 from 1998 levels. (Story .16094)

Black Blade: Uh Huh, I can just see the pundits spin now: Silver � Silver everywhere. As far as the eye can see! Just a blip on da radar screen.

NY Precious Metals Review: Platinum jumps, others slip New York--May 24--NYMEX Jly platinum futures ended up $6.50 at $548 per ounce after jumping to $555, which on continuation charts equaled the high made on Feb. 17. The $555 level is the highest price platinum has seen in 11 years. The jump was made on fund buying, which is being spurred by the tightening physical market supply. Gold, silver and palladium all ended lower. (Story.2333)

Black Blade: Pt and Pd prices are about even. Both reversed direction after the GM and Nissan announcement. Up to about $560. Were up to about $570 earlier this morning. Yep, those supposed massive Russian supplies that came into Switzerland sure made a dent.

Russian CBR May 19 foreign exchange/gold reserves rise on week Moscow--May 25--The foreign exchange/gold reserves of the Central Bank of Russia as of May 19 were US $18.3 billion, up $600 million from May 12, the CBR announced Thursday. (Story .5453)

Black Blade: Can you just see it now, a strong rubble, and a weak Brit Peso. Soon many Russkies will be on holiday in London town and waving down taxis with packs of cigarettes, and buying manors in the country-side! Hmmmm�����.

ORO

(05/25/2000; 06:21:15 MDT - Msg ID: 31228)

BTD, TC, TG, Solomon - gold and paper

The paper markets provide an investor with a means to play the price of gold. They do not reflect directly the availability of gold, just the availability of paper obligations denominated in gold. As such, the gold prices discovered by these markets are detached from the reality of gold supplies. The price of gold in these markets is the value of a fiduciary gold. The only mechanism for the connection of the gold price to its supply and demand fundumentals is arbitrage.

The whole purpose of owning gold long term has been to avoid fiduciary exposure. The gold holder wants to be relieved of the exposure to bad debt that a bank or a government may produce.

The holding of paper gold does not protect the holder from fiduciary default. The futures contracts are on shifting sands, there is the demonstration of the TOCOM Pd contract before us. It had failed to deliver Pd and the contract market settled in cash. During the settlement period there was no Pd to be had from refiners beyond fulfillment of existing long term contracts. Immediate delivery brought a premium of some 15%, and up to 20% over the settlement prices. In terms of Pd delivered, the futures contract had a loss of 15% - while the markets in the rest of the world were still functioning, what would the result have been if the markets were not functioning elsewhere? 50% premiums?

In a market much larger than Pd, gold paper will settle in a liquidity crissis in just the same way. There will be premiums of 50%, 100%, who knows. While Pd is not what people go into in times of market chaos, gold - physical gold - is. Premiums to settlement prices may be so much greater than the settlement price that the gold investor who replaced gold purchases with paper gold would not see any of the rewards of holding gold. Exposure to bad debt is maintained, exposure to market chaos is maintained, and the arbitrary settlement prices reached in the paper markets will not buy the physical gold once the funds are in the investor's hands.

To invest in paper gold is to incur the same risks of dollar investments. While the the dollar inflation may be hedged, the parallel fiduciary gold inflation is not. Furthermore, none of the default potential of the credit markets is alleviated. In addition to the credit market default risk, there is the risk of default that is peculiar to the gold markets due to the fact that no lender of last resort exists.

In short, if you are investing in gold as insurance against a chaotic market that craters credit quality and causes a rush to physical assets, paper gold provides no more than 10% of the protection you seek, while increasing your risk by introducing an additional mode for market failure going against you.

If you want to make use of the leverage of the markets, buy now what everyone OWES, buy now what all will seek when those who OWE can not DELIVER.

Banking, by its definition, is in a constant state of insolvency. Historically, the gold banking system (which until 1933 was the whole of banking, and until 1971 was the whole of international banking) fails when leverage exceeds a factor of 4. In 1929-1933, US gold leverage was at a factor of 26. Gold contracts were defaulted on by banks with the full support of the government. The removal of denomination of the contracts in gold within the US, deleveraged the accounts to a factor of 1.6 (60% reserves) for the foreign holder of US gold obligations who had retained the right to redeem his gold.


Now, for a philosophical question: do you believe the US dollar, a debt currency, is the true bassis of the international trading system? If so, go ahead and think in terms of denominating your ultimate profits and balance sheet position in these terms.

I, for one, found that the dollar is not at all at the center of the trading system, but is an intermediary to the center - standing between the seller of goods and services and his payment in gold. This system had been constructed to prevent the running of the nominal amounts of trade through gold, leaving only the accumulation of profit to weigh on the demand for gold. Not having gold circulating directly for settlement of trade, the market price of gold is reduced because there is no need to hold large cash balances of gold for trade. The only balances necessary are those for the net profit margin, which is in the range of 5% to 10% of the volume of trade. Having diverted 90-95% of the demand for gold cash balances, the maker of large scale profits can buy gold at a proportional discount (90-95%) to its full monetary value as long as the system functions.

In order to protect against short term moves in currency values, the merchant trader uses shorter term holdings in paper gold to protect his receivables, from which his profits will be taken when the obligations on these receivables are deducted. The profits will eventually be put into physical holdings.

If the system is not functional, as it is bound to become, then the merchant trader would tend to put the whole of the balance of his receivables into physical gold. At the peak of this process, the price of gold would rise well above the full monetary value - which is now 20 fold higher (according to the proportionality of profit and revenue). It will show the full value of gold as the replacement of all currencies in the practices of trade. Since the price of gold production rises with the volumes of production required, the top limit to price would rise well above the 20 fold proportion.

The next limiting factor is the value of gold cash balances as full replacement for fiduciary media and other financial assets. The ultimate currency price of gold would allow for the whole of the purchasing power of currency denominated assets (cash currency balances, bonds, stocks) to move into gold. These balances stand today at 85 trillion dollars. Ultimately, this balance of purchasing power will be transferred into the available gold. At 4 billion ounces above ground today, and at 4.5-5 billion ounces being available within the next 5-10 years, this ammounts to an ultimate gold price of over $20,000 dollars, assuming no price inflation. Over this same period of 5-10 years, the price inflation is likely to be substantial, a double or triple in prices is likely, in some currencies it would be likely to be 5-10 fold. For the dollar, an equalization with purchasing power parities at a positive trade balance, dollar region prices would need to rise 3-5 fold relative to other currencies; 3 fold for PPP balance, 5 fold to induce a trade surpus proportional to the current trade deficit.

So, BTD, the choice is yours as to whether you would believe that the assignat, oops, dollar will buy the same ammount of gold when you are settled for cash and seek the old Krugs when you have the cash in hand a few days later.

I would imagine that the same conditions that would cause the cash settlement, would also cause a near instantaneous rise in Krugs and Eagles to the same level that would prevent the people who were settled in cash from being able to buy the coins and bars with their cash. The supply of the physical gold would not magically grow to match the sudden demand from the people who received cash settlements from the exchanges and banks - which would happen all at once.

You see, BTD, like Aragorn's "thunder in the night", the occasion of cash settlement would be an instantaneous event. It would be that moment in time when a bar of gold was not delivered to the gold account holder at the bank counter because there were no gold bars in the bank at all, and there were no gold bars to be had from the other banks either, so that the seeker of delivery could not be sent to another bank. That moment of the last bar of available reserves leaving the bank vault is an infinitesimal instant of time. The conditions of the market before and after this event are completely different. In electronic time, it would be a simultaneous total collapse. The few days needed to get cash settlement - usually 5 days - but the law allows up to 2 weeks for local settlement and up to 3 weeks for international settlement, would be sufficient to make sure that no one will manage to get more than a couple of grams per contracted ounce.

The break in the chain of parity (dollar=paper gold=gold) will occur at the two points of parity at the same time. Such events, in history, have been momentous, and the results were very quick to arrive. With more leverage than ever before, they results will be that much greater, and that much closer to instantaneous.

Christopher

(05/25/2000; 07:34:03 MDT - Msg ID: 31229)

Al Fulchino re: HI-HAT

Hey Al,
Sounds like HI-HAT's back forty needs detecting (BIIIIG SMILE)

To the giants of this forum: Many times I sit here and read what is offered with little understanding and tardy comprehension. It is true that the school system never taught economics like that which is bantered about this place with such easy familiarity. It is truly awe inspiring. And humbling as I walk at the very end of the line on the Trail. But walk I do though to most it is but a crawl. I just wanted to offer my appreciation to the threads of the past few days. The entertainment factor has been Wonderful, and the education factor has been incalculable.

I was thinking the other day about how much money I had "spent" on Gold purchases in the last year and as my mind mulled over the amount it dawned on me that I was thinking about it in the wrong way. I had not "spent" that money on Gold, I had more truthfully exchanged it for Gold, and that if the need arose I could exchange it back into any brand of paper that I wanted and that was most facilitative of my needs at that particular time. I did not have to go to the bank and get their permission to do so, or fear any intervention from any government branch. The government will not call me next week and ask me to turn my "old gold" for the new and approved counterfeit-safe note. It is MINE to do with as I see fit. It is real.
It is solid. It doesn't fade when it gets washed. I guess, most of all it is comforting when all around me is in turmoil. It sits there in the midst of the storm and says "What, me worry?" And yes like HI-HAT alludes, it is treasure. What a feeling it must be to open your closet and be avalanched by K-Rands.

Sorry for the interruption teacher, just ruminations from a student at the back of the class. Teach on!

Laura

(05/25/2000; 07:57:49 MDT - Msg ID: 31230)

Wheat and Corn threatened

http://www.vny.com/cf/News/upidetail.cfm?QID=88174The touch of death is never gentle.

USAGOLD

(05/25/2000; 08:30:29 MDT - Msg ID: 31231)

Today's Market Report: Markets Off to Quiet Start Despite Inflationary Growth Report

http://www.usagold.com/Order_Form.html5/25/00 Indications
�Current
�Change
Gold June Comex
273.30
-0.50
Silver July Comex
5.01
nc
30 Yr TBond June CBOT
93~15
-0~07
Dollar Index June NYBOT
111.60
+0.48


Market Report (5/25/00): Gold was essentially sideways this morning as the dollar firmed and
the Commerce Department reported a strong 5.4% consumer-led annualized growth rate -- well
ahead of the 3.5 to 4% rate that the Fed believes can be sustained without igniting inflation. The
markets will likely read this as more grist for the inflation mill though the reaction thus far has
been subdued. The dollar gained impetus from the European Central Bank decision to keep euro
interest rates steady leaving the Fed .5% rise unanswered. The euro was down about a half cent in
the early going. The Dow and government paper markets' reaction to all this, like gold's, was
muted in the early going. The Asian and European gold markets were quiet overnight with traders
looking around for direction. "At the moment no-one knows if it's going to be pushed lower or
just left where it is, so it's safer to stand back and wait," a source told FWN. There was light
physical buying at lows preventing the metal from breaking through the $272 level, but otherwise
trading seemed to be quiet in advance of the upcoming long holiday weekend in the U.S. All in all,
it looks like the markets at least from the early evidence have decided to take the day off despite the
inflation news.

Have a good day, fellow goldmeisters. See you back here tomorrow.

If you would like to receive an information packet which includes our newsletter on the gold market plus Gold Almanac 2000, please click on the link above.

YGM

(05/25/2000; 10:10:36 MDT - Msg ID: 31232)

Futures & Options

Quite Simple Really...The Future is Gold and the Option is Own it or Don't....

I've never heard anyone say Gold- It's not worth the PAPER it's printed on, but we soon may hear just that....I do know this and it's not negotiable to my mind.....As long as I live I'll trust no mans paper, regardless of what he prints on it......History will repeat and will suffer heretofore unthinkable changes.......These are truly uncertain times or have you noticed while being blinded by all the imaginary wealth and euphoria created by a corrupt and bankrupt system......GO GATA and GO PHYSICAL GOLD....
YGM.

lamprey_65

(05/25/2000; 10:12:49 MDT - Msg ID: 31233)

WAC

I share your views on the China issue. This vote yesterday was just the final nail in the coffin for the U.S. blue collar worker...the truth is they were sacrificed years ago in the name of greater compensation for the upper-level corporate types. The politicians sided with the corporations for re-election purposes ($$$).

Where is the social contract in this country? I don't see one anymore...the new religion is "whatever is cheapest is best" -- well, that does not work in a recession or depression. How can a service-based economy pull itself out of hard times? We sure won't be able to export our way out, that's for sure.

Holtzman

(05/25/2000; 10:28:35 MDT - Msg ID: 31234)

Holding versus betting

Holtzman here,

Reaching back in time to an equine analogy which has suddenly become appropriate again, the manager of Cheltenham Racecourse, and the auctioneer at Tattersalls, are not in competition with one another. Customers come to Cheltenham in order to place wagers on horseraces with hopes of acquiring cash, whilst customers come to Tattersalls with hopes of acquiring horses (some of whom intend to later resell their horses for cash).

Some customers of each establishment will profit, whilst other customers of each will not. Also, a small number of customers come to both establishments because neither on its own provides the total solution they feel they require.

The way in which each of us views Risk seems to play a part in this. Which is the riskier proposition: to own physical gold, or to play the futures markets?

I should venture to say that TownCrier does not proselytise the benefits of physical gold on account of it being his job to do so. Rather, I suspect that he took his job (and continues to remain in his job) because of his pre-existing strongly held belief that precious metals are an insurance policy everyone should own.

Meanwhile, I should venture to say that goldhunter remains in his career as a futures broker because he genuinely feels that keeping one's wealth "in play" is the most efficient use of same.

Both of you have history on your side. Since well before the parable of the Talents, there have been many periods when active investment far and away outperformed the hoarding of one's wealth. Most recently, the past twenty or so years have been such a period. However, there have been many other periods in history when the only investors left standing were the ones who had at least a part of their wealth squirreled away for just such emergencies. Most recently, as ORO just pointed out, holders of physical palladium have fared better than holders of TOCOM contracts. A year or so ago, residents of Kosovo (on either side) who held portable wealth were more likely to have outperformed residents who owned real estate.

goldhunter's argument falls along the lines of reaching for the maximum possible return ON one's investment. To do otherwise, I'm sure he feels, is to fail to keep up with the economy.

TownCrier's argument falls along the lines of doing one's best to assure that there will be a return OF one's investment. To do otherwise, I'm sure he feels, is to risk going down with the present economic bubble.

Both are valid arguments, and both have their day in the sun. It's just that the two arguments seldom see the sun at the same time. For the past twenty years, presumably most of goldhunter's adult lifespan, his argument has been carrying the day, whilst TownCrier's argument has been painfully losing ground. However, that's no reason to assume this trend will continue forever.

Beware linear thinking in a cyclical world. But also beware of allowing yourself to believe that you know when the cycle is due to reverse.

I imagine that's why BTD still holds 4/7 of his commodities wealth as physical: he doesn't want to be left out of the present trend's benefit stream, yet he doesn't want to be annihilated should the trend unexpectedly reverse on him. Indeed, BTD's desire to diversify his holdings is something I've been advocating since I first began posting here.

For myself, however, I have not (and most likely will not) ever wager even a small part of my holdings in the futures markets, whether on gold or on pork bellies. But then again, I don't place wagers at Cheltenham, either. I believe in owning rather than in betting, but I don't own all of any one thing. I own physical gold, but I also own gold mining stocks, and I own fiat currencies, I own stocks not involved in mining, and so forth. My holdings in euros haven't done so well this past year. My holdings in dollars have done wonderfully... so far.

And my physical gold holdings, as viewed in terms of British pounds, have appreciated respectably over the past year.

As an aside to those dollar-centric posters who in past weeks have been bemoaning the renewed fall of POG, I should point out that it is only in terms of U.S. dollars that gold is in fact falling. From the point of view of a Concorde passenger, an Airbus A300 appears to be falling behind, but the dollar isn't going to perform like a Concorde forever. And when that changes, euphoria will return to the hearts of goldbugs who cannot help but judge their own success in terms of dollars. As Douglas Adams advises, Don't Panic.

Yours,
I.V. Holtzman

JavaMan

(05/25/2000; 10:40:20 MDT - Msg ID: 31235)

lamprey_65, WAC...

WAC, you said..."I blame not the American people for this dilemma. The question as to be asked, why do the leaders in China allow their own people to be enslaved?"

Let's take your thinking a step further and ask...why do American leaders choose to do business with a country who's leaders allow their own people to be enslaved? Not to mention the rest of the human rights violations they are guilty of.

And while the American leaders choose to do this, it seems the American people (who elect them) look the other way because "its good for the economy."

We, as a nation, are selling out at the speed of light, as long as the old portfolio keeps growing, and if the American people are not to blame, then who is?

I made my mind up this week that even though I've been a registered Republican for thirty years, I will never vote the Republican ticket again (and the Democrats are just as guilty).

TheStranger

(05/25/2000; 11:02:39 MDT - Msg ID: 31236)

For Perhaps The First Time Ever, I Disagree With You, Lamprey

Capitalism dominates the world economy because it creates more wealth for more people than any other system which has ever been tried. But capitalism means competition, and in any competitive environment, one must either grow or die. There is no standing still.

It is a credit to our leaders (you won't hear me say that very often) that they understand this fundamental point: In the final analysis, if you want to live better than a Guatemalan (for example) you are going to have to produce more value than a Guatemalan. You can do that either by working longer hours than he does or by moving higher up on the food chain.

In the United States, good jobs go begging every day because those who otherwise might have been hired have failed to adequately educate themselves. What you call a "social contract" would be nothing more than a warm and fuzzy, but very misguided, effort to mitigate improved standards of living for all in order to help such people cling to a past which no longer exists anyway. No, I am afraid not. Far better we should remind ourselves of what our fathers told us so many years ago,

"Nobody owes you a living."

aircrew

(05/25/2000; 11:14:33 MDT - Msg ID: 31237)

On being a PGA--bullion vs numismatic

I've been lurking here lo these many months and have decided to test out my spiffy new userid and password. I've read as much of FOA/Trail Guide's ruminations as I've been able to find here but I've only seen one reference to coins, that being his recent "conversion" of his K-Rands. MK has numismatic type coins, as well as bullion coins available for sale. What are the pros and cons of both sides? POS (Poor Old Solomon 05/24/00; 21:46:23MT - usagold.com msg#: 31208) laid out a cogent thesis for having silver (but in what form Solomon?) Can anyone else offer an opinion on coins that is as well thought out? TIA.

TheStranger

(05/25/2000; 11:20:20 MDT - Msg ID: 31238)

I Had To Laugh

I had to laugh when I read BTD's tirade against prognosticators the other day. I suppose one would be able to divine the future were he possessed of omniscience. For this reason, it makes sense that we spend our lives acquiring knowledge. It's obvious we will never foresee everything in our future. But isn't it axiomatic that the more our understanding grows, the more prescient we are likely to become? And where do we turn for this understanding if not to those who are brighter than ourselves?

So why did I have to laugh at BTD? Because I have been predicting higher gold prices in this forum for over a year now, and I have been wrong, wrong, wrong. Absolutely Wrong! Geez! I hope no one was listening.

lamprey_65

(05/25/2000; 11:21:26 MDT - Msg ID: 31239)

TheStranger

This is the great argument - whether local production in the developed countries has a place in today's world economy. My bet is we will see the negative effects when the eventual U.S. recession hits (we are way overdue for one). I ask you Sir, how do you propose for us to get out of the next recession -- more government spending? exports? We've crushed both possibilities - the first through our enourmous current debt and the second by allowing corporations to send so many manufacturing jobs overseas. Once the recession hits, service-related jobs will be the first to be eliminated as they are the most expendable. Where will we find the jobs to take their place? Remember, the Chinese will still work for less in a world recession which will only accelerate the export of U.S. jobs as corporate profits come under pressure.

As I said, it will become apparent how we've screwed ourselves once the economy goes sour...until then, everyone is fat, dumb, and happy.

Henri

(05/25/2000; 11:22:43 MDT - Msg ID: 31240)

Holtzman

Do you keep a towel handy as well? To signal a passing spaceship for a ride? I do.

lamprey_65

(05/25/2000; 11:38:09 MDT - Msg ID: 31241)

Further...

The Chinese have the manpower, resources, and technical expertise to develop their own internal economic miracle. Why haven't they?...Their government has not allowed the one missing ingredient - true freedom. So now, instead of allowing enough freedom for their economy to truly prosper on its own (this would endanger the Communist Government), they instead allow just enough freedom so that their people can make and export products in a controlled environment...the Chinese government and the multi-national corporations are the biggest winners (and those at the top of both pyramids are the true winners). Everyone else is expendable.

JavaMan

(05/25/2000; 11:42:56 MDT - Msg ID: 31242)

Sir Stranger, your msg ID 31236...

...But capitalism means competition, and in any competitive environment, one must either grow or die. There is no standing still.

...if you want to live better than a Guatemalan (for example) you are going to have to produce more value than a Guatemalan. You can do that either by working longer hours than he does or by moving higher up on the food chain.

JavaMan: I agree, there is no standing still so lets consider a third alternative, working smarter. This is how we can maintain a competivite advantage and live better thant the Guatamalan (for example).

TheStranger

(05/25/2000; 12:22:27 MDT - Msg ID: 31243)

Lamprey

Go back to your encyclopedia, Lamprey, and read again about the Luddites in 19th Century England. The fear these craftsmen had of the industrial revolution caused them to run about sabotaging factories and machinery. They didn't understand (or didn't WANT to understand) that cheaper means of production free up capital, which creates demand for new products, new industries, and ultimately a higher standard of living for all. Think of what we would be missing had we listened to them back then. Yet their's was almost precisely the ground upon which you base your argument today.

As to recession: Yes we will have one one day, and, as usual, money creation will get us out of it. (You'd think that alone might augur well for gold). Meantime, American private debt is still well below extremes reached in the 1980s (for example) and the public national debt, as a function of overall economic activity, is nowhere near previous historical extremes. And it is shrinking!

As to China: Capitalism only works as well as it does when it protects the valid claim of each practitioner to the fruits of his own enterprise. Such protection in China will always be sporadic at best until representative democracy and basic human rights are guaranteed to all. For this reason, China is a long way off from ever achieving the kind of productivity we have in the United States. So I wouldn't lie awake nights worrying if I were you. Of course, if these hallmarks of democracy ever should come to China, the whole world will be better off. For, as things presently stand, the average Chinaman doesn't create much wealth for anybody.

Elwood

(05/25/2000; 12:25:46 MDT - Msg ID: 31244)

TheStranger (5/25/2000; 11:02:39MT - usagold.com msg#: 31236)

Stranger, the need to grow or die arises because inflation through monetary debasement is a tax on capital. Left alone, the technological advance that arises from market competition would, in fact, produce gains from an economy or a firm which didn't "grow." That is, the price reductions of computer technology we've seen over the past generation would be extended across the production structure resulting in lower rather than stable or slightly increasing consumer prices.

The difference between consumer prices now and what they would have been were they allowed to fall represents a real transfer of wealth from the producers (consumers) to the beneficiaries of the policy of monetary debasement through credit expansion.
Elwood

jinx44

(05/25/2000; 12:36:21 MDT - Msg ID: 31245)

Gold tanking

I am glad to see gold dropping hard (down about $5). If the cabal can drop it into the low 60's or 50's, they will nail some more shorts if the EEC makes another WA type move. Given the euro flopping about so low and gold being hit significantly below the 280 mark, that may spur Europe to get mean with the BB's and double reserves or force the euro carry-traders to cover. I think that would be good for gold.

Netking

(05/25/2000; 12:43:38 MDT - Msg ID: 31246)

Mr Goldhunter

Goldhunter - In your own professional opinion Sir, how quickly & to what extent would the price of gold(paper) have to rise before risk of default was a real possibility for Comex participants & commercial intermediaries?

lamprey_65

(05/25/2000; 12:45:51 MDT - Msg ID: 31247)

TheStranger

I guess we'll just have to agree to disagree on this one. One last observation...I followed the Soviet Union for many years as an analyst for the government -- they too have ALWAYS had the necessesities for creating a vibrant free market economy...everything that is except for true freedom.

The mulit-national corporations are facilitating the facade in China which will continue...make no mistake, the Chinese Communists NEVER would have agreed to the current situation if they thought it would do them harm, and the military in that country will prosper, not die on the vine as some would suggest. Once Russia and China form the closer alliance which is in both's best interest, the U.S. will be left out in the cold.

Like I said, we've already been sold down the river -- yesterday's vote was merely doing away with the facade.

These are my last words on the topic...I thank the forum for allowing the off-topic posts -- I do carry strong feelings on this issue.

Lamprey

TheStranger

(05/25/2000; 12:46:33 MDT - Msg ID: 31248)

Elwood and Java Man

Elwood - try that argument out on all the Moms and Pops that have been put to death by the likes of Mcdonalds or Staples or 7-Eleven in the last few decades. Your point about monetary debasement is well taken, but I think your image of the marketplace is a little narrow. Thanks.

Java Man - Yessir. That is also a means of moving up the food chain, and many companies have accomplished precisely that. Nuccor Steel comes to mind.

Leigh

(05/25/2000; 12:49:39 MDT - Msg ID: 31249)

aircrew

Dear aircrew: Welcome! Trail Guide/FOA and ANOTHER have written about coins a number of times. Have you read through ANOTHER(THOUGHTS!), which can be accessed through the Gold Trail page? At one point ANOTHER writes about how bullion coins (Eagles, Maples, and such) are the "good hold," but that numismatic coins (Roosters, Angels, 20 Marks, etc.) are valuable for their "artwork" as well as their gold content (and historical significance, I might add).

A couple of months ago Trail Guide discussed the possibility that "legal tender" coins could be confiscated under extreme circumstances. That led some to consider whether bars or rounds would be a safer investment.

The topics of gold vs. silver vs. platinum, and coins vs. bars are ongoing around here. Even if you've been lurking for a while, you might want to reread some of the Archives.

I've tried to diversify among my precious metals, in the hope that if one venue is rendered less valuable, another will soar.

Trail Guide

(05/25/2000; 12:51:58 MDT - Msg ID: 31250)

Comment

goldhunter (5/25/2000; 5:05:29MT - usagold.com msg#: 31225)
Trail Guide Mkr #1
Sir Guide...Apples to apples I do repeat...
You can say you sold your Krands for $270.00 (a fair value?)
for the day...Is that ALL you could get?...I read your post yest. in response to BTD, but to be
FAIR, the "local price" from the vault was "$282.00 per coin" as I checked with CPM Inc. right
after the store started for the day...
Here in lies the Small problem...You could only "get" $270 but a comparison "purchase" costs $282...
Is it not more truthful to have "bought both" yesterday AM.and see how the dust settles in the
future on a total equity worth basis? I offered Dec1 as a practical window of time...
Once again, The "buy" price of our physical contrasted with the "buy" price of our futures will give a fair and honest comparison of the two (in my opinion, related)"investments.
You try and stack the deck in your favor by using the "sell price" of $270...and then using this as your "basis"...That isn't right for this comparison...

Hello Goldhunter

I read you the first time. Understand, I'm not doing this for your benefit nor do I follow your rules. This is a real life demonstration done in a simple "rounded out fashion" "by me" and for the benefit of the average investor watching. Most of these people (thousands I believe) read my talks while they are using a good helping of their common sense. They know how to read between the lines and figure things for themselves. As an example I believe all of them knew that Dec futures didn't close at $383 as I mis typed yesterday. They can also read my extremely poor English usage (smile).

BTD didn't offer any physical sell price or future buy price in his post. That's why I wanted to mark my trade close to the market for all to see. Your quibbling about my price to sell these K-rands is small change to me and even smaller to these readers who are looking for a big picture. I know
they will not accept if someone nickel and dimes a trade to prove a point. Truly, if my exercise doesn't completely overwhelm your difference, I'll present it as a paper win.

Also:

This whole exchange was never an effort to pick on BTD or fault his physical position change into futures. As I said, using leverage is how most Westerners play the game. The problem is the concept always falls out of context because everyone touts a trade but never fully follows up with a
general outline of their position. Or when they leave it. Everyone here has some perception of my capacity to own gold and general entry points. By simple extension the average thinker knows I'm huge, big time, "world class down" in dollar terms. Yet, I am comfortable because I understand it's future and proclaim where we are all going with it. Gold is a "percentage of my wealth" savings to me, not a trade. I will see out distance every other investment in time.

Yourself Goldhunter is a good example. You declare to hold Eagles and trade futures. You also commented in your above post to me about being truthful, fair and honest. How about giving these people a position that lasts longer than a few months? If you make a living as a futures broker and trading is where it's at, take us on a hike (smile)?

thanks

Trail Guide

SHIFTY

(05/25/2000; 13:02:24 MDT - Msg ID: 31251)

The Stranger

The Stranger : I think its time you smelled the coffee. China is not going to change. The citizens of the USA have been sold out once again by the politicians in DC ( District of Criminals) ! You Sound like a republican to me. I was one till I saw that there is no difference between the two parties. I hear the same global nonsense from both mainstream parties. The Democrats tax and spend, the republicans borrow and spend. The citizens of the USA had better wake up or they will find themselves hoping to get one of those 3 cent per hour jobs of the new global economy.
Our representatives don't represent us. They represent the global corporations. The global corporations want cheep labor. A worker with a mortgage , car payment, homeowners insurance, utility bills ect has no place in the New Global Economy! They just don't know it yet. All they hear is Let them eat cake and they think they are actually going to get some.
Wake up America and clean out the barn and make America great again.
Think of Valley Forge and bloody footprints in the snow.
The people that think China is so wonderful should move there and stay .
PS Don't let the door hit you in the *ss on the was out!

$hifty

Trail Guide

(05/25/2000; 13:08:59 MDT - Msg ID: 31252)

Comment

Leigh (5/25/2000; 12:49:39MT - usagold.com msg#: 31249)
aircrew

Hello Leigh and welcome also "aircrew"!

Thanks Leigh, for pointing out those past discussions. Yes, a rounded coin holding is very good for most people, myself included. The old world coins may do very well if they are frozen out of the trading marketplace because of their art appeal and non- Legal Tender status. I even thought of
comparing Stranger's NEM against the performance of the 20 Marks, MK offered. But I am unsure of my personal outcome. You see, if the 20 Marks beat out NEM, Stranger will come after me with an "AX". But, if NEM wins, he will try to hug me! I'll be in a bad position either way (big smile)!

PH and ORO, just a minute.

thanks

Trail Guide

Leland

(05/25/2000; 13:16:25 MDT - Msg ID: 31253)

John Hathaway's Latest...

http://www.tocqueville.com/brainstorms/printbrainstorm0067.html.

Elwood

(05/25/2000; 13:24:12 MDT - Msg ID: 31254)

TheStranger (5/25/2000; 12:46:33MT - usagold.com msg#: 31248)

"Elwood - try that argument out on all the Moms and Pops that have been put to death by the likes of Mcdonalds or
Staples or 7-Eleven in the last few decades. Your point about monetary debasement is well taken, but I think your
image of the marketplace is a little narrow. Thanks."

Stranger, sorry, I don't follow. Are you saying that the inflationary policies of the powers that be are there to benefit the Mom and Pops that failed to change? Or are you saying that the Mom and Pops that grew to become the McDonalds, Staples and 7-Elevens are now somehow bad because their existence threatens those who are unable to compete with them?

What reason is there to "try that argument out" on anyone? What is, is what is. Technological change is a fact of life. Those who fail to use it will be disadvantaged relative to those who don't. This is without regard to the type of monetary system in use.
Elwood

TheStranger

(05/25/2000; 13:37:46 MDT - Msg ID: 31255)

Farfel, Shifty and Trail Guide

Farfel - You are one smart Eli. Your call for an abortive China-vote bounce was right on the money, brother.

Shifty - I am not a Republican, though I understand why you drew the conclusion. Your post does bring one question to mind however. If, as you say, there is no difference between the two parties, how come they are so frequently gridlocked? Is it possible you have become so disinchanted that you aren't paying very close attention anymore? Seriously though, if I made some point in my post with which you particularly disagree, I will be very happy to respond.

Trail Guide - if any of us ever get out of this quagmire with a profit, I would hasten to hug you. If I only knew where you are.

TheStranger

(05/25/2000; 13:46:49 MDT - Msg ID: 31256)

Elwood

Sorry. I probably misunderstood you. I thought you were saying the "grow or die" imperitive exists primarily because of monetary debasement. My point was that many thousands of businesses that chose not to grow have died, not because of monetary debasement but because someone else, like McDonalds for example, did choose to grow and wound up snatching their markets away.

TheStranger

(05/25/2000; 14:00:24 MDT - Msg ID: 31257)

Elwood

I just reread your first post to me, and I realize I didn't give your thought the attention it deserved. In a sense I was underestimating you, and I apologize. Welcome to my sphere of awareness. I wish I had recognized you sooner.

Al Fulchino

(05/25/2000; 14:06:10 MDT - Msg ID: 31258)

TC/TG/Stranger/BTD/Goldhunter etc etc etc

These are great exchanges. Appreciation on behalf of all, I am sure.

Oswald Murphy

(05/25/2000; 14:13:22 MDT - Msg ID: 31259)

Greenspan is confused and rightly so

http://www.fame.org/whatsnew.aspIn a recent exchange with Congressman Ron Paul, MD, a member of the House
Banking Committee and a member of FAME's Board of Advisors, Federal Reserve
Chairman Alan Greenspan lapsed into clarity and declared that he cannot
define nor manage the nation's money! This is yet another example of a
"press failure."
The exchange was not reported in the establishment media.

Read about it, along with Dr. Paul's views about gold, in Jay Taylor's
interview with Mr. Greenspan.
The interview appears in the What's New section of FAME's website.

Just click on: http://www.fame.org/whatsnew.asp

lamprey_65

(05/25/2000; 14:14:11 MDT - Msg ID: 31260)

Wages

I expect the latest wage data to be very negative for the market, i.e. wages going up. I'm seeing wages in my neck of the woods (New England) exploding to the upside now...just got word of a $2 an hour increase in wages at one of the highest paying blue-collar employers in Southern N.H. -- they are DESPARATE for workers.

Hold on Gold holders, reality will begin to sink in very soon in regards to inflation -- and the dollar's fall will only make matters worse.

lamprey_65

(05/25/2000; 14:18:23 MDT - Msg ID: 31261)

Oswald

I saw that exchange between Paul and Greenspan a few months ago...and yes, he stated clearly that they have no clue about money supply! You should have seen Paul's reaction! Rep. Paul is one of the few people in Congress I can say I truly respect -- he's on top of the Fed's shenanigans.

This was also the testimony where Greenie jokes about being more concerned about deflation than inflation. The guys is getting senile, I think.

Trail Guide

(05/25/2000; 14:21:55 MDT - Msg ID: 31262)

Comment

Hello again ORO
Great post! A few comments:

-----------
ORO (5/25/2000; 6:21:15MT - usagold.com msg#: 31228)
BTD, TC, TG, Solomon - gold and paper The paper markets provide an investor with a means to play the price of gold. They do not reflect directly the availability of gold, just the availability of paper obligations denominated in gold.
---------------------

Your part above brought me back to a subject I only touched on before. When all the gold loans were a big rage a year ot two ago, no one really bothered to confirm if the loan money the mines got really came from "sold gold". The media and Bullion houses said it was, but was it? The price said it was, but did the price fall from physical selling or was it just some physical and mostly paper derivatives?

You know, the original typical unconvoluted mine loan. The BB borrows gold, sells it and they and the mine control the account where the money from the sale is placed. Some people think the BB just gives the mine the money for it's own use, but then the mine would owe the BB both cash and gold bars. No, the mine owes the BB only gold bars. They usually jointly invest the cash from the gold loan sale until it's used to buy the newly mined gold that's returned to the lender.

Correct me if I'm wrong, but the mines don't hold any confirming documents that absolutely state that a real physical gold sale produced the cash collateral. Could you imagine a miner demanding such a document as a condition for a gold loan (smile). I think someone should check into this!
No?

You see, this cash could come from someone's account, a loan, official entity or official government source? I bet some of this money wanted to actually receive gold for the cash (oil?). But most of it just wanted to stimulate (expand) the paper gold supply. From this view the gold
loan isn't the rainman, is it? The profit for the banks comes from selling the derivatives to create a channel for new mined gold. As the price falls, the derivatives grow fat.

The gold loan cash doesn't have to be generated by real gold moved from a vault and sold. Even though a CB is involved as backup. Once this cash is introduced into the deal as collateral, the BB is obligated to cover his position if the mined gold is not wanted. Not by going long gold derivatives, rather by selling gold short. All in an effort to create an avenue to send the gold down if the gold loan ever starts paying down instead of rolling over.

During this time, the more funds available from investors or fractional reserve banking, the more gold paper is sold, the lower the lease rate, the more paper gold is expanded. Why, almost anyone could borrow gold cash in this fashion. For someone wanting paper gold to fall, it was like "money
in the bank". I don't think there is much lending against the lease rate now as rates reflect a diminished market. But who needs it? Everyone has learned to just sell the derivatives outright. This won't last much longer.

I bet if someone went to a willing mine, they could find gold. Not in the shaft, on the books!

Just thinking out loud.

more on your full post

Trail Guide

Oswald Murphy

(05/25/2000; 14:29:45 MDT - Msg ID: 31263)

Durban Roodepoort Deep, Ltd.

Contrary to what other people have published in some other gold forums, Drooy, is highly hedged. According to their own hedge book as of 03 May 2000, their Year Ended April 00/Jun 00 is 51% hedged and 55% committed.

Drooy's stock is reflecting their heavy hedging by being flushed down the drain. Today, reached a low of 29/32. I alarmed the people when the stock was around 2 1/4.

I feel sorry for Joe Calamari and those who fell in the trap. My deepest regards for those in deep agony. They should have listened to me when I posted, "stay away from Drooy." After that, I was stabbed to death by their pushers.

Oswald Murphy

(05/25/2000; 14:38:47 MDT - Msg ID: 31264)

Greenspan getting senile?

lamprey_65Indeed, IMHO. I wonder who will take care of Andrea. She is still a "Cat on a hot tin roof."

Send King Bubba to the rescue.

SHIFTY

(05/25/2000; 14:48:27 MDT - Msg ID: 31265)

The Stranger

Stranger : The gridlock in DC is so the little people think there is a difference .Watch what they do , not what they say. We have been hearing about campaign finance reform since Perot brought it to the attention of the American people. That was 1992 ,and we still hear how they want to reform campaign finance as they take money by the train load from corporations that have no allegiance to any country. I fear that the media is in bed with both parties and do not wish to wake the sleeping giant( the American people ) so they spin and they spin and tell us all that a third party cant win.
The American people should have a hard time deciding who to vote for because all the candidates are so good. But instead we are told we must pick one head of the two headed snake.
I will no longer.

I came inside from working on my truck in 98 degree heat , looked at the price of gold being pushed down this afternoon, and decided to pop over here to see what was being said about it and saw your post were you said:

"Go back to your encyclopedia, Lamprey, and read again about the Luddites in 19th Century England. The fear these craftsmen had of the industrial revolution caused them to run about sabotaging factories and machinery. They didn't understand (or didn't WANT to understand) that cheaper means of production free up capital, which creates demand for new products, new industries, and ultimately a higher standard of living for all. Think of what we would be missing had we listened to them back then. Yet their's was almost precisely the ground upon which you base your argument today."

That on top of the China sellout just pushed me over the top!
I have had enough of being sold down the river by politicians, and I hope to God I'm not alone!

lamprey_65

(05/25/2000; 14:50:00 MDT - Msg ID: 31266)

Oswald

Actually, Durban Deep's problems stem more from a low gold quote than their hedge book (although I do agree, their hedge is higher than many expect).

Deeps is a marginal producer...when POG flops, they flop -- this is the main reason they actually do need more of a hedge than most miners. The current management is working to acquire properties which produce at lower cost.

Believe me, if POG were at its historic ratio to the CRB (above $325), Deep shares would be well above the current levels.

SHIFTY

(05/25/2000; 14:55:38 MDT - Msg ID: 31267)

NY Ponzi

Nasdaq 3,205.35 + Dow 10,323.92 = 13,529.27 divide by 2 = 6764.63 Ponzi

Down 28.78 a new Ponzi low!

SHIFTY

(05/25/2000; 15:23:59 MDT - Msg ID: 31268)

Ponzi Correction!!

Nasdaq 3,205.35 + Dow 10,323.92 = 13,529.27 divide by 2 = 6764.63 Ponzi

Down 138.35 for an all time low Ponzi!

SHIFTY

(05/25/2000; 15:51:58 MDT - Msg ID: 31269)

Food for thought!

"A Visitor From The Past"

I had a dream the other night, I didn't understand. A figure walking through the mist, with flintlock in his hand. His clothes were torn and dirty, as he stood there by my bed. He took off his three-cornered hat, and speaking low, he said:

"We fought a revolution, to secure our liberty. We wrote the Constitution, as a shield from tyranny. For future generations, this legacy we gave. In this, the land of the free and home of the brave.

"The freedom we secured for you, we hoped you'd always keep. But tyrants labored endlessly while your parents were asleep. Your freedom gone, your courage lost, you're no more than a slave. In this, the land of the free and home of the brave.

"You buy permits to travel, and permits to own a gun, permits to start a business, or to build a place for one. On land that you believe you own, you pay a yearly rent. Although you have no voice in choosing, how the money's spent.

"Your children must attend a school that doesn't educate. Your Christian values can't be taught, according to the state. You read about the current news, in a regulated press. You pay a tax you do not owe, to please the I.R.S.

"Your money is no longer made of Silver or of Gold. You trade your wealth for paper, so your life can be controlled. You pay for crimes that make our Nation, turn from God in shame. You've taken Satan's number, as you've traded in your name.

"You've given government control, to those who do you harm,
so they can padlock churches, and steal the family farm,
and keep our country deep in debt, put men of God in jail,
and harass your fellow countrymen, while corrupted courts prevail.

"Your public servants don't uphold the solemn oath they've sworn.
Your daughters visit Doctors, so their children won't be born.
Your leaders ship artillery and guns to foreign shores,
And send your sons to slaughter, fighting other people's wars.

"Can you regain the freedom for which we fought and died?
Or don't you have the courage, or the faith to stand with pride?
Are there no more values for which you'll fight to save?
Or do you wish your children, live in fear and be a slave?

"Sons of the Republic, arise and take a stand!
Defend the Constitution, the Supreme Law of the Land!
Preserve our Great Republic, and each GOD-Given Right!
And pray to GOD, to keep the torch of Freedom burning bright!"

As I awoke he vanished, in the mist from whence he came.
His words were true, we are not Free, we have ourselves to blame.
For even now as tyrants trample each GOD-Given Right,
We only watch and tremble, too afraid to stand and fight.

If he stood by your bedside, in a dream, while you're asleep,
and wonders what remains of our Rights he fought to keep,
what would be your answer, if he called out from the grave:
"IS THIS STILL THE LAND OF THE FREE AND HOME OF THE BRAVE????"



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


Copyright �1986 Thelen Paulk. All Rights Reserved.

JavaMan

(05/25/2000; 15:56:26 MDT - Msg ID: 31270)

Sir SHIFTY,

You said..."But instead we are told we must pick one head of the two headed snake. I will no longer."

Either will I my friend, as per my Msg ID 31235 post.

Watch this country "look the other way" when China moves on Taiwan. It will be interesting to see what spin is put on it to justify or rationalize the event but one thing is for sure, the U.S. may do some hand waving, jaw shaking, and sabre rattling but in the final analysis, we will do nothing of substance except conduct more bu$ine$$.

On the issue of gridlock, it seems that its purpose is to prevent any progress from occurring too quickly, if at all. What happened to the line item veto? So much crap gets appended to a bill that causes congressmen to change their vote either for or against it that its practically impossible to figure out where they actually stand on an issue.

@aircrew, welcome to the forum. While others here may have more info to share on the subject of numismatics, I was told by one wiser and more experienced than myself that the more common, lower grade coins which sell for less premium are more likely to be surpassed in a rising gold market by the value of their gold content, thus they get melted down. But numismatics that are rare and are of higher grade are like beach-front property during a booming real estate market. They increase in value more than the average property and the premium goes up accordingly. The moral of the story is if one is buying numismatics, buy quality.

Perplexed

(05/25/2000; 16:07:31 MDT - Msg ID: 31271)

True Wealth

Holtzman thank you for the recent post concerning alternatives, you pretty well put the
plug in the jug on this discussion, like religion, the question is not about right or wrong,
but choice.

After auditing the forum for several months, over this last week I have invested considerable time in the Hall of Fame archives. Aristotle's 5 part series on money, Trail
Guides analysis and general approval, and the rebuttal by others, especially ORO, was most enlightening. My new insight into the thinking and philosophy of many of the
regular participants added a new dimension and appreciation of the forum. The lack of rancor and personal attacks on each others perceived intelligence and perspectives is very
refreshing in a group with such diverse, varied, and deeply help opinions. The investment of a few hours time is highly recommended to any lurker or newbie.

While I can appreciate ORO's and other gold purist position, the reality of what is possible, puts me very solidly in agreement with the perspective of Aristotle and Trail
Guide. The American people have voted overwhelmingly in favor of convenience, and are quite willing to pay very handsomely for it. While this fact is without question not the only one, it is a contributing factor to the current dismal price of gold. In reality, very few people care one way or the other at what price it trades; whether or not it trades, nor if it trades on a rigged market. A very large percentage of our citizens recognized long ago that our government has been purchased, lock, stock and barrel, by the law and currency manipulators, and has itself been rigged to favor vast accumulation of un-earned wealth at
the expense of those who actually produce the wealth. This fact has seemingly been accepted with unalterable resignation, thus, one more example of official lawlessness
draws a yawn, and a "So! What else is new"?

As Trail Guide has stated, while gold is indeed a form of money, it is not the only form, and the same may be said of wealth. As many of the contributors have pointed out, health and happiness is also wealth, and in my opinion, more valuable than gold. Although they may not be traded as currency, if either of them is lost, in many instances, not enough currency of any nature exist to restore them.

The ultimate wealth however is time, it is irreplaceable and finite; once gone, wealth, in any other form, ceases to exist for that individual. Without the freedom to determine how our time is spent and a right to any proceeds from a transaction, most of us on this forum would consider life to be a prison. Freedom therefore occupies a very high place on the list of what we deem wealth. Common sense dictates therefore, that we must devise a currency system which protects our time and freedom as well as accumulated physical wealth.

We may curse, condemn, and pray for its demise, but the fact is irrefutable: The American currency system, for the last 50 years, has served as the most prolific, world
wide wealth producing engine, in the history of mankind.

Most of us seem to overlook the fact that every depression this nation has ever experienced, has occurred under the gold standard, with the constitutional money of gold
and silver in free circulation, and paper money redeemable one to one for gold or silver coin.. As we are all aware, the system established by the Constitution was abolished by
government edict, with criminal penalties for resistors in order to escape the clutches ofthe depression of the 1930s.

So why was the 1930's depression so severe? How could a nation possessing so much potential, with every natural resources required for self sufficiency, and gold litterly being picked out of streams, find itself in such dire strates? Yes I know that the bankers, money
manipulators, and government received most of the blame, and deservedly so. However, several contributing aspects have been overlooked. Not the least was the fact that we had
been in almost constant warfare from 1776 until then. How much wealth can a new country accumulate in about 150 years under these circumstances?

If it wasn't with foreign governments, it was among ourselves. The War for Independence had been very expensive and fought on credit. The Civil War, in terms of casualties, property damage, divisiveness, and percentage of total wealth diverted, remains the most costly war this nation has every fought. The nations boundaries had been
stretched from coast to coast by the Indian Wars. And the Booze War, fought on the streets, hiways, biways, back alleys, and backwoods, pitting the federal government
"police" against legislatively created "criminals", exacted a tremendous price, and was a very recent memory.

Our experience with foreign governments had engendered a "we neither need nor desire contact with the rest of the world" persona. We were content to trade among ourselves and let the rest of world get by the best way they could. A coast to coast railroad was our most important achievement. Most of our wealth of natural resources lay untouched and unrecognized.

Many citizens had no bank account. Outside the major commerce areas, and secured by private fortune, most of the banks were local, family owned businesses. Their customers consisted primarily of landed gentry and businesses with resources. A large percentage of
the loans were of the personal nature, based upon probable liquidity of assets, primarily land, buildings, and inventory. Middle class men were providing for families, working for pennies per day. Savings in this nation were virtually non existent. As my father remarked many times, "There is no problem getting a loan, so long as you can prove that you don't need it".

Most banks had very little appetite for risk, and unproved technology and ideas represented risk with a capital R. As an example: From its founding, labor unions found it impossible to organize the Ford Motor Co. Because of Henry Fords� insistence that his employees earn enough money to purchase the product of their labors, the Ford
Motor Co. pay scale was above the prevailing the wage of the time. This was a glaring exception to the rule. According to bank philosophy of the day, the motor car, (unproved
technology) had very little value compared to its cost, thus most refused to finance them. The Ford Motor Co. by financing its cars, demonstrated confidence in its product, the value of technology, faith in the integrity of its employees, and most importantly, THE VALUE OF TIME As a bonus, the expanded market for current technology generated
revenue required for its future advancements. The Ford Motor Co. prospered. The blooming technology industry of the thirties eventually flowered as part of the war effort,
and evolved into the garden in which we now live. Had the rest of the business and banking community of the time been so astute, there would have been no depression. .

The depression was caused and perpetuated by the lack of money in the hands of millions of potential customers, possessing nothing but need, desire and near worthless
time.

It took a world war to impart value to time, and since then, with the division of labor, and currency management, productivity and ingenuity has exploded, resulting in the creation of extremely well advanced transportation, communication and recreational equipment in great profusion, at a price most of us can afford, and at the cost of a very modest expenditure of time. Do these houses, cars, boats, computers etc. not count as wealth? Do they not also possess intrinsic value? Can they not be exchanged for other things of intrinsic value?

Years ago I heard or read a story of a man who gave each of his two sons $4000.00 in gold coin. The story goes something like this: The first son immediately deposited his into a bank savings account at four percent interest, a good return for the time. The other, son, intrigued by an automobile in an estate sale, purchased the Duesenberg, not for investment, but for transportation. The father almost had a heart attack, and, utilizing the first sons action as an example of the proper use of money, berated the second son for his irresponsibility. Despite the rift with his father, the man took great pride in driving the car
and cared for it like a baby. Seduced by automotive advancements over the years, the man owned other cars, but never forsook his first love. As the years wore on, an old man cared for an old Duesenberg, and never lost his sense of pride while driving it. The car was sold after his death for $500,000.00 to settle the estate. Assuming the bank account had appreciated to the same amount, ( highly unlikely) who made the best investment? Lets ad a kicker: The car, although not for sale, is now in a collection, and valued at $3,000,000.00. FRN. A true story? Perhaps. True or false, it serves to demonstrate not only intrinsic value of something other than gold., but the value of human satisfaction andhappiness as well.

Our system of gold currency did not have an adequate means of accurately determining the worth of either manufactured, or technological wealth, nor of creating currency
against their value. It wasn't until about 1950, that their full value began to be recognized, and, the representative value of paper money added to the economy. This was after the gold based system was abandoned, to be replaced with one based on Gross National Product, the result was called inflation!

In the final analysis when an officer of government can create a criminal simply by declaring the money of
account, created by the supreme law of the land, to be contraband, then it makes little difference whether the currency is made of gold, paper, or camel dung. Even now, paper currency in inordinate quantity, (as determined by officers of government); in the wrong hands, as determined by these same officers, or in the process of being transported, is routinely confiscated as contraband, and those possessing it are charged with criminal conduct. The same may be said of gold, silver, guns or any other inanimate object of the moment, which the "authorities" chose to criminalize. Obviously the problem is not with
the currency system, it's with the governmental system. Unless that government is staffed by people of integrity, our wealth, as well as our freedom, may be stolen by usurption, inflation, or at gun point, regardless of what circulates as currency. This forums consternation over, and current discussion of the legal qualification of gold which
perhaps would be exempted from confiscation, I think proves the point.

Still Perplexed

Trail Guide

(05/25/2000; 16:15:16 MDT - Msg ID: 31272)

Comment

Again, back to: ORO (5/25/2000; 6:21:15MT - usagold.com msg#: 31228)

ORO,
You could have not presented this any better than your full post has done. I wanted to note your item:

-----The price of gold in these markets is the value of a fiduciary gold. The only mechanism for the connection of the gold price to its supply and demand fundamentals is arbitrage. ---------

Yes, and if that process is blocked by an ever falling price? Or better asked, who delivers bullion against a short contract if the contract can be sold at a profit? Arbitrage doesn't happen in these one way paper markets. The contract is covered in a cash close and the bullion is sold on the open spot. Further driving the price. As a percentage of the whole traded paper gold market place, very little is delivered against contracts. If you sell a tonn to a dealer, sure he hedges, but he mostly covers those contracts in cash. Right?

My point, that coattails your post, is that the existing gold market as we know it is already mostly in "cash settlement". In a gold crisis, physical could easily be withdrawn from what little arbitrage exists. The lost profit potential from suspect payment in a delivery against contracts becomes the "premium" on "barrel head gold". Or reversed, the contracts trade at a discount.

We are so close to lighting the fuse on this, I can almost feel it.

World gold derivatives positions are exploding as authorities turn away. There is truly nothing left to
protect. Without arbitrage it's a full on cash game.

The Euro is incredibly strong considering the interest rate difference with little or no price inflation comparison. The ECB has just held tough. I've said it before and will say again; can you imagine what the Euro would do if they raised rates close to ours? Just look at the ongoing London / Euro
iX plans. How long do you think Europe would take to reestablish a gold market in Euros once England makes the dive? Certainly, LBMA is going to lose a few big members as this winds down.

Your "fiduciary gold" risk is building daily as the "risk" to paper is truly in cash settlement and currency transition. Not to mention the "walking dead" from the WA bomb.

Then there is oil! OH boy! Everyone talks like this political price range will save us. But, the jockeying for position in an alternative Euro must surely be complete. Once the gold flow slows, the oil price will surge. That will break the dollar and the ECB will be cutting rates to stop the Euro from also surging. Next step, a jump to basket or full Euro oil pricing!

Yes, the leverage against the explosion and demise of derivatives is only in physical gold. What an incredible event this is going to be!

Thanks

Trail Guide

Hipplebeck

(05/25/2000; 16:26:30 MDT - Msg ID: 31273)

To Stranger your message #31243

Dude, I hope you don't think me rude, but you better reread what you wrote here and think about it some more.
1. I think the Luddites knew exactly what they were standing up for. It wasn't a material arguement for them. As craftsmen, of coarse they could understand higher productivity. They were argueing against the dehumanizing aspect.
2. If you think the national public debt including future social security obligations is small and shrinking, you don't have a clue how much inflation is headed our way.
3.Do you understand that most of our wealth here in the US is due to Chinese (and others) productivity? Look on the labels of everything and sing to me about American productivity. When they advance a little more and are building their own machine tools industry, do you really think you will be able to compete with someone working more hours and for way less money? Do you think a country with so many more people will not field as much technology as us when they gear up for it?

Al Fulchino

(05/25/2000; 16:29:01 MDT - Msg ID: 31274)

Perplexed

You wrote a terrific post, much of which I agree with, so when I make this comment, do not for a moment think it outweighs my agreements.

you write:
Most of us seem to overlook the fact that every depression this nation has ever experienced, has occurred under the gold standard, with the constitutional money of gold
and silver in free circulation, and paper money redeemable one to one for gold or silver coin.. As we are all aware, the system established by the Constitution was abolished by
government edict, with criminal penalties for resistors in order to escape the clutches ofthe depression of the 1930s.

I write:
It also then goes without saying that every depression that this nation experienced also was ESCAPED with the gold standard in practice....with the exception of the 1930's. My point being that depressions are not inherently the responsibility of a gold standard. Remember there were also many boom periods and tranquil periods during this countries history WITH the gold standard.

Al Fulchino

(05/25/2000; 16:45:03 MDT - Msg ID: 31275)

You have to like these two guys

They are both bold. They both firmly believe in what they post. They make this a strong forum


Trail Guide displays his enthusiasm with this bold statement:

Yes, the leverage against the explosion and demise of derivatives is only in physical gold. What an incredible event this is going to be!

The Stranger's arguments are always strong, here he displays humility, but I know in the future he will be able to say...SEEEEEEEEEEEE!

I have been predicting higher gold prices in this forum for over a year now, and I have been wrong, wrong, wrong. Absolutely Wrong! Geez! I hope no one was listening.

White Rose

(05/25/2000; 16:50:22 MDT - Msg ID: 31276)

What happened with Goldman Sachs today?

The stock market took a sudden dive this afternoon. It had something to do with an announcement from Goldman Sachs. On another forum, I saw something about rumors circulating through Wall Street that a hedge fund was in trouble, and the fund was Goldman Sachs. The price of gold went down $5 today in New York. Would this be the result of Goldman Sachs trying to unload a lot of paper quickly?

Does anyone have any information about this? Am I reading too much into events? Does anyone know anything about this situation?

John Doe

(05/25/2000; 16:57:57 MDT - Msg ID: 31277)

Gold & Paper

Should one hold physical gold, futures, shares, options on futures, or options on shares? It depends on one's objectives: speculation, investment, savings, or wealth preservation. Generically speaking, in ordinary times, one may choose to hold a proxy for physical gold. But, even in ordinary times, one should make no mistake that one is surely "holding a proxy for physical gold" and all the risks (and benefits) that entails. Yes is yes and no is no, black is black and white is white, gold is gold and paper is paper. Gold and paper are, in an investment sense, and certainly in terms of risk, polar opposites�for how can one convert that which is the antithesis of liability into the essence of liability and still consider the two interchangeable? The two are only nominally interchangeable, not de facto interchangeable. As ORO, FOA, et al have pointed out, in times of stress the commonly assumed points of "interchange" may well not function.

When the rubber meets the road, nominal interchangeability will not magically yield to a higher standard of de facto interchangeability, and I fear we have a great deal of unfamiliar road ahead of us. These are FAR from ordinary times. Therefore, one's objectives are, or should be, materially aligned to the times that exist. As much as the interlocking banking-government combine would wish this "self-inflicted expansion" to continue, the nascent contraction will not be averted, only delayed and worsened by the excessive, unnatural continuance of the current round of debt expansion.

Though I cannot generally advocate holding gold derivatives, except perhaps for a small allotment across unhedged mining shares, there are times when a gold futures contract would be an "ok" speculation vehicle. But for now, gold futures are a very poor speculation We have been given generous fair-warning of the lack of cohesion underpinning the global financials, especially in the derivatives area. Currently, he risks in gold futures far outweigh the potential reward, for both the contracts and the currencies in which they are settled. If all derivatives could be thought of as being at one end of a leaky financial boat, it's time to move to the other end�where the gold-plated lifeboats are stationed.

The rules of futures and options settlement are stacked against the speculator as it is and in this climate especially, the very culmination of which one may well be anticipating in terms of potential reward. The events that could collapse the global financial system, and by extension unleash gold, are the very events that could foul futures settlement and lead to massive defaults of derivatives of all kinds. Within such an environment, I find it highly unlikely that the hoary golden whipping boy will be given favorable treatment in terms of institutional/governmental support and forced contract enforcement.

The history lessons bear repeating:

A bank overissued gold certificates, reneging on its promise to exchange the gold certificates for gold upon demand. The bank defaulted and the gold certificate holders were cheated and left with worthless paper.

A government-regulated and sanctioned central banking system overissued gold notes domestically, reneging on its promise to exchange gold notes for gold on demand. The government defaulted by recalling all gold in circulation at the central bank's behest, and then devalued the central bank fiat currency given in exchange for the confiscated gold. The former gold note holders were cheated and left with devalued paper.

A government overissued its commitments to balance its trade in gold with other governments, reneging on its promise to exchange its international currency for gold on demand. The government defaulted and the other governments expecting payment in gold were cheated, left only with the option of continuing to hold their balance of payments as credits with the defaulting nation. The longer they held these credits, the more they eroded in terms of the gold for which they had originally contracted.

A global derivatives system, operating largely without oversight because the world's governments are too fearful of opening a Pandora's Box, created a massive pyramid of contracts far in excess of reasonable commercial needs across many vitally important markets, including gold,�

[That's where we are right now. One may fill in the blanks in a number of imaginative and surprising ways, but I expect the conclusion to be something along the order of:]

�reneging on the terms of their derivative promises. In essence, the dollar-centric, global financial system defaulted, leaving the many derivatives holders insolvent and screaming for a bailout from an already inflation-racked, debt-burdened taxpaying public.

White Rose

(05/25/2000; 17:06:14 MDT - Msg ID: 31278)

followup to my message #31276

http://www.lemetropolecafe.comMoments after I posted my message asking for information about Goldman Sachs, I got an e-mail from Bill Murphy of GATA about a new posting on the "Le Metropole Cafe" website. While this is in a members only section, I will quote a portion of his message:

----------

My guess is that behind the scenes there is serious concern regarding some financial market stress or event that is about to surface, or have a negative effect on a fragile stock market. It could be that the dollar is about to take a sudden beating, it could be that the price of oil is about to soar towards $40 per barrel. It could be that a known financial institution is in big trouble for some reason. Something like that.

Whatever it is, the "powers to be" must be afraid of a stock market meltdown (I wrote that earlier today).

Today's actual big stock market drubbing is some additional confirmation on my thinking about why gold is being trashed.

These same powers (bullion banks and the New York Fed/ESF) know that a gold derivative banking crisis could develop if the price of gold started to move higher during a period of general financial instability.

It is the build up of these gold derivatives that is keeping down the gold price. That is clear from the data that GATA has discovered. If investors were to turn to gold in a time of general financial chaos, a gold buying panic could quickly get out of hand and set off a series of gold buying chain reactions.

White Rose

(05/25/2000; 17:06:54 MDT - Msg ID: 31279)

followup to my message #31276

http://www.lemetropolecafe.comMoments after I posted my message asking for information about Goldman Sachs, I got an e-mail from Bill Murphy of GATA about a new posting on the "Le Metropole Cafe" website. While this is in a members only section, I will quote a portion of his message:

----------

My guess is that behind the scenes there is serious concern regarding some financial market stress or event that is about to surface, or have a negative effect on a fragile stock market. It could be that the dollar is about to take a sudden beating, it could be that the price of oil is about to soar towards $40 per barrel. It could be that a known financial institution is in big trouble for some reason. Something like that.

Whatever it is, the "powers to be" must be afraid of a stock market meltdown (I wrote that earlier today).

Today's actual big stock market drubbing is some additional confirmation on my thinking about why gold is being trashed.

These same powers (bullion banks and the New York Fed/ESF) know that a gold derivative banking crisis could develop if the price of gold started to move higher during a period of general financial instability.

It is the build up of these gold derivatives that is keeping down the gold price. That is clear from the data that GATA has discovered. If investors were to turn to gold in a time of general financial chaos, a gold buying panic could quickly get out of hand and set off a series of gold buying chain reactions.

ss of nep

(05/25/2000; 17:22:59 MDT - Msg ID: 31280)

are TRUTH and GOLD related in history ?

I do think a contest is in order.

Canuck

(05/25/2000; 17:47:06 MDT - Msg ID: 31281)

POG

Seeing the POG break through 270 makes me weak in the heart.
Please tell, please reassure me that the graph today doesn't mean anything.

I have full faith in gold, physical that is, just need a little comforting. I noticed the unhedged Goldcorp(g.a,TSE)
actually went up today; a little comforting. How did the XAU make out?

I'm worried and confused but funny, I feel strength building. It must be close, markets are completely haywire.
Analysts are completely opposed, odd, like 'paper and physical' opposite.

Thanks.

Canuck

(05/25/2000; 17:59:03 MDT - Msg ID: 31282)

Question

http://www.kitco.com/charts/livegold.htmlI'm going to ask the dumbest question probably ever asked on this forum. Ready.

The link above reflects 'spot' price for gold correct? Each day in the newspaper and on television the POG is communicated, yes? Sometimes spot, sometimes a future month.

Are this prices quoted discovered from paper?

When I buy gold I buy from spot. Tomorrow I will be able to buy spot cheaper, yes? So when this 'paper' burns and physical separates from it what will spot be quoting 'paper'
or physical?

Leland

(05/25/2000; 18:05:35 MDT - Msg ID: 31283)

ss of nep, Your Message is Well Answered by Paul Hein (phein@inlink.com)

"Until April of 1933, gold was used as money in this country. Silver was
used until June of 1968, when the irredeemability of Silver Certificates
became final. Since then, nothing has been used as money; we exist only
on credit, or belief.

Can you have a sound economy without sound money? That seems as
unlikely as a fortress built upon sand, but we are told that the economy is
strong. The astonishing popularity of the president is attributed to the fact
that the economy is so robust. How is this possible? Have our money
managers accomplished the impossible?

A friend who goes from obvious good health on Monday to emaciation by
Friday is obviously not doing well. However, if the degeneration is slow,
over decades, and if the unfortunate friend is able to rouse himself
occasionally, we might say that he is "doing well," although, in fact, he is
dying. It is in this sense, I believe, that our economy is "doing well."

Young people, who have never seen the dying economy in a state of good
health, may disagree. Statistics are not of much help in this situation,
because many of them are based on 'dollar' measurements, which are,
inescapably, deceptive. Until 1968, the dollar was a fixed amount of silver;
today it is no particular amount of anything. Comparisons are not simply
between apples and oranges, therefore, but between apples and imaginary
oranges.

So comparing average income now and in, say, 1950, is meaningless,
because in 1950 income was measured in ounces of silver; today it is
measured in - what? Moreover, the numbers (on bills or checks) which
represented money in 1950 now represent nothing, but are much larger. It
is difficult � probably impossible - to fully convince someone that $10,000
in 1950 was about the equivalent of 75,000 or 80,000 bucks today.

But no one can deny that the tax rate on 75,000 is much greater than on
10,000, so that even if the larger number is equivalent to the smaller
number of dollars, the tax upon it is much more. How can society prosper
when less is taxed at a greater rate than more?

For those of us of a certain age, what could be termed (perhaps with a
wee bit of disdain) nostalgia suffices to clarify the situation. I remember,
for example, when homes were made of brick, not brick veneer on the
front only. Interior walls were plaster, not wallboard. Mail was delivered �
to the door - twice a day. There were alleys behind the houses �
wonderful places for riding bikes or playing games! There were sidewalks
in front, with streetlights. Mom didn't have a job outside the home. A
milkman delivered milk, cream, cottage cheese, etc., to the door daily, and
the cleaner picked up and delivered the clothes. There was even a man
who came once or twice a year to change the furnace filters! Department
stores delivered also, and not just large or expensive items. Buy a
handkerchief and a pair of socks downtown, and they would be delivered
the next day. And downtown was an exciting, bustling, prosperous place. I
can't recall vacant stores, or boarded up buildings.

We had three newspapers in town, not just one. You could go anywhere
on the streetcar or bus, at any time. The railroad station hummed with
activity. Has anyone related the disappearance of these things to the
introduction of fiat money? It would be a fascinating study for someone
writing a paper on economic trends.

Is it farfetched to associate sound money with sound morality? In addition
to the material aspects of life I've cited, there was an obvious moral
difference between then and now.

Children in school did not, with some regularity, assault one another or their
teachers. Metal detectors, even if they existed, would have been unheard
of in school. Condoms were not mentioned, much less distributed, in the
belief that the innocence of childhood was precious and should be
preserved. Today that idea holds as much currency as the idea of sound
currency! One could attend a movie without being embarrassed by the
language, and listen to a popular song without being incited to kill a
policeman.

I do not assume that sound money causes a sound morality; rather the
reverse. Sound morality takes honest money for granted. If we think our
president is doing a grand job, and that the economy is booming, maybe it's
because we don't know right from wrong!"

Tom

(05/25/2000; 18:10:54 MDT - Msg ID: 31284)

Mr. Oswald Murphy - DROOY - the straight story

This is a reply sent to Steve Saville in response to a statement he published on Gold Eagle:

Hi Mr. Saville

I read with interest that Durban Deep has been expanding its hedge book. This is not true. Mr. Roger Kebble ( Chairman ) , Mr. Mike Prinsloo ( CEO ) , Mr. Charles Mostert ( CFO ) and myself manage DRD s hedge book. We have not authorised any forward sales of gold since prior to the last UK Gold Auction. What we have done however, is to guarantee greater upside participation through buying Call Options ( 1.2 million ounces ) and physically buying back of certain forward sales. Our current �net exposure is 850,000 ounces ( being forward sales plus call options sold less call options bought ) which is less than one year of DRD s production ( 1.2 million ounces ) . This hedge book is managed in the interest of all stakeholders.

The DRD hedge was put in place to protect the business against further declines in the gold price.
It was also put in place to protect our capital upgrade and renewal programmes that have been essential in the growth of DRD production profile over the past two and a half years. We have completed sixteen of these programmes to date and are busy with the last three programmes. All these will add additional ounces at more than $250/oz.
Part of our hedge is used to protect marginal mines from closure and then restarting mining operations ( at extremely high cost ) during this very volatile period of gold price movement.
We have also been busy with restructure programmes at the operations we have acquired and we fix a target price for these operations while we conclude the restructure and bring these operations into profit.
As we continue to acquisition and grow, the percentage hedged reduces accordingly.
With the recent Harties acquisition with an additional 400,000 ounces of production per annum and our growth in Australasia, DRD is now a 1.2 million ounce producer per annum which will continue to reduce our net exposure and allow upside participation.
DRD s reserves exceed 14 million ounces, which means the �net exposure� is roughly 6% of DRD reserves ( and 1% of resources ) .
Our current hedge is spread over a five-year period, but we have the ability to accelerate delivery into our hedges that we are currently doing in order to maximise exposure for future upside participation.

This to us is good business and adds to shareholder value. We are well positioned to take advantage of the higher gold price.

I would appreciate if you could correct the statement that you posted on Gold Eagle, as it is incorrect, damaging to shareholder value and skews perceptions of DRD.

Regards
Ian Murray ( Manager: Corporate Finance )

Canuck

(05/25/2000; 18:31:53 MDT - Msg ID: 31285)

Post # 28110

http://www.kitco.com/charts/livesilver.htmlOdd that silver took the EXACT same line today, thieving, lying, crooked s.o.b.'s.

JavaMan

(05/25/2000; 18:43:17 MDT - Msg ID: 31286)

All...

Is it my imagination or are the insights posted lately reaching a new level of excellence?

Sir Canuck, hang tough...the only possible way to lose is if you sell. Actually, that's a lesson I learned long ago...never, ever invest money you might need later. That way, you can ride out anything. Unless, of course, you invested in something that has a limited life expectancy. If you did, you may not want to admit it here though (smile).

SS, you said..."are TRUTH and GOLD related in history?" I ask, aren't the two synonymous?

John Doe, if I may borrow from another source...MENE, MENE, TECKEL, UPHARSIN. The writing IS on the wall and I think, unfortunately, this paraphrases your post (and the state of our Union) most effectively.

HI - HAT

(05/25/2000; 18:49:32 MDT - Msg ID: 31287)

Al Fulchino Masters

Hello to you, and a golden sunset, from the Gulf Coast of
Florida.

In your opinion, is the Roy Masters material worthy of one to look into?

Netking

(05/25/2000; 18:51:54 MDT - Msg ID: 31288)

Canuck (31285)

...I prefer to look at it as a window opportunity...this is a short term thing...before all "Hell breaks loose" in this particular market. I for one will be ready!

HI - HAT

(05/25/2000; 18:56:01 MDT - Msg ID: 31289)

Christopher ...................Back Forty

I only have 10 acres ; but 40 guns ! : -)

You are right! Gold and silver are the best sleeping pills.

JavaMan

(05/25/2000; 19:02:10 MDT - Msg ID: 31290)

Leland...

Thank you. I think your post is truly inspirational. Are you sure the link is correct? It times out.

Leland

(05/25/2000; 19:05:22 MDT - Msg ID: 31291)

Java, That Address is From 1997. Yes, it is Probably Out-of-Date.

.

TownCrier

(05/25/2000; 19:13:15 MDT - Msg ID: 31292)

Canuck's Question...

"Each day in the newspaper and on television the POG is communicated, yes? Sometimes spot, sometimes a future month. Are these prices quoted discovered from paper?"

Hello Sir Canuck. Where I have apparently failed to convey the method of gold price discovery despite repeated attempts, allow me to turn the podium over to one who communicates much more effectively:

ORO (5/25/2000; 6:21:15MT - usagold.com msg#: 31228)
"The paper markets provide an investor with a means to play the price of gold. They do not reflect directly the availability of gold, just the availability of paper obligations denominated in gold. As such, the gold prices discovered by these markets are detached from the reality of gold supplies. The price of gold in these markets is the value of a fiduciary gold."

Just to complete the picture for you, spot prices, then, are arrived at by mathematical adjustment upon the price discovery of the trading on the most active futures contract--adjusted in order to account for the "time value" of the two funds involved...interest rates on the dollars and lease rates on the gold.

TownCrier

(05/25/2000; 19:56:39 MDT - Msg ID: 31293)

Today's market at a glance: Contracts being sold...who's buying?

Here are some excerpts from various sources that you may find to be thought provoking, somewhat illuminating, or (take your pick) either reassuring or downright frustrating. To see the paper nature of these lower gold prices, read on...
-----------------------
New York--May 25--COMEX Jun gold futures hit a 8 1/2-month low Thursday on fund selling, as buying interest has largely dried up [since Tuesday].

Traders said one US fund in particular was a heavy seller throughout the session. Sell stops below $272 were triggered and added momentum to the sell-off.

Some of the selling pressure was linked to liquidation related to the upcoming rollover of the Jun contract month to Aug. Tuesday is gold futures last notice day.

"The shorts keep piling on," commented Leonard Kaplan, president of Prospector Asset Management in Chicago.

Kaplan noted that there is a tendency in both gold and silver for prices to move lower in the first four or five days in front of a futures month delivery date.

Market longs, if they want to roll into Aug, have to pay a "revoltingly" high price because the contango is extremely high, Kaplan explained. So instead of rolling, many just liquidate.

Bill O'Neill, director of futures research for Merrill Lynch, said gold's move was based almost solely on weak technicals. "There really isn't anything seasonal or fundamental about it. When we get thin conditions like this, the chartists really take over," he said.
***
(c) Copyright 2000 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN.
-----------------------------
From the WGC weekly gold market commentary:
"The latest statistics published by the Commodity Futures Trading Commission showed the net short position of the large speculators increasing on Comex during the two weeks ended May 16, rising from 20,353 contracts to 29,530 contracts."

Chris Powell

(05/25/2000; 20:07:24 MDT - Msg ID: 31294)

Midas commentary for May 25

http://www.egroups.com/message/gata/467?Midas commentary for May 25 by 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

Cavan Man

(05/25/2000; 20:08:57 MDT - Msg ID: 31295)

Nikkei

Tokyo index takes out 16K. More selling in Japan.

Al Fulchino

(05/25/2000; 20:12:53 MDT - Msg ID: 31296)

Town Crier

Unfinished business from last night: At the forefront, I acknowledge that your instincts regarding Goldhunter may in the end be correct, and IF that is correct I will have to acknowledge your instincts. At the time and even now, I do not see that he or BTD really stepped over any line.

I feel they have added a lot for this forum's elite to be challenged by. They provide real examples of differing strategies and as long as sincerity is the drive behind their message then I think we are better off for the shared ideas.Also and this is the most important for me when I see the back and forth between you all, it sorts things out for me.

I don't know if you are aware that one reason so many Italians are short, ( I am of Italian descent by the way before anyone starts attacking me ..smile) is because years of living in small villages, with very little outside contact resluted in many marriages that were not varied enough in the gene pool. Thus, we like them, will begin to stunt our thought and argumentitive talents without a good mix of people to draw out the best in all.

Anyway that is the end of it from me. Thank you for your post last night.

PS I am six feet tall

elevator guy

(05/25/2000; 20:15:30 MDT - Msg ID: 31297)

@Al Fulchino

And a giant at heart!

Al Fulchino

(05/25/2000; 20:17:21 MDT - Msg ID: 31298)

Free trip to Hawaii

Christopher / Hi Hat re:

HI - HAT (5/25/2000; 18:56:01MT - usagold.com msg#: 31289)
Christopher ...................Back Forty
I only have 10 acres ; but 40 guns ! : -)

Christopher, I just bought ole Hi Hat two round trip tix to Hawaii for seven days at the Hawaiin Hilton Village for seven days. Think I can do enough metal detecting and shovelling of ten acres on seven days?

Al Fulchino

(05/25/2000; 20:21:53 MDT - Msg ID: 31299)

HI - HAT (5/25/2000; 18:49:32MT - usagold.com msg#: 31287)

HiHat ole fella, the answer is yes. Yes I do, it is very much a golden subject, yet I fear it is not the type of gold we usually talk about here. If you would like to talk about it, then everything at my disposal, email, phone number and any other thing you require is at your disposal. Let me know...also how did you know about my interest?
Hmmmmmmmmmm

Al Fulchino

(05/25/2000; 20:23:33 MDT - Msg ID: 31300)

elevator guy (5/25/2000; 20:15:30MT - usagold.com msg#: 31297

And I can see dear fellow that yours goes to the top floor, thank you.....

Off to pick the wife and kids up at the airport. To one and all peace in the heart and soul.

beesting

(05/25/2000; 20:25:03 MDT - Msg ID: 31301)

@White Rose # 31276 What Happened to Goldman Sachs Today?

ALERT!!! For anyone holding Gold Fields Ltd. Shares
Thursday May 25, 11:23 am Eastern Time

Gold Fields Limited Issues Cautionary Announcement

JOHANNESBURG, South Africa, May 25 /CNW/ -- Shareholders of Gold Fields Limited
(Nasdaq: GOLD; JSE: GFL) are advised that, as a consequence of Gold Fields being involved in
discussions with a number of parties, the price of Gold Fields securities may be materially affected.

Accordingly, shareholders are advised to exercise caution when dealing in the company's securities
until a full announcement is made.

For further information

Web site: http://www.goldfields.co.za

Comment:
Goldfields Ltd. Shareprice rose slightly today!

Does anyone have any more news on what this is about?

Is the Goldman Sachs rumer and this press release related?

Is Goldman Sachs trying to Blackmail unhedged Gold Fields Ltd.??

We watch together....beesting.

ORO

(05/25/2000; 20:50:35 MDT - Msg ID: 31302)

AlFulchiano, Perplexed, The Federal Reserve's non-gold standard

Two points on the comments you two posted:

At the start of the banking crissis, the gold in the US banking system was sufficient to redeem only 3.75% of the outstanding accounts. For all intents and purposes, the gold standard was abolished when the Fed doors opened.

Within 15 years, the fiduciary money - woven of promises and the privelege of calling the promises "gold" - grew nearly 7 fold. The economy was running on high octane 96.25% credit money. Obviously, credit money was what had failed then.

The ease and convenience you ascribe to credit money is not the result of it. It is the result of the technology that makes possible the immediate ascertainment of availability of bank balances or credit lines. Neither of these would be limited by a free market money.

What would be limited would be the volumes of credit issued beyond the capacity of the economy to produce goods. What would be limited is how much your government can spend before you notice it and say "no". What would be limited is the capacity of bankers to take the extra 5% interest that they can charge over the natural gold interest rate of 3% on long term loans. It would put you on an equal footing with bankers and government regarding lending and borrowing.

Solomon Weaver

(05/25/2000; 21:17:28 MDT - Msg ID: 31303)

the real cost of newly mined gold is $360 ounce

http://www.tocqueville.com/brainstorms/printbrainstorm0067.htmlA snippet from today's John Hathaway post on gold hedging:

"Few mine company executives seem to grasp the importance of the relationship between the cost of replacing reserves and hedging decisions. In our view, that cost is well above the market price, probably in the range of $350-$360/oz on an industry wide basis. While annual reports and financial presentations of gold producers focus on cash cost per ounce, or total cost to produce, almost no company that we are aware of considers replacement cost in the context of hedging."

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

Out there in the world of gold mining, it seems that in order to run a healthy gold company, including exploration, development, and full utilization of reserves, as well as a reasonable return on investment (attract ongoing capital), that a real cost of gold mining in on the order of $360/ounce (at today's dollar and economy)...and remember, many mines are in "third world nations not earning many dollars".

So anyone who goes out and buys a gold Krugerrand for $270-$283 is getting a nice specimen, with a beautiful design, highly portable and highly recognizable for 80% of the replacement cost...and gold, unlike cars does not wear out with the years.

Poor old Solomon

Gandalf the White

(05/25/2000; 21:45:03 MDT - Msg ID: 31305)

oh oh !!

I was going to welcome you to the RoundTable, Taurus, BUT you should have read some of the rules before you jumped in.
<;-)

TheStranger

(05/25/2000; 21:57:03 MDT - Msg ID: 31306)

Hipplebeck, Shifty, Al Fulchino and Canuck

Productivity is higher in the U.S. than any other country in the world. This is because of a degree of automation and infrastructure here which simply does not exist in any of the countries whose labels you mention. It is also because there are fewer governmental barriers to wealth creation and relatively less corruption in the U.S. than in most other countries. Furthermore, it is precisely because of the labor intensive, low productivity nature of some manufacturing that it is done overseas. Believe me, America wouldn't be so productive if so many of us had to assemble things with our hands all day.

It may also interest you to know that the U.S., in addition to being the world's largest importer, is also the world's largest exporter. This information is readily available to anyone who cares to pursue it. Furthermore, had you read my post more carefully, you would realize that I clearly said the national debt AS A FUNCTION OF THE SIZE OF THE OVERALL ECONOMY is well below previous extremes, and it's shrinking. To clarify this point, imagine if you owed the bank a million dollars and Bill Gates owed the bank two million dollars. Yes he owes them more than you do, but as a function of one's ability to pay, he owes them far less than you do. This is consideration is elemental to the point that was being made.

I cannot very well consider you rude for standing up and shouting "Baloney" when you think it appropriate, even if you are mistaken. I would do the same thing. But if you really want to engage other serious students of economics, you may be wise to give more thought to what you post. If that sounds like an insult, believe me, it isn't. I obviously share your fascination with these subjects and will be happy to contribute to your understanding anytime.

Shifty - This not being a suitable time or place for such topics, I can only guess at the reasons for your cynicism about so many things. I'll bet you have a lot to say about the times you've been "sold down the river" as you say. But I also have a hunch you have accomplished a lot more in your life than you sometimes give yourself credit for. You are obviously a smart guy who likes a challenge. I appreciate your friendship.

My thanks to both Al Fulchino and Canuck for recent compliments.

TheStranger

(05/25/2000; 21:58:42 MDT - Msg ID: 31307)

Clarification

The first three paragraphs of my prior post were intended for Hipplebeck. Thanks.

Hill Billy Mitchell

(05/25/2000; 22:03:35 MDT - Msg ID: 31308)

Official release

http://www.bog.frb.us/releases/H15/update/
Official: Federal Reserve Statistical Release

Release Date: May 25 2000

Rates For Wednesday, May 24, 2000

Federal funds 6.48

Treasury constant maturities:

3-month 5.92
10-year 6.47
20-year 6.61
30-year 6.19

upside-down spread FF vs long bond = (.34%)

Hill Billy Mitchell

(05/25/2000; 22:07:24 MDT - Msg ID: 31309)

Correction

upside-down spread FF vs long bond = (.29%)

Hill Billy Mitchell

(05/25/2000; 22:25:45 MDT - Msg ID: 31310)

Taurus re: trading

Investing in paper to make a profit is not the same thing as transfering wealth from paper to hard assets for preservation purposes. You do two different things. You make profits by trading in paper and preserve wealth by transferring your earned profits from paper to hard assets. I do the same only my choice of earning paper profits is that of performing services for others at a paper profit and taking my savings after necessities and transfering the savings into hard assets for preservation. The only difference between you and me is our method of earning a living. I keep my occupation off the internet but I can assure you that my return on investment cannot be measured in percentages because I do not know how to put a math computation on my labor investment. The 40% has nothing to do with what you are implying. You are implying that you are more sucessful than others by comparing apples with oranges.

Do not take my comments to mean that I do not value your contribution to our education on this forum.

hbm

ax

(05/25/2000; 22:27:38 MDT - Msg ID: 31311)

HELP

Since the Le Metropole Cafe revised its web site it does
not recognize my password. Does anyone else have the same
problem?

beesting

(05/25/2000; 22:37:54 MDT - Msg ID: 31312)

@ Sir Towncrier # 31211 5/24/11

TownCrier said:
If a someone such as beesting or Solomon Weaver or ORO
were to suddenly find the need to share their own investment strategy and advice on the forum
which turned out to be exactly this same trade, I may or may not offer a kind word about
remembering to factor in counterparty risk, but that would be it.

Townie, I am very flattered you included my handle on a sharing of investment advice,but I live under a bridge of the interstate highway system here in the Western U.S. with only my PC and my 2-400 ounce Gold Bars for company(BIG BIG BIG SMILE),but I sure am happy!!!

Seriously,I would consider myself an ultra contrarian, but I will share this:
Being Scottish, I was tought at an early age to save as much as practical the fruits of my labor.(money)
Rule # 1 NEVER,NEVER spend more than you make on a monthly basis(except for real estate purchases)
If you want to buy anything save your money and pay cash,you appriciate it more.
My first "investment" was a standard(at that time) 5% savings account.
My second investment was a duplex house my wife and I bought around 1968.We paid off the promissary note in full including interest in 1971.
By 1975 I had invested in stocks and gone to school earning enough credits to become a stock broker, I never took the exam.
By 1983 I went into semi-retirement earning enough being a trucking owner operator and stock investor during the 1977-1983 run up in Gold to kick back....age 43.I also lost a lot investing...be prepared for that!

My investment advice...NEVER invest in something you don't completely understand, or you may be sorry, and I agree with Holtzman, diversify!
Think of yourself and family as noble bankers of old backing your investments with PHYSICAL Gold! The percentage is up to you.

Disclaimer:
None of this is meant as investment advice.....beestings wife(fights like Al Capps Mammy Yokem, you know L'il Abners mother) forced me to write this.....good night all...beesting.

SHIFTY

(05/25/2000; 22:44:30 MDT - Msg ID: 31313)

ax

I had a bit of trouble tonight getting in . I got a page to send an e-mail for help . I did send the e-mail and came here to read for a while. When I tried again it worked fine . Lots to read there. Just checking back here to see if anyone knows what is going on with Goldfields Ltd. I don't know if I should laugh or cry.

ax

(05/25/2000; 22:50:56 MDT - Msg ID: 31314)

SHIFTY

On, Gold Fields, Ltd, it could be an impending merger.
On the web site, I sent multiple emails but the problem
remains. I am puzzled. Thanks for letting me know that it
works for you now.

Perplexed

(05/25/2000; 23:00:58 MDT - Msg ID: 31315)

Rehash

ORO I have really appreciated your insight and explaination
of the financial system, the figures and statistics are very
interesting however they do not change fact. As I stated in my original post, The American currency system, sans gold, in the last 50 years, has served as the engine for the creation of more world wide wealth than at any previous time in world history. There is more prosperity, better health care, and increased longivity under the American financial system, than at any time in recorded history. If gold was the key ingrediant to a successful civilization, then the Inca and Aztec nations should have been paradise on earth.

Do I believe in physical gold? YES! Do I own physical gold?
YES! Do I believe that gold is the only viable money? NO!
Do I believe that the system is in trouble? Without doubt! The fault however belongs to the selling of our following generations into indentured servitude by our current government representatives. The Federal Reserve is nothing but an accomplice.

It is interesting that inflation is only now being noticed by "news" media, it has been a fact of life beginning with the first "deficit budget." Inflation has been hidden in clear sight since at least 1960, and there has always been only three ways to eliminate it, Taxation, default, or inflation. We all recognize taxation to be a dirty word, we desire the benefits, but hate the cost. Inflation, only as a last resort. Default, a LAST LAST resort.

We are now entering the inflation. Are our wizards capable of stealing enough money thru devaluation within the next few years to wipe out 40 years of red ink? We all know the answer to that question. Even know we are kicking and screaming about the price of fuel we run through our $150,000 motor homes.

In 1969, in the midst of Lyndon Johnsons war on Vietnam and war on poverty,(both on credit) he made the statement that we had unleashed economic forces that no one understood. He was right. He and the bankers released the doomsday machine of compound interest, and it is now devouring the economic structure which they devised. Who stands to get bitten the hardest by the influx of new money. How about the bankers who are now stuck with long term loans which will be returned with noticeably cheaper money, and a public, reluctant to initiate new loans. This leaves credit cards and bank charges as the primary income. Couple this with a plunging stock market, much of it financed by banks and security companies, and the seeds of disaster sown over the last 40 years are now ready for harvest.

ORO I know what is in the works, and I am as aware as you are of the fact that there is no way out. My only difference
with you is the discounting of the wealth now present in this world, it is not going to vanish, just because the markers representing it become worthless. The past accomplishments of the system are not going to vanish, and may well serve as the basis for a new system.

Why is no one trying to crash, but, contrarily doing their best to save the American system? Because politicians world wide have their necks on the chopping block. It is not only our government pouring money into the market, when it crashes, so do many governments.

The United States is not the only nation in trouble with red ink, Europe is in no better shape, especially France. No one wants to rock the boat because they are well aware of the precarious positions of their respective governments.

The United States Constitution must be destroyed! Gold and silver remain the money of account within this document. There was nothing designated as money when gold and siver was removed under the color of law, this is the sword hanging over the heads those who will try to prosecute the paper claim to the vast wealth of the nation. The only way that may be changed is by amendment. This is the reason for the attacks on the 2nd Amendment, if it can be discredited,
then we are without lawful government.

Still Perplexed

totalamateur

(05/25/2000; 23:13:52 MDT - Msg ID: 31316)

Just a dream?!

"THE MONEY EXPLODES!"

I HAD THIS DREAM just now, and it scared me so it woke me up! We were at the grocer's trying to buy a can of soup, and you asked the man, "How much is this?" He said, "That'll be three pounds." I said "three pounds!--For a can of soup!" He said "That's the price today, and you better take it or leave it, Buddy! For there's no telling what it's going to be tomorrow!" So we paid him three pounds and walked out stunned!

I DON'T KNOW WHAT HAPPENED IN BETWEEN, but we must have decided we should leave the country because of the monetary situation. A can of soup for three pounds! So the next thing I knew we were at the railway station trying to buy a ticket, and I was asking him for a return ticket, a round-trip ticket.

"I'M SORRY, WE'RE ONLY SELLING ONE-WAY TICKETS," he said. "We have no idea what the return fare would be later. I wouldn't care if you were returning this weekend, I wouldn't sell you a return ticket because I have no idea what the price will be by then. All we're selling is one-way tickets, and we have no idea what the price will be on returns. We'll sell you a one-way ticket at what it is today, and that's it! And that's for your fare today only. It's got to be used today. We've no idea what the prices are going to be tomorrow!"

SO EVIDENTLY WE DECIDED TO GO TO THE BANK and take our money out-what little we had--for due to this skyrocketing inflation its value was being lost so rapidly, and we were apparently going to leave the country.

ON THE WAY TO THE BANK we stopped to watch this train go by. It was leaving the station and picking up speed as it left, at first starting to roll real slowly and then faster and faster, till soon it was just flying! I didn't understand at first what that meant, but I realise now I was thinking, "It's symbolic of how once the thing starts rolling, the inflation really gets going, it really flies!"

THE POUND'S LOST 10% OF ITS VALUE IN THE PAST WEEK! But it wasn't even in the headlines! Isn't that peculiar? It's down to the lowest it's ever been, now, and the dollar is up the highest it's ever been!--I've got something on that too in a minute.

SO THEN AS WE PASSED ON WE WERE GOING THROUGH THIS JUNKYARD of old scrap iron, and I looked at these piles of old scrap iron on both sides and said, "My, if you can imagine, it's not just the price of gold that's skyrocketing, but even old scrap metal like this is going to be worth a fortune!"

WE GOT TO THE BANK AND THE BANK WAS JUST PACKED WITH PEOPLE standing in long queues at each window waiting to do the same thing, to get their money out. I must have figured I could get quicker action by going to see the manager, and I wouldn't have to stand in the queues, so I went through this door into the manager's office.

IT WAS A DOOR YOU PUSH IN LIKE SOME OF THESE ONE-WAY DOORS do, and it slammed shut behind me. I turned around and I looked at it and thought, "That's funny!" I pushed on it and it wouldn't open, for it just opened inwardly, but it wouldn't open outwardly, and there was no handle on the inside so there was no way I could open the door from the inside. I thought, "My Lord this is just like a trap! I'm trapped in this bank!"

THEN ALL OF A SUDDEN THE WHOLE BUILDING BEGAN TO SHRINK! I thought, "My God, this thing is going to crush us all!" The bank was literally shrivelling, crushing, and the walls were beginning to close in on us! But suddenly there came this voice from above: "Don't worry! The Green Pig is about to explode and it'll blow the bank to bits!" (See "Green Paper Pig," Letter No.243.) And I woke up--Boom! Just like that! It was like a nightmare!

I THOUGHT, "LORD WHAT DOES THAT MEAN?" Then suddenly there dawned on me something I told you before: When those big business financiers, were releasing the Green Pig to chase us down the Jordan Valley, remember it was just a little thing at first? But as it raced down the Jericho road and then down the Jordan it got bigger and bigger and bigger just like a big balloon, till by the time it got almost to us it was like one of those big blimps--a huge parade balloon!

OF COURSE! WHAT DOES THAT SYMBOLISE?--AN INFLATION of the Dollar value! The Green Paper Pig was inflating and getting bigger and bigger and bigger all the time, until suddenly it burst! You understand?--The "Green Paper Pig is about to explode and will blow the bank to bits!"--The monetary system is about to explode and cause the capitalistic financial system to collapse!

BUT I WAS SO SCARED of whatever it was, the idea of the bank blowing up didn't seem to appeal to me much more than the bank collapsing on me! The voice said, "Don't worry! The Green Pig is about to explode and blow the bank to bits!" It seemed the voice came out of the sky like an angel.

WHEN THE GREEN PIG EXPLODED, THAT WAS A SUDDEN INFLATIONARY EXPLOSION OF THE MONETARY SYSTEM!--And what happens?--What followed?--It collapsed!--In total deflation! See? That's a deflation: It just collapsed! Then I was thinking, "I wonder if that has anything to do with the comet and the 40 Days and the destruction of America?"

IMMEDIATELY I SAW THE PRICE OF THE DOLLAR GROWING and growing: The Dollar, the green Dollar, the Green Pig, is literally inflating right now very rapidly. But I was thinking, "Lord, how come America seems to be coming out on the best side of the deal, and the dollar's going up in value? If You're about to destroy America, how come the Dollar's going up?" Well it's inflating, so of course it's going up!

IT'S GOT TO INFLATE BEFORE IT CAN EXPLODE! It would be funny if the Lord destroyed America through its greedy god, the Dollar! There might be an earthquake or bombs or heaven knows what, and it could be that too. But the dollar is definitely inflating and it's got to eventually explode!--And boy, if anything would ever destroy America, that would be it!--And of course it would also destroy the whole world monetary system which is based on that Green Pig!

"DON'T WORRY! THE GREEN PIG'S ABOUT TO EXPLODE and it'll blow the bank to bits!" In other words, that is obviously symbolic of an inflation that's so bad that it finally just absolutely explodes and collapses the whole monetary system, and the bank must represent the financial system the banking system and so on. If this happens, it will literally blow the whole world banking system, its financial system, to absolute bits!

IT'LL BE A TOTAL WORLD COLLAPSE OF THE MONETARY SYSTEM which is built on that stupid Paper Pig! See! Isn't that ridiculous? If that little Pig inflates to that point where it explodes, it's going to literally blow their whole monetary and financial systems to bits! If the monetary system explodes, it will literally destroy the financial system. The bank must represent the financial system.

THAT'S WHERE I WOKE UP, and I was thinking, "How come the poor pound has gone down, down, down, and the Dollar's going up?" The answer came to me as clear as anything: It's the Dollar that really has to explode! It will be so inflated in value that it finally explodes! See? The pound has actually gone down in value, which in a way is safer for the pound, believe it or not, than to be inflated like the Dollar is right now. But boy, our friends better get their money into gold or they're going to be sorry!

THEN IT CAME TO ME as plain as anything: "Well, what do you think is doing it? Why is the Dollar inflating?"--This is what's doing it: They are selling out their European currencies and buying Dollars instead! The banking interests apparently are buying Dollars and dumping pounds and European money deliberately to try to hurt England and Europe for the stand they took on the Mideast! So they're dumping their European currencies and buying Dollars to favour their friend America and punish Europe!

THIS FULFILLS EXACTLY WHAT THE LORD SHOWED ME about what they were doing in that dream about the Green Paper Pig! (editor's comment: another dream the author had) They're the ones who are releasing the Green Paper Pig and causing it to inflate, you see?--The Dollar! (Maria: But it's their pig.) Yes, it is their pig, but apparently they thought they could control it.

THEY NEVER DREAMED IT WAS GOING TO GO SO FAR, see? They thought it was going to scare hell out of us and cause us some kind of damage. But instead of that I just pointed my finger at it and it went "Poof"! Boom! Exploded! And that was it! They never expected in to inflate to the point that it was going to absolutely explode and be totally destroyed!

THEY REALLY UNLEASHED THAT GREEN PIG ON THE EUROPEANS, SEE?--Because what were we doing in the Green Pig dream?--Europe was crossing the Jordan of decision and the Dead Sea of death to the Dollar to the side of the Arabs in that dream! The Green Dollar Pig is the weapon they are using against the Europeans for siding with the Arabs for oil!

THEY ARE UNLEASHING THIS DOLLAR INFLATION WEAPON against the Arabs and their friends!--You get it? That would include Britain and Europe, whose currencies are going down in relation to the Dollar. The Dollar is expanding, inflating, going up in price, whereas European currencies are going down.

BECAUSE THEY ARE DUMPING THEIR EUROPEAN CURRENCIES AND BUYING DOLLARS! They are the ones who have precipitated this monetary crisis deliberately, see? That's why the international monetary fund and all those big money boys, the Council of 20 and Council of Ten, etc., have gotten together several times lately to try to agree on a monetary policy, but they flatly refuse--they can't agree on it. The only reason they can't agree is that they don't want to agree!

THOSE WHO CONTROL THEIR PORTION OF THE MONEY which is tremendous, their big banking interests don't want to stop it. They're using the inflation of the Dollar to try to destroy their enemies, including pro-Arab Europe! They know how much money those Arabs have got invested in Europe, and they are trying to destroy not only the Arabs but the Arabs' friends, which would include Europe and Britain.

BUT THE INFLATION WHICH THEY HAVE PRECIPITATED WILL GET OUT OF HAND AND THE DOLLAR WILL EXPLODE AND BE TOTALLY DESTROYED INSTEAD! Instead of becoming a monster that was going to frighten and devour their enemies, when I pointed at it, it exploded!

SO THE DOLLAR IS INFLATING LIKE MAD RIGHT NOW, and when it gets to that point that it explodes, the whole world monetary system will collapse!--And the bankers and capitalists will be left sitting on their stacks of bank notes which will be worthless!

ANOTHER THING WHICH SHOULD HAVE BEEN HEADLINES IN THE PAPER YESTERDAY WAS THE PRICE OF GOLD: It's up to nearly $140 an ounce, the highest it has ever been in history! There wasn't one word in the paper about the fact that the pound had sunk another 10% in a week and that gold had gone up almost another 10%! This shows the Dollar is really not all that valuable, but only better than other currencies. So it began to dawn on me what all this meant, or what it could mean: The soon explosion of the Pig!

THEN I SUDDENLY REMEMBERED THE NEWS THAT RUSSIA HAD JUST ANNOUNCED SHE'S GOING TO CARRY ON ROCKET TESTS in the North Pacific and warned shipping to stay out of the area. I wonder if that has any connection? What could that mean? Why should she be warning shipping to stay out of that area right now, which is near Siberia and Alaska?

WHAT IF RUSSIA WERE PLANNING TO TAKE ADVANTAGE OF THE SITUATION, knowing somehow that America's monetary system was about to collapse and therefore weaken the whole country? If the Dollar collapsed America would absolutely collapse! When she collapsed financially, she'd be in a state of absolute chaos!

THAT WOULD BE THE SMARTEST THING IN THE WORLD TO DO, TO TAKE ADVANTAGE OF AMERICA IN A STATE OF COLLAPSE and absolute chaos for an invasion! The logical way for Russia to invade, of course, the way that Americans have always been afraid she was going to invade, is the shortest possible route right through Siberia right across the Bering Straits into Alaska and down. Now that's quite possibly what Russia has in mind!

BUT HOW COULD THAT AFFECT THE MIDEAST? Well of course, dying America in its last desperate death struggles, what would it do? What was causing it to collapse? If her money had collapsed and she was out oil, what would become the only valuables in the world?

IF AMERICA'S WHOLE SYSTEM WAS COLLAPSING AND SUDDENLY GOLD AND OIL HAVE BECOME THE ONLY THINGS THAT ARE WORTH ANYTHING, the only commodities with standards of value and usefulness, what would the Americans do as a last act of desperation? Dying America would do what?

AMERICA WOULD TRY TO ATTACK THE ARAB COUNTRIES AND GRAB THE OIL AND THE GOLD! Whatever super power possesses and controls those Arab countries would have all the oil and they'd have most of the gold too, and they would have what would be the most valuable things in the world at a time of crisis like that!

SO THE EXPLOSION OF THE GREEN PIG, THE MONETARY SYSTEM, COULD CAUSE THE MIDEAST TO EXPLODE. I have always theorised that it was because of the Arab defeat that they were the ones who would get desperate and start doing the shooting. But the reason we saw the Arabs in our vision doing the shooting could be because they realised or had intelligence that America was about to attack, so they just started attacking first, and then everybody started shooting because they were all prepared for it anyhow.

40 DAYS! 40 DAYS, BY THE WAY, IS THE TIME ALLOTTED FOR THE [ISRAELI] DISENGAGEMENT FROM THE EGYPTIANS. 40 Days! Russia is smart enough to see what's happening or about to happen--and, who knows, she may even be helping to engineer it! Russia has long sought to engineer the collapse of the capitalistic system. What better way to help the collapse of the capitalistic system than to explode its monetary system and its banking system, its whole financial system?

SO THE RUSSIANS MAY BE GOING TO TAKE ADVANTAGE OF THE SITUATION TO ATTACK A WEAKENED AMERICA. What a perfect preparation for any proposed rocket attack on America! The Money Explodes! The Dollar Explodes! Inflation Explodes!--And War Explodes!

THE LORD APPARENTLY GAVE ME THE DREAM TO WARN US THAT THE PIG IS ABOUT TO EXPLODE and is going to destroy the monetary system and with it the financial system, and with it virtually the whole capitalistic system; and Russia is probably preparing to take advantage of situation to destroy America.

AMERICA IN ITS LAST DYING DESPERATE HOURS IN VERY LIKELY GOING TO EXPLODE IN THE MIDEAST and try to grab the oil and the gold to save herself. As a result, America and Russia would be going to war and destroying each other, which would work out just like we have seen it before.

THEN CHINA, EUROPE AND THE POOR NATIONS OF THE THIRD WORLD COULD TAKE OVER: THAT'S THE HAPPY ENDING! So praise the Lord! Boy I tell you, we are without excuse! The Lord has warned us so much!

Copyright (c) 1998 by The Family

Dear Forum readers!
One of the most amazing things about this dream is that it dates back to January 1974! The author is Father David, an American by birth - he passed on in 1995.

Some things take time and there just wasn't any alternative to the US dollar back then. Now a lot of things have happened in the mean time and it looks like the stage is set for the showdown. We will soon know! I nominate this one to the hall of fame!

Please note one important piece of practical advice given: "But boy, our friends better get their money into gold or they're going to be sorry!"

Hill Billy Mitchell

(05/25/2000; 23:21:21 MDT - Msg ID: 31317)

beesting (5/25/2000; 22:37:54MT - usagold.com msg#: 31312)

Sir Beesting

Re: your rule # 1 as follows:

Rule # 1 NEVER,NEVER spend more than you make on a monthly basis(except for real estate purchases)

This is also my Rule # 1 with one difference. I do not add the parenthetical exception. I am not sure I even understand the exception. Do you mean that if you cannot earn $100,000 in one month that you would not buy a new over-the-road tractor to make a living? Do you lease the tractor month-to-month in order to make a living and still abide by your self-imposed rule # 1? Or do you consider the purchase of an over-the-road tractor to be an investment rather than "spending"?

My self-imposed rule works like this. I never spend more than I earn on a month to month basis unless the expenditure is funded with prior savings, ie. I would not buy real estate with funds obtained from a loan; however I would buy real estate or a vehicle or income producing assets in excess of one month's earnings if and only if I had the cash to do so from prior savings. I know that this would seem be a bit too extreme but it works for me. I also have religious reasons for not borrowing which I would not pretend to be absolute for anyone but myself.

hbm

SHIFTY

(05/25/2000; 23:22:26 MDT - Msg ID: 31318)

The Stranger

The Stranger: I also appreciate your friendship and I agree about this not being the time or place for such topics. Please forgive me , just having a bad day.

$hifty

SHIFTY

(05/25/2000; 23:36:40 MDT - Msg ID: 31319)

ax

You may be spelling your name or password wrong. I have done that before.

ax

(05/25/2000; 23:41:33 MDT - Msg ID: 31320)

Shifty

Yes, but I have done it over and over like about 25 times.

aunuggets

(05/26/2000; 00:00:15 MDT - Msg ID: 31321)

Leland #31283

In your referenced Paul Hein text, certain thoughts came to mind that I just wanted to share briefly.

Although it is obviously true that there is no particular backing or convertability for U.S. greenbacks to gold since 1933 or to silver since 1968, this applies only to "government" convertability.

Yes, the dollar was "backed" (convertable) to silver in 1950, but is it not "convertable" today also in the free marketplace ? You still can "buy" or trade fiat for silver at the "going market price" on any given day (for now anyway - GRIN).

And while $10,000 in 1950 "cash" may well be equivalent to some $75,000 - $80,000 in present day value, looking at the current depressed metals markets from this standpoint quickly uncovers one of the great advantages of these "down" markets.

Where else could you possibly find $1,000 in 1950 "value" for a mere $3,600 (+-) in present day pure fiat ? Remember, here we are talking 260% "inflation" since 1950 rather than Mr. Hein's stated 650-700 percent.

What I am talking about are $1,000 face value bags of "junk silver" coins. Something worth considering.

Or what about 1965 to 1969 40% silver halves ? Talk about limited downside risk. Currently in the neighborhood of 75 cents apiece (bag quantities), your downside is what, 33 percent even if you had to spend them at face value ?

Like most here, I prefer to keep the majority of my holdings in AU, but silver coins are a nice fallback.

Just a couple of thoughts.....View Yesterday's Discussion.

Leland

(05/26/2000; 00:31:41 MDT - Msg ID: 31322)

aunuggets

"Like most here, I prefer to keep the majority of my holdings in AU, but silver coins are a nice
fallback."

May I add...just a wee item to your excellent posting...
For only a few dollars, a US $1.00 bill of the silver
certificate variety can be purchased from almost any
coin shop.

The one that I have was saved in 1957. It has been a
wonderful tool for teaching my children the difference
between redeamable and irredeamable currency. When
children read what the U.S. Treasury said in 1957 and
compare to what is printed on today's paper currency,
VIOLA! What a valuable piece of paper that old dollar
bill has been.

totalamateur

(05/26/2000; 00:42:42 MDT - Msg ID: 31323)

"The Dying Dollar!"

"THE DYING DOLLAR!"

THE DREAM I HAD LAST NIGHT WAS JUST ABOUT AS VIVID AS THE ONE I HAD IN LONDON, "THE MONEY EXPLODES!", when we walked in and they wanted 3 Pounds for a can of soup, and then they wouldn't sell us a roundtrip railroad ticket because prices were going up so fast!

I WAS DRIVING THIS CAR AND LITTLE TRAILER SOMEWHERE IN THE UNITED STATES. It was sort of hilly and backwoods like Southern or Midwestern U.S., and really kind of a typical little small conservative town.

THE LICENSE ON MY CAR AND TRAILER HAD EXPIRED, and I was trying to drive as quick as I could to the license bureau.

WHEN I GOT TO THE LICENSE BUREAU IT WAS JUST ONE WINDOW IN THIS LOCAL STORE where they did a little business on the side selling licenses, but it was closed!

THE SIGN SAID IT WAS ONLY OPEN FROM FIVE TO SIX EVERYDAY, one hour a day! The storekeeper was a typical conservative small-town American. I said,

"WHAT DO YOU MEAN, YOU'RE ONLY OPEN ONE HOUR A DAY!" He said, "I don't even hardly have enough license business for that! Why should I stay open more?" "Well," I said,

"I'M DESPERATE! I'VE GOTTA HAVE NEW LICENSES! This is an emergency! You're here, what if the window's shut, can't you please sell me some licenses?" He said.

"WELL, I CAN, BUT I'M SORRY WE DON'T ACCEPT DOLLARS ANYMORE. You'll have to pay me in Swiss Francs!"--And boy, was I relieved! I said, "Oh, I'll be glad to pay you in Swiss Francs!"--And that was the dream!

SMALL-TOWN AMERICA SAID, "WE DON'T ACCEPT DOLLARS ANYMORE, YOU'LL HAVE TO PAY ME IN SWISS FRANCS!" He said it almost like he didn't expect me to have it, like he thought that was another stall he'd give me so that he wouldn't have to worry about selling me the licenses out of hours.--Even that's significant! It was after hours, the window was closed, past time! In other words, brother, it's getting late, later than you think!

I WAS AN AVERAGE AMERICAN TRYING TO GET A LICENSE TO OPERATE, which is typical of the United States where you need a license to do almost everything but spit! It's typical of almost total complete governmental control, like n the dream about "The Emergency" where everything had to have permission. (No. 160A.)

"BUT YOU'VE GOT TO PAY IN SWISS FRANCS!" In other words, the U.S. currency wasn't any good!

THE DAY'S GOING TO COME WHEN IN THE U.S. ITSELF AMONGST U.S. CITIZENS, THE DOLLAR IS NO LONGER GOING TO BE WORTH ANYTHING! That is exactly what happened in Germany after losing both World Wars: Their local currency was no longer worth anything. It also happened in the U.S. South in 1865 and in China in 1895.

IT'S ALMOST EXACTLY THE SAME THING AS THAT DREAM I HAD ABOUT BRITAIN AND THE 3 POUNDS CAN OF SOUP: That showed the skyrocketing prices! But at least in Britain in that other dream, 3 pounds was still worth a can of soup!

BUT HERE EVEN THE GOVERNMENT WOULDN'T ACCEPT ITS OWN MONEY, knowing it was worthless! You had to pay in something else!

COUNTRIES HAVE GOTTEN TO THE CONDITION AFTER WARS WHERE THEIR MONEY WAS WORTH NOTHING, so they paid in goods, paid n eggs or chicken or farm products. They went back to bartering just like in the old days. They gave something for something, because nobody would accept nothing for something anymore--like paper dollars!

IN OTHER WORDS THE U.S. IS GOING TO COME TO EXACTLY THE SAME CONDITION THAT GERMANY DID AFTER WWI:--Money's worth nothing, because the government has nothing to back it up with anymore!

MOST AMERICANS DON'T UNDERSTAND A THING ABOUT ECONOMICS or trade or the monetary system. The only thing they understand is how much they're paying for their groceries and whether their favorite TV show is on or not!

THE ONLY THING THAT WOULD EVER STIR UP THE AMERICANS TO REALLY HOWL is if their favorite TV show got pre-empted, or if the government should clamp down on their gasoline!

THEY COULDN'T CARE LESS ABOUT THE DECLINE OF THE DOLLAR as long as it doesn't make much difference with what they're having to pay for their groceries.

THEY DON'T DARE FACE IT! They would be terrified, it would cause an absolute panic!

THEY DON'T EVEN CARE IF THEY'RE GETTING LESS, AT LEAST THEY'RE NOT HAVING TO PAY ANY MORE. Business surveys have discovered that the customers are willing to take less for their money as long as it's in the same package and it looks the same size, even if there's less in it and they know it!

JUST THINK, GOLD WENT UP TO $215! They're always giving the same old excuses, "Well, gold always goes up when the people are a little worried. It'll settle down again, blah blah blah!"

DO YOU KNOW WHAT THE SWISS FRANC WAS A YEAR AGO, July, 1977? 2.44 Swiss Francs per Dollar! Now it's down to 1.60! That's over a 34% drop, over one-third down in just one year! Thank God we switched to Francs two years ago!

I'VE PRETTY FAITHFULLY WARNED THE WORLD IN MY LETTERS. I've talked about the collapse of the Dollar and the money and warned them. (See Letters 103, 243, 285, 294 and 310.)

I WROTE THAT FIRST WARNING ON THE DOLLAR NEARLY TEN YEARS AGO! Do you know what the Dollar was worth then?--4.32 Swiss Francs! In other words it's dropped 63% in just the last ten years!--Nearly two-thirds!

I WROTE ANOTHER WARNING IN LONDON IN 1974 in which I told you about my 50-year-old $20 gold piece that was then worth $200, ten times as much! That's 90% down in 50 years! Gasoline, bread, milk, normal ordinary daily items were each of them only 10� when I was ten years old! When we left the U.S. 40 years later we were paying almost exactly 5 times that amount for each of those items!

IT MEANS THAT THE DOLLAR DECREASED IN VALUE 80% IN 40 YEARS! In other words, it lost 20% every ten years, then 63% in the last ten!--And now 34% in one year!

THAT'S ACTUALLY A 96% DEPRECIATION IN FIFTY YEARS!--Worth only 4% of what it was in 1928! It's just absolutely phenomenal, and it is catastrophic! The United States is living on in a dream, not facing facts!

IT'S LIKE THE GUY WHO HAS HAD SO MUCH MOMENTUM ON THE ROLLER COASTER: He comes racing down and then he goes whsst up and off through midair still under the momentum of his previous power.

HE DOESN'T EVEN REALISE THAT THERE'S NOTHING LEFT UNDER HIM until after a while the momentum ceases and the bottom drops out and he crashes to the ground! That's what's going to happen, and the fast drop's started now!

I DON'T THINK THE WORLD IS GOING TO GAIN THAT MUCH CONFIDENCE IN THE DOLLAR AGAIN. (ed's comment: it definitely looks like the author was wrong here, but then greed knows no limits. And I would not call it real confidence anyway, people are just going along hoping to make a quick and easy buck) They've lost faith and they're fed up!--The U.S. does nothing!

WHAT AMAZES ME IS THAT THE BIG MONEY INTERESTS HAVE BEEN SO DUMB! Look at the bind the Arabs are caught in right now:

NEARLY FIVE YEARS AGO I TOLD THE ARABS, "DON'T TAKE ANOTHER DOLLAR FOR YOUR OIL! Refuse to accept anything but gold from now on." They'd be billions richer now if they'd taken my advice, and the West would be broke! (ed's note: From what I have gathered by now; they did go for gold and the west especially the US is worse than broke.)

BUT THEY'VE GOT TOO MUCH MONEY INVESTED IN THE U.S., and they've got too much of their own money in Dollars! So they are literally supporting the Dollar just to save themselves, when they're actually losing money!--And the Western countries are the same.

OF COURSE, NOW THEY'RE CONSIDERING A CHANGE and this is one thing that's contributing to the Dollar's fall, that Dollars might not buy oil anymore! If that happens, even if they go to the European basket, it would virtually bring about the financial bankruptcy and collapse of the U.S. and a lot of Dollared Arabs.

THE EEC'S TRYING TO CREATE A EUROPEAN BASKET OF CURRENCIES and Helmut Schmidt of Germany is taking the lead, and France is completely concurring.

ALL THE COUNTRIES PUT IN THE POT TOGETHER A CERTAIN AMOUNT OF RESERVES to back their currency to make it more stable, because the Dollar is not stable. They're going to have it only one-third Dollars, one-third European currencies and one-third gold. (Ed's note: A pretty good guess back in 1978!)

THIS OF COURSE WOULD CREATE TREMENDOUS WORLD CONFIDENCE IN EUROPEAN CURRENCY because it's backed by something that's worth something. Whereas the U.S. Dollar is getting worth less all the time and is not backed by anything that's worth a thing! No-thing! Think of it!--Just paper!

THE U.S. ECONOMY REALLY ISN'T CRASHING, IT'S ALREADY CRASHED! The only thing is that people just don't know it and won't believe it and are going ahead in blind faith in the Dollar!--Their crumbling god!

ONE OF THE FOREMOST SIGNS OF THE DEMISE OF ALL THE FAMOUS WORLD EMPIRES WAS WHEN THEY BEGAN TO ADULTERATE THEIR METAL COINAGE: They began to reduce the actual valuable metal in the coins to much below what it said on the coin. In other words, the governments were literally cheating the people. It was almost always a sign that they were on the way down, and out! I am going to tell you something now that's going to be hard for you to believe!:

IN 1965 AND 1970 THEY ELIMINATED ALL OF THE SILVER FROM "SILVER" COINAGE IN THE U.S.! There's no more silver in the "Silver" coins at all! Guess what the actual metal value of a 25-cent piece is now?--One cent!

GUESS HOW MUCH ACTUAL METAL VALUE THERE IS IN A "SILVER" DOLLAR?--FOUR CENTS! I presume the only reason they even make silver dollars anymore is for the sake of Las Vegas who uses them in their gambling machines!

THEY HAVE CHEATED THE PEOPLE BY GIVING THEM COINS THAT ARE WORTH ONLY A BARE FRACTION OF WHAT THEY'RE SUPPOSED TO BE WORTH! They've not only cheated the people on the paper money, which is really worth absolutely nothing, but also on the hard currency, the minted metal money!

THE U.S. GOVERNMENT IS LITERALLY CHEATING ITS PEOPLE! Well, they might be able to fool their own people and get their own people to keep on trusting the Dollar, but who else?

THEY DIDN'T SAVE THEIR GOLD. They didn't hedge with anything that was really worth anything, like commodities etc.

THEY PUT ALL THEIR FAITH IN THAT PAPER DOLLAR, AND IT IS 96% GONE! Over a 50-year period it has dropped to only 40% of its 1928 value!

THIS PAST YEAR ALONE THE DOLLAR HAS LOST 34%--THAT I WOULD CALL A CRASH!--Just like the British stock market crash in 1974. They never did call it a crash, but in one year they lost over 300 points out of 400! That's what I'd call a crash!

--AND IN 1974 THE BRITISH POUND LOST A DOLLAR IN VALUE! It went down from 2.65 to 1.69, almost a 36% loss in only one year!

IT CRASHED RIGHT AFTER THEY SET IT AFLOAT. They had had an official set exchange rate with the Dollar. But the Dollar was beginning to get weak, so they decided the best thing to do was to break loose from the Dollar. Well, they lost for awhile, but look where they are now, whereas the Dollar is still going down!

THE DOLLAR'S GOING DOWN AND THE BRITISH POUND IS GOING UP! So in the long run they actually played it safe by cutting themselves loose from the Dollar. In doing that they almost as good as did what we told them to do in "America the Whore."--They broke loose and put their money on the open market.

THE AVERAGE AMERICAN IS DUMB ABOUT ANYTHING TO DO WITH ECONOMICS. They don't understand it. They don't understand a decrease in the value of the Dollar, except all they can see is higher prices. It doesn't even seem to sink through that their Dollar's worth less--and soon worthless!

THEY'RE NOT EVEN BLAMING IT ON THE DOLLAR! They're blaming it on those guys that charge the higher prices and a "disorderly market"!--Ha! It's not the market, it's those disorderly Americans!

THIS IS VIRTUALLY A COLLAPSE OF THE DOLLAR, over one-third down in one year! Now the Americans themselves will not really begin to feel that except as their foreign trade begins to affect their purchase prices.

THEY'RE GOING TO START GRIPING ABOUT THE PRICES OF CHEAP JAPANESE PRODUCTS GOING UP now, and German tape recorders and cameras going up, and Swiss precision instruments, clocks and watches which were underpriced too long. Now they're going up to what they're really worth!

THE DAMNED DOLLAR WAS WAY OVER-VALUED AND WAS ROBBING THE REST OF THE WORLD, has been now for years! At last the Dollar is getting its due, thank God! It's getting what it deserves. It's being devaluated to what it's really worth, nearly nothing!

THE U.S. WAS BUYING ALL THESE PRODUCTS FROM THE REST OF THE WORLD DIRT CHEAP and living in luxury and high style on the low wages and low standards of living of the poor of the world. Now the rest of the world is rebelling against working at such low wages and getting those low prices for their goods.

THEY ARE RAISING THE PRICES OF THEIR GOODS AND RAISING THEIR WAGES and raising their standard of living to what it's worth. So now the Japanese and the Germans and the Swiss are beginning to get paid what their stuff is really worth in Dollars.

THE DOLLAR IS LITERALLY DECLINING TO WHAT YOU MIGHT CALL ITS REAL VALUE. In fact it's still far above what it's really worth. If the showdown ever comes, which it's bound to sooner or later, it's worth no more than the paper it's printed on!--And that's not worth much!--Just fancy paper and fancy ink! They'll be framing it one of these days like they did the old German 50-billion-mark notes, worth only a few cents, and the old Chinese yen and Southern Confederacy bills!

THE AMERICANS HAVE NEVER BEEN THROUGH A RUNAWAY INFLATION like the Europeans had in the '20s and '30s. They had a stock market crash, but that was a deflation. They've never suffered a runaway inflation like what's happening now. (Ed's comment: They staved it off, but it's picking up speed again�.)

BY LAW MOST OF THE COUNTRIES OF THE WORLD, PARTICULARLY THE U.S., HAVE GUARANTEED INFLATION. The depression scared them almost out of their pants and they determined to never allow the stock market to crash again, never allow prices to crash like that again, and the labor unions have determined never to allow wages to crash again.--So:

THEY'VE GOT ALL KINDS OF LAWS TO GUARANTEE PRICE SUPPORT, STOCK SUPPORT, AND WAGE SUPPORT. And these very laws absolutely guarantee inflation, and no other way but for it to get worse!

IT'S GOING TO GET WORSE because it's already about 10% a year which is terrible! It's been 4, 5 and 6% but now 10%

DO YOU KNOW WHAT A 10% INFLATION RATE MEANS? It means approximately that from the beginning of the year to the end of the year your Dollar buys literally 10% less. So the Dollar would automatically lose 10% of its value every year, 10% just by inflation alone!

I'M NO ECONOMIST, I'M JUST A SIMPLE GUY THAT LOOKS AT THE SIMPLE FACTS THE WAY THEY ARE, not at all these complicated explanations. And frankly what I think has happened, and a lot of economists think so too, is this:

EVEN THOUGH THE DOLLAR HAS DEVALUATED AT LEAST 2% A YEAR over the first 40 years, it didn't devaluate as much as it should have. It kept on coasting on its own momentum for several years after it had really lost its value because of the skyrocketing inflation.

BUT NOW THE REST OF THE WORLD FINALLY HAS AWAKENED! They hung on a long time hoping it would come back. But now they're beginning to see it's not going to come back, it's not going to make it. So therefore they're dumping their Dollars down to what they were really worth a long time ago.

THEY SHOULD HAVE DONE IT TEN YEARS AGO WHEN I FIRST WARNED THEM. It would have tapered off more gradually and they might have been able to absorb it easier. But they kept on going out in space like that, then all of a sudden they looked down underneath and there wasn't anything there!--So now--CRASH!

SO IN OTHER WORDS IT'S JUST CATCHING UP WITH WHERE IT SHOULD HAVE GONE over the past ten years, down to where it really belongs. In fact, God only knows where it belongs! That Green Paper Pig (Ed's note: symbolizing the greenback; the dollar) was as flat as a pancake after it exploded, in fact it disappeared! (Ed's not: another article called "The Green Paper Pig!" I'll post it later, DV)

EVEN IF THERE WASN'T ANOTHER WORLD WAR, THE WORLD IS HEADED FOR ECONOMIC CATASTROPHE, disaster, crash! When I was a kid there wasn't such close communication and transportation, and if some little thing happened in one part of the world it didn't affect the rest of the world. In fact most of them never even heard about it, and if they had, they wouldn't have cared less!

BUT NOW EVERYTHING IS SO CLOSELY OVERLAPPED AND INTER-RELATED BY INSTANT COMMUNICATION AND FAST TRANSPORTATION that not one little thing can happen in any one little rinky-dink country without making it earth-shaking news! If any little tiny thing happens anywhere, it shakes the whole world and scares them all to death that either the U.S. or Russia or somebody's going to get into it and it's going to upset the whole applecart--which it's going to do one of these days!

CAN YOU IMAGINE WHAT WOULD HAPPEN IF THE ARABS WOULD SUDDENLY DEMAND GOLD INSTEAD OF DOLLARS?--Or Swiss Francs or Deutsch Marks or something else?--Or even if they would just enter the basket and insist on at least one-third payment in gold, one-third in European currency, and only one third in Dollars?--WOW! CRASH!

(My comment: It would be interesting if someone in the know could reveal what the oil-producers have done with their money; what exactly is their asset allocation, what percentage is in dollar-based paper assets, how much is in paper gold and how much in physical gold? - If they for some reason have bought paper gold, by somewhat na�ve souls believed to be as good as gold, I can only guess what will happen when they want to take physical delivery and find that the settlement they are offered will be in soon worthless paper dollars. They will be very upset!)

CAN YOU IMAGINE WHAT A SCRAMBLE THE U.S. WOULD HAVE TRYING TO RAKE UP ENOUGH GOLD and European currency for oil! Ah, the tables would really be turned! This is what America has been putting the rest of the world through for years! (Ed's comment: Did they really, as some speculate, scrape the floor and empty Fort Knox etc. and sell the gold?! And are they planning to steal it back?)

THE REST OF THE WORLD HAVE BEEN BREAKING THEIR BACKS AND SCRAMBLING LIKE MAD and scraping the bottom of the barrel trying to earn enough Dollars to pay for American goods.

NOW THE TABLES CAN BE TURNED!: Americans scrambling for gold and European currencies! It could bring about the downfall of the U.S., God's judgments on selfish America at last!

EUROPE AND THE ARABS MAY NOT ACCEPT ANYTHING IN PAYMENT FOR THEIR OIL AND THEIR GOODS BUT THEIR OWN CURRENCY, OR GOLD! The U.S. is screaming about even the vaguest rumour or hint or talk about such a thing!: "It would mean our collapse!"

YET THAT'S EXACTLY WHAT THE U.S. HAS BEEN DOING TO THE POOR OF THE WORLD FOR YEARS, bringing about the collapse of a lot of other governments--like Allende's. They put the financial squeeze on Allende and that is what drove him out of office. It wasn't just the final military coup--it was U.S. Dollars!

IT WAS THE U.S. FINANCIAL SQUEEZE THAT SENT CHILE INTO BANKRUPTCY and skyrocketing inflation, 300% a year, and forced a military coup! The people were ready for anything that would save them from the Dollar emergency that the U.S. itself had created!

THEN OF COURSE THE U.S. "SAVED" THEM BY BACKING A MILITARY COUP!--JUST LIKE THE WAY THE DEVIL "HEALS" SOME PEOPLE!: He afflicts them with his own diseases, and then he "heals" them through some fake religion so they'll give that phoney religion the glory and the credit!

AFTER ALL, HIS DEMONS CAUSED THE DISEASE, SO HE CAN CALL THEM OFF, then they're "healed"! Just like the U.S.: They sick their CIA dogs on any little country that's getting too independent or going Socialist, then when it collapses, they volunteer to reach in and "save" it through Dollar diplomacy!

THE U.S. HAS BROUGHT ABOUT THE DOWNFALL OF INNUMERABLE LATIN AMERICAN REGIMES! Then they step in and supposedly "save" the country through their choice of politicians and militarists, and in most cases it's those who were the most cases it's those who were the most anti-Socialist, anti-liberal, and often anti-human rights!

THE U.S. ITSELF IS RESPONSIBLE FOR BRINGING INTO POWER NEARLY EVERY ONE OF THE GOVERNMENTS IN LATIN AMERICA THAT THE U.S. IS NOW CRITICISNG for their attitude on human rights! And now the U.S. is complaining because they use that power to persecute their own people! It's oppression "Made in U.S.A."!

THE U.S. HAS JUST GONE CRAZY BECAUSE THEY'VE REJECTED THE TRUTH! So God has sent them strong delusion that they, might believe a lie that they might be damned! (2Thes.2:10-11.)

SO THE U.S. IS IN THE WORST MESS OF ALL!--Nearing its end! It would hardly take the slightest thing to set it off, not even a war!

I AM SURE IT'S GOING TO GET WORSE, and at the rate things are going right now it's not going to take long!

EVERY CRASH IS LIKE A SNOWBALL ROLLING DOWNHILL!: It gets bigger and worse and faster the closer it gets to the bottom, gaining momentum as it descends!

THE DOLLAR'S BEEN GRADUALLY DECLINING FOR YEARS and now it's really rolling downhill!

EUROPE IS BEGINNING TO SAVE ITSELF A LITTLE TOO LATE, so will suffer pretty badly. They're reaping what they sowed.

THEY WORSHIPPED THE DOLLAR AND THEY WORSHIPPED AMERICA. They worshipped American power, arms, technique, culture, music, styles, movies, politicians and the American standard of living. The U.S. was the world's ideal, Heaven, the Promised Land, Dreamland!

THE WORLD SET THEIR EYES ON THE THINGS OF THIS EARTH WHICH AMERICA REPRESENTED. They based their economies on the American Dollar and put their faith in the American system & military power.

NOW AMERICA IS FAILING THEM ALL THE WAY AROUND! Its military power is no longer able to defe

totalamateur

(05/26/2000; 01:28:15 MDT - Msg ID: 31324)

(No Subject)

"THE DYING DOLLAR!"

THE DREAM I HAD LAST NIGHT WAS JUST ABOUT AS VIVID AS THE ONE I HAD IN LONDON, "THE MONEY EXPLODES!", when we walked in and they wanted 3 Pounds for a can of soup, and then they wouldn't sell us a roundtrip railroad ticket because prices were going up so fast!

I WAS DRIVING THIS CAR AND LITTLE TRAILER SOMEWHERE IN THE UNITED STATES. It was sort of hilly and backwoods like Southern or Midwestern U.S., and really kind of a typical little small conservative town.

THE LICENSE ON MY CAR AND TRAILER HAD EXPIRED, and I was trying to drive as quick as I could to the license bureau.

WHEN I GOT TO THE LICENSE BUREAU IT WAS JUST ONE WINDOW IN THIS LOCAL STORE where they did a little business on the side selling licenses, but it was closed!

THE SIGN SAID IT WAS ONLY OPEN FROM FIVE TO SIX EVERYDAY, one hour a day! The storekeeper was a typical conservative small-town American. I said,

"WHAT DO YOU MEAN, YOU'RE ONLY OPEN ONE HOUR A DAY!" He said, "I don't even hardly have enough license business for that! Why should I stay open more?" "Well," I said,

"I'M DESPERATE! I'VE GOTTA HAVE NEW LICENSES! This is an emergency! You're here, what if the window's shut, can't you please sell me some licenses?" He said.

"WELL, I CAN, BUT I'M SORRY WE DON'T ACCEPT DOLLARS ANYMORE. You'll have to pay me in Swiss Francs!"--And boy, was I relieved! I said, "Oh, I'll be glad to pay you in Swiss Francs!"--And that was the dream!

SMALL-TOWN AMERICA SAID, "WE DON'T ACCEPT DOLLARS ANYMORE, YOU'LL HAVE TO PAY ME IN SWISS FRANCS!" He said it almost like he didn't expect me to have it, like he thought that was another stall he'd give me so that he wouldn't have to worry about selling me the licenses out of hours.--Even that's significant! It was after hours, the window was closed, past time! In other words, brother, it's getting late, later than you think!

I WAS AN AVERAGE AMERICAN TRYING TO GET A LICENSE TO OPERATE, which is typical of the United States where you need a license to do almost everything but spit! It's typical of almost total complete governmental control, like n the dream about "The Emergency" where everything had to have permission. (No. 160A.)

"BUT YOU'VE GOT TO PAY IN SWISS FRANCS!" In other words, the U.S. currency wasn't any good!

THE DAY'S GOING TO COME WHEN IN THE U.S. ITSELF AMONGST U.S. CITIZENS, THE DOLLAR IS NO LONGER GOING TO BE WORTH ANYTHING! That is exactly what happened in Germany after losing both World Wars: Their local currency was no longer worth anything. It also happened in the U.S. South in 1865 and in China in 1895.

IT'S ALMOST EXACTLY THE SAME THING AS THAT DREAM I HAD ABOUT BRITAIN AND THE 3 POUNDS CAN OF SOUP: That showed the skyrocketing prices! But at least in Britain in that other dream, 3 pounds was still worth a can of soup!

BUT HERE EVEN THE GOVERNMENT WOULDN'T ACCEPT ITS OWN MONEY, knowing it was worthless! You had to pay in something else!

COUNTRIES HAVE GOTTEN TO THE CONDITION AFTER WARS WHERE THEIR MONEY WAS WORTH NOTHING, so they paid in goods, paid n eggs or chicken or farm products. They went back to bartering just like in the old days. They gave something for something, because nobody would accept nothing for something anymore--like paper dollars!

IN OTHER WORDS THE U.S. IS GOING TO COME TO EXACTLY THE SAME CONDITION THAT GERMANY DID AFTER WWI:--Money's worth nothing, because the government has nothing to back it up with anymore!

MOST AMERICANS DON'T UNDERSTAND A THING ABOUT ECONOMICS or trade or the monetary system. The only thing they understand is how much they're paying for their groceries and whether their favorite TV show is on or not!

THE ONLY THING THAT WOULD EVER STIR UP THE AMERICANS TO REALLY HOWL is if their favorite TV show got pre-empted, or if the government should clamp down on their gasoline!

THEY COULDN'T CARE LESS ABOUT THE DECLINE OF THE DOLLAR as long as it doesn't make much difference with what they're having to pay for their groceries.

THEY DON'T DARE FACE IT! They would be terrified, it would cause an absolute panic!

THEY DON'T EVEN CARE IF THEY'RE GETTING LESS, AT LEAST THEY'RE NOT HAVING TO PAY ANY MORE. Business surveys have discovered that the customers are willing to take less for their money as long as it's in the same package and it looks the same size, even if there's less in it and they know it!

JUST THINK, GOLD WENT UP TO $215! They're always giving the same old excuses, "Well, gold always goes up when the people are a little worried. It'll settle down again, blah blah blah!"

DO YOU KNOW WHAT THE SWISS FRANC WAS A YEAR AGO, July, 1977? 2.44 Swiss Francs per Dollar! Now it's down to 1.60! That's over a 34% drop, over one-third down in just one year! Thank God we switched to Francs two years ago!

I'VE PRETTY FAITHFULLY WARNED THE WORLD IN MY LETTERS. I've talked about the collapse of the Dollar and the money and warned them. (See Letters 103, 243, 285, 294 and 310.)

I WROTE THAT FIRST WARNING ON THE DOLLAR NEARLY TEN YEARS AGO! Do you know what the Dollar was worth then?--4.32 Swiss Francs! In other words it's dropped 63% in just the last ten years!--Nearly two-thirds!

I WROTE ANOTHER WARNING IN LONDON IN 1974 in which I told you about my 50-year-old $20 gold piece that was then worth $200, ten times as much! That's 90% down in 50 years! Gasoline, bread, milk, normal ordinary daily items were each of them only 10� when I was ten years old! When we left the U.S. 40 years later we were paying almost exactly 5 times that amount for each of those items!

IT MEANS THAT THE DOLLAR DECREASED IN VALUE 80% IN 40 YEARS! In other words, it lost 20% every ten years, then 63% in the last ten!--And now 34% in one year!

THAT'S ACTUALLY A 96% DEPRECIATION IN FIFTY YEARS!--Worth only 4% of what it was in 1928! It's just absolutely phenomenal, and it is catastrophic! The United States is living on in a dream, not facing facts!

IT'S LIKE THE GUY WHO HAS HAD SO MUCH MOMENTUM ON THE ROLLER COASTER: He comes racing down and then he goes whsst up and off through midair still under the momentum of his previous power.

HE DOESN'T EVEN REALISE THAT THERE'S NOTHING LEFT UNDER HIM until after a while the momentum ceases and the bottom drops out and he crashes to the ground! That's what's going to happen, and the fast drop's started now!

I DON'T THINK THE WORLD IS GOING TO GAIN THAT MUCH CONFIDENCE IN THE DOLLAR AGAIN. (ed's comment: it definitely looks like the author was wrong here, but then again; greed knows no limits. And I would not call it real confidence anyway, people are just going along foor the ride hoping to make a quick and easy buck, before they flee the sinking ship) They've lost faith and they're fed up!--The U.S. does nothing!

WHAT AMAZES ME IS THAT THE BIG MONEY INTERESTS HAVE BEEN SO DUMB! Look at the bind the Arabs are caught in right now:

NEARLY FIVE YEARS AGO I TOLD THE ARABS, "DON'T TAKE ANOTHER DOLLAR FOR YOUR OIL! Refuse to accept anything but gold from now on." They'd be billions richer now if they'd taken my advice, and the West would be broke! (ed's note: From what I have gathered by now; they did, at least to some extent, go for gold and the west especially the US is worse than broke.)

BUT THEY'VE GOT TOO MUCH MONEY INVESTED IN THE U.S., and they've got too much of their own money in Dollars! So they are literally supporting the Dollar just to save themselves, when they're actually losing money!--And the Western countries are the same.

OF COURSE, NOW THEY'RE CONSIDERING A CHANGE and this is one thing that's contributing to the Dollar's fall, that Dollars might not buy oil anymore! If that happens, even if they go to the European basket, it would virtually bring about the financial bankruptcy and collapse of the U.S. and a lot of Dollared Arabs.

THE EEC'S TRYING TO CREATE A EUROPEAN BASKET OF CURRENCIES and Helmut Schmidt of Germany is taking the lead, and France is completely concurring.

ALL THE COUNTRIES PUT IN THE POT TOGETHER A CERTAIN AMOUNT OF RESERVES to back their currency to make it more stable, because the Dollar is not stable. They're going to have it only one-third Dollars, one-third European currencies and one-third gold. (Ed's note: A pretty good guess back in 1978!)

THIS OF COURSE WOULD CREATE TREMENDOUS WORLD CONFIDENCE IN EUROPEAN CURRENCY because it's backed by something that's worth something. Whereas the U.S. Dollar is getting worth less all the time and is not backed by anything that's worth a thing! No-thing! Think of it!--Just paper!

THE U.S. ECONOMY REALLY ISN'T CRASHING, IT'S ALREADY CRASHED! The only thing is that people just don't know it and won't believe it and are going ahead in blind faith in the Dollar!--Their crumbling god!

ONE OF THE FOREMOST SIGNS OF THE DEMISE OF ALL THE FAMOUS WORLD EMPIRES WAS WHEN THEY BEGAN TO ADULTERATE THEIR METAL COINAGE: They began to reduce the actual valuable metal in the coins to much below what it said on the coin. In other words, the governments were literally cheating the people. It was almost always a sign that they were on the way down, and out! I am going to tell you something now that's going to be hard for you to believe!:

IN 1965 AND 1970 THEY ELIMINATED ALL OF THE SILVER FROM "SILVER" COINAGE IN THE U.S.! There's no more silver in the "Silver" coins at all! Guess what the actual metal value of a 25-cent piece is now?--One cent!

GUESS HOW MUCH ACTUAL METAL VALUE THERE IS IN A "SILVER" DOLLAR?--FOUR CENTS! I presume the only reason they even make silver dollars anymore is for the sake of Las Vegas who uses them in their gambling machines!

THEY HAVE CHEATED THE PEOPLE BY GIVING THEM COINS THAT ARE WORTH ONLY A BARE FRACTION OF WHAT THEY'RE SUPPOSED TO BE WORTH! They've not only cheated the people on the paper money, which is really worth absolutely nothing, but also on the hard currency, the minted metal money!

THE U.S. GOVERNMENT IS LITERALLY CHEATING ITS PEOPLE! Well, they might be able to fool their own people and get their own people to keep on trusting the Dollar, but who else?

THEY DIDN'T SAVE THEIR GOLD. They didn't hedge with anything that was really worth anything, like commodities etc.

THEY PUT ALL THEIR FAITH IN THAT PAPER DOLLAR, AND IT IS 96% GONE! Over a 50-year period it has dropped to only 40% of its 1928 value!

THIS PAST YEAR ALONE THE DOLLAR HAS LOST 34%--THAT I WOULD CALL A CRASH!--Just like the British stock market crash in 1974. They never did call it a crash, but in one year they lost over 300 points out of 400! That's what I'd call a crash!

--AND IN 1974 THE BRITISH POUND LOST A DOLLAR IN VALUE! It went down from 2.65 to 1.69, almost a 36% loss in only one year!

IT CRASHED RIGHT AFTER THEY SET IT AFLOAT. They had had an official set exchange rate with the Dollar. But the Dollar was beginning to get weak, so they decided the best thing to do was to break loose from the Dollar. Well, they lost for awhile, but look where they are now, whereas the Dollar is still going down!

THE DOLLAR'S GOING DOWN AND THE BRITISH POUND IS GOING UP! So in the long run they actually played it safe by cutting themselves loose from the Dollar. In doing that they almost as good as did what we told them to do in "America the Whore."--They broke loose and put their money on the open market.

THE AVERAGE AMERICAN IS DUMB ABOUT ANYTHING TO DO WITH ECONOMICS. They don't understand it. They don't understand a decrease in the value of the Dollar, except all they can see is higher prices. It doesn't even seem to sink through that their Dollar's worth less--and soon worthless!

THEY'RE NOT EVEN BLAMING IT ON THE DOLLAR! They're blaming it on those guys that charge the higher prices and a "disorderly market"!--Ha! It's not the market, it's those disorderly Americans!

THIS IS VIRTUALLY A COLLAPSE OF THE DOLLAR, over one-third down in one year! Now the Americans themselves will not really begin to feel that except as their foreign trade begins to affect their purchase prices.

THEY'RE GOING TO START GRIPING ABOUT THE PRICES OF CHEAP JAPANESE PRODUCTS GOING UP now, and German tape recorders and cameras going up, and Swiss precision instruments, clocks and watches which were underpriced too long. Now they're going up to what they're really worth!

THE DAMNED DOLLAR WAS WAY OVER-VALUED AND WAS ROBBING THE REST OF THE WORLD, has been now for years! At last the Dollar is getting its due, thank God! It's getting what it deserves. It's being devaluated to what it's really worth, nearly nothing!

THE U.S. WAS BUYING ALL THESE PRODUCTS FROM THE REST OF THE WORLD DIRT CHEAP and living in luxury and high style on the low wages and low standards of living of the poor of the world. Now the rest of the world is rebelling against working at such low wages and getting those low prices for their goods.

THEY ARE RAISING THE PRICES OF THEIR GOODS AND RAISING THEIR WAGES and raising their standard of living to what it's worth. So now the Japanese and the Germans and the Swiss are beginning to get paid what their stuff is really worth in Dollars.

THE DOLLAR IS LITERALLY DECLINING TO WHAT YOU MIGHT CALL ITS REAL VALUE. In fact it's still far above what it's really worth. If the showdown ever comes, which it's bound to sooner or later, it's worth no more than the paper it's printed on!--And that's not worth much!--Just fancy paper and fancy ink! They'll be framing it one of these days like they did the old German 50-billion-mark notes, worth only a few cents, and the old Chinese yen and Southern Confederacy bills!

THE AMERICANS HAVE NEVER BEEN THROUGH A RUNAWAY INFLATION like the Europeans had in the '20s and '30s. They had a stock market crash, but that was a deflation. They've never suffered a runaway inflation like what's happening now. (Ed's comment: They staved it off, but it's picking up speed again�.)

BY LAW MOST OF THE COUNTRIES OF THE WORLD, PARTICULARLY THE U.S., HAVE GUARANTEED INFLATION. The depression scared them almost out of their pants and they determined to never allow the stock market to crash again, never allow prices to crash like that again, and the labor unions have determined never to allow wages to crash again.--So:

THEY'VE GOT ALL KINDS OF LAWS TO GUARANTEE PRICE SUPPORT, STOCK SUPPORT, AND WAGE SUPPORT. And these very laws absolutely guarantee inflation, and no other way but for it to get worse!

IT'S GOING TO GET WORSE because it's already about 10% a year which is terrible! It's been 4, 5 and 6% but now 10%

DO YOU KNOW WHAT A 10% INFLATION RATE MEANS? It means approximately that from the beginning of the year to the end of the year your Dollar buys literally 10% less. So the Dollar would automatically lose 10% of its value every year, 10% just by inflation alone!

I'M NO ECONOMIST, I'M JUST A SIMPLE GUY THAT LOOKS AT THE SIMPLE FACTS THE WAY THEY ARE, not at all these complicated explanations. And frankly what I think has happened, and a lot of economists think so too, is this:

EVEN THOUGH THE DOLLAR HAS DEVALUATED AT LEAST 2% A YEAR over the first 40 years, it didn't devaluate as much as it should have. It kept on coasting on its own momentum for several years after it had really lost its value because of the skyrocketing inflation.

BUT NOW THE REST OF THE WORLD FINALLY HAS AWAKENED! They hung on a long time hoping it would come back. But now they're beginning to see it's not going to come back, it's not going to make it. So therefore they're dumping their Dollars down to what they were really worth a long time ago.

THEY SHOULD HAVE DONE IT TEN YEARS AGO WHEN I FIRST WARNED THEM. It would have tapered off more gradually and they might have been able to absorb it easier. But they kept on going out in space like that, then all of a sudden they looked down underneath and there wasn't anything there!--So now--CRASH!

SO IN OTHER WORDS IT'S JUST CATCHING UP WITH WHERE IT SHOULD HAVE GONE over the past ten years, down to where it really belongs. In fact, God only knows where it belongs! That Green Paper Pig (Ed's note: symbolizing the greenback; the dollar) was as flat as a pancake after it exploded, in fact it disappeared! (Ed's not: another article called "The Green Paper Pig!" I'll post it later, DV)

EVEN IF THERE WASN'T ANOTHER WORLD WAR, THE WORLD IS HEADED FOR ECONOMIC CATASTROPHE, disaster, crash! When I was a kid there wasn't such close communication and transportation, and if some little thing happened in one part of the world it didn't affect the rest of the world. In fact most of them never even heard about it, and if they had, they wouldn't have cared less!

BUT NOW EVERYTHING IS SO CLOSELY OVERLAPPED AND INTER-RELATED BY INSTANT COMMUNICATION AND FAST TRANSPORTATION that not one little thing can happen in any one little rinky-dink country without making it earth-shaking news! If any little tiny thing happens anywhere, it shakes the whole world and scares them all to death that either the U.S. or Russia or somebody's going to get into it and it's going to upset the whole applecart--which it's going to do one of these days!

CAN YOU IMAGINE WHAT WOULD HAPPEN IF THE ARABS WOULD SUDDENLY DEMAND GOLD INSTEAD OF DOLLARS?--Or Swiss Francs or Deutsch Marks or something else?--Or even if they would just enter the basket and insist on at least one-third payment in gold, one-third in European currency, and only one third in Dollars?--WOW! CRASH!

(My comment: It would be interesting if someone in the know could reveal what the oil-producers have done with their money; what exactly is their asset allocation, what percentage is in dollar-based paper assets, how much is in paper gold and how much in physical gold? - If they for some reason have bought paper gold; by somewhat na�ve souls believed to be as good as gold, I can only guess what will happen when they want to take physical delivery and find that the settlement they are offered will be in soon worthless paper dollars. They will be very upset! They will demand physical gold for any future oil deliveries plus delivery of already contracted paper gold. Then the US if they already have sold their golden shirt, something which they very likely have, will not be able to deliver the gold, the flow of oil will cease, and the US in the face of all this will �� I'll leave something to your imagination!)

CAN YOU IMAGINE WHAT A SCRAMBLE THE U.S. WOULD HAVE TRYING TO RAKE UP ENOUGH GOLD and European currency for oil! Ah, the tables would really be turned! This is what America has been putting the rest of the world through for years! (Ed's comment: Did they really, as some speculate, empty Fort Knox and sell the gold?! And are they planning to steal it back?)

THE REST OF THE WORLD HAVE BEEN BREAKING THEIR BACKS AND SCRAMBLING LIKE MAD and scraping the bottom of the barrel trying to earn enough Dollars to pay for American goods.

NOW THE TABLES CAN BE TURNED!: Americans scrambling for gold and European currencies! It could bring about the downfall of the U.S., God's judgments on selfish America at last!

EUROPE AND THE ARABS MAY NOT ACCEPT ANYTHING IN PAYMENT FOR THEIR OIL AND THEIR GOODS BUT THEIR OWN CURRENCY, OR GOLD! The U.S. is screaming about even the vaguest rumour or hint or talk about such a thing!: "It would mean our collapse!"

YET THAT'S EXACTLY WHAT THE U.S. HAS BEEN DOING TO THE POOR OF THE WORLD FOR YEARS, bringing about the collapse of a lot of other governments--like Allende's. They put the financial squeeze on Allende and that is what drove him out of office. It wasn't just the final military coup--it was U.S. Dollars!

IT WAS THE U.S. FINANCIAL SQUEEZE THAT SENT CHILE INTO BANKRUPTCY and skyrocketing inflation, 300% a year, and forced a military coup! The people were ready for anything that would save them from the Dollar emergency that the U.S. itself had created!

THEN OF COURSE THE U.S. "SAVED" THEM BY BACKING A MILITARY COUP!--JUST LIKE THE WAY THE DEVIL "HEALS" SOME PEOPLE!: He afflicts them with his own diseases, and then he "heals" them through some fake religion so they'll give that phoney religion the glory and the credit!

AFTER ALL, HIS DEMONS CAUSED THE DISEASE, SO HE CAN CALL THEM OFF, then they're "healed"! Just like the U.S.: They sick their CIA dogs on any little country that's getting too independent or going Socialist, then when it collapses, they volunteer to reach in and "save" it through Dollar diplomacy!

THE U.S. HAS BROUGHT ABOUT THE DOWNFALL OF INNUMERABLE LATIN AMERICAN REGIMES! Then they step in and supposedly "save" the country through their choice of politicians and militarists, and in most cases it's those who were the most cases it's those who were the most anti-Socialist, anti-liberal, and often anti-human rights!

THE U.S. ITSELF IS RESPONSIBLE FOR BRINGING INTO POWER NEARLY EVERY ONE OF THE GOVERNMENTS IN LATIN AMERICA THAT THE U.S. IS NOW CRITICISNG for their attitude on human rights! And now the U.S. is complaining because they use that power to persecute their own people! It's oppression "Made in U.S.A."!

THE U.S. HAS JUST GONE CRAZY BECAUSE THEY'VE REJECTED THE TRUTH! So God has sent them strong delusion that they, might believe a lie that they might be damned! (2Thes.2:10-11.)

SO THE U.S. IS IN THE WORST MESS OF ALL!--Nearing its end! It would hardly take the slightest thing to set it off, not even a war!

I AM SURE IT'S GOING TO GET WORSE, and at the rate things are going right now it's not going to take long!

EVERY CRASH IS LIKE A SNOWBALL ROLLING DOWNHILL!: It gets bigger and worse and faster the closer it gets to the bottom, gaining momentum as it descends!

THE DOLLAR'S BEEN GRADUALLY DECLINING FOR YEARS and now it's really rolling downhill!

EUROPE IS BEGINNING TO SAVE ITSELF A LITTLE TOO LATE, so will suffer pretty badly. They're reaping what they sowed.

THEY WORSHIPPED THE DOLLAR AND THEY WORSHIPPED AMERICA. They worshipped American power, arms, technique, culture, music, styles, movies, politicians and the Ameri

totalamateur

(05/26/2000; 01:32:30 MDT - Msg ID: 31325)

Last part of "The Dying Dollar!"

part2:

THEY WORSHIPPED THE DOLLAR AND THEY WORSHIPPED AMERICA. They worshipped American power, arms, technique, culture, music, styles, movies, politicians and the American standard of living. The U.S. was the world's ideal, Heaven, the Promised Land, Dreamland!


THE WORLD SET THEIR EYES ON THE THINGS OF THIS EARTH WHICH AMERICA REPRESENTED. They based their economies on the American Dollar and put their faith in the American system & military power.

NOW AMERICA IS FAILING THEM ALL THE WAY AROUND! Its military power is no longer able to defend its worshippers, so Russia's taking over the world! U.S. politics are corrupt, its Dollar crumbling and its economy on a crash course to destruction!

RIGHT NOW GOD'S BEEN MERCIFUL AND IT'S GONE DOWNHILL SLOWLY, but gaining momentum as it goes. But when it hits bottom it's going to crash!

SO THE DAY IS COMING WHEN EVEN YOUR DOLLARS AREN'T GOING TO BE WORTH MUCH!--In fact it's already here!: --They're only worth 4% of 50 years ago! But from this dream it sounds like Swiss Francs are still going to be worth something for awhile!

SOON AMERICA WILL WAKE UP TO THE FACT THAT ITS DOLLARS AREN'T WORTH ANYTHING ANYMORE! Even U.S. shops will demand Francs! That dream was so clear!

THE MORAL IS that in order to stay operational in the near future, your money better be in Francs or gold or something better than Dollars!

THIS DREAM IS ANOTHER WARNING that if you haven't paid any attention to our previous warnings to get out of Dollars and go to something else, even in the U.S., you'd better do it now!--Amen?--God help us!--And He will!


Copyright (c) 1998 by The Family

The above was written by Father David August 3, 1978

Leland

(05/26/2000; 01:49:25 MDT - Msg ID: 31326)

From Flambeur, my Most Respected Poster at Gold-Eagle

"Kaplan's recipe for a gold bear
(Flambeur)
May 26, 01:47

KAPLAN'S CORNER: QUESTION (from Mr. Scott Griff): What
if anything would get you to be bearish on gold? ANSWER:
If all of the following occurred simultaneously, I would
become very bearish on gold:
1) Louis Rukeyser proclaiming that gold was the best of
all possible investments;
2) William O'Neill of Merrill Lynch and Peter Ward of
Lehman Brothers agreeing with him;
3)very high call buying and almost no put buying on gold
and gold mining shares;
4) a cover story extolling the virtues of owning gold in
Time magazine (remember Jeff Bezos and Amazon.com in
December 1999);
5) the XAU staying flat as gold rallied strongly on
consecutive trading days;
6) the CRB index of commodities topping out at a
multi-year high after a major rally;
7) the U.S. dollar bottoming after a collapse;
8) traders' commitments showing commercials heavily net
short COMEX gold futures, and speculators almost
unanimously on the long side."

-------

Black Blade

(05/26/2000; 02:18:57 MDT - Msg ID: 31327)

Cheap Prices Precipitate Surge In Silver Demand (From miningweb)

http://196.36.119.130/MGGold.nsf/Current/422567D9004530DF802568E9005260AA?OpenDocumentAn interesting and upbeat read before todays carnage ;-)


Low prices are precipitating a surge in silver demand. So much so that the deficit between fabrication demand and supply (including mine output and recycled silver) was as much as156 million ounces last year, according to "World Silver Survey 2000". Despite the bullish fundamentals, silver sagged 2 cents to $4.96 an ounce Wednesday, a level which encourages considerable consumption, maintains Robin Bhar of Standard Bank London.

Silver has performed poorly because China and other central banks unwound their monetary silver reserves, while investors still holding poor performing large stockpiles of silver, sold. Silver's twelve range of $4.88 to $5.79, contrasts with the $50 all time peak in 1980 when Texan tycoon, Bunker Hunt attempted to corner the market. In short, silver is seriously cheap. The survey, which is researched by Gold Fields Mineral Services on behalf of the The Silver Institute, a producer association, finds that global silver fabrication demand rebounded by 5 percent or 41 million ounces to 877 million ounces last year. In contrast production fell for the first time in five years because of uneconomic quotes. The revival in East Asia and India, where demand rose by 11 percent and 5 percent respectively, following a weak performance in 1998, generated much of the overall increase. Fabrication demand in North America was up an impressive 8 percent to 232 million ounces, compared with 214 million in 1998. Industrial applications of silver, which accounted for over 39 percent of all fabrication demand, surged ahead in 1999 on the back of very healthy offtake in the US and Japan.

Silver usage in electrical and electronic products provided much of the rise in overall fabrication demand and absorbed 148 million ounces, benefiting from the robust economic environment, as well as the development of new products and end uses. Worldwide demand for industrial applications jumped 26 million ounces to 343 million. Photographic demand for silver, long a mainstay, continued to edge higher as well. Demand for jewellery and silverware rose 5 percent last year to 261 million ounces. This growth occurred even though India, the largest Market for such items, was virtually flat at 71 million.

Total supplies rose 6 percent to 888 million ounces. But mine production slipped marginally, while supply from recycled scrap dropped by 10%. Total official sales soared by 117 percent to 87 million ounces, and out of this total China offloaded 61 million ounces. Had China not sold, the fabrication supply deficit would have forced prices higher, GFMS believes.

By: Neil Behrmann

ORO

(05/26/2000; 02:25:59 MDT - Msg ID: 31328)

Perplexed - comments

Perplexed (5/25/2000; 23:00:58MT - usagold.com msg#: 31315)

Perplexed
Yours:
" The American currency system, sans gold, in the last 50 years, has served as the engine for the creation of more world wide wealth than at any previous time in world history. There is more prosperity, better health care, and increased longivity under the American financial system, than at any time in recorded history..."

First, general principles: The nation receiving imports and paying out paper is a beneficiary of trade. The nation exporting and accepting paper is being fleeced. The only way to preven this is through the use of commodity money to settle trade. The great benefit to the exporter is the buildup of productive capacity. The great detriment to the importer is the loss of productive capacity.

What you say is true, however, the beneficiaries of a disproportionate piece of the improvement are those in the creditor nations and those in the intermediary nation (US). Furthermore, the benefits to Europeans, Japanese and Americans were a result of importation of underpriced goods. The underpriced goods were a result of the Bretton Woods currency system and its "floating exchange rate" successor and the debt traps it spawned.

My point has been that the US dollar was "sans gold" for only the period 1976-1982, and during the period 1971-1976 many in the financial world were still hoping to see a return to a gold backed dollar. The period 1983-1999 saw a limited defacto gold standard in international trade.

Mexico's level of industrialization has increased dramatically, as had its people's productivity, yet they are living in hovels, the narrow upper class has become narrower, and the bulk of the middle class disappeared. Same in Argentina and Brazil, and practically any other nation in Latin America. Why? Because the US is the main beneficiary of their productivity. How? By mispricing of the dollar through debt traps into which their incompetent leaders threw them. Why could the leadership do so? Because the people accepted a doctrine that said that the government can take on debt in the name of its people and enforce its collection through the currency system.

" If gold was the key ingrediant to a successful civilization, then the Inca and Aztec nations should have been paradise on earth."

Here we are confusing things - the key to understanding gold's monetary function is that it is a facillitator of wealth creation and guardian of it. It assures only that the monetary system leaves the benefits of the productive person's efforts to himself. It is the lowest cost mechanism for conducting trade. It can't create a washing machine, or build a sheet steel mill. It can't negate the effects of constrictive trade policy, nor of destructive regulation; nor can it make a cleptocracy such as our own more productive than an equitable system. It only makes clear that purchasing power is stolen from us in taxes rather than hidden within inflation of the currency, and makes avoidance of theft by the official sector easier.

In the international arena, the gold system provides much greater equity since it becomes the denominator of debt and is cash. Its use does not allow plunder without an army, so that the victims are clearly aware of what is happening. No one nation has a monopoly on its creation, and no cartel can completely dominate its existing stock nor its continuing production. In the debt currency world, the reserve currency producer is priveleged to create the money that all must use for trade (through an international agreement among the governments of the main economies). The debtors must supply real goods and services in order to supply the reserve currency to settle debt. The terms of international trade make nothing but the reserve currency as a practically available for medium for taking on debt. The fact that the debtor nations can't produce the reserve currency at will increases their interest rate burden relative to the reserve issuer's. When the US cut the dollar's tie to gold, it started losing its reserve position. When our banker friends in London reattached the dollar to gold, it stopped the slide - at least till last year.

Yours:
"Do I believe in physical gold? YES! Do I own physical gold? YES! Do I believe that gold is the only viable money? NO!
Do I believe that the system is in trouble? Without doubt! The fault however belongs to the selling of our following generations into indentured servitude by our current government representatives. The Federal Reserve is nothing but an accomplice.

"It is interesting that inflation is only now being noticed by "news" media, it has been a fact of life beginning with the first "deficit budget." Inflation has been hidden in clear sight since at least 1960, and there has always been only three ways to eliminate it, Taxation, default, or inflation. We all recognize taxation to be a dirty word, we desire the benefits, but hate the cost. Inflation, only as a last resort. Default, a LAST LAST resort. "

Some may be shocked to hear this from me, but I am not a "believer in gold". I recognize the reality of there being many possible mechanisms by which one could substitute a different "wealth money" for gold. Not only a "commodity money". However, each has its limitations and gold has timely practical advantages over any other bassis for a monetary system: we know it works, we have the gold created already, and the public will tend to go along with those who insist on gold even if they don't understand it, because the folklore makes it familliar.

The selling of the future is not really possible because the debt is not collectable. For collection to be possible, the US government must retain allegiance with the creditors in the face of the impoverishment of the many that collection would cause. The easiest pollitical solution remains the inflation of the debt into oblivion. The current progression of events favors this outcome, though newly passed and pending legislation seems oriented towards a process of default and receivership for the benefit of bankers gaining control of the real assets put up for collateral against loans.

Yours:
"In 1969, in the midst of Lyndon Johnsons war on Vietnam and war on poverty,(both on credit) he made the statement that we had unleashed economic forces that no one understood. He was right. He and the bankers released the doomsday machine of compound interest, and it is now devouring the economic structure which they devised. Who stands to get bitten the hardest by the influx of new money. How about the bankers who are now stuck with long term loans which will be returned with noticeably cheaper money, and a public, reluctant to initiate new loans. This leaves credit cards and bank charges as the primary income. Couple this with a plunging stock market, much of it financed by banks and security companies, and the seeds of disaster sown over the last 40 years are now ready for harvest."

If a hyper-inflation is starting, the "crack-up-boom" will start with all maxing out on their credit cards and taking on loans to the full extent of their credit carrying capacity. Some late 70s experiences come to mind as motivators: one could buy a car and resell it after a year's use at the same, or higher price.
Contrary to your thinking about the banks, they have never had any problem during inflationary periods when interest rates were not limited by statute. The main losers are those who have deposits at the bank.

Yours:
"ORO I know what is in the works, and I am as aware as you are of the fact that there is no way out. My only difference
with you is the discounting of the wealth now present in this world, it is not going to vanish, just because the markers representing it become worthless. The past accomplishments of the system are not going to vanish, and may well serve as the basis for a new system."

I say again, the purpose of straying from gold is not, and has never been, for creating anything, just allocating what is there from those who make it to those who can take it. The control of the new wealth of the world will simply change hands. - from us who borrowed for it - to those who lent bogus money to us. The accomplishments of the system might as well vanish if we can't keep them for ourselves.

Furthermore, some of these accomplishments are not truly such. The greatest successes of America are in the origination of technology (medical and otherwise) and mostly in marketing and distribution. The latter are largely useless when the volume of imports is gone and only exoirts remain. It is a great achievement that some have reached in exporting under these conditions of currency price distortion that artificially raises the cost of exports. It is a wonderful advantage that our system provides in allowing quicker and greater creation and initiation of businesses and technologies. Part of this, however, comes from the fact that much of the need to produce daily goods has been alleviated through imports, thus freeing up the time of technical professionals to create new technologies and businesses instead of running, maintaining and improving current processes and goods.

Since TheStranger (TheStranger (5/25/2000; 21:57:03MT - usagold.com msg#: 31306) ) shares your concept here, this should serve as a partial critique of his view.

Yours:
"The United States is not the only nation in trouble with red ink, Europe is in no better shape, especially France. No one wants to rock the boat because they are well aware of the precarious positions of their respective governments."

Europe has the advantage of having little external government debt. Our government debt is held by foreigners to a great extent. The advantage will become clear as the foreign owned US government debt is dumped back into the US markets.

I don't understand the following, so please elaborate in as much detail as you are willing to provide:
"The United States Constitution must be destroyed! Gold and silver remain the money of account within this document. There was nothing designated as money when gold and siver was removed under the color of law, this is the sword hanging over the heads those who will try to prosecute the paper claim to the vast wealth of the nation. The only way that may be changed is by amendment. This is the reason for the attacks on the 2nd Amendment, if it can be discredited, then we are without lawful government."

Hipplebeck

(05/26/2000; 02:43:50 MDT - Msg ID: 31329)

To Stranger

Absolutely no offence taken.
Thank you for engaging me in conversation.
I see your point about debt in relation to the overall economy, but isn't this just because they have flooded us with money? I've been saying for the last 10 years that the only way the government can pay off the debt is to inflate their way out.
Wasn't it just a few short years ago that the debate in congress was the huge deficit and balancing the budget etc,? And now, poof, there is a surplus. Haven't they have just inflated the other side of the equation? I still believe our productivity is an illusion riding on the backs of those workers out there in the world who are working long and hard for very little. We are reaping the rewards of their work because they still don't understand the ponzi nature of the U S dollar.
If you were running a retail business. and you were able to secure very cheap products because of very cheap labor yet still charge a high price for your product, where should the productivity credit go? Here, it goes to you because it looks like you have high productivity, but in reality, who is doing the producing?

Hipplebeck

(05/26/2000; 03:02:19 MDT - Msg ID: 31330)

To whom it may concern

Oil,, the foundation of energy, agriculture and plastics is still rising
Gold is falling
If this is not a buying opportunity for gold, then my whole reality is topsy-turvey.
I get so excited sometimes because it is so obvious where this is headed. I think to myself 'This is just too easy, you must be missing something', but sometimes only a small number of people see the obvious.
Don't lose faith fellow gold bugs, big events unfold.

Aragorn III

(05/26/2000; 03:29:31 MDT - Msg ID: 31331)

An initial reply for ORO

Your post yesterday at 31228 was a nice piece of work! A treat to read, as it always is with I.V. Holtzman, too.

I have had some time to consider your thoughts from the 5/19 post #30860, but have not yet found the means to assemble my notes into a fashion that would be of any use to you...rather fractional and loosely connected they are.

With the moment I have, allow me to offer this to prepare the table for the famine that is sure to follow.

We are fortunate to have an aged father time as our honest and steady guide. Seeing that I have taken his hand--in a manner of speaking--do not let my willing rejection of any of a wide number of bygone systems (fixed gold standard, free banking, etc.) serve as an impeachment of the merits to be found with such systems. As an individual, I assure you my own opinion matters as little as your own, as humbling as it may be for two thoughtful persons to acknowledge. Rather, we would be mindful to accept that each system in turn (whether or not it earned our approval, skepticism, or scorn) could not survive the dynamic forces of an evolving civilization of mankind.

I am pleased that you have expressed respect for the wisdom of Thomas Jefferson as have I. Yet, must we not admit, if that great man's efforts could not forever stave off the evolution of banking as we have now come to know it, what likelihood is there for any better success in that regard going forward? Our task, it would seem, is not to attempt replication of "a snapshot of our past" with expectations of applicable success in our present world, but rather to draw upon past lessons in the effort to nurture a viable hybrid...something not seen before for a world that is not as before. And while it is true that there is nothing "perfect" under the Sun, there is also nothing "new" under the Sun, either. So, as with all things done by the hand of man, we must be prepared to settle for something less than textbook perfection while striving at least for "as good as it gets". Gold finds its proper role precisely there. As you envision bringing gold into its nearest state of perfection (an ancient role quite alien to the common banking mind), you will perhaps more readily see how all else must fall into place.

While those with an eye for value endure, nay, enjoy these times to acquire metal, we see many people with their gold mining shares underwater calling rightly (though positioned poorly) for an end to their gold lending and hedging. I say, "Give the people what they want!"

got gold?

And in the kindest spirit, a la Roberto Duran, I say to totalamateur, "No mas, no mas".

goldhunter

(05/26/2000; 04:21:14 MDT - Msg ID: 31332)

Good morning

http://www.usagold.comA very goog definition of (spot)the price of gold was offered by Mr. Town Crier last night...
And from spot gold (derived from futures) all coin/physical dealers adjust their gold up and down (a deivative from a derivative?) and as I mentioned before, both are linked...

They move together...

So why will futures out-perform physical in our contest?
Because when you buy futures the buy/sell spread is more efficient (smaller) than that of a physical dealer...

The two golds move up/down in step, however the more efficient market will "return more" to the holder...

FOA can use any price he chooses? What is that all about?
It's not "My RULES" It's not "HIS RULES" It's a comparison FAIR and HONEST...He sold his KRands for $270 If you buy KRands to compare the BUY with futures you paid $282 The comparison Dec futures price is $283.30.

As HE says: we'll ALL watch together.

(Happy Memorial Day everyone...be back Mon nite)

Hipplebeck

(05/26/2000; 04:33:59 MDT - Msg ID: 31333)

definition of a derivitive

A wallet so fat with counterfiet money that it still intimidates everyone into capitulation

goldhunter

(05/26/2000; 05:43:17 MDT - Msg ID: 31334)

Mis-spell

http://www.usagold.comI meant: A very "good" definition... Sorry.

Black Blade

(05/26/2000; 06:23:39 MDT - Msg ID: 31335)

Morning Wakeup Call!

Source: Bridge NewsAsia Precious Metals Review: Platinum extends losses
By Hiroyuki Fujiwara, BridgeNews

Tokyo--May 26--Spot platinum extended previous day's losses due to massive profit taking on Friday in Asia after failing to rebound early in the morning, dealers said. Gold hovered just above U.S. $270 per ounce after being supported at the key psychological level, they said. Overnight decline on NYMEX platinum market following weaker Asian market discouraged players on the Tokyo Commodity Exchange (TOCOM) on Friday, the dealers said. Spot platinum declined below the key $550 on Friday in step with weak TOCOM. Many players expect prices could be supported in the near term on expectations of stronger demand, but few tried to start buying ahead of the weekend, they said.

Black Blade: Could get ugly again today. Nikkei dropped -239.68 overnight, nipping at 16000! Hang Seng down -198.36 to 13722.7

Europe Precious Metals Review: Gold, silver stabilize at lows
By Gavin Maguire, BridgeNews

London--May 26--Gold prices centered on the U.S. $270 per ounce area through the morning after having thinly traded around there overnight in the aftermath of Thursday's fall to eight-month lows. Dealers said conditions were expected to stay flat for the rest of the day ahead of the long weekend and a short trading day in the United States. Silver was also subdued but managed to recover the $4.90 level, while platinum was virtually untraded. Sources said the thin conditions ahead of the long weekend and Memorial Day holiday are widely expected to keep levels of trade to a minimum, although one dealer said spot metal may attempt a corrective bounce back to the $272 area over the course of the day. "It was a pretty harsh move although I think everyone is quite relieved we've finally broken out of that boring range and can bring some new numbers in to play. However, I'd be depressed but not surprised if we went straight back up to $272-277 early next week," the dealer added. "There's a lot to be said for the idea of market equilibrium, and with physical demand remaining good at $270 and profit-taking and other liquidation always appearing at $280, it seems we're destined to stay between those levels at least for now," he lamented. Silver managed to scrape itself off the 11-month lows seen late Thursday and overnight to resurface in the $4.91 region. However, like gold, spot metal's movement is expected to be prohibited by the thin conditions, and continued sideways trade is foreseen for the rest of the day, sources said. Platinum and palladium traded intermittently at overnight levels and are expected to hover near current levels for the next few days.

Black Blade: That's about it. I think I'll go fishing and have a few six-packs.

Goldfly

(05/26/2000; 06:30:29 MDT - Msg ID: 31336)

That $3 spike on Kitco....

.... is a phantom.....

Black Blade

(05/26/2000; 06:36:36 MDT - Msg ID: 31337)

Gold perking up nicely!

Au is getting mighty frisky, now up $3.70 at $273.60! So much for the Morning Wakeup Call doldrums.

Christopher

(05/26/2000; 07:15:18 MDT - Msg ID: 31338)

Al Fulchino

Hey Al,
When does the plane leave???
P.S. Mr.HI-HAT(I always call a man with 40 guns MR.) If you read this then rest assured, as far as you know, we are kidding.

But seriously, if you do ever happen to misplace your treasure, I would happily offer my services to help you relocate it.

Christopher

Black Blade

(05/26/2000; 07:22:22 MDT - Msg ID: 31339)

POG Fake Out at Kitco, Again.

Never mind. The Kitco Chart and quote is a fake. Gold is comatose this morning. Bummer!

Black Blade

(05/26/2000; 07:31:37 MDT - Msg ID: 31340)

Link to more accurate price quotes.

http://www.thebulliondesk.com/This link is a fairly new one and updates every few seconds.

Henri

(05/26/2000; 08:36:13 MDT - Msg ID: 31341)

Gold fields announcement/warning

I'm just guessing but maybe they ran foul with one or more bullion banks who threatened downgrading of their credit if they didn't sell some gold to them in a forward delivery contract. As I understand it they are mostly unhedged. Amazing what leverage a bank can have on your operations with even just a toe in the door.

TownCrier

(05/26/2000; 08:55:09 MDT - Msg ID: 31342)

Memorial Day reading list at the Gilded Opinion

http://www.usagold.com/THEGILDEDOPINION.htmlPlenty of new material for you to enjoy over the long weekend, and some old classic you may want to get familiar with again...plus some others that are currently in the pipeline (or, seeing that this is a gold forum, should I say, on the conveyor belt or leach pad?)

SHIFTY

(05/26/2000; 09:08:10 MDT - Msg ID: 31343)

Henri

If your thought's about Goldfields are correct, lets hope that Chris Thompson gives that door a good swift kick.
lol
$hifty

TownCrier

(05/26/2000; 09:14:30 MDT - Msg ID: 31344)

Good news for the acquisition-minded

http://www.usagold.com/onlinestore/special.htmlYesterday's selloff on the COMEX futures market means that the real stuff can be had at even better prices (while supplies last, naturally.) Some of you may have already noticed yesterday that our on-line featured gold coin, the uncirculated German 20 mark, is now available for the nice price of $75 per each.

As you plan and stock up for your holiday weekend events, you might be more at ease knowing you've secured your own small handful of these beauties--no matter what may happen in the rest of the world's markets while the U.S. has been "gone fishin'" on Monday.

RS

(05/26/2000; 09:19:25 MDT - Msg ID: 31345)

"Golden dollars"

Decal seen on a coin-op vending machine:
"Use the GOLDEN DOLLAR here!"
(refers to the new "dollar" coin)

What a perverse joke, and an insult to those who gave their blood to the founding of this nation.

Ever get your hands on a Mexican coin?
They're always rusty, decomposing back to their natural state: iron oxide, also known as dirt.

Thank god we live in an affleunt nation where we can afford coins made of zinc. :^)


-------------------------------------------------
"There's a sucker born every minute"
-P.T. Barnum

RS

(05/26/2000; 09:22:50 MDT - Msg ID: 31346)

Correction to msg #31345

That last line should have read:

Thank God we live in an affleunt nation...

ORO

(05/26/2000; 09:24:05 MDT - Msg ID: 31347)

AragornIII - Past and principle

What I have been putting up is an analysis relating to the nature of money in its various forms. The historical points are just used for the purpose of demonstration.

What I am criticizing repeatedly is the notion that "human nature" had anything to do with the actual choices made in banking and currency development over the centuries, particularly the last two. The point is that paper money based on debt is unworkable on its own. The basic concept put forward by Aristotle, yourself and FOA for a "free gold" parallel to a pure debt money with a monetary base tied to gold through an inaccessible reserve is as unworkable as all the previous attempts at maintaining debt money.

It boils down to this: debt money is a device for the re-allocation of resources from those who made them to those who did not. Without a substantial effect on this allocation in favor of bank and government interests, there would not be any profit in running a debt money system at all. Yet, the shift of resource control from the productive to the wasteful reduces the total resources available, be they products, services or wealth.

Because of this, all debt money is destructive, a negative sum game. The fact that people have succumbed to having the wool pulled over their eyes, and let thieves take their deposits does not mean that the people at large were getting what they wanted. It also does not mean that the people do themselves any good by getting from government what they do want; "democracy is two wolves and a sheep deciding what to have for dinner", to which I will add that the next day there would only be the two wolves and they will have to eat each other since the sheep has been eaten.

Eating someone else's seed corn may satisfy your hunger now, but you will be denied the corn next season.
Taking someone else's seed corn to plant for yourself does not make more corn. It just lets you control the corn, even if it makes for a lesser amount of corn at harvest.
Government does the first, bank cartels do the second.

History has not shown that "people" want the debt money. History has shown that uneducated people who will not think for themselves and stay vigilant against thieves will have debt money imposed on them by these thieves. "If you don't watch the chicken coop you will find no chickens there".

RS

(05/26/2000; 09:33:19 MDT - Msg ID: 31348)

Mr. Oro your msg 31347.... Very well stated. My hat is off to you, sir!

YES!

beesting

(05/26/2000; 10:36:32 MDT - Msg ID: 31349)

@ Sir, Hill Billy Mitchell # 31317--Trucking and Gold.

Sir, it seems we have the exact same philosophy when it comes to self-imposed rules.
Your writings:

< basis unless the expenditure is funded with prior savings, ie. I would not buy real estate with
funds obtained from a loan; however I would buy real estate or a vehicle or income producing
assets in excess of one month's earnings if and only if I had the cash to do so from prior
savings. I know that this would seem be a bit too extreme but it works for me.>

A little off subject but here goes,IMHO, the trucking business is like any other business. The larger the expenditures the more cash backing the business needs to stay solvent. Most businesses and people use the banks easy credit terms for the cash backing, they've been TAUGHT to use (here in the USA) since childhood.They lose their own hard earned cash every time they have to pay interest. My own trucking business was backed by me(money in liquid investments).Hence I received a good education in investing, a good education in running a business, a good education in mechanical stuff.(poor education in the literary field, as you can see.)

What does this have to do with Gold?
Everything!!! If the old time solvent bankers backed all the small investors in a town on their business ventures with money lending, including interest payments, think about what the bank used as collateral of last resort. Answer...GOLD!! You can do that too!!!

If a person was able to by-pass banking almost completely(very hard to do in the USA, but possible) think of all the interest and fees that would be saved over a life time.

Here is something else to think about:
If a person makes payments on real estate loans for 25-30 years or more they usually end up paying 3 times or more what the original cost of the real estate was.
Who gets that all that money? Answer, your friendly banker, thats why after 30 years in business a bank can afford to build a new building, and your real estate is by this time in need of repairs.

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

RossL

(05/26/2000; 10:44:16 MDT - Msg ID: 31350)

The money that the people want

This is an excellent discussion today about the money that the people really wants. Credit cards are obviously very popular. My rhetorical question for today is: Would people run up excessive debts if they knew it had to be paid back in hard money?

This may come across as cynical, but I believe that most Americans who have maxed out credit cards do not ever really intend to pay them off. They intend to default because they know deep down inside that the money is not real.

PH in LA

(05/26/2000; 10:44:50 MDT - Msg ID: 31351)

Dollar/Euro exchange update

Big drop in the dollar versus the euro today: Dollar down almost 3% since this time yesterday...

mhchuck

(05/26/2000; 11:01:03 MDT - Msg ID: 31352)

ORO message # 31347

ORO, If this post isn't a Hall Of Fame post, I AIN'T never
seen one. You have condensed the issue along with the concomitant political chicanery into a compact stick of dynamite. This is one post I recommend all to read DAILY, as it is the fulcrum for all meaningful discussion related to the monetary issue. There is no gray area here....you have
stated the truth plainly for all to see! Many thanks for all your efforts.

PH in LA

(05/26/2000; 11:15:27 MDT - Msg ID: 31353)

New essay at Golden Sextant

http://www.goldensextant.com/commentary12.html#anchor341719

Anyone even thinking of accusing FOA/Another of being on the fringe, far out in left field somewhere, must address the question: Why are so many thoughtful observers and commentators reaching the same conclusions...?

"...An old saying, long forgotten, is about to take on new life: "There's no rush like a gold rush, and no run like a bank run." In these circumstances, the safest gold is not in bank storage of any variety. It rests in more imaginative places: the snake pit, the closet with the black widow spiders, or buried in the backyard near the Doberman's bone and well-within range of his leash." Reginald Howe at (www.Goldensextant.com)

Farfel

(05/26/2000; 11:16:58 MDT - Msg ID: 31354)

The Nasdaq, Gold, and Goldman Sachs

Well, I must say that, not since I was a young man playing the stock market, have I called the trends so accurately.

It may sound arrogant to say this but I cannot help but be amazed how things have changed for me. Over the past few years, I could NOT get anything right, making one bad call after another, watching my bank account disappear. A complete failure on my part to analyze the psychology of the markets properly. And now it seems I cannot get anything wrong. What a turn of events!

So what the hell: I'll keep making calls and see how long this hot streak lasts.

Today my sense is that most people do not want to go into the long weekend holding long stock positions. There could be an amazing dump later today as people prefer to relax by the pool this weekend rather than think about how badly their stocks might do. Too much tumult in the world right, too many potential negative left field events, from problems in Israel to Clinton's Arkansas disbarment.

The other factor suggesting a huge dump at day's end is the fact that another huge amount of IPO lockup stock gets "set free" on Monday. SO by Tuesday, one would expect more billions of lockup sales to overwhelm any potential market funds inflows. Those in the know probably want to start dumping Naz stocks today.

Then by late Tuesday or Wednesday, the market could have its selling climax, with the Dow dropping below 10,000 and the Naz falling below 3000, then possibly turn around and make another strong upswing. In fact the market could see good strength until June 4-5 when yet another huge amount of IPO lockup goes free, acting to trigger another strong bear phase.

With respect to gold, it seems all hell is about to break loose and the result should be an amazing price explosion. The trigger: the escalating war between major investment firms, triggered by GS and its rapidly failing relationship with Merrill and Donaldson Lufkin. First GS "stole" a huge bridge loan deal from MER and Donaldson; that was followed by MER's astounding downgrade of GS.

As I wrote previously on this forum, I really believe that there are primarily two possible ways in which gold will break free of the shackles imposed by the bullion bank cartel:

1. The cartel must fall apart in a war amongst various warring factions, with each faction seeking to screw the other. Quite possibly, the faction that fires the first shot may act solely as a proxy for OTHER investment firm heavyweights OUTSIDE the cartel (such as Merrill or Donaldson, for example)

Given that most bullion banks hold huge gold short positions, then the first bullion bank to cover its gold short WINS at the expense of the rest. Thereafter, the victor can walk across the battlefield and collect the remains of the defeated for pennies on the dollar.

2. A left field news development of such negative magnitude that it pounds the US dollar out of its bull trend, thereby causing weakness in bonds and stocks, leaving gold as the only potential stable flight to safety.

Another prediction: I would not be surprised if the developing investment bank war soon triggers a war on Barrick. Again, I cannot restate often enough how Barrick is one of the central culprits behind gold price weakness. Selling foward multi-years of future gold production, this company has been a notable factor in bulldozing the gold price into the ground and thus destroying much of the remaining industry.

Who will launch the war on Barrick? Well, this time, it might come from investment firms hostile to GS and cognizant that Barrick, as a large gold shorting client of GS, represents a notable Achilles Heel in the GS army against gold. Once one major investment firm launches an attack on Barrick, then just watch how many major gold producers join in and fire their own aggressive salvos. After all, Barrick's billions in profits have come at the expense of most of the other senior producers who, by virtue of this horrible gold bear, have become hobbled, weak medium size producers

And this time, if an investment firm heavyweight gets behind a big gold price surge, there is a real chance the surge will get some amazing legs. For example, just imagine if MER or another financial heavyweight convinces the Europeans to back the EURO with 30% gold reserves! Oh, oh!

As part of this strategy, the investment firm going to war with GS could simultaneously create long positions in various currency carry trades (like the Canadian and Aussie Dollars) and go to war with them there by forcing a short cover in those currencies.

Of course, I could have the whole hypothetical scenario assbackwards. It could be that in this upcoming war, it is GS and Barrick who make the first move to cover their physical gold shorts at the expense of the others. While talking badly about gold out of one side of their mouths to fellow members of the bullion bank cartel, Barrick and GS could move secretly and rapidly to create the conditions for a gold upspike that would bury the other members. After all, GS's sneaky tactics with respect to grabbing major bridge loan busines away from MER (as reported in the WSJ) prove that this firm is willing to do almost anything to anybody in order to maximize its profits.

Bottom line: the gold short positions are amazing powder kegs and represent the real Achilles heels to the bullion banks. It is only now a matter of time before some shrewd antagonist makes a move that forces a panic cover. There is a real financial war out there and the combatants fully well know how best to win it.

Thanks

F*

goldhunter

(05/26/2000; 11:26:45 MDT - Msg ID: 31355)

No "House of Cards" there either...

http://www.usagold.comThe Comex just reported that they have 1,850 (100)ozs. of the REAL STUFF too...

This is not posted to steal any customers....It is to inform all that Comex will probably open on Tuesday.Humor.

I do not have any evidence at this time (Netking, from yesterday)That Comex is in danger of any lock-up or closing.

The largest commercial producers and consumers of commodities use these exchanges for price discovery, price protection (hedging long & short), and speculation for profits...unfortunately, the bears have been winning lately.

ORO

(05/26/2000; 11:27:39 MDT - Msg ID: 31356)

SHIFTY your 31251

The motives have allways been:

Eliminate competition in the markets you sell into.

Lower costs by eliminating competition for your inputs (including labor).

Free markets were never something a large established business wanted. They would allways want to maintain their hold.

In the attempts to do this, governments were purchased and cartels created with government used to maintain the cartels and enforce them.

The problem:

If your costs are minimized than you will have no market into which to sell your product.

What is the value to you of a great profit if the only thing you can buy is your own product? Do you really care to micromanage everyone's life if your bunch of cartels "wins"? Would not this control cost as much as paying a fair wage and charging a market price?

So, a solution of sorts came about in dividing the world into a target market for which all compete and a supply market, where all activity for local economic benefit is diverted into the supply for the target markets.

The people of the target market were to become the unwitting beneficiaries of the enslavement of the new "colonies". In the target markets there was still a need to create the official funds that the businesses would need to earn profit in, and in the source markets these funds would have to be made impossible to get. You could not do this with gold or silver, only with cartel money - the factory scrip - that the "emerging economies" would receive from the "factory", but must use in order to buy the basics from the "factory store" and the scrip they borrowed in order to build the "national projects" - those white elephants that the World Bank has its dependents build in order for the countries to destroy themselves.

This was what Bretton Woods was all about. The victors - USA and UK + commonwealth, but mostly the US were to own the rebuilding Europe lock stock and barrel and keep Germans, Italians and French on a tight indenture of debt service. Not realizing that people create the stuff of economies - not monetary capital - the Europeans, partially helped by spending from the presence of US and UK troops, bought the bare minimum needed for survival and for building manufacturing capacity. With no regulation (since there was nearly no government at all) these factories were simply built themselves from old scraps and lots of effort. Within an astoundingly short time, Europe had a trade surplus and soon became a creditor to other countries, most notably creditors to the US and UK. By the late 50s Europe was financially independent and had growing piles of reserves. Germany was rebuilt, France was nearly 1/3 modernized, Italy close to 1/4. The dollar trap was too loose and the prey managed to get loose and was stalking the US itself. A simillar situation emerged in Japan.

First Europe, and much later Japan, used the plan for the Anglo bank cartel's version of the "Third Reich" to put themselves on an even keel with the US and to overtake the UK. For the Anglo bankers it completely backfired. Europe had to become part of the "target" markets zone and new "sourcees" had to be found. Hence the "investment" in Taiwan and other emerging nations.

The 70s saw some of emerging Asia and to some extent Latin America, become cash flow positive. It nearly destroyed the dollar completely. In order to undo this danger, Volcker pulled the rug from under the global currency markets by reducing the monetary base by 1/2. Interest spreads between the emerging market debtors and US rates expanded to incredible proportions. The Emerging economies saw their governments print growing amounts of local currency in a futile attempt to cover the dollar debt by selling more and more freshly printed currency in order to obtain the dollars coming due on the loans and for the buildup of cash dollars and dollar credit lines to purchase oil.

The "easy money" of a few years before had turned into a debt trap. Anything that could be sold for dollars was dumped on the markets. Copper, mines, real estate, bananas, people, governments...anything that was for sale. The US managed to have dictators installed nearly everywhere through the chaos arrizing from destruction of the local currencies by the dollar debt traps.

In Mexico, for example, the per capita real GDP ROSE at an average rate of 6% in 1977-1987. Real per capita personal incomes FELL at a rate of 4%. Mexicans produced 6% more every year, but lost 4% of their income every year. Their consumption fell from 90% of their production to a low level of less than 68%, yet they largely maintained a current accounts deficit because of the dollar debt created by their government distorting the value of their production. More of these examples abound, they are the rule and exceptions are few.
(data from IMF International Financial Statistics - the current "Doomsday Book")

beesting

(05/26/2000; 11:28:34 MDT - Msg ID: 31357)

A little more info on Gold Fields Ltd.

http://biz.yahoo.com/prnews/000515/gold_field_1.htmlThis news release is a little old(05/15/2000) but may be the reason Gold Fields sent yesterdays warnings to investors.


Monday May 15, 6:48 am Eastern Time

Company Press Release

SOURCE: Gold Fields Limited

Gold Fields Clinches a Deal with Ashanti

JOHANNESBURG, May 15 /PRNewswire/ -- Gold Fields Limited (Nasdaq: GOLD; JSE: GFI)
today announced that it has reached agreement to acquire a portion of Teberebie Mine's assets from
the Ghana mining company Ashanti Goldfields pursuant to Ashanti acquiring Teberebie from Pioneer
Group Inc.

The assets to be acquired by Gold Fields are located on the northern portion of the Teberebie mine
and are adjacent to Gold Fields Tarkwa operations. The assets include heap-leach pads and their
associated crushing agglomerations and stacking facilities. In addition, Gold Fields will be acquiring
approximately one-million ounces of resources suitable to carbon-in-leach processing.

The consideration for this transaction is a payment of approximately US$5 million dependent on the
timing of payments.

This transaction will enable Tarkwa Mine, a subsidiary of Gold Fields, to increase production
significantly.

Completion of this transaction is subject to certain conditions such as bank creditors, which is
expected in the next few weeks.

Gold Fields Limited is one of the largest gold producers in the world, with annual production in
excess of 4 million ounces, proven and probable reserves of 74 million ounces and resources of 152
million ounces. Gold Fields trades on the Johannesburg Stock Exchange (GFI), as well as on
Nasdaq (GOLD) and on the London, Paris, Brussels, and Swiss stock exchanges.


beesting comment:
We have learned Ashanti was financially advised by Goldman Sachs, last year.
Ashanti had major problems when the price of Gold shot up after the Washington Agreement(09/28/1999).
To me this news release shows Gold Fields Ltd. is some how involved with Ashanti.
Possibly assuming some of Ashanti's debt burden in exchange for Gold in the ground assets.
Anytime ANYONE is involved with those slick bankers, especially the ones backed by Governments, WATCH OUT!!! The playing deck is usually stacked in favor of the house(bank, lender,whoever)

Bottom line:
Could everyone involved be fighting over the Gold in the ground???....beesting.

goldhunter

(05/26/2000; 11:33:41 MDT - Msg ID: 31358)

Comex

http://www.usagold.comI meant to type 18,500 100oz lots...1,850,518 total ozs.

Please forgive my calculator.

Good Day.

Tom

(05/26/2000; 11:36:21 MDT - Msg ID: 31359)

THANKS to Farfel

Farfel I really appreciate your insight! Yep I have made some mistakes the last few years on gold and the gold stocks
after doin this for 30 years now then I found out THEY wuz
screwin with the market, same as the 1976-78, Paul Volker and the IMF, then
JEZAM I made a fortune between 78-84 and traded a BEAR market for the better part of 20 years with GOOD success cept the past 3 years.

This comin JUMP in gold will be for REAL and will DWARF
any move we have seen in the past.

Stay tuned.

Tom

TheStranger

(05/26/2000; 11:54:10 MDT - Msg ID: 31360)

Hipplebeck

Thanks for your response. It has been about a year since I went to the Treasury Department's web site, so I am a little rusty on the numbers. But, up until that time at least, the U.S. really wasn't running a genuine surplus, yet. Instead, the purchase of government debt by the Social Security system had simply begun exceeding new issuance, creating the illusion at least, that the national debt was shrinking. Now, however, we actually have the Treasury buying back government bonds. So perhaps we are finally at surplus. I don't know, but it is easy to check out at the Treasury's web site.

Anyway, I couldn't agree with you more about whether we are in a period of monetary expansion and reinflation. Clearly, we are, or rates would not be rising. But these things are very easy to exaggerate. Remember, depending on how you measure it, U.S. money growth in the past twelve months has been maybe 7 to 9 per cent. This is a lot, yes, and that is by any historical measure. But before one can assume this growth translates directly into rising prices of 7 - 9%, one has to consider the mitigating influence of such things as growth in the size of the workforce, which may be 2 or 3% per year and growth in productivity, which is very difficult to accurately measure, for a variety of reasons, but may be somewhere around 3%. These influences are what justify, even require, as a matter of fact, some growth in the monetary base.

Put all of this together, and you get the makings of maybe 5% inflation in America today, but there is certainly nothing in the figures yet which would indicate much more than that. Can the numbers change? Sure, and they will. But we will have to take them as they come to see where things are headed next.

In the meantime, if you define inflation the way the dictionary does (growth in the supply of money), then you are correct. America is inflating her way out of debt. But if you define inflation simply as a loss of buying power, then you are only a little bit right, because loss of buying power in the dollar has been nowhere near sufficient to account for the improvement in the nation's balance sheet.

I believe 5% inflation, in a world which was threatened by DEflation as recently as 15 months ago, ought to be sufficient to turn around a 20 year bear market in gold. It has, after all, been enough to turn around long-term bear markets in most other commodities. But so far, for reasons we both read about daily here at the forum, I have been wrong about that.

Now, about productivity. If you travel around the world much, you see American food products everywhere. Heinz Ketchup from Pittsburgh is ubiquitous. So is Coca Cola made with syrup from Atlanta. So are a myriad of other American consumer products from pharmaceuticals to computer software. Believe me, our productivity may be a myth to you, but it is not to our trading partners. Indeed, we are so efficient that American companies often farm out many of our least productive tasks to poorer countries. Many of our imports, in fact, are produced by factories owned elsewhere by our very own corporations. This is why, some years back, the Labor Department switched from reporting GNP (Gross National Product) in favor of reporting GDP (Gross Domestic Product).
Now, to your final question: "If you were running a retail business. and you were able to secure very cheap products because of very cheap labor yet still
charge a high price for your product, where should the productivity credit go? Here, it goes to you because it looks like you
have high productivity, but in reality, who is doing the producing?"

Hipplebeck, I suspect you were asking this question rhetorically, but it still begs an answer. If productivity were measured by the weight of that which is being produced then the poor soul in Bangladesh or Botswana takes the prize. But productivity isn't measured that way and never should be. Instead it is measured in value received, in short, how well it pays. The guy in Bangladesh walks to work, sometimes without shoes. He often has bad teeth and may not be able to read or write. But even if he had none of these problems, his application to work at, say, the Gap in Cincinnati wouldn't be approved anyway, because he can't get to where the customer is. All of these problems impose de facto limitations on the man's productivity which are not shared by even the typical American teenager. This is why the typical American teenager's labor has more value, and it accounts for why he gets the bigger paycheck.

Is this a pleasant state of affairs? No. Everyone on the planet ought to have equal access to the fruits of a productive life. I believe someday everyone will. But it will never happen so long as people are restrained in their endeavors by trade barriers that are designed to punish some to the benefit of others.

I very much regret the length of this post. I won't blame anyone who deliberately passes it over. But, if you read this far, thanks. I hope it was worth it.

Leland

(05/26/2000; 12:00:54 MDT - Msg ID: 31361)

Only a Very Few Editorial Cartoons Are Worthy of Posting...

http://www.thestar.com/thestar/editorial/opinion/20000526NEW01c_ED-CARTOON.htmlThanks to THE TORONTO STAR.

aunuggets

(05/26/2000; 12:11:17 MDT - Msg ID: 31362)

RS and others..."GOLDEN DOLLARS"

RS, your mention of the "Golden Dollars" caused me to stop and wonder if maybe this is another part of the ploy to "desensitize" the public from the real thing. Very uncanny how close the colorization of these new dollar coins are to real gold coins, although they mimic 14 karat alloy more closely (the most widely distributed form of gold ?)

Make it visible and make it abundant......but the clincher is "make it".....

lamprey_65

(05/26/2000; 12:23:48 MDT - Msg ID: 31363)

The "Golden Dollar"

Well, after the Susan B. Anthony flop, the mint needed the following:

1. A coin that was round!
2. A coin that could be distinguished from a quarter.

So, they came up with the brass-bronze dollar. I have no problem with this part...it all makes sense (except it's too bad the darn thing turns ugly so quickly once in circulation).

What I do have a problem with is the "Golden Dollar" marketing campain. They did this for popularity and it is deceptive. I do think, however, that it will have the opposite effect that many here have posted...mainly that once the populace learns it's not really gold, they'll wonder about the real thing. It's a step in the right direction.

Oh, a silver dollar coin would have been the best way to go -- but then we would have to turn the definition of a "dollar" back about 35 years!

SHIFTY

(05/26/2000; 12:38:57 MDT - Msg ID: 31364)

ORO

Oro: Please forgive me as I'm trying to get my gear together to get out in the field to do some prospecting. I will have to try to read your post again this afternoon. My comprehension is poor. I'm not a collage guy, heck I'm lucky I got through high school. I grew up in the sixties and seventies. Smile
If you can put it in a nut shell that may help. Till later this afternoon my friend. $hifty

Solomon Weaver

(05/26/2000; 12:52:54 MDT - Msg ID: 31365)

? In the past 16 years or so, gold has been one of the worst leading indicators of consumer inflation compared to other familiar candidates.

http://www.northerntrust.com/economic_research/us_reports/daily2000/daily_23may.htmlEven Gold Is Signaling Higher Inflation - Doesn't Kudlow Look At His Own Pet Indicator?

Poor old Solomon

Journeyman

(05/26/2000; 13:13:26 MDT - Msg ID: 31366)

Never too young to gamble @ALL

- ~"That's why this market is so great; the investment community keeps getting younger and younger and younger." -Maria Bartaromo, comment about a thirteen-year-old caller asking about his COSTCO stock, CNBC, 26-May-00, 2:49:45 PM

Regards, J.

Trail Guide

(05/26/2000; 13:21:36 MDT - Msg ID: 31367)

comment

Hello Goldhunter

In your corrected post #: 31355 you say:

------------ 18,500 100oz lots...1,850,518 total ozs.. of the REAL STUFF too...--------

I ask, so what? You see, we all have been talking about comex gold for a year or so. The present fact that 1,850,518 ounces is laying in their vault, but owned by others doesn't do comex any good if someone wants to call for delivery. Right? You know, I know , we all know that this "Real Stuff"
has no play to make credible my (3) or others outstanding "longs" unless the owners of that "real stuff", who are not "the comex operation", wish to sell it. TownCrier has written on and followed this for several months. This is old refuted news, my friend.

You say:

-------The largest commercial producers and consumers of commodities use these exchanges for price discovery, price protection (hedging long & short), and speculation for profits...------------

Yes, this is good, but just because one of these "players" have placed some cash down and taken the other side of my (3) or others contracts in no way secures any gold to honor delivery. Right?

In fact the entire total comex outstanding contracts mostly represents "margin" money on both sides of the contracts. Look at me? I'm new long and have only T-bills as 100% margin. 99% of the short players do not trade like me. They place appx. $2,000 +/- a thousand and go short! Do they have
"uncommitted gold" to deliver? Usually not! The bulk of commercials only hold the paper version as a hedge against wholesale and retail operations. If they suddenly were called to deliver, they would have to buy outright most of the gold. That's because their customers would demand them to cover their deals too. Tell me have you done much international / commercial gold trading? I mostly
just watch (smile).

Is this what you call "gold on the ready" to be delivered from comex? NO? I'm glad you agree, because no one here accepts that perception anyway.

Also: Comex is but a tiny fraction of paper gold traded around the world. But you knew that too. (smile)

"paper gold, it's just for fun"

"physical gold, it ain't for trading any more"

When are you going to take us for a futures hike?

thanks

Trail Guide

Trail Guide

(05/26/2000; 13:27:42 MDT - Msg ID: 31368)

Comment

PH in LA (5/26/2000; 11:15:27MT - usagold.com msg#: 31353)
New essay at Golden Sextant


Hello PH!

Boy, Howe is talking to real people now! I think he is getting into the thick of it.

(big smile) Trail Giude

MarkeTalk

(05/26/2000; 13:44:19 MDT - Msg ID: 31369)

(No Subject)

My, how the markets seem to be following the turning points which I outlined in my last two posts. I give credit to various sources which I read here at Centennial, i.e. R.E. McMaster and Steve Puetz, among others.

First of all, the stock market rallied albeit anemically into the full moon time period (which happened to coincide with options expiry on the 19th) and promptly fell out of bed on Monday, May 22nd, and has continued lower with intervening rallies. The Bank of England gold auction took place on Tuesday, May 23rd which was followed by the usual suspects of shortsellers who knocked the price down to $270/oz. at one point yesterday. The U.S.Dollar Index broke critical support of 110.75 late in the day yesterday which unleashed an avalanche of selling today. The charts of the Euro and Swiss Franc look to be on bottom, with the Euro putting in a double bottom--a classic formation. Add to that news from Europe of intervention in support of the Euro plus higher crude oil prices (because all oil is priced in U.S. dollars) and you have a recipe for a classic turning point in the U.S. Dollar.

Now, as the U.S. Dollar goes, so goes the U.S. stock market. Talk is now circulating that the Dow will break 10,000 and the Nasdaq will hit 2800 in the next 10 days or so. This is exactly the impetus for higher gold and silver prices that I have been waiting for. With the Memorial Day weekend upon us and multi-year cycle lows in the precious metals occurring now, we have a wonderful setup for a surprise rally. And don't forget the CRB Index which just keeps climbing little by little week by week. This is an old inflation indicator--although it has been disparaged lately--which even Alan Greenspan watches.

So in summary: Lower stocks, lower U.S. Dollar, higher Euro and Swiss Franc plus higher CRB Index equal much higher gold and silver prices. As a final note: Premiums on bullion gold coins are on the rise signalling that the temporay glut due to Y2K selloff is now behind us. Don't believe the talk that there is a glut of physical gold on the market. This is just talk from the shortsellers.

Farfel

(05/26/2000; 14:02:22 MDT - Msg ID: 31370)

Closing market rally! (I'm fallible again:>))

Well, well, I guess the funds managers want ma and pa and family to feel good this long Memorial Day weekend about the stock market so she ended in a strong close. They can sit around the dinner table and imagine the bull market is still intact.

It's difficult to predict exact daily movements but the trends seem fairly well defined now.

Tuesday should be interesting, place your bets.

And gold: well the spring grows tighter and the fellows holding her down don't seem to be getting along with each other the way they once did.

Interesting times ahead.

Have a great weekend and peace!

Thanks

F*

Hipplebeck

(05/26/2000; 14:05:54 MDT - Msg ID: 31371)

to Stranger

Thank you for the discussion. It's how I learn
I respect your opinion

TheStranger

(05/26/2000; 14:28:28 MDT - Msg ID: 31372)

Hipplebeck

You are welcome and thank you too.

Leland

(05/26/2000; 14:46:31 MDT - Msg ID: 31373)

On The Subject of "Real" Silver Mexican Pesos...Enjoyable History

THE NEED FOR A BADGE

During the second half of the 19th century, the biggest threat to Texas was lawless
Texans. In 1874 the legislature created two Ranger forces to restore order; the Frontier
Battalion, led by Major John B. Jones, and the Special Forces under Captain Leander
McNelly.

Feuds and disputes erupted over land, cattle and politics that involved local law
enforcement agencies and hired guns. Maj. Jones's Texas Rangers were often called in
to restore order. However, with local law enforcement in one camp or the other, they
found it difficult to establish their authority.

In south Texas, along the cattle-rich Nueces Strip, Mexican and American bandits
ranged back and forth across the border killing citizens and stealing livestock. Capt.
McNelly's small Special Force was given the monumental task of restoring order by
ending the border violations and cattle rustling. However, there was no visible means of
identifying McNelly and his men from the bands of outlaws roaming the area.

In response, the Adjutant General of Texas issued Warrants of Authority to Range
officers---impressive paper documents which were to be kept in the folds of their
pockets. Sometime later enlisted men received paper commissions as well, but neither
officers nor their men were issued "official" badges until 1935. If the Rangers needed to
identify themselves as law officers, they were left to their own devices.

THE FIRST BADGE

The legend of Rangers cutting their own badges out of coins around campfires is myth.
The earliest known "unofficial" Texas Ranger badges were made for individual Rangers
from silver Mexican peso coins. Some were probably made by frontier watchmakers or
jewelers, others may have been made by gunsmiths or metalworkers. A few Rangers
ordered them from mail order firms. Photographs taken from 1870 through the 1920's
reveal that very few Rangers wore badges since a lot of their work was undercover, but
that there were several badge varieties. This makes the authentication of pre-1935
badges a difficult task usually requiring a reference collection such as that at the Texas
Ranger Hall of Fame and Museum in Waco, Texas.

AN OFFICIAL RANGER BADGE

The first "official" Texas Ranger badge appeared in 1935 when the Texas Rangers
became part of the Texas Department of Public Safety. The first badge was unpopular,
and after another unpopular revision, Colonel Homer Garrison, Jr., then Director of the
Texas Department of Public Safety and Chief of the Texas Rangers, announced in 1962
a return to the tradition-steeped badge worn by Texas Rangers during the frontier days.
Col. Garrison stated "the new official Ranger badge, issued to each of the 62 members
of the Force, is a replica of the historic original badge which old-time Rangers carved out
of a Mexican five-peso silver coin", when the Republic of Texas became a state in the
union and the Texas Ranger's duties changed from military to civil law enforcement.

The Texas Ranger badge of the 21st century will still be made from the Mexican silver
coin as it was in the 19th and 20th centuries. The oak leaves on the left side which
represent strength, and the olive branch on the right which signifies peace, were taken
from the Great Seal of Texas. The star is engraved with the Company designation (A, B,
C, D, E, or F) or the rank of Sergeant, Captain or Senior Captain. The original flutes
from the coins can usually be seen along the edges, and coin tampings are visible on the
reverse side of the badge. The five point "Lone Star" surrounded by a "wheel" is a
common motif in many early badges from the early 1800's.

Leland

(05/26/2000; 15:28:06 MDT - Msg ID: 31374)

PS..Don't Try to Order Any Pesos From Michael

They are NOT one of his specialties...Darn!

JavaMan

(05/26/2000; 15:36:06 MDT - Msg ID: 31375)

Sir Leland...

A picture IS worth a thousand words...and that picture spells out all too clearly what the U.S. priorities are.

Leland

(05/26/2000; 15:43:09 MDT - Msg ID: 31376)

Sir Java,

Editorial cartoonist are GREAT....Toronto has a SUPERB one!

Aragorn III

(05/26/2000; 15:51:20 MDT - Msg ID: 31377)

Seeking answers

ORO, I must say I am pleased to find you so resolute on this, as seen concisely in your 31347 today. It would be too much to ask for you to be consistently "eating your peas and carrots" without these intermittant "tantrums" for "toys and ice cream". The patient parent would say, "That's my child, and I love him all the same!" In this regard, I appreciate your own indulgence in my steady fit to remove the monkey from off the back of gold. I am pleased to find you willing to deliver the fate of gold into the hands of bankers (under a structure to provide free banking if I correctly follow your intent), because it surely will stretch my abilities to show that it must be otherwise. I maintain that banks (under any structure of your choice, free or centrally supervised) and their willing customers may have the currencies of their own devising, but let the free people of the world have access to gold as an unmanipulated wealth asset.

As I say, you will certainly test my abilities to frame a convincing case to set gold free from banking, so allow me to hold off on an engagement with you at this time, so that I may gather wisdom from all sides, perhaps asking for your brief input now and again on new facets as they develop, but saving you the chore of reiteration of your past case which has been duly made and noted.

To begin, what was your response to my inquiry, "I am pleased that you have expressed respect for the wisdom of Thomas Jefferson as have I. Yet, must we not admit, if that great man's efforts could not forever stave off the evolution of banking as we have now come to know it, what likelihood is there for any better success in that regard going forward?" Or should I say what is the likelihood for success in rolling back the clock these few years? Then, let us look in this direction---->>

There was a good post by TheStranger #31360 today that I did enjoy (yes, Stranger, to its very end. "Mas, mas".) He said, "...before one can assume this growth translates directly into rising prices ... one has to consider the mitigating influence of such things as growth in the size of the workforce ... and growth in productivity. These influences are what justify, even require, as a matter of fact, some growth in the monetary base."

For shame!!! I know very well what this represents, but please do us this favor. Spare the forum MY tiring and belabored words, and explain more plainly if you will be so kind, so that all can see what treat is in store for the holders of a monetary-type wealth asset that does not expand at the brisk pace of the economy. ORO, please wait in the wings to explain why gold should be denied this day in the Sun in favor of your system. (If you reply before Stranger, you are not playing fair, and no ice cream for you!)

You see, (addressed to all) too few people, with their measuring devices called "dollars", can successfully recognize what The Stranger is about to lay bare. That being (my predictive skills are feeling sharp today, forgive me) that most people are (at best) in tune with the inflation of a currency supply through the banking system, but they fail to properly recognize the true nature of inflation of all things under the Sun. More of this, more of that, more shoes, more people, more occasions of one man helping another (services), and perhaps a little less of a thing or two at times along the way. The economic base of available goods and services inflates, and its expanding real value (hard to measure with a shifty "dollar price", hard to measure with ANY price!)) reflects a "biological pattern" growth rate (at times exponential in sectors).

Where the active currency inflates at a pace with all else in general, prices quoted in that currency are seen to be nearly constant. A debt currency that makes "venture capitalists" of us all (see my 5/19 #30828) can indeed be expanded at a pace as the occasion may demand. Whereas gold, contrary to ORO's assertion that "the quantity of [a] commodity money stays in proportion to the productive capacity of the economy as a whole", is a unique natural resource that can NOT be reasonably expected to keep pace with the biological (exponential) type growth of EVERTYTHING else in the productive lives of mankind. As a happy consequence, where gold serves a use (storing wealth) that does not diminish in importance as the rest of economy grows and inflates, the purchasing power of gold will not only hold steady in the future, but will gain in purchasing power in accord with real economic growth against real gold growth. Any use in banking--lending, derivatives, etc, --would provide additional, artificial growth of gold supply, thus hurting the gold holder's value. The effect to brace for, in the system I "throw tantrums for" is the initial adjustment for "free gold" to rise to its proper relative level among the real economy--which has raced ahead as PAPER gold called the tune while we have sung the blues.

But we need more voices to weigh in on this, and we shall have them over time. Nearby I see mhchuck speaking to ORO on these matters...
<<>>

Yes, I agree that ORO in that post condensed his case nicely, as I continue to fail to do. Now mhchuck, please provide more commentary. Please share precisely what it is about preserving a degree of gold lending and derivatives that appeals to you as it so clearly does?

I would appreciate others to share their thoughts on this matter also. Trail Guide, certainly, your thoughts as time allows? Thank you.

got ice cream?
got gold?

PH in LA

(05/26/2000; 16:16:14 MDT - Msg ID: 31378)

An Overlooked Detail in Aragorn's Pragmatic Reality

Esteemed Sir Aragorn:

Please forgive my uneducated intrusion into your discussion with ORO with a suggestion that I have not heard voiced by either of you.

Would it not be true in an economic system fixed on gold, that the increases you speak of in productivity, sheer biological reproductive growth, and the inevitable increase in overall social wealth (goods, services, even potential wealth) would be reflected in lower prices over the long term. We are all so accustomed to monetary growth that we assume that increases in economic activity must be compensated for by corresponding monetary growth. However, in another system, prices COULD go down over time, as value and wealth grows, at the same time and rate that society grows and progresses.

Couldn't they?

TownCrier

(05/26/2000; 16:22:00 MDT - Msg ID: 31379)

Public service announcement, or shameless self-promotion?

http://www.usagold.com/onlinestore/special.htmlHello dear ladies and kind knights, one and all. Sorry to break into the flow of the discussion, but I have received word from MK that the available number of uncirculated German 20 mark gold coins is now down to the 500 level. These really are nice coins, and if you have no buying interest at this time, you will nontheless benefit from the educational page I have assembled at the link above.

To those of you who showed your approval of our efforts to try this out, our sincerest thanks for making this endeavor a success. Michael promised me he would try to find something equally interesting for next month. (Personally, I doubt he can top the offer of these historically significant coins, but I stand prepared for anything.)

Let the discussion continue!

Leland

(05/26/2000; 16:31:25 MDT - Msg ID: 31380)

@Sir Java, Totally Off-Topic

One of my goals, you see I have a 6 year-old great granddaughter, is to put her behind me on my cruiser
and cruise, and cruise. But, she's so small. It will
be about 3-4 more years before her feet will reach the
passenger footpegs. Oh, what a great time she and I
will have TOGETHER!

Aragorn III

(05/26/2000; 16:32:14 MDT - Msg ID: 31381)

My kindest Sir PH in LA

Such an effect as you describe is precisely that which I referred to as the "treat" which lay "in store for the holders of a monetary-type wealth asset that does not expand at the brisk pace of the economy."

You will see that thought also reflected here..."As a happy consequence, where gold serves a use (storing wealth) that does not diminish in importance as the rest of economy grows and inflates, the purchasing power of gold will not only hold steady in the future, but will gain in purchasing power in accord with real economic growth against real gold growth."
We would see such a "gain in purchasing power" reflected as lower prices, or as it were, a greater exchange rate against currency, whereas currency prices of all other things remain at bay.

Thank you for pointing out that my core point was dreadfully shabby, and offering me this early opportunity to provide a redress.

got gratitude!

aunuggets

(05/26/2000; 16:50:16 MDT - Msg ID: 31382)

Leland - Texas Ranger Badges

Don't forget to mention the beautiful Captains badges, many of which were made using Mexican 50 peso GOLD pieces. Personally think the 50p is one of the most beautiful designs available on the larger gold coins.....my favorite !

Leland

(05/26/2000; 17:19:04 MDT - Msg ID: 31383)

aunuggets

http://www.grasshoppernet.com/walrafen/badges.htmlUnfortunately, Texas Ranger Badges have become a commercial
item. Hopefully, this will not detract from the coins
used.

R Powell

(05/26/2000; 17:37:39 MDT - Msg ID: 31384)

Gold shorts breaking ranks

Farfel's 31354 post suggests that the group (cartel) of gold shorts might turn against the short position with the first among them covering their shorts(sales) at the lowest price. Yes, indeed, wouldn't that be a sight to behold and would certainly launch the POG.
How much could one buy before being foundout? Warren Buffet started buying silver in the summer of 1997 and took possession from COMEX of about 79 million ounces before Philbro, his purchasing agent, was sued for (I believe) trying to corner the market as did the Hunt brothers once. This forced Buffet to reveal himself at which time he stated that he intended to buy a total of 129 million ounces which he did and moved them to London where he can better hide them. He did manage to buy, slowly over many months, 79 million ounces before he was discovered.
I agree with Farfel that one or more of the big short positions will at some time (soon?) make a move to cover. Short covering= buying=POG liftoff or as they say at another well know forum, gold to the moon! Mr. Buffet's disclosure took silver to a high between $7.30-$7.40 on Feb. 5 1998. It happened very fast and IMHO the coming gold/ silver upmoves will be even quicker once they start.
Farfel, congrats on the predictions! I'm quessing from the mellow tone of your recent words that success has soothed your disposition and lowered the bloodpressure. Keep up the good work but remember, greed costs money.
Happy and safe Memorial Day to All...

R Powell

(05/26/2000; 17:42:00 MDT - Msg ID: 31385)

Test

Test, are we working?

TownCrier

(05/26/2000; 17:55:54 MDT - Msg ID: 31386)

Rotation

With first notice day arriving Wednesday, and thus opening the window for the possibility of delivery on June COMEX gold contract, the rotation out of June and into August futures began yesterday concurrent with the despair among the longs in the face of a stiff paper selloff.

In yesterday's action, only 34,911 June contracts were left in open interest as 15,986 contracts were closed out. At the same time, the open interest in August futures climbed by a similar 15,823 positions to 65,697 contracts.

Following yesterday's action, COMEX open interest on gold contracts totaled 163,069, each a representing an individual wager on the price quoted for that same contract come expiration day. The typical payoff (or payout) is the cash difference between the entry point and the contract price at settlement, multiplied by 100 for the amount of ounces theoretically represented by and "under control" of each contract.

TownCrier

(05/26/2000; 17:58:38 MDT - Msg ID: 31387)

Rotation...amendment to post

To be sure, the rotation began earlier than yesterday. I meant to say the rotation began IN EARNEST yesterday...

RAP

(05/26/2000; 18:00:29 MDT - Msg ID: 31388)

Premiums on 2000 eagles?

http://www.usmint.gov/bullion/annualsales/sales2000.cfmThe US Mint put out more 1oz Gold eagles on Jan 1 1999 than they have to date this year. 6726/day in Jan 1999; 6500 total in 5 months this year.
These might be worth investing in, if they don't make up for it later this year.
RAP

Golden Truth

(05/26/2000; 18:21:35 MDT - Msg ID: 31389)

PLATINUM and PALLADIUM Prices Soar as Supply Shortages Persist.

http://www.LiveInvestorsForum.com Looks like the word is spreading about Supply Shortages.
Please click on Link above for all the facts!
It's a very good link for anyone interested in the white metals, you will not be disappointed!
G.T


P.S I was going through a very bad time in my private life the last couple of months. So if i posted something mean or bad i,am sorry, to anyone i might of torn a strip off of.
I must say GOLD did help keep me alive it truly is a awesome Metal!

Also F.O.A/T.G thankyou so much for staying here at this Forum after all the shit and abuse you recieve here sometimes, you truly are a Giant as in a Giant Hero, thanks man. We all luv yah!!!! Also to everyone else here a big thankyou, i have never learnt so much in a year and a half
as i have on this forum. Job well done Men and Ladies.

JavaMan

(05/26/2000; 18:25:39 MDT - Msg ID: 31390)

Leland, more OT...

Ah, Sir Leland. You remind me of the time I took my (then) eleven year old daughter for her first ride. She had mixed emotions of eagerness and caution. With her on the back, I rode even more responsibly than usual. Her immediate suggestion was "ok, we can go back now." It was not a convenient point in time to comply with her request so we went a mile or so more and then I indicated we would turn back. Interestingly enough, her reaction was something like, "that's ok, we can go further now." She was loving it. And we rode for miles.

HI - HAT

(05/26/2000; 18:25:44 MDT - Msg ID: 31391)

Java Man ______________Dollars

I guess we're going to be on our own with the cash-dollar question. Amazing how one can be satisfied with ones investment positions and then be on a roller-coaster of doubts in no time at all.

SHIFTY

(05/26/2000; 18:32:22 MDT - Msg ID: 31392)

N.Y. Ponzi

Nasdaq 3,205.11 + Dow 10,299.24 = 13,504.35 divide by 2 = 6,752.17 Ponzi

Down 12.46 Ponzi points. Another Ponzi record low!

TheStranger

(05/26/2000; 18:34:38 MDT - Msg ID: 31393)

Aragorn III

Sir Aragorn - For shame, indeed. I missed a great opportunity (upon which you quickly seized) to draw the distinction between paper and gold. You do raise one practical question, however. I know the world's supply of above-ground gold currently grows at something like 2% per year. Meanwhile, the world population apparently doubles every 30 years or so, also indicating a rate of increase of about 2%. I would assume that, the higher the price of gold, the greater the rate of production and vice versa.

Doesn't this mean the amount of tradable gold would be almost thermostatically controlled by market forces in the long run? If so, would the distinction you draw still hold water? I don't know. I'm askin'.

As always, I bask in your intellect.

SHIFTY

(05/26/2000; 18:36:20 MDT - Msg ID: 31394)

Java Man

Will you buy a new bike when gold makes it move?

JavaMan

(05/26/2000; 19:24:40 MDT - Msg ID: 31395)

Hey HI - HAT...

Things could be worse. As it turns out, it looks like my situation is going to resolve itself. Either I'm going to dump my equity dollars into another house soon, or "tough it out" in our present accommodations and transfer the dollars into the shiny yellow. One thing is for sure, those dollars are not going to sit in the bank for too long. In any case, independently of this, I have my core position that allows me to sleep all too well. Actually, I'm amazed at how I can be satisfied with my investment position, and then, be satisfied with my investment position. (smile) No roller coaster here, thank you.

Chris Powell

(05/26/2000; 19:37:46 MDT - Msg ID: 31396)

(No Subject)

Gold: Can't bank with it, or without itGold sure is money, and bankers spent it
all.

Latest by Reg Howe, reposted at GATA:

http://www.egroups.com/message/gata/468?


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

Chris Powell

(05/26/2000; 19:38:39 MDT - Msg ID: 31397)

Gold: Can't bank with it, or without it

http://www.egroups.com/message/gata/468?Fixing link -- sorry, folks!



Gold sure is money, and bankers spent it
all.

Latest by Reg Howe, reposted at GATA:

http://www.egroups.com/message/gata/468?


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

JavaMan

(05/26/2000; 19:38:44 MDT - Msg ID: 31398)

The Shifty One...

It wasn't really a financial situation that prompted me to sell the last one, rather, I reached the painful point of realization that it was no longer practical at this point in time. (Not that owning an HD is ever "practical".) I simply didn't feel the wife and I were getting anywhere near the enjoyment we should from it mostly because the area we recently moved to is not particularly conducive to cycle riding (read the people in North Carolina drive like idiots so a motorcycle can be hazardous to your health).

Were I younger, I would probably see another one in the future, but I have begun thinking, once again, of my first love...a 58 foot Alden ketch that stole my heart twenty-five years ago but has eluded me ever since.

SHIFTY

(05/26/2000; 19:47:03 MDT - Msg ID: 31399)

Java Man

Is an Alden Ketch a sail boat?

R Powell

(05/26/2000; 20:04:15 MDT - Msg ID: 31400)

June contracts and COMEX supply

Town Crier (31386) tells us that June's open interest declined today leaving 34,911 contracts open before next week's first notice day.
Goldhunter (31358) tells us that the COMEX warehouse currently holds 18,500 100oz. lots or 1,850.000 ozs. Thanks to both for the numbers which I believe should be closely watched as a decline in either would indicate that someone is accumulating. If anyone did take a notion to squeeze the market, with the intent of raising POG, what better way than to lower COMEX warehouse stores? Perhaps when the explosion comes it won't be caused by a sinking Ponzi or falling dollar or GATA's fine efforts or a banking crisis but instead by an intentional old fashion short squeeze. What better market than gold with an existing short position equaling years of production?
Poor old Soloman has recently reminded us that this same situation exists in silver. I think both those holding physical and those with futures/options positions will be dancing arm in arm long before either fiqures out which approach yielded the greater return. I don't think the difference will be appreciable either way.
Thanks T.C.and Goldhunter for the fiqures. Keep a sharp eye open for us!

JavaMan

(05/26/2000; 20:06:51 MDT - Msg ID: 31401)

Shifty...

Yes, a ketch is a sailboat that has two masts, the taller one in the front and a smaller one behind it. A schooner, for example, has just the opposite rigging.

Today many sailboats look like giant chlorox bottles bobbing on the water but this girl was designed in the fifties by John Alden Co. and is truly a proper yacht. I would much rather have a boat built according to that original design than something made today.

Are you a sailing man?

Marius

(05/26/2000; 21:36:55 MDT - Msg ID: 31402)

Stranger: No thanks are necessary!

Sir,

Methinks thou art far too modest. Your posts are always interesting, and have been particularly so the past few days.

M

SHIFTY

(05/26/2000; 21:38:26 MDT - Msg ID: 31403)

Java Man

I grew up on the Hudson River in Nyack NY. Im more of a power boat guy. Now that I live in Florida I fish (fresh water) the most. I don't get time to fish like I used to.I do like the water. Now I spend more time under it dredging for gold than fishing.

Black Blade

(05/26/2000; 23:13:14 MDT - Msg ID: 31404)

A few quick comments, Re: Leland, Aunuggets, Aragorn III, Golden Truth, and Shifty

Leland: Msg. 31383, and Aunuggets, Msg. 31383, The Silver Mexican Onzas-Libertads are fairly nice, and at near to spot as most rounds - as opposed to Silver eagles and maple leafs - Que Lastima! The Gold 10 peso with the potrait of Morales are nice, but I especially like the 20 Peso gold coin with the Aztec (or is it Mayan?) calander on the obverse side - Muy Bella.

Aragorn III: Msg 31377, I just came back from a sucessful day of fishing. Just ate some nice pan size trout with a bit of habanero chili - Ice cream indeed :-0

Golden Truth: Msg 31389, PGM supplies are very tight. This will be especially true if the ecomony continues forward as strongly as it has. Auto manufacturers have felt the strain of decreased PGM supplies for some time. They have drawn down their Pd supplies for autocatalysts for some time, while hoping upon hope that the Russians would deliver Pd. Now GM and Nissan have announced that they are returning to the use of Pt and Rh in their autocatalyst production. Other will follow, trhey have no choice! Think of how tight PGM supplies could get if fuel-cell tech becomes viable, though not likely anytime soon, but an interesting thought none the less. The expansion of mine capacity will not occur for several years anyway. I would expect the price of PGMs to skyrocket substantially, irregardless of the Russians. The Russian economy is a basket-case and overly corrupt. PGMs will blast-off. Personally I hold SWC stock and some 1 oz Koalas from Oz. I suspect that MK can still provide Pt eagles which would probably be a good physical holding.

Shifty: I have a 16' Fisher Marine with a small Johnson outboard. A nice bass-boat. Though I was stream fishin today!

Black Blade

(05/26/2000; 23:19:03 MDT - Msg ID: 31405)

All - apologies for my terrible spelling and grammer!

OK, so my spelling and grammer are a bit rough right now. But after a day in the sun, rod and reel in hand, and a few Sierra porters and a couple of black-and-tans, what-a-ya-expect? Meanwhile, I think I'll finish off another couple of Sierra porters. Cheers ;-)

PH in LA

(05/26/2000; 23:41:15 MDT - Msg ID: 31406)

Joke of the Day...

http://www.gwbush.com/index.htmDid George W. really say this? Maybe we could get him to post here...

"What goes up must come down."--I call that negative thinking. Investors who pulled out of the NASDAQ stock bubble need to get back their CAN-DO attitude and pour all that $$ back into the market. Capitalism's not for quitters!

That's what my new Social Security plan is for: Using the hard-earned savings of working class America to kick-start the action at that grand casino called Wall Street.

Pumping trillions of dollars of America's retirement into the DOW/NASDAQ pyramid scheme--call it Dubyanomics. If J.F.K could put a man on the moon, and Clinton could win most-favored-nation status for China, then damn it, I can create a financial perpetual motion machine...a pyramid scheme that doesn't have to end (at least during my administration)...chain letter wealth that expands forever...

Anyway, if it doesn't work the Fund Managers will always have the option to pull out first, leaving the American people holding the bag. (We'll blame it on the unions or something.) The Bush family has a proven track record of bailing out our fellow millionaires--don't forget S&L.

SHIFTY

(05/27/2000; 00:24:24 MDT - Msg ID: 31407)

Black Blade

Did you catch any fish?
I sold my bass boat a few years back. It loved to drink the gas with 140hp. Now I use an old fiberglass 14 ft Johnson with a 25 hp Johnson kicker.View Yesterday's Discussion.

SHIFTY

(05/27/2000; 00:50:39 MDT - Msg ID: 31408)

ORO

I read your post again . I don't quite get what you are saying. I think that Americans should mine our own steel , build our own cars, TV sets, VCR, toasters, ect ..... I don't see were chasing all over the globe for the cheapest labor is beneficial. It may look good on the books for a time , but when all the industry has left the country and all we have left are a few Mc Jobs , how do you defend the nation in a time of war? Hope that we can buy what we need from other country? I cant tell were you stand. I need to get some sleep and hit the road . I will try to get to a computer this week and pop in from time to time.
I hope we can agree. If not then we can agree to disagree.
Have a good holiday.
$hifty

Black Blade

(05/27/2000; 01:51:04 MDT - Msg ID: 31409)

@Shifty

Kept two 16 inch browns and 1 14 inch rainbow (has a nice gold red color down the sides). Released several more, but only needed acouple for dinner and breakfast. Going out again tomorrow. Fishing hole is about 200 yards from the front door, unfortunately no gold in there, only gold colored trout :-)

Black Blade

(05/27/2000; 02:21:18 MDT - Msg ID: 31410)

Ted Butler is at it again.

http://www.gold-eagle.com/gold_digest_00/butler052700.htmlTed Butler hammers home the point about the Ag deficit. Some would probably prefer that this guy stop ranting about the Ag deficit and manipulation of the PMs. I can imagine that he is probably like Chinese water torture where the first few drops are just an annoyance, but eventually the force, drop by drop, become rather difficult to ignore. Good article!

Leland

(05/27/2000; 04:28:17 MDT - Msg ID: 31411)

Doug Noland -- "Ponzi Finance"

http://www.prudentbear.com/credit.htm"Unfortunately, we see the U.S. financial and
economic bubble as history's greatest episode of Minsky's "Ponzi
finance." Importantly, "a �Ponzi� finance unit must increase its
outstanding debt in order to meet its financial obligations." Such a
structure is patently unsustainable. And with the U.S. now running a
current account deficit of more than $1 billion daily, there is "no room
for error." Foreign lenders must remain highly confident in the
soundness of the U.S. financial system and economy. Unfortunately,
we just don't see how such confidence can be maintained. When
foreign source creditors are unable or unwilling to continue to
finance our boom � either due to a change in perceptions or the
forced unwind of faltering leveraged speculations � the game is
over. If our invoking Minsky "Ponzi finance" analysis is indeed the
correct analysis for the U.S. bubble, the prognosis is increasingly
perilous."

[Click for More]

Leland

(05/27/2000; 06:15:26 MDT - Msg ID: 31412)

Sir Black Blade

About Ted Butler, sometimes I wonder...what it's all about...Is it actually us little guys (like Ted) in a
war with the big boys?

Thanks for the article.

Black Blade

(05/27/2000; 06:25:17 MDT - Msg ID: 31413)

Morning Wakeup Call! (The Ag news is interesting though)

Source: Bridge NewsRussia's Norilsk says makes regular PGM sales on world market

Moscow--May 26--Norilsk Nickel, Russia's largest producer of platinum group metals (PGM), is making regular sales on the metals on the world market, Norilsk Chairman Yury Kotlyar said Friday. He also said Norilsk's PGM export quota for 2000 exceeded those in 1998 and 1999. (Story .17302)

Aide says Russia's CBR made ample palladium deposits abroad

Moscow--May 26--The Central Bank of Russia has deposited 120-300 tonnes of palladium at foreign banks, a government official said Friday. A large part of the deposits has reportedly been made to Swiss banks. (Story .17431)

Black Blade: Too little - too late. You have to wonder what is meant by "regular sales"? That's quite a spread of deposited Pd - they don't sound so sure.

Rumor mills wind up as South Africa's Gold Fields issues notice

Johannesburg--May 26--A cautionary announcement by South African gold producer Gold Fields Ltd. that it is in discussions with a number of parties has sparked a flurry of speculation on potential targets or whether a merger is on the cards. Either way, Gold Fields is believed to be close to announcing a deal in line with its stated strategy of replacing reserves and production. (Story .14364)

Black Blade: A friend of mine close to the situation says that it's more than a rumor. I am not allowed to say who, some who have posted on this on the other forum have it nailed though (wink, wink). We have to see if the parties can come to an agreement.

NY Precious Metals Review: Gold up on dlr dip after Thurs loss

New York--May 26--After slumping to an 8 1/2 month low of $269.50 per ounce Thursday, COMEX Jun gold managed to recoup some of these losses to settle up $1.50 at $272.20 in Friday's abbreviated session. Gold was helped by the US dollar's losses against other currencies, particularly the euro. Silver, platinum and palladium also climbed on the back of dollar's slip. (Story .2333)

Black Blade: Weakening Dollar? Hmmmn��

GFMS says 800 tonnes silver shipped from UK to US in February

New York--May 25--In February 800 tonnes of silver was exported from the United Kingdom to the United States, said Philip Klapwijk, managing director at Gold Fields Mineral Services. He said that COMEX stocks in the US have risen sharply and dealer stocks in Europe have fallen as a result of the silver price arbitrage between London and the US. (Story .22389)

Black Blade: Could Warren Buffett be calling home some of Berkshire Hathaway silver? A bit-o-silver piled into the COMEX warehouse, raising stores to over 102 million oz. Remember that there was some speculation back a couple of months ago. Hmmmnnnn��..

S African gold output dips 7% to 3.43 mln ounces in 1st quarter

Johannesburg--May 25--South Africa's total gold production eased 7% to 3,426,064 ounces (106,562 kilograms) for the quarter ended March 31 from 3,682,273 ounces (114,531 kilograms) in the preceding three months, according to the Chamber of Mines. (Story .17055)

Black Blade: How much anyone wanna bet that this new of Au supply reduction doesn't make it to the mainstream media?

JavaMan

(05/27/2000; 06:32:03 MDT - Msg ID: 31414)

Good morning Leland...

I read your link with my morning coffee. Sheesh...what a way to start the day. In this story, I see the truth of a proverb - There is a way that seemeth right unto a man, but the end thereof are the ways of death. Forewarned is forearmed. Thank you, good sir.

Black Blade

(05/27/2000; 06:35:20 MDT - Msg ID: 31415)

@Leland Msg. 31412

>About Ted Butler, sometimes I wonder...what it's all about...Is it actually us little guys (like Ted) in a
war with the big boys?<

Black Blade: Isn't that always the case? There is a war going on over the PMs. Look at all the battles around us. The TOCOM Pd default, the UK dutch auction, the Swiss unlinking their franc from Au, etc. etc. Then there are those of us like Ted Butler, GATA, Reg Howe, Frank Veneroso, you and me. They got the big guns, we get pounded, but they are running low on ammo ;-)

Sometimes it don't seem like a fair fight.

Going fishing again today, got beer, got fishin gear, and my latest copy of "News and Views". Take care.

Leland

(05/27/2000; 07:38:57 MDT - Msg ID: 31416)

From Jim Cramer -- An E-Mail That he Posted on His Site

"I am a very dedicated reader of the site and you in
particular. But I must share with you the horror of
this market and my activities in particular. I must
have taken a really big dumb pill two months ago or
things have really changed big time. I have
managed to lose my entire $2.5 million account in
the last nine weeks. I am very experienced and
have invested and traded for 13 years.

"I am 33, single and have no
kids, thank God. I will be the
only one who really suffers
this bad dream. I have let my
parents and good friends
down big time. I think they
hurt for me more than the
numbness I am feeling. Jim, I knew to take
something off and even went to a trusted friend to
beg him to make sure I did. The dinner meeting on
that Friday was followed by a Monday where I went
from $1.9 million to $800,000. I was stunned, frozen
stiff, couldn't act to take something off then, heck it
was too late, right.

"WRONG! The following Monday I went down to
$400,000. Now it was really to late, right? Yeah,
right.

"WRONG again. The market had just crashed and
heck, Brocade was going to report blowout EPS in
a couple of weeks. It should run ahead of the
numbers just like last quarter I was thinking.

"WRONG!! This is something I must live with for the
rest of my life. It is very difficult, since I knew what
to do but got caught in the decline so fast. I will
recover eventually, but geez, I wish I could turn the
calendar back two months for once in my life. I
need a mulligan so bad it hurts.

"I broke the No. 1 rule, survival, be left standing. I
have given 5-6 gift subscriptions of TheStreet.com
over the past year. I sure hope they listened to take
something off and be left standing more than I did."

Yep, that's right. This letter writer
lost it all. And $2.5 million is a lot
to lose. Heck, anything is a lot to
lose. I present this sobering email
because, 1) I don't want it to
happen to you, and 2) It is never
too late to take something off the table.

When I started this "take something off the table"
call a couple of months ago it was in reaction to a
woman screaming at me in a parking lot after I had
spoken at the Miami Herald investment conference.
She was telling me that I would lose it all. No way, I
said, I am taking something off the table.

The following day I wrote a piece for the site
outlining again, that I was redoubling my efforts to
take something off the table. We took a huge
amount off. We even personally switched some
money to New Jersey municipal bonds, something I
thought I wouldn't do unless I knew thermonuclear
war was coming between Jersey and New York!

So, let's get something straight. From Jeff, as I will
call this letter writer, it was not too late to take
something off three times. But then it was too late.
Don't make his same mistake. If you are riding on
big, big wins and they aren't as big as they were but
they are still big and you have taken nothing off the
table, you are being foolish. The most you will lose
is opportunity cost and the taxes to the federal
government.

Jeff, by the way, owes no taxes. He has no money!
So much for the tax man.

Second, it can happen to you. I don't care how good
you are. Objectively you are not better than Julian
Robertson, Stanley Druckenmiller or Stanley
Shopkorn. Trust me on this. I think I am really
good. I have the long-term record to match these
guys. But their departure shakes me to my bones.
These are mentors, teachers and Hall of Famers.

They are guys I learned to respect when I started 20
years ago. I can't say that my teachers and
mentors got too old. I can console myself that they
might have gotten too big, but that's a little
chimerical because they had been big for years. I
respect my elders. These guys were pros. When it
is too hard for the pros, it is too hard for the
amateurs, no matter what the size.

Third, Jeff wasn't a newbie. He had traded for 13
years. He had obviously been through the 1990 and
1994 and 1997 and 1998 downturns and lived to tell
about them. He knew enough to play the Brocade
(BRCD:Nasdaq - news - boards) upside, a company
that is hard to understand, but has done
spectacularly and was a good percentage bet. (We
made the same one and we are pretty good at the
upside surprise game.) Yet, this downturn caused
him to lose everything. This downturn is the big
storm, the one that gets you.

Fourth, the downturn isn't over. That would be
wishful thinking. Sure it could end. But as we will
see from this series, time will cause it to end.

Not events. Time.

Fifth, and finally, I am writing this stuff for one
reason only: to be sure that you have some money
left and can live to play again. The most salient
thing in Jeff's note to me is that he recognized the
cardinal rule: Survival, to be left standing.

That's what this game is all about. That's what we
talk about in the huddles at Cramer Berkowitz.
We want to be left standing after the bears romp.
Maybe we have to play dead for a while. Maybe we
have to hide. Maybe we just have to leave the park
altogether for a while and stay in cash.

Whatever. The goal is survival, preservation of
capital for when the bears have eaten so many
salmon that they lull themselves to sleep or go into
hibernation. If you don't believe me, like the marshal
in the Fugitive said: "I don't care."

I know I am right.

(Thanks to Jim Cramer, And Fair Use For Educational/Research Purposes Only.)

SHIFTY

(05/27/2000; 07:52:17 MDT - Msg ID: 31417)

RUMOR/GOLDFIELDS

I heard from a good source (very good source) that Goldfields is rumored to be talking with NEWMONT and Franco- Navada ! New un-hedged Powerhouse!

I hope so!!

$hifty

SHIFTY

(05/27/2000; 08:03:50 MDT - Msg ID: 31418)

PONZI

For those that read my ponzi posts: They may be late or missing this week if I cant get to a computer. I will do my best , but hey we all know where its headed. ( LOWER )

Maybe Thaigold will fill in next week?



$hifty

Leland

(05/27/2000; 10:55:24 MDT - Msg ID: 31419)

Leigh, I Know You Are Relieved...So Am I!

Lloyd's Won't Seek Swissair Jewels



Updated 7:29 PM ET May 23, 2000

By SUE LEEMAN, Associated Press Writer

LONDON (AP) - Lloyd's of London canceled its plans
Tuesday to search the site of the 1998 Swissair crash off
Canada for $200 million worth of diamonds and jewels, saying
it was sorry "for any distress" it caused crash victims' families
by initially pursuing a search.

Hours earlier, Lloyd's spokesman Adrian Beeby denied that
the insurance company was being insensitive by seeking to
retrieve the valuables from the wreckage of the crash, which
killed 229 people. He said the site already had been dredged
by Canadian authorities immediately after the plane went
down.

But Lloyd's later said in a statement that the license it applied
for to search the site, if issued, would be used solely to deter
treasure hunters.

"The reputation of Lloyd's has always been founded on its
integrity," the statement said. "Consequently, Lloyd's will not
dive or explore the site, respecting the wishes of the families.
Lloyd's would like to apologize to all of the families of the
victims of the Swissair crash for any distress caused by its
application for a license."

Investigators still have not discovered what caused Swissair
Flight 111 to crash into the ocean just off Nova Scotia on
Sept. 2, 1998.

Through a Canadian insurance company, Lloyd's had asked
the Nova Scotia government for permission to hunt for 4 1/2
pounds of diamonds and 11 pounds of jewelry listed on the
flight manifest.

The diamonds reportedly were in a stainless steel tube, which
may have disintegrated on impact or been driven deep into the
seabed.

Lloyd's had said it planned to start hunting this summer, using a
mini-submarine to seek the gems among the wreckage, which
lies in about 200 feet of water.

Swissair spokesman Jean-Claude Donzel had said the airline
was not involved in the salvage issue, calling it "something
between the rescue and investigation team and Nova Scotia."

Ian Shaw, whose daughter died in the crash, argued before the
Nova Scotia legislature Friday that no one should be allowed
to "rake through" the site. He said other victims' relatives also
opposed the plan.

He later called the company's change of heart a "ray of
sunshine"

Bill Estabrooks, a member of the Nova Scotia legislature who
represents communities near the crash site, had said the
province should reject any treasure trove application "because
of the sacredness of the site."

(Fair Use For Educational/Research Purposes Only.)

PH in LA

(05/27/2000; 11:22:23 MDT - Msg ID: 31420)

Incoming!! Incoming! Time to take cover?

http://www.bearforum.com/cgi-bin/bbs.plHeard at another forum (see link). Has this guy been reading FOA? Or is this (like all good ideas) just appearing "in the air" all over the place at the same time?

Posted By: L.A. Bear (Date: Saturday, 27 May 2000, at 6:07 a.m.)

Derivatives Time Bomb???

We indeed live in interesting times. The new FASB 133 guidelines will go into affect shortly requiring the reporting of all derivatives positions and marking them to market. We shall soon know if derivatives are really the ticking bomb waiting to burst this bubble.

"For the 1st time in financial history, risk management positions - derivatives - must be reported next month due to FASB 133. It requires all companies to report on their balance sheets the fair market value - marked to the market - of its derivatives. There will be enormous discrepancies in that value, as derivative accounting/valuation is subject to a good deal of interpretation and surmise. Nevertheless, the $74 trillion or so [estimated notional value] of derivatives must now be displayed, as well as a rational for the strategy. Brokers and gold producers short gold in excess of what they own, or can deliver will raise eyebrows, if not investigation. Bankers & brokers must be horrified at the Pandora's Box they must open. Companies that use derivatives to boost earnings will be humbled. A year or so ago, Forbes reported on its web cite that Dell made more money shorting puts on its stock that it did selling computers in a previous quarter or so. Unwarranted currency, interest rate, energy, stock, Baltic Freight, etc. derivatives will now be liquidated as the gray-hairs that are the captains of industry will be loath to report derivatives that can be perceived as imprudent. This will hammer brokers and bankers with large derivative desks. In a bear market, most, if not all, of the surprises are negative."

This excerpt is from the "Daily Briefs" section where Ramsey King is a regular contributor (see link below). The daily brief section is a good summary of daily news from multiple webb sites.

NEEXT POST (BY TANABEAR):

IMHO, The most IMPORTANT post I've read on this BB in MONTHS!!!!!!!!!!!!!!!

Mr. L.A. Bear, Can you please expand as to date due and what the HELL a FASB133 even is? I am sure it is an SEC filing but am totally in the dark. I thought they (Congress) had been bought off and had decided "that derivite oversight was not necessary"

As you are probably aware, this is the one biggest issue facing the state of international, financial well being today. Unduly Complex and Insolvent Derivitive Contracts have the potential of doing more damage to world economies, ESPECIALLY OURS, than anything else out there today .

Want Proof? NOBODY TALKS ABOUT IT!!!!! Can you name JUST ONE other 100 Trillion Dollar segment of our national economy which NOBODY even mentions? Could it be that nobody wants to be blamed for yelling "FIRE" in the auditorium? As far as that goes can you name one other 100 Trillion Dollar Industry, in America? Canst thou spelt BUBBLE?

Tanabear Rule # 14: "In America, ONLY worry about, what they DON"T talk about!"HehHehHeh,

Cheers---------------Tanabear

Leland

(05/27/2000; 11:30:07 MDT - Msg ID: 31421)

PH in LA

"$74 trillion or so [estimated notional value] of derivatives must now be
displayed, as well as a rational for the strategy."

Forget the national debt, this is bigger!!

RossL

(05/27/2000; 11:39:44 MDT - Msg ID: 31422)

Updated Chart

http://users.erinet.com/3354/gold2400.htm
I have updated the SDR-currency chart. The currency gyrations of the last two weeks can be seen clearly. The British Pound is tanking. The Euro seems to have bottomed. The dollar has leveled off after the rise.

I have so much planned for the next two weeks that I may not be able to update it again until mid-June.

TownCrier

(05/27/2000; 13:54:44 MDT - Msg ID: 31423)

Sirs PH in LA and Leland, the new FASB 133 guidelines is nothing new to USAGOLD visitors...

http://www.usagold.com/NewMillenniumGold.htmlLast Autumn we offered a Gilded Opinion piece by Leanne Baker of Salomon Smith Barney (see the full commentary at the link above) that gave us all an adequate warning of the coming change. Thank you for revisiting this topic now that we are on the threshold to its implementation.

Below in an excerpt regarding SFAS 133 from the Gilded Opinion page called "A New Millenium Gold Rush"--which also gave a nice perspective on the Washington Agreement.
--------------------
SFAS 133 -- NEXT YEAR'S ACCOUNTING NIGHTMARE

FASB has written a new accounting standard governing the treatment of derivative instruments and hedging activities in financial statements. Implementation was recently postponed one year to June 15, 2000--and debate continues as to the impacts of this complex, technical standard on company income statements, balance sheets, and actual hedging behavior. SFAS 133 will require different accounting treatment for derivatives considered "hedges" and "non-hedges"--with most related activities by mining companies qualifying as "cash flow hedges." However, many derivatives strategies will fail to qualify for hedge accounting--and thus to the extent that these are used to offset an economic risk (the gold price), mark-to-market impacts to net income will not be matched by recognized period-to-period changes in the underlying exposure (the value of reserves). This will result in greater net income volatility.

Important departures from current practice will be marking-to-market of the time value of options through the income statement-rather than straight-line amortization of the premium paid or received. Forward contracts will be treated more favorably--with mark-to-market fluctuation flowing through equity on the balance sheet. However, this will introduce equity volatility and has the real potential to throw off credit ratios--complicating the lives of analysts, bankers, and shareholders. Under SFAS 133, the recent gold rally and plunge in mark-to-market value of mining companies' hedge books would result in huge hits to net income from call options sold and to equity from sub-market forward contracts. Current rules allow these effects to be disclosed as a simple footnote to the financial statements, but if the gold price stays in the $320 per ounce range--or trades higher as we expect--the SFAS 133 derivatives-related damage to company income statements and balance sheets will be staggering.

HEDGE BOOK MARK-TO-MARKET VALUES PLUMMETED

Rising gold prices, lease rates, and volatilities have also served to crush the mark-to-market value of company hedge positions--most of which have swung deep into the red since the second quarter reporting cycle. The symmetry is intriguing--that much-touted premiums to spot in previous periods are often completely offset by negative mark-to-market values now, revealing that many programs amounted to simply selling financial risk. The damage is compounded by the fact that price premiums were earned when gold prices were low, group equities were out of favor, and share-price multiples contracting-- while the upside is surrendered now that investor interest is high and multiples expanding for gold-leveraged names...

As spectacular as some of the negative mark-to-market numbers are, it is important to recognize that under current U.S. GAAP, the value of derivatives is shown as a footnote to the financial statements and does not flow through the balance sheet or income statement. With the implementation of SFAS 133 next year, this will all change. In severe cases, counterparties can demand that mining companies post cash margin to cover the paper loss--exactly what happened to Ashanti Goldfields, whose hedge book plummeted from positive $300 million in value during our July site visit to an astounding negative $570 million at $325 gold.

aunuggets

(05/27/2000; 14:08:36 MDT - Msg ID: 31424)

SHIFTY - BLACKLADE

Shifty ? Dredging for gold in Florida ? I assume it is of the pre-dug, pre-fabricated (and lost again) type ? (grin) We regularly go west on the vacation equipped with gold pans and Goldmaster detectors. Nothing like having "A hobby where the heart is", eh ?

Black Blade - Those Mexican 20 peso gold coins are indeed nice designs, and happen to be one of the least counterfeited bullion types of all time. That calander device would certainly be a challenge.... Aztec by the way, and these coins were once refered to as "Aztecias", the larger 50 peso gold pieces as "Centenarios". Both beautiful designs.

Leland

(05/27/2000; 16:16:06 MDT - Msg ID: 31425)

A "Golden Jewel"

http://www.gold-eagle.com/gold_digest_00/droke052900.htmlMany ask, "How can gold offer value and financial protection in the
period of late runaway deflation that we are entering?" It is true that
gold's fundamental tendency is to lose dollar value during period of
deflation. But when overseas markets and currencies are losing value
relative to the U.S., investors in foreign countries seek protection in
precious metals. With foreign stock markets beginning to crumble and
currencies rapidly losing value, foreign capital flight will find a channel
in gold investments, among other things. This, along with diminishing
faith in global fiat currencies, explains how gold can appreciate in even
in the most deflationary of economic environments.

We are entering the worst of all possible worlds-a deflationary cycle
which will wreak havoc on equities prices, erode currency values,
inflate certain staple commodity prices, and exert a lifting effect on
interest rates. For the first time in nearly a decade, it is becoming quite
expensive to be a debtor, since the value of debt is continually rising
due to the strengthening value of the dollar, while interest rates are
also increasing. In such a perilous economic milieu, it is the gold
investor who possesses peace of mind, knowing his assets are safe
from the ravages of the developing financial storm.



Clif Droke
29 May 2000

SHIFTY

(05/27/2000; 16:38:10 MDT - Msg ID: 31426)

AUNUGGETS

Still here, running late (Im late Im late for a very important date!) I mine in north Georgia! Nice gold in Georgia. Gotta go! No time, should have left this morning. The later I got the HOTTER it got. I don't have A/C. It's just now cooling off enough to hit the road. see ya $hifty

Aragorn III

(05/27/2000; 18:28:51 MDT - Msg ID: 31427)

Growth and Value considerations for TheStranger, food for thought for ORO

I should stress it was not my intent to leave an impression that "all things human" could be put on par with a culture as seen in a petri dish. We certainly have an ability to exercise some mindful control over our destiny and our productivity as you surely know, there are in fact limits beyond our control.

Where you have remarked in your recent post, "I know the world's supply of above-ground gold currently grows at something like 2% per year. Meanwhile, the world population apparently doubles every 30 years or so, also indicating a rate of increase of about 2%. I would assume that, the higher the price of gold, the greater the rate of production and vice versa."

We do not see price alone as a controlling factor for the rate of new gold production. In Turkey they have watched the price of gold increase by 800 percent in less than five years. Many others could be found able to boast of similar currency misfortune. Yet, let the price double, and double, and double again, it is not expected that gold production in these areas will move greatly beyond the mining pace seen today, certainly never keeping pace with price.

A better speculation for you to attempt would be this: "I would assume that, the higher the **relative value** of gold, the greater the rate of production and vice versa." Certainly, we must acknowledge that the ATTEMPT would naturally be made to pursue greater production, but there are natural limits to the success, as we will see next.

To start, we revisit your initial observation, "I know the world's supply of above-ground gold currently grows at something like 2% per year." Let us think about this practically. We have all heard the claims that compound interest has been described as "the greatest force invented by mankind" or some such variation of that. A single penny invested in the days of Christopher Columbus would now be a vast fortune were the account to grow by 2% each year. You surely see the limitation for above-ground gold supplies to expand at such a rate for any sustainable period. Given enough time, we would have to begin storage on the moon! But no. As the above-ground inventory is increased, such an additional annual two percent production would require ever more reserves to be found, yet the below-ground resources are not growing. They diminish with the removal of each ounce today. Further, I do not foresee the pavement of Paris or New York being torn up for the traces of gold to be found below.

What now of the "biological" rates of inflation I spoke of for the real economy of goods and services? This is no petri dish to be sure, and our own numbers are not expanding exponentially, yet consider this example of which you are keenly aware but shared "out loud" for the benefit of all to see how quickly we may let the productive genie inflate outside of the bottle of steady population.

For this instructive example, I need reach no further than my own dear circle of friends. Selecting among them I shall make you aware of three; one from China (who indicates the "daily wages" among his family and neighbors during his youth were nearly zero because the farming existence was simple and self-sufficient in nature) while the other two for this example originate from Viet Nam and India. In the countryside of their native lands, you can easily imagine there to be little opportunity for them to add meaningful levels of productive value for which the world's wealthy population would compete to purchase. If you work the long day in fields with a hoe to grow just enough turnips and cabbage to feed your family, you do nothing to ADD to the value of gold held by others because you have no EXCESS to offer in exchange for the gold. To be sure, the turnips could be exchanged for gold, which could then be exchanged for an equivalent value of rice and wheat. But had excess foodstuffs been produced against a backdrop of a given gold supply, the gold price of turnips would surely be reduced due to the inflation of real turnip supply.

It may be argued what rate may dictate for the productive growth of these many similar people...the development and provision of infrastructure (a new road, an electric cable, water distribution lines, etc.) would open a gate to greater productivity among the existing populations. When viewed like this, at question is how quickly the infrastructure, productive capacity, and concurrent opportunities of a "New London" or "New Denver" or "New Pittsbugh" could be developed and brought to these populations.

If we turn to my three selected friends, we are offered a better lesson and insight in growth rate potential for the real economy. While the city may not come quickly to the boy, the boy may nevertheless come quickly to the city! Right now, each of these three gentlemen are engineers in U.S. cities, producing far more real value in each year than they ever did before or can personally consume. In very little time we can see how the real excess output of three individuals rose, and as such, the product inflation they produced help "cheapen" their respective products, while at the same time adding to the value and competition for the existing gold supply as a "store of wealth" asset.

Having thus cast your comments and assumption in a better light, what do we make of your concluding remark: "Doesn't this mean the amount of tradable gold would be almost thermostatically controlled by market forces in the long run?" Perhaps we may now see that "free gold" would be on course for a grand adjustment to higher valuation relative to all things, including currency (particularly the U.S. currency!), which is then to be followed by a salient trend of sustained, climbing real value, even as it may be mined (and taxed accordingly by the sovereign state) with the utmost vigor.

ORO, rather than sacrificing gold as a mere tool to enhance/enforce market discipline to banking in general, would it not be more suitable to allow gold to perform more perfectly its unique ability in the role of an unmanipulated, un-artificially-inflated wealth asset?

got gold appreciation?

TheStranger

(05/27/2000; 20:10:02 MDT - Msg ID: 31428)

Aragorn III, Marius

You are something else, Aragorn. Your #31427 is a long and thought-provoking missive aimed at a near total "stranger". I thank you for taking the time.

Your remarks do, on the whole, make good reading. So much so, that I hope you'll forgive one nitpick. Certainly your observation about compounding is correct. The supply of above-ground gold cannot grow at 2% ad infinitum. But, for that matter, neither can the supply of anything else, including the human beings who might want to possess that gold. Might we not, in fact, be looking for space on the moon to store a population surplus long before we needed a spot for more gold. The issue, in other words, is not whether above ground gold can continue to grow at 2% in the VERY long run. Rather, the issue is whether growth in the supply might rise and fall to reflect demand in the FAIRLY long run (your lifetime, perhaps). It seems logical to me that it will, and, in fact, that it already does.

If this is so, then gold, like scrip, is clearly inflatable. And no alchemy is necessary, either. All that's required is an inordinate diversion of the world's productive resources into gold mining.


Leland - I hope your #31425 was an attempt to show how far off base that guy is. When dollars become scarce relative to other currencies, one thing which has proven true time and time again is that people run to the dollar itself, not gold. Fortunately, however, it is virtually all currencies which are being inflated nowadays, not just foreign ones. Believe me, the world is not about to experience deflation in any of them.

Marius - Thanks!

tedw

(05/27/2000; 20:18:32 MDT - Msg ID: 31429)

Silver and China

http://www.usagold.com

Ted Butlers article on silver was interesting, especially
the link to the silver institute and their recent press release.


The Press Release attritbutes the Offical Sector selling of
Silver from China as keeping the price down.


That being so, the coming war with China over Taiwan should
be the cause of silvers precipitous rise.

Thoughts?

Solomon Weaver

(05/27/2000; 20:44:57 MDT - Msg ID: 31430)

Stranger - Inflation

Leland - I hope your #31425 was an attempt to show how far off base that guy is. When dollars become scarce relative to other currencies, one thing which has proven true time and time again is that people run to the dollar itself, not gold. Fortunately, however, it is virtually all currencies which are being inflated nowadays, not just foreign ones. Believe me, the world is not about to experience deflation in any of them.

----------

Stranger

The truth of your comment depends on "which" definition of inflation one uses.

In the sense that almost all Central Banks and Governments will create additional money to handle liquidity crisis, I will agree with you that most currencies are experiencing "monetary inflation".

On the other hand, the popular concept of "inflation" is actually "increase in average pricing of goods and services". Remembering that the "price of a good" is related to the amount of money "available" from multiple sources to "bid" for it, we should consider that when the "desire to spend" decreases dramatically (drop in monetary VELOCITY), there can be siginficant price decreases, even in the face of "monetary" inflation of the money supply.

What appears to be driving the value of the dollar up now is the "scarcity" of liquid dollars to service debt, and perhaps an accelerated attempt to move out of dollar debt. It is almost irrational, but we could see significant dollar strenghtening in the near term (of course only makes the "correction" later more severe). By the way, in that correction, don't expect to see gold and dollar moving together anymore.

Poor old Solomon

TheStranger

(05/27/2000; 23:52:18 MDT - Msg ID: 31431)

Solomon

Thanks for your input.

The contingency you raise, namely that "there can be
significant price decreases, even in the face of monetary inflation" is undoubtedly true, but never more than anecdotally so. What you may have really meant to say, if you'll forgive my presumption, is that SYSTEMIC price deflation can occur despite a policy of monetary inflation. This argument has been made before here at the Round Table on several occasions.

For your benefit, I will repeat a challenge made long ago to all the Knights assembled. Towit: Please cite a single historical example where this scenario has actually occurred.

Needless to say, there is no example. Nor will there ever be. Real monetary inflation ("real" meaning an increase in the supply of money relative to the supply of goods and services) has ALWAYS lead to higher prices. This is because the value of money, like the value of anything else, is a function of supply and demand.

If you want to take up the challenge, here's a hint: Don't waste time on America between 1929 and 1933. During that deflationary period the nation's money supply dropped by a third!

Leland

(05/28/2000; 02:27:38 MDT - Msg ID: 31432)

How About "Voodoo"?

May 28, 2000


RECKONINGS / By PAUL KRUGMAN

Money for Nothing?

Economists don't usually make good
speculators, because they think too
much. Like the famous if apocryphal
professor who refused to pick up a $100
bill, they tend to assume that if there were
money to be had, someone would already
have taken it.

However, caution that can be a liability on
the trading floor is an asset off it. Sometimes the observant do spot
opportunities for large, risk-free gain -- $100 bills lying in the street --
that others have somehow missed. But a wise man doesn't assume that
such opportunities will present themselves on a regular basis, and he
certainly doesn't use that assumption as a basis for his family budget -- or
his plan to save Social Security.

It is a fact that historically stocks have been a very good investment. The
best-known demonstration of that fact comes from Jeremy Siegel of the
University of Pennsylvania, who has pointed out --in his book "Stocks
for the Long Run" -- that during the 20th century anyone who was willing
to buy and hold for long periods would almost always have done better
buying stocks than bonds. So there wasn't a tradeoff between risk and
return: stocks were just a better investment, period. It turns out that there
was a $100 bill lying on the sidewalk (quite a few billion bills, actually)
that for some reason nobody picked up.

But many people have misunderstood what that observation means. It
doesn't say that there is some natural law guaranteeing that stocks will
always be a great investment; it says that historically stocks have been
underpriced. Investors weren't willing to pay as much for claims on
corporate earnings as they would have if they had properly understood
how low the risks were.

And a funny thing happened on the way to the 21st century: the
price-earnings ratio -- the price of a dollar of corporate earnings --
soared. In the period studied by Professor Siegel prices were on average
less than 15 times earnings, and stock investors on average earned a real
return of 7 percent. Nowadays the price-earnings ratio is on average
more like 30. Is this irrational exuberance, or did investors finally absorb
Professor Siegel's lesson? Either way, that $100 bill has now been
picked up. If stock investors now have to pay twice as much as they
used to for a claim on earnings, and if profits grow in the future as they
have in the past, those investors should now expect to earn only half the
historical rate of return.

And yet many of those offering plans to reform Social Security -- among
them, of course, advisers to George W. Bush -- insist that stocks are the
answer, and that it is safe to assume that stocks will keep on yielding 7
percent forever. And if you try to point out that buying a piece of
corporate America is much more expensive than it used to be, they just
repeat the mantra that stocks have historically been a great investment. In
other words, that $100 bill was there yesterday, so it must still be there,
right?

Is the odd susceptibility of first-rate economists to such a na�ve fallacy a
triumph of wishful thinking over analysis, or a disingenuous bow to
political expediency? Recent remarks by Mr. Bush offer evidence of
good old-fashioned American disingenuity at work.

In a May 15 speech he asked his listeners to "consider this simple fact:
even if a worker chose only the safest investment in the world, an
inflation-adjusted U.S. government bond, he or she would receive twice
the rate of return of Social Security." That's an amazing fact; it's even
more amazing when you realize that the Social Security system invests all
its money in, you guessed it, U.S. government bonds. But the explanation
-- which Mr. Bush's advisers understand very well, even if the governor
does not -- is that today's workers are not only paying for their own
retirement, but also supporting today's retirees. And if you think that's a
minor detail -- that the question of how to meet existing obligations when
workers are allowed to invest their contributions elsewhere is a side issue
-- let me assure you that I too would have no trouble devising a painless
plan to save Social Security, if you let me assume that a large part of the
system's obligations would magically disappear.

Or maybe "magic" isn't quite the right word. How about "voodoo"?

(Thanks to THE NEW YORK TIMES, And Fair Use For Educational/Research Purposes Only.)

View Yesterday's Discussion.

Leland

(05/28/2000; 03:18:09 MDT - Msg ID: 31433)

If You Like Paul Krugman...Here's His Home Page

http://www.mit.edu/people/krugman/index.html.

gidsek

(05/28/2000; 03:21:11 MDT - Msg ID: 31434)

Niall Smith: Director, Deutsche Bank Securities

http://mny.co.za/BusToday.nsf/Current/422567D900452FF8422568EB0056FEEEMONEYWEB: Is he Father Christmas or is he just a really smart guy? Niall Smith, director of Deutsche Bank Securities is with us and today Deutsche Bank came out with the warrant that you issued -- it's the Gold Fields C1, call 1, we'll go into that in a little while -- but you are offering a price which is above the last trading price. Now let's just talk about warrants. You brought the first warrants into South Africa, the market has developed very well, but what is a warrant?

NIALL SMITH: Right, Alec, a warrant really gives an individual a cheap way to get into blue chip stock, and what they pay is about a quarter or even less of the price of the share, and they get the upside on the share.

MONEYWEB: Now, when was this Gold Fields Call 1, or C1 warrant launched?

NIALL SMITH: I don't know exactly, but probably, typically our warrants are a year and a half or so, probably about a year and a half ago, so I would expect about a year and a half ago.

MONEYWEB: So a year and a half and now it's coming up for expiry on 15 June.

NIALL SMITH: Yes, so about three weeks to go.

MONEYWEB: Now for this warrant to be worth anything, Gold Fields Ltd share price has to get to R32.25.

NIALL SMITH: Correct. The investor in the warrant makes the difference between the R32.25 and whatever the share price is, so if the share price gets to R35, they'll make the difference between R32.25 and R35.

MONEYWEB: But at this point in time, the share price is R25. Now that would suggest theoretically the warrant is worthless?

NIALL SMITH: Well, that's right, it's very close to worthless. I think if you do normal calculations on this warrant, it's worth maybe 2c, around there, 2c, 3c. However, we are running a risk business, these are our warrants that we've issued and in terms of that, there is a chance that the warrant goes above R32.25. There are about 48m to 50m warrants in issue, if that happens, we stand to lose R20m. It's not our business to lose R20m. So what we've decided to do, and we do this fairly often overseas, we've done it in South Africa before, and Sasol, Breweries and Barlow warrants, where they approach expiry, the warrant is not too far from expiry and strike price, we make a decision -- do we want to play roulette, do we want to go for red or black? Now, if we're wrong in going for red or black, we can lose R20m, so what we do is we make a conscious decision, it's better to spend 5c on 48m warrants. If people want to sell them, we'll lose a couple of million rand. That's fine, we're happy to lose one or two million rand, to save the probability of losing R20m.

MONEYWEB: But why don't you just go into the market and buy as many as you can at 2c, which is where they last traded?

NIALL SMITH: Well, Alec, it's the normal thing, if you bid for 2c, you'll get a few warrants, you won't get very many. Yesterday we traded -- I think it was just over 2m warrants we managed to buy -- so certainly if you bid up the price, you are more likely to attract sellers and, let's be honest, if you hold that warrant, your probability of making a profit is extremely low. So, if I was an investor, I wouldn't actually hold onto that warrant. I think it's a great price, sell now, from Deutsche Bank's point of view, we don't like risk, we don't like the probability of losing R20m or more so, although it's small, although the probability is maybe a few percent�.

MONEYWEB: Just explain why, how would you lose R20m?

NIALL SMITH: Let's say the price jumped. The price jumped now, there's now time left for us to do anything about that. We can't recover that by buying the shares or anything, there's three weeks left. We can't recover that. If the price jumped to R30, went to R35, we've got 48m warrants in issue. Just simple calculation -- if the share price is R2 above R32.25, we lose huge amounts of money, huge. Now, in three weeks we can't do anything about that, so I don't like gambling. In terms of the desk we run, we run a business, we're here for the long term and I'm happy we'll spend one or two million rand, that's fine, that's the cost of issuing warrants. Now I don't want to say every warrant that approaches expiry we're going to pay these sort of numbers, but you can expect that we will pay up above ruling prices if warrants are coming to expiry and they're fairly close, or we think they're close enough.

MONEYWEB: And if it's highly speculative like this one is ...

NIALL SMITH: I think it's a highly speculative stock.

MONEYWEB: Clive Roffey is talking about a catapult that's coming through and, if that were to happen end of May, he's got five days left now to get over $300 an ounce, so if that were to happen, if the gold price went over $300 an ounce, you'd be in big trouble.

NIALL SMITH: Absolutely. You do the sums. R2 on 48m warrants, you start losing money, so we're not prepared to take that risk, we don't run our business like that, we say we'll pay the money, it costs us a couple of million. That's fine, we're happy to do that. We are here for the long term. We've got lots of warrants, and typically, as I say, we've done this before on SAB, on Barlows, on Sasol, and on the other warrants where we think there's a realistic, even though small, possibility, even if it's a 5% possibility, of a warrant expiring in the money, we'll pay the money, we'll take the pain, Deutsche Bank can afford that, but we don't like gambling.

MONEYWEB: You don't know anything? There's nothing you can tell us about the announcement that came out yesterday from Gold Fields, saying they are involved in talks.

NIALL SMITH: Unfortunately, I can't help you.

MONEYWEB: But the fact is, that increases is your risk.

NIALL SMITH: It does increase the risk, but I can't say anything, it might be good news, it might be bad, I don't know anything.

MONEYWEB: What a fascinating development. All those people who bought warrants for 2c yesterday, Niall Smith will give you 5c for them now, but they've got to be a particular type, they're the Gold Fields call 1s and they expire on 15th June. Theoretically worth nothing, but who knows, Clive Roffey has been right before, and we've also got some discussions going on with Gold Fields Ltd at the moment offshore. They've warned us about it and some of the people were saying that they could be talking about a price of around R35. If that happens, then Niall Smith is going to look like a genius.
By: Alec Hogg

ss of nep

(05/28/2000; 03:56:12 MDT - Msg ID: 31435)

old news ?

http://www.tv-u.com/china.htmlThe McAlvany Intelligence Advisor

SPECIAL REPORT
RED TIDE: THE CHINESE COMMUNIST
TARGETING OF AMERICA

May, 1997

Rugen

(05/28/2000; 04:19:00 MDT - Msg ID: 31436)

The Wolf and the Sheep

The Wolf And The SheepSect. TwoOperation Trojan HorseThe JanissaryThe wolf's greatest problem is other wolves. In the days of the Ottoman Empire, the Turkish Sultan ruled Arabs, Seljuk Turks, Ottoman Turks, Khazar Turks, Kurds, and varied other wolf-packs going under one name or another. Each had his own problems and each had problems with the other. When ordered to mobilize to go to war, he would find them fighting among themselves. He would have to delay until he got the dispute worked out before he could start a campaign, then he would have to wait again when another fight broke out. At all times some of his followers were off invading a neighbor, or squabbling about this or that. Wolves are great on the hunt. But, getting them to the hunt and getting the hunt started wrecked the dreams of many an alpha- wolf. The solution was found - found in the least expected place - the sheep.Sheep have many qualifications necessary to be "super-wolves." Without a sheepfold, and without their Shepherd to teach them, they become what they are taught. Naturally trusting, single- minded, and dedicated, and with a substitute wolf-shepherd to tell them "wolf-right" from "wolf-wrong," and trained to war, their newly acquired "wolf- heart" causes them to become as vicious as any biological-wolf. Unlike wolves, they will fight to the last drop of their sheep's-blood. This is the sort of building material an alpha-wolf craves. An elite storm- troop, single minded, loyal to him alone. Of course, they must be kept loyal.The sultan recruited a force made up of indoctrinated-sheep. He sent emissaries to take young sheep by force. He bought others from child-stealers and kidnapers. He paid top dollar and took good care of his young "guests." They were slaves, but were never called "slaves." Even slaves object to being called slaves. They were called "Janissaries," but, since he paid them a "salary" - they were slaves.As mentioned earlier, rather than be the slave of another wolf, a wolf will drive a camel or a taxi, or almost anything rather than take a salary. "Salary-takers" are at the bottom of the pack's pecking order. To a wolf - the difference between being a plant manager and a floor sweeper is a question of degree. The salary makes both salary-slaves. Both are dependent on their salary- payer. A wolf, working for himself, at least keeps his pretensions and can dream of one day rising on the ladder to become an alpha-wolf himself. The salary is the wolf's slave-chain.1 The sultan fed his young guests well, he clothed them in the finest apparel, and had them converted to Islam. They were then trained to be warriors - janissaries - the alpha-wolf's salaried representatives.The "janissary," a sheep-slave with a wolf heart! The "leaven of the pharisees." They were the most fanatical group of warriors Islam has ever known. They had the discipline that came with 1,000 generations of selective breeding guaranteeing sheep- like obedience, and they had placed in their hearts the "jihad," the "holy-war" of the wolves. This force numbered 20,000 to 40,000. These disciplined, well trained warriors formed the spear-point of the Ottoman invasions of Europe, and they were almost invincible. The first wild-eyed sword-swinging heathen trying to separate the Christian's head from his shoulders often had blond hair and blue eyes. His hate- filled eyes and heart were filled with wolf-lore. The wolves honored them - they were elite. Most wolves feared them, but looked down on them at the same time, because they were "wage-slaves." In time, conditions changed. The janissaries were allowed to keep what they captured from the sultan's enemies, and in this way they amassed wealth, possessions, estates, slaves, and women. But, they were prohibited from marrying or keeping children bred by their slaves. In the wolf-world power comes from riches. "Great" wealth can only be inherited. Seldom can enough wealth be accumulated in a single generation to cause one to become a rival to the alpha-wolf.2 On the death of the janissary, his estate went to the janissary organization, and the organization became strong and powerful.The janissary not only faithfully fought Islam's wars, but their hereditary make-up made them remarkably good governors and administrators. In time they also provided the police, and relatively honest tax-collectors - in-as-far as honest tax- collectors can be found in a wolf society. In peace time they drew a salary from the sultan. In war time they gathered the loot from the enemies of their leader the Sultan. They were Islam's civil service and first line of defense.In time, these Janissaries took complete control. They ruled the Sultan and appointed his successor. They stopped the humiliating salary "slave-wage" and went into business themselves or took "tribute" (their protection money) from the wolves just as other wolves do. Being the most powerful with the powerful janissary organization to back them, they took most of the tribute. Now they were no longer "wage- slaves."3 It had become socially acceptable to join, and every wolf in Islam tried to enlist his children in the organization, drastically changing its composition in its latter days.4Some believe that clips showing blond-haired figures mixed in among the packs of dark-skinned wolves in mid-east newsreels may account for some of yesterday's "missing sheep" - now trained to be janissaries.5The American Red WolfRed-wolves, living around the Great Lakes captured the frontier children of the sheep, raised them as red-wolves, and gave them wolf-hearts. They became chiefs and medicine men. They were worse in their treatment of captured sheep than the red-wolves were. Having the natural discipline that came from their breeding - they single-mindedly sought to exterminate the white sheep. Their captors turned them to war and they obeyed with their entire heart. Their vision became the destruction of the flock. The names Simon Girty and Joseph Brandt come to mind. The smiling blond-haired stranger knocking at the stockade gate, begging shelter for the night - the one who held the door open for the wolf pack to rush in was the trusted one who then gleefully joined the massacre.The ravaged Sheep became careful. Many was the time Lew Wetzel, "Deathwind" himself, was bound hand and foot after entering a fort and released only when someone vouched for him. The janissary is the most feared of all foes because one cannot tell him by sight. His skin and smell are sheep, but his heart is wolf.6 Operation Trojan-Horse PoliticalWolves tend flocks of sheep with as much care as farmers tend cattle. They know all about them. It's their job. To prevent the unexpected, wolves station lookouts wherever sheep gather. Where the sheep appear agitated, or belligerent, lookouts are doubled and special care is taken.This care consists of inserting janissaries among the dissident sheep to take leadership if possible, and if that is not possible, to plant "disinformation." Rhodesia, surrounded by wolves, fought to victory. In the hour of victory their leader, Iaan Sheep, without consulting the flock, negotiated to turn the entire sheepfold over to the wolves: a magnificent coup resulting from prior careful and systematic wolf-planning. The elected ram has all the hall-marks of a janissary with a wolf-heart.South Africa, the most powerful nation in Africa, has been brought to her knees by a janissary who was given the leadership of the sheep-fold because of favorable mention given him in the South African "wolf-howl." In the U.S. the dissident sheep were given a leader. George Janissary. The George Janissary's third-party organization could have won the presidency. This would have given the sheep a grass- roots organization - something the wolves definitely do not want the sheep to have. So, George was shot and his organization fell apart. Later, George admitted to being a liberal all along. The conservative sheep of America's right wing are once again restless. To take charge and lead them in circles, the wolves have given them a distinguished janissary to be their leader, one who is being discretely promoted by the wolf-howl. The "sheep- leader" has a wolf-heart. He lies. He violates the Shepherds' laws.Rams who wish to take charge of the sheep in the future will have to pass through the filter of the Shepherd's Law if they expect be accepted by the sheep. If they pass through the filter, they won't be janissaries.Wolves Suppress Sheep RebellionWolves accumulate, take, steal, and monopolize. It's their nature. The Shepherd says that the land is to be divided among his sheep and never sold.7 Sheep law says that the land is never to be taxed, because missing a tax payment will cause the land to default to another.8Suppose wolves come to take a sheep's property and the sheep won't relinquish it, protesting that "the Shepherd" gave it to him and said that it is never to be sold. If he were allowed to get away with this, the rest of the flock might also defy wolf- authority and refuse to relinquish their land when foreclosed. This would create a problem. A sheep presenting a similar problem was a farmer named Kirk - Arthur Kirk. Such rebellion must be rapidly crushed as an example to others. A janissary strike-force composed of salary-slaves was sent to punish him.9 Wolves know that sheep will tolerate abuse from other sheep that they will not tolerate from wolves. They went to Arthur Kirk's farmhouse door and called him out. They called him names to incite him. When he came to the door - brrrrrup, bang! bang! bang! It was all over. Kirk, the sheep who showed defiance, was rapidly taken down. The point was made; Sheep who defy the wolf or his representatives, or who may become a rallying point, die. That's the way it is. The wolf-howl reported that another radical farm protester was shot by "peace officers" who were simply enforcing "the law of the land." Wolf Tribute Taxes I pay my taxes. I overpay my taxes. I encourage all others to pay their taxes. I have an accountant who tells me how much taxes I have to pay and I add extra to them. I pay under protest - but I pay.Some people use the legal system to lawfully avoid paying taxes. More power to them. However, I don't have the time or the expertise to do this. There is a very large tax-protest movement in America. At the root of the tax-protest movement is the knowledge that sheep cannot own land that is taxed. A single missed tax payment reveals who owns the land. The sheep know that the scriptures say that "the children are free" from taxes. So they go to the limit to gain exceptions so that they will not have to pay the present income tax. This infuriates the wolf who treats legitimate tax avoidance as unwillingness to pay tribute and is treason to themselves. One such person was Gordon Kahl. He was ambushed by Federal janissaries and killed. A bullet was fired into the back of his head. This type of death is a wolf trademark - the bullet in the back of the head. It leaves no doubt that the offender was executed by "the pack" for crimes against the pack. In China, the conquering reds killed millions of their opponents, each with a bullet in back of the head. In the USSR, millions were shot, a bullet in back of the head. In Poland, the reds killed the Polish officer corps - each with a bullet in the back of the head. Kahl's death was supposed to have been hushed up. But, in spite of wolf-howl disinformation, the message went out among the "kings and priests" that this killing was wrong. Kahl was really trying to obey the Law with his tax avoidance.10 The wolves say that Kahl was breaking the law by not paying these taxes, which thereby made him an outlaw. But the message among the flocks is, "Hey, this sheep was killed for obeying God's law!" This is not what the wolves want to hear. It is not what they want the sheep to be told.Another case at present is that of a "false witness." Janissaries claim that a sheep had in his possession a forbidden weapon. The sheep said his fingerprints were fraudulently planted on the weapon. If true, that is called a "false witness" which sheep-law calls unlawful. The accused sheep says that a wolf-janissary lied about the whole thing and that he is not going to play their game and go to jail for 5 to 10 years for something he didn't do. He then went to the top of a distant mountain where wolves couldn't get him.11Wolves cannot allow a sheep to wander off and form his own country. A Robin Hood in his Sherwood Forest is the last thing the wolves need. So, they sent janissaries to do a Kahl job, a Kirk job - on him. But, instead, the janissaries managed to do something that is against all sheep rules - something sheep consider "unfair." They killed a child. A young kid. "Women and children first" is as old as sheep-history. They are evacuated first from sinking ships, even when rams go down. Sheep always look after their women and children. Sheep are that way. Wolves aren't. Wolves are the first in the life-boats. Even the wolf- howl admits it. Remember the Greek passenger ship that went down and the passengers accused the crew of getting in the lifeboats first and leaving them on the ship to drown? That's the nature of wolves. The Titanic went down and those saved were women and children. The male passengers and the crew went down with the ship. It is the difference between a sheep- ship and a wolf-ship. The Weaver Massacre on the mountain at Ruby Creek got out of hand. The janissaries ambushed a sheep and killed one of his kids. The wolf-howl blacked it out outside the packs hunting area. It was only later that the sheep in other hunting areas heard about it. The Northwest wolf-pack hunting area gave the sheep a wolf- version of the story, but to this very day many other parts of the nation know nothing about it. The wolves know how to manage the sheep with their wolf-howl. They've had enough practice.They knew what would happen in the great valley if the sheep caught the smell of wolves making a kill. A sheep stampede could result! It has happened before. The German sheep caught the smell of blood as the wolves killed Russian sheep and they stampeded. It took the combined efforts of all the wolf-packs in the world to get them under control again. Wolves already have their problems with other wolves, they don't need the flock stampeding off somewhere. The next stampede could take a hundred years to bring under control. Perhaps never. The wolves made their Ruby Creek kill, and then stood still and waited to see what the sheep were going to do. Most sheep knew nothing about it, so they did nothing. A few were restless. As soon as these settle down and go back to acting like sheep - the packing house operation will start up again. The wolves have shown the sheep once more that there is no Robin Hood, and there's no Sherwood Forest where one can run away and hide. That's the way wolves manage sheep. Wolves Require Janissary BonafideTo be truly accepted as a janissary and receive the benefits that accrue to a janissary - a sheep must irretrievably divorce himself from the flock. That irretrievable step is often a capitol crime. The sheep who attacks his God and curses him can then be trusted by the wolves - but not by the sheep. The bridges are burned and the outlaw- sheep is considered "traitor" by the rest of the flock. He is THEN a fit candidate to become a "janissary."The change of allegiance may be sealed by the ancient ritual of marriage.12 Marriage is the ancient ritual that merges kingdoms, economic empires, and can be the blood union of wolf and sheep. It causes the offspring to inherit the characteristics of the wolf while appearing to be a sheep.13 This preferred offspring is needed to open the door to the sheepfold because the wolf disguised by a sheep-skin is the wolf most difficult to detect. The offspring of a wolf- sheep marriage is one of the most valuable acquisitions of the wolf-pack. Its lifetime job is opening the gates of the sheepfold so that the wolves may enter. The one who makes it possible receives special consideration.Next to the union of the sheep with the wolf is the bonafide of allowing one's child to be taken and united with a wolf. Sheep- law dealing with this infraction is strict. The father of the wayward sheep wars against his God if he refuses to disown his sacrilegious offspring.14 The sheep who refuses to disown his mixed off-spring may now be accepted as bona fide, he has a "wolf-heart." The wolves may now safely pay him the benefits accruing to a loyal janissary.In South Africa, a janissary named DeKlerkasheep - a sheep with a wolf- heart - has given his blessing to his son's marrying a black she- wolf. To obtain the substantial rewards a janissary receives - bridges to the flock must be burnt.In Germany, a wolf posing as a sheep was elected to the nation's highest office. He helped bring more than 100,000 sheep to trial for wolf-assault. Janissary judges have filled the prisons with sheep accused of assaulting wolves. In Russia, 35,000,000 sheep and their allies died in the teeth of the wolves. Not a single wolf has been found guilty. It would be against nature if they were. Wolves see nothing wrong with wolves doing what wolves do.Janissaries Protect WolvesAn injured wolf quickly falls victim to another wolf. "Red Brigade" wolves in Italy shoot victims in the legs so they can't walk. Being a cripple is one of the ultimate injuries inflicted by wolves on wolves. Wolves have this thing about hurting other wolves, breaking fingers, arms, and legs, to make cripples out of them. American red-wolves used to cut the Achilles tendon so the injured one could not dodge the blows of other wolves. Desert- wolves cut off hands or feet, or cut off eyelids to make their selected victims blind and forced to beg. It's what wolves do. Wolves can fight skillfully and well. But they prefer to use others to fight their battles: they pay them handsomely. Under sheep-rules this appears cowardly, but this is not the case. The wolves use sheep-janissaries to preserve the wolf from being injured and falling prey to other wolves. The highest example of wolf-skill is to fulfill the wolf motto; "use an enemy to kill an enemy." Wise sheep never talk down wolves. Wolves are often magnificent animals. They are strong and muscular. They are the end product of 1,000 generations of selective breeding - breeding the very best of those animals who survived doing what wolves do. I had a dog when I was in the Army. A German shepherd. His name was Thor. I used him to hunt people. I know something about dogs. I saw a coyote. A coyote is a wolf, a small wolf. My dog wanted that coyote. I told him to go get him. Then I began to have second thoughts. Maybe that was not such a good idea. I took a good look at that coyote. That coyote was nothing but a bundle of wire and steel muscles. My dog was good. He weighed 110 pounds. He was tough. But he was a dog and he was chasing a wolf. If my dog caught that wolf, he would probably kill him, but my dog would be hurt before it was over. So, I called my dog off. Fighting wolves is something that should never be undertaken lightly. Once started - it's for keeps. Wolves seldom take prisoners. There have been sheep-armies which held wolf-armies in contempt, and were exterminated as a consequence. Just because you are at the front and the wolves remain behind working in finance or in quartermaster, it doesn't mean that they are cowards. It means that they don't see the need to fight when they have gotten someone else to fight for them. And most believe they have more to lose by being injured. An injured wolf is sooner or later going to be attacked by another wolf. Among wolves there is no such thing as a "knight in armor" ready to rescue those in distress. Wolves can be family-oriented, musicians, merchants, traders, agitators, Mafia hit-men, or "wolves-on- patrol," but "knights" are butts of their jokes. I have played football against wolves and they weren't afraid to butt heads. I have fought them in the ring and they weren't afraid to get in your face. Wolves are a lot of things - but yellow isn't a trait. Don't get the idea they are yellow. When they back away and feign flight - expect a trap. They go by different rules. A wolf is a wolf. He is what he is. He was made by God to cull the flocks - and he does it very well. He forces the sheep to choose.15

HI - HAT

(05/28/2000; 06:52:50 MDT - Msg ID: 31437)

Premises

The arguements for the productive values, outcomes, and modern necessities of a Fiat - debt-based, fractional reserve money medium will Ladies and Gentlemen soon have its apologists taking you to the etherial regions of modern Economics.

Like the Spiritualists old preoccupation with how many Angels can dance on the head of a pin, it is given modern voice and status by the Economists, who rationalize the debt-money in exchange for service and commodity wealth IE.exchange of nothing for something of value, as how many consumers can dance on the head of a heroin needle.

Injecting further debt-money to maintain life-style

Is as IMMORAL as

Injecting heroin to maintain life.

The Master Wolves ; those enfranchised -Big Government - Big Banking, can for only a time enjoy the "free" blood from an enforced perpetual motion killing machine.

USAGOLD

(05/28/2000; 08:54:26 MDT - Msg ID: 31438)

GoldFields/FrancoNevada Rumor: This Could Be Important

As far as I know the merger deal described by "minesite.com" out of UK has not been verififed and must for the moment be considered rumor. It is neverthless extremely interesting and a potentially significant breakthrough. I don't know what all the implications are to such a merger though mine.com lists a few. Would such a mining company restrict the amount of gold it placed on the market as mine.com seems to infer? Now that makes for an interesting discussion subject.

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

MERGER OF GOLD FIELDS AND FRANCO NEVADA A DEFINING MOMENT FOR GOLD INDUSTRY.

The moment when Gold Fields and Franco Nevada actually pledge their troth will be a defining one for the gold industry and it would be wise for the hedgers
from Barrick to little Allstate Exploration to tear up their sell order tickets and throw out their bullion dealers� telephone numbers. As for the bankers such as JP
Morgan, Macquarie and Goldman Sachs who have wreaked such havoc in an industry they say they support, think again.

The merger between the two would bring together not only the three best brains in the gold industry - Chris Thompson of Gold Fields and Seymour Schulich
and Pierre Lassonde of Franco Nevada � but also create a new number two company wholly anti- hedging. Thompson dumped his company's hedge book at the
time of the statement by the central banks last September and anti-hedging is writ large in all policy statements made by Franco Nevada.

Barrick would still be number one , but the combination of Franco Nevada, currently number five in terms of market capitalisation and Gold Fields, now
number eight in world rankings, would start to run it close. And the companies have plenty of fire power. Gold Fields has minimal debt and Franco Nevada has
a bundle of cash.

Interestingly , the Financial Times, not known nowadays for its coverage of the resources fields, got the story half right, but very wrong. It claimed that Gold
Fields was after Franco Nevada's wholly owned Midas mine and that the company had around C$1 million in cash and marketable securities. Actually the sum
is nearer C$1 billion and it misses the point a bit that the Ken Snyder mine at Midas in Nevada is just a part of Franco Nevada's portfolio.

More importantly, it is the leading precious metals royalty company in the world with high margin producing properties and royalty interests in the world's
major gold camps and a total royalty portfolio spanning five million acres in six countries. It also, and this is a crucial key to the deal, has a royalty over
Barrick's best property. Gold Fields, for its part, has 4 million ounces of production a year with cash costs dropping below US$200/oz next year. Its reserves
of 74.4 million ozs are mostly in South Africa and it has an ambition to make an impact in North America.

Together the two companies would have a market capitalisation that would attract generalist fund managers. This , in turn, would increase their leverage to a rise
in the price of gold. Together, also, they could have real impact on the supply of physical gold to the market. This is power with a capital P and the possibility
will not be lost on bearish gold traders. Even now Gavyn Davies may be whispering a new message to Chancellor Brown, but as a politician he may be too
stupid to take it in.

28 May 2000

USAGOLD

(05/28/2000; 08:56:05 MDT - Msg ID: 31439)

Link to minesite.com

http://www.minesite.com/feature1.htmArticle below. . .

Golden Hook

(05/28/2000; 09:07:17 MDT - Msg ID: 31440)

(No Subject)

TEST

Golden Hook

(05/28/2000; 09:09:06 MDT - Msg ID: 31441)

TEST

TEST

Trail Guide

(05/28/2000; 09:32:47 MDT - Msg ID: 31442)

Comment

USAGOLD (5/28/2000; 8:54:26MT - usagold.com msg#: 31438)

--------Would such a mining company restrict the amount of gold it placed on the market as mine.com seems to infer? ----------------

A Great Hello to you USAGOLD!

You have to admit it would be an interesting development for the bullion markets if a large sector even "Thought" about redirecting supply. Almost like channeling gold away from the contract markets? (smile)

You know, that Golffields might be a good one to hold through "thick and thin" no matter what it's share price goes to? Oh, but if only investors would learn to reverse the "accepted" rules and place 90% of their hard money wealth in real gold and 10% in "the best gold companies". Then one could lean back and watch it all "play out" these next few months. No matter what happens.

I'll be back later. Hope you (and every American) is having a fine Memorial day.

Trail Guide

TheStranger

(05/28/2000; 09:34:05 MDT - Msg ID: 31443)

The Euro Rally

This is from the current Barron's:

"Europe's single currency rallied against the dollar last week, surprising
investors around the globe. Indeed, many analysts doubt it will maintain the
gains. Paradoxically, the euro's newfound strength came after the European
Central Bank's decision not to raise rates in response to the Fed's recent
move. It was seen as a hopeful sign the ECB is focusing on longer-term
issues, not short-term gyrations in the currency. It ended the week at 93.35
cents, versus 89.90 cents a week earlier."

Stranger's Note: The fact that Euro rallied after the Fed raised rates and the ECB didn't should testify to how disjointed the relationship between these two currencies had become. Despite what the article says, I would look for continuation of the Euro recovery back to dollar parity at least and probably beyond. Let's just hope it helps the dollar price of gold.

Journeyman

(05/28/2000; 10:13:28 MDT - Msg ID: 31444)

How About "Voodoo"? Pray for it!! @Leland, ALL

http://www.zolatimes.com/v2.32/socsec_mythtext.html
"In a May 15 speech he asked his listeners to "consider
this simple fact: even if a worker chose only the
safest investment in the world, an inflation-adjusted
U.S. government bond, he or she would receive twice the
rate of return of Social Security." That's an amazing
fact; it's even more amazing when you realize that the
Social Security system invests all its money in, you
guessed it, U.S. government bonds." -PAUL KRUGMAN from
Leland (5/28/2000; 2:27:38MT - usagold.com msg#: 31432)

But there's just a wee tiny little accounting abnormality about
those bonds given to the Social Security Administration by
FedGov:

THEY'RE NOT ACCOUNTED AS A US GVT. LIABILITY. The "U.S.
government bonds" that "the Social Security system invests all
its money in" are not accounted as a FedGov debt on FedGov books
as are all other FedGov bonds!! This interesting accounting
practice is the heart of the so-called "Unified Budget." In
nearly all political discussions in Washington D.C., when a pol
says, "budget," you can substitute "Unified Budget."

"Unified Budget" simply means any surplus SS taxes (FICA on your
pay stub) are spent by the FedGov just like any other tax take.
This "excess" SS tax money is accounted in the Unified Budget as
income, a credit, an "asset." Thus, as with any other income,
tax or otherwise, it REDUCES the FedGov deficit without creating
any balancing liability. Any normal bond-based government
borrowings WOULD create a liability that showed up on the FedGov
balance sheet if standard accrual accounting were used. But NOT
the pseudo bond-based borrowing from SS, which would otherwise
show up as an approximately $9 trillion additional liability,
almost tripeling the $5.6 trillion "official" (on-budget)
government debt to $14.6 trillion.

When asked, Alan Greenspan verified the accuracy of this
accounting procedure. {Greenspan quote}

Why? Why would Alan Greenspan, correctly I might add, endorse
this apparent glaring accounting "irregularity?"

BECAUSE, ACCORDING TO THE STATUTES, the F.I.C.A. (Federal
Insurance Contribution Act) money taken from your pay (and your
employer) is a TAX, not a payment to a retirement fund. That
money does NOT belong to you in any way at all. {Cong. Collins &
Greenspan quotes here from TC01L & TC01M} I repeat, the money
they take from you in the name of "Social Security" is NOT a
retirement fund payment. It is a TAX, plain and simple, and as
such doesn't obligate the government extorting that tax from you
and your employer to do a damn thing for you.

When you receive that Social Security check, it is, by statute, a
welfare payment. That's right, by statute, you're a welfare
recipient, just like the "food stamp folks" in the check-out
line. {Greenspan quote on people don't like to think of it as
welfare.} This is not meant to disparge those people impoverished
directly or indirectly by the ~50% tax load government imposes on
them.

I won't waste more bandwidth here. If you want the full story on
the statutory basis for my claims above, look up Journeyman
(3/22/2000; 11:23:21MDT - Msg ID:27282) in the archives. For a
full presentation of the SS problem in context, check out the
link in the header to this message.

If you still think I'm a touch cynical about so-called "Social
Security" - - and wonder why - - consider the implications of the
following quote from well-respected ex-Senator Sam Nunn:

"When Social Security was passed in 1935, life
expectancy was 61 and retirement age was 65. This was
actuarially sound." -ABC's This Week, 3 August, 1997

I'm not a Bush supporter (or a Gore supporter either), and I
doubt that either has a clue to the true status of Social
Security OR the real advantage of the "Bush" SS reform program
his father's advisers have cooked-up for him. Shucks, the
advisors probably don't really know either - - - this is
_politics_ after all.

What happens when some future Congress confronts the choice of
either paying the old folks empoverished by their predecessors --
or paying themselves? HINT: History (as recent as Russia's) shows
that the old folks eat it. So the advantage of Bush's plan is
that perhaps folks who avail themselves of the "Bush" SS option
may not starve; perhaps they'll be able to afford dog food.

Bush plan or no Bush plan, our kids and grand kids aren't going
to like SS much. So how about Vodoo instead? Pray for it!!

Regards & CYA,
Journeyman

Leland

(05/28/2000; 10:40:07 MDT - Msg ID: 31445)

Journeyman, As a Danger to America's Financial System...From 1937 to Date...Look at THIS

http://www.ssa.gov/OACT/COLA/taxRates.htmlFrom the SSA website.

USAGOLD

(05/28/2000; 10:50:58 MDT - Msg ID: 31446)

Greetings, Trail Guide. . .Let me Ramble a bit....as we slowly hike the crosscut

And a Happy Memorial Day to you as well.

With the derivatives mess, as outlined by Reg Howe, this morning at his Golden Sextant site, I can see why you've said so many times that the leverage is in the physical. He touches on something very important when he gets into the discussion about how much gold is actually on loan and how much is sold via the derivatives markets. I think the naked calls he refers to are much more prevalent than he even surmises. I remember right after the Washington Agreement was signed, the buzz among gold traders was the size of the naked call position that had to be filled. It was a wild, fearful scramble. This is when management clamped down in some of the bullion banks, people fired, changes made. Of course that's when the word went out that an investor could sell calls but they would have to be taken in "at market" -- which of course left holders at the mercy of the players. Odd that nearly every brokerage in the country was telling their options clients the same thing at the same time, don't you think? I expect that to happen again the next time we have a big run-up and then of course you verge on a TOCOM style default, as you have mentioned many times.

I am among those who is beginning to believe that the loan pool isn't as big as some have hypothesized and that very little of the derivative position is represented by physical. This could go to critical mass -- especially when you consider that on one side of the equation you have dollar inflation ramping up creating ever more dollars and on the other side you have the derviative positions holding down the price. In essence more dollars chasing ever fewer ounces of gold. The gold will eventually disappear. Open interest is dropping in gold because no one with any common sense believes they can make a profit trading gold derivatives on the long side anymore -- the John Henry syndrome.

Isn't it interesting, TG, that all these mega stock mutual funds (Janus, comes to mind), hedge funds (Quantum, Tiger, come to mind) and trading firms (John Henry) are having to close down or trim operations for essentially the same reason -- because they can no longer find anyone to peddle their positions to? Big enough to buy everything in site; but too big to find a buyer. These markets do eventually take care of themselves don't they? This is by far the most important development in the investment markets with huge social, economic and political repercussions and nobody is talking about it.

Now we will have a splintering over the coming months into smaller entities, competitions should be renewed. I think this is healthy for the investment business, but the current "paradigm" will likely suffer. The warning is very clear to those who read the signs. In fact, the process has begun. As I say, the markets do eventually take care of themselves.

A thought that occurred to me recently is that these gold derivative position might have been funnelled to Morgan and Deutsch to make it politically possible for a bailout to occur (via the "Too Big To Fail" Docrine) -- that bailout would be on paper products of course, but that could gun the price as they buy back their positions. In the end though, they will be left as we all know with some huge gold loans to pay at inflated prices -- their worst nightmare will have come to life.

As for the GoldFields and FrancoNevada, I would like to know what they are thinking. (??) (One thing that comes to mind is that I have had some clever mining people tell me that the best gold is not what you are bringing up now, but what you will bring up in the future. Consider that one!) I do not think the two have enough metal to affect the price by keeping production out of the market. So I think that minesite.com might be overly optimistic there. Besides these are companies not countries. It would be a different story if South Africa were to cartellize and restrict production with Australia, or some such thing, but two companies representing less than 200 tons of production annually won't have anything but a short term effect. How much of that 200 would they be willing to take off the market? They do have bills to pay.

I think they have something else in mind -- like a company with enough capitalization to attract big time mutual fund money. I don't know. Just guessing. I'll be watching with interest along with everyone else.

Overall, I agree with you as you well know, TG: Physical gold ownership is foundational; these stock plays should be with capital you have for speculation. These are really two different approaches, two different investment vehicles. As I have said many times, gold stocks are stocks first and gold second -- Ashanti and Cambior being proof of the pudding. Many lost big money thinking they owned a gold play only to see the stock tank when the price of gold rose. Now there have been several lawsuits filed against Ashanti by those who claim they were never properly informed that Ashanti had become essentially an anti-gold mining company.

Please realize, I'm not saying you shouldn't invest in gold stocks; I am saying that they are risky for many reasons and require a good eye. A good advisor is requried, but how do you find a good advisor? They all seem good to the uninitiated. At least if you read this site, you know that buying unhedged or lightly hedged producers is the way to go. But after that there are a dozen other considerations.

Gold itself is less ambiguous. Any gold investor entering the gold stock arena should understand that stocks are not really a proxy for gold itself, and resist the temptation to load up because you think gold is going to explode and these stocks are going to rise ten times faster than gold, etc -- especially the so-called juniors. We have seen where that type of thinking can land you. There seems to be always something unforeseen. My advice would be to take a measured approach, stick with the blue chips, and don't take a position that's going to keep you up at night worrying.

Enough of my rambling, trusted Guide. Speaking of unforeseen, have you seen any bears on this mountainside lately? What are your thoughts this fine Sunday morning?

Leland

(05/28/2000; 11:14:01 MDT - Msg ID: 31447)

Comment From GOLD-EAGLE on the Reg Howe Analysis..

the derivitive market for gold & Reg Howe
(Organ)
May 28, 13:06

Here is my take on the scenario regarding the derivitive
market.

First of all, the total of all gold held by central
banks are as follows:
1. USA registered to have 8100 tonnes
2. Euro zone + surrounding Euro areas= 13,000 tonnes
3. the rest of the world = 9000 tonnes.

This total figure is really made up to two figures which
when added together gives the total for each area. The
USA has physical gold in tonnes to which we add the
asset gold receivable (from gold loans) to get its total
which is reported by the world gold council.

The BIS is the bankers bank and as such all settlements
go through it. They have on their books derivitives for
the G10 at 26,000 tonnes of gold or 28,000 tonnes for
everybody.

Also what is known is the shortage of gold by mining
companies e.g. Barrick at 13.4 million oz = (4174
tonnes) + Placer Dome + Anglo etc. we probably have for
certainty a shortage of at least 7,000 tonnes and more
likely 10 to 11,000 tonnes.

Because derivitives is a zero sum game were you expect
to have 50% winners and 50% losers, Reg doubled the
known certainty short of 10,000 and in a perfect world
one would get 20,000 total derivitive but instead the
BIS is showing 26,000 -28000 or an extra 6 to 8,000
tonnes which must be added to the already shortage of
10,000 tonnes.

What this means is that there are only 15,000-17,000
tonnes of physical supply left to our CB. The demand for
gold each year is 4900 tonnes and the supply is 2500
tonnes.

Henceforth, the entire gold supply of the world will be
wiped out in 6 years. This is alarming and must be
brought to the attention of the American people

TheStranger

(05/28/2000; 11:35:18 MDT - Msg ID: 31448)

Journeyman

It is precisely because SS is "welfare" that I hope the Bush proposal fails. SS was created because many people are inept at managing money and would otherwise have nothing on which to retire. Given a chance to invest their own SS accounts, they will fail. Then, as they approach retirement, they will vote for an even bigger safety net to be paid for by you and me.

No Sir. I say leave it as the "welfare" that it is and don't let it get any bigger.

Canuck

(05/28/2000; 12:07:59 MDT - Msg ID: 31449)

@ Town Crier

Thank you Sir for posting ORO's comment Thursday night.
--------------------------------------------------------
"The paper markets provide an investor with a means to play the price of gold. They do not reflect directly the availability of gold, just the availability of paper obligations denominated in gold. As such, the gold prices discovered by these markets are detached from the reality of gold supplies. The price of gold in these markets is the value of a fiduciary gold."

"Just to complete the picture for you, spot prices, then, are arrived at by mathematical adjustment upon the price discovery of the trading on the most active futures contract--adjusted in order to account for the "time value" of the two funds involved...interest rates on the dollars and lease rates on the gold."
----------------------------------------------------------
I have read ORO's definition about a dozen times and there still is a piece of the puzzle that I don't understand. I will lay it out and I hope you or anyone else can walk me down the trail.

".. the gold prices discovered by these markets are detached from the reality of gold supplies. "

Why?

I recall the analogy of the horserace. Spectators place bets on which horse wins the race, a paper money bet; they don't want to buy a horse, they want to win the bet and walk away with more money. Ok, so we have 'GOLDIE' who can run the race in a minute, 10 seconds. 'Silver' can run the race in a minute, 20 seconds and 'OLD 3 LEGS' who runs in 1 minute, 30 seconds. These times are based on numerous past races over the years. Just before the bell the odds posted look like this

Goldie 5:1
Silver 3:1
Old 3 Legs 2:1

Why are the 'betters' going against 'Goldie'?

Back to gold. Supply deficit is around 10,000 to 14,000 tonnes. Is this a physical deficit, a paper deficit, neither
or both? How does the paper 'betting' of gold keep the price down when it has ben stated that the natural equilibrium physical POG should be $500-$600/oz. Is it merely the magnitude of the short 'betting', just like the horserace above?

Posts last week indicated that of all silver traded 2% is physical and 98% paper. Is gold at a similar ratio?

I need to ask a final question.

Are the physical gold holders under the belief that the short paper pushers now at a pivotal point whereby they cannot hold down the physical supply/demand price anymore? Is the fundamental supply/demand deficit causing gold to rise now equal to and soon to be larger than manipulative paper depressants?

tedw

(05/28/2000; 12:39:30 MDT - Msg ID: 31450)

Memorial day thoughts

http://www.usagold.com
To all those knights, true knights indeed, at this forum
who,when called by their country, went without fanfare or recoginition to do their duty. Korean war knights, WWII Knights, and Vietnam war knights. Let us especially remember those knights who went and fell from their steads never to rise again. Young knights with many tommorrows who gave all their tommorrows for all of our todays. A Golden sacrifice indeed worthy of the Gold Star which makes our Golden coins seem dim,pale, and earthly.

True sons and knights of the American experiment,birthed by the blood of the faithful who valued liberty more than all.
Courageous knights worthy of a golden heritage, who have set the real Gold Standard to which I aspire.

Thank you for your service to our country.

And may God bless you and yours.

R Powell

(05/28/2000; 12:44:51 MDT - Msg ID: 31451)

Trader, yes: Broker,no

From Town Crier's 31211 of 5/24/00.
"I don't want to scroll back through to find the exact post but I recall that Sir RPowell said he was a trader/broker?"

I don't mind being unseen and therefore "taken" at the face value of my words. In fact, I consider this a positive aspect of the forum in that we all have this mask which denies any bias or preconceived judgements derived from our physical appearance. I know almost everyone here as I read everyday but I know all from what you have told me about yourselves and from this only.
With this in mind, I would like to state that I am indeed a commodities trader but not a broker. I enjoy the research and challenge of trying to figure out where a certain commodity price will be in the future and I try to make a few bucks at this through the purchase and sale of options. However, concrete construction (floors mostly) pays the bills keeping a roof over our heads and food on the table. It's a sole-proprietor, one truck, one worker company. I own the company and I pour and finish the floors.
This is not important information but I felt the disclosure necessary. Happy holidays to all,
R.Powell (real name)

ORO

(05/28/2000; 13:11:50 MDT - Msg ID: 31452)

Canuck - Goldie wins the race...

The physical deficit is a well documented actual physical deficit that has accumulated over quite a few years and has had many gold market analysts scratching their heads.

There is one thing in the horse analogy - let's say that the other horses are not silver etc. but dollar, Euro, Yen...

Now the owners of the other horses have been prancing their horse round for ages and ages, but they are all workhorse breeds and a couple of them are pretty long in the tooth. The owners parade these with shiny silk and satin robes so that no one ever sees that they are workhorses - or that they are rather old. The owners give alot of interviews and have put up all they had for an enormous purse expecting that one of them will win the race, each thinking he has the chance and while negotiating among themselves how to orchestrate a three way split by which each gets some of the wealth the bettors put on the race.

In the meantime, Goldie, an Arabian thoroughbred is sheltered from the crowd and nobody knows who the owners are. They don't interview and don't show the horse. All that is known is that this horse comes from a blood line that dates back centuries and that its predecessors have won all the races in which an invitation was issued, something that no one remembers but the owners of the workhorses who are now trying to extricate their fortunes from the purse.

What will the owners do?
Will they admit to having lost the race before they started and leave the arena with the race cancelled and the purse disbursed back to them and the funds back to the bettors and to the owner of Goldie, each taking their stake as a draw and living in infamous discredit for lifelong humiliation?
Will they let the race go on and just plain lose?
Will they put their bets on the winning horse, Goldie at the last minute knowing still that the bank would be broke if they won and the payout would still be small relative to what they lost?
Will they try to negotiate a deal on how to distribute Goldie's winnings after the race by taking ownership stakes in Goldie, something that Goldie's owner had been suggesting for ages and has made it possible for anyone who wants to do so?

What if Euro's owner was the only one who cut a deal with Goldie's owner and has a stake in her winnings?

Since the odds have been staked so far against Goldie, the Big Race's pot would be bankrupt if you pile up so soon before the race, which some old-timers who remember Goldie's bloodline decided to do at the last minute despite the bad press she got. The odds could not be adjusted on time and the race track was not allowed to change the odds by the big players who put up the purse because they feared that people would see the improved odds as a good reason to put their bets on Goldie too, or worse yet, buy a stake in the horse and dilute the currency owner's negotiating power.

The race has been delayed by a number of last minute negotiations, but finally the horses are out of the gate, the workhorses are using up all their energy as Goldie starts out at a mild trot just behind the others, not breaking a sweat. In the meantime, at the dark glass VIP box the owners are talking to Goldie's owners and among themselves, getting nowhere. Euro's owner, with the youngest workhorse and a stake in Goldie is quiet, knowing he has a sure second position and part of the purse.

Outside, the crowd has many who took on the favorite, dollar, who is running ahead but is running out of steam quickly because his owners let him grow fat and insisted on keeping Goldie's bloodline out of him and on letting his undiciplined breeder trainer and jockey, veterans of many losses, to hold on to their jobs because they were familly.

Have we any reason to place a bet in a bankrupt pot? Or should we take a stake in Goldie? Perhaps we should just sit it out because the "dark horse" has not been in a race in our adult lives but for the one cancelled in the middle some 20 years ago?

Journeyman

(05/28/2000; 13:31:16 MDT - Msg ID: 31453)

Thanx for the link! @Leland msg#: 31445

The stuff those -- people -- get away with and their audacity - - or is it stupidity and incompetence - - is breath taking. Even more so than the gold leasing/banking debacle in that it's been going on continuously and so much longer! Well there's a limit --- you can't take more than 100% - - - or can you?

Sorry to be so angry?? -- taking a close at Social Security always seems to do that to me.

Leland, thanx for the eye-opening link, regards,
J.

ji

(05/28/2000; 14:26:51 MDT - Msg ID: 31454)

Stranger, Journeyman, Re: SS

SS was created because the people that instituted the new monetary system at the same time knew that they would be stealing 90% of your productivity throughout a lifetime and it would not be likely that you would have any savings for old age. They could dangle this carrot in front of you and pay the "benefits" with devalued notes and not one in a million would see what was happening.

Leland

(05/28/2000; 15:11:33 MDT - Msg ID: 31455)

I'm Sure Michael Would be Very Helpful to Anyone Wishing to Put Gold Bullion Into a Retirement Plan

I know very little about the subject. Gold American Eagles have been approved as legal investments to include in your IRA.

HI - HAT

(05/28/2000; 15:33:05 MDT - Msg ID: 31456)

ji___________SS...Uncle Nanny Fiduciary Malfeseance

One could further add that the "new monetary System", had to be instituted after the self-inflicted (conspiracy?),depression debacle.

The Federal Reserve Masters broke the back of the Country and harvested the FEAR that would usher in the ever-more power grabbing Uncle Sugar. Whose paternity would now reach out and embrace all His childrens.

1913 is truly the beginning date-time for our slide into REGIMENTATION.

Ask not what your country can do for you.

Journeyman

(05/28/2000; 15:37:56 MDT - Msg ID: 31457)

Calling a spade . . . @TheStranger #31448, Leland, ALL

"It is precisely because SS is "welfare" that I hope the Bush proposal fails. SS was created because
many people are inept at managing money and would otherwise have nothing on which to retire." -TheStranger msg#: 31448

Many lose in the markets, but many losers lose because they are playing a game they don't understand. The numbers of people who think they're "investing" in the markets when they're really gambling in them today, blows me away. The markets also blew Soros, etc. and a lot of the other pros away too.

Three thoughts:

1. The markets are so dangerous that even the consumate pros can't handle them because the effects of monopoly megabyte (Federal Reserve) money/credit, lacking free-market controls, has caused malinvestment to reach wild-fire proportions. The result is, markets can't be anticipated at all -- just watch the fluctuations for one day. If you weren't buying and holding for the long run, you're losing.

2. Assuming calmer markets under free-market credit and currency controls, which would presumably persist for longer periods without mega-credit induced gambling bubbles, a cultural tradition of truely _investing_ in the markets for retirement, not gambling, would build-up in the culture, and be passed from mother to son, etc.

3. All EVERYONE in SS now holds at best is the bonds of a potentially bankrupt entity, USA Inc. Not only that, but they are bogus bonds. People THINK they have money in a retirement account. They have none. The money they paid was a tax. That is, every penny people sent to SS was spent, not saved. No one has any money left from the money they paid to SS. They have NO money in SS, they control NO fiduciary medium, SS owes them zero, nada. Period.

Even if the speculations in 1. & 2. above are completely wrong and future markets are volatile and only attract gamblers, at least some of them would have something left by retirement age. Beats the h*** out of SS where everyone is broke and on statutory SS welfare. This means that no SS recipient has any money in his SS Ponzi account on which to retire and EVERY PENNY every recipient collects comes out of "our" pockets - - - or the pockets of our kids and grandkids.

"No Sir. I say leave it as the "welfare" that it is and don't let it get any bigger." -TheStranger msg#: 31448

Now THERE's a notion I can whole-heartedly get behind. And it should be done right. First tell all Americans that the money they pay into F.I.C.A. is a tax as per:

"The [social security] proceeds, when collected, go into the
Treasury of the United States like internal-revenue
collections generally. 905(a) They are not earmarked in any
way." -U.S. Supreme Court in Steward Machine Co. v. Davis,
301 U.S. 619 at 574, May 24, 1937

and as such, isn't kept in any kind of retirement account, for them any more than is their so-called "personal income tax" payment.

Next, since the payments are made under the general welfare provisions of the constitution, and come out of the general fund and not out of any special funds earmarked to SS employment taxes as per:

"The [social security] appropriations when made were not
specifically out of the proceeds of the employment tax, but
out of any moneys in the Treasury." -U.S Supreme Court,
Steward, supra, at 577-578

tell the American people that the welfare payments made to them under the welfare part of the SS statutes may be ammended, changed, qualified or cancelled at any time, and that at some unknown point, will undoubtedly be drastically reduced or even completely cancelled and that they should plan their finances accordingly.

Finally, it should be explained in great detail that all SS payments come out of the pockets of those people now working, including their kids, grand kids, etc.

As with any defective, dangerous product, the Gvt./SSA should run news clips and saturation ads (perhaps "this is your brain on drugs" commercials could be the models) explaining the dangers their product poses so people won't be taken completely by surprise.

If telling this truth sounds preposterous, or worse, harsh to you, well what's become of America, and particularly it's political establishment?

Regards,
Journeyman

P.S The Stranger, didn't mean to seem harsh here. It's not you, it's THEM claiming SS was to help the old and poor when along with everything else, it was instead, originally at least, designed to put more money in government-banker pockets -- when you can't collect a penny of SS Welfare payments until you're 65, but you're expected to die by the age of 61 - - - you tell me.

Leland

(05/28/2000; 15:46:52 MDT - Msg ID: 31458)

Journeyman

I printed, now let's see, how many grandkids and great-grandkids? Now I remember...and each one will
receive a copy. Thanks!

Journeyman

(05/28/2000; 16:00:35 MDT - Msg ID: 31459)

Do-it-yourself retirement: Calling a spade postscript @TheStranger, Leland, ji, ALL

Under the conditions even today, gold would be a great retirement fund, in your own hands, tax free (if you choose) and you don't have to depend on SS, Congress, or the US Grabbit to keep their word.

Gold. Retire on it! (with apologies to Aristotle)

Regards, J.

HI - HAT

(05/28/2000; 16:04:28 MDT - Msg ID: 31460)

Leland....msg#31455.............IRA Gold

"Approved as legal, now." Legal now, is the operative phrase.

The locked-in visability of the wealth gold, may not be a good idea.

Legal is seasonal in the District Of Deceipt.

Leland

(05/28/2000; 16:11:11 MDT - Msg ID: 31461)

That's the Beauty

You and I have some, and neither you, me, or Michael is
tellin'.

Gandalf the White

(05/28/2000; 16:22:45 MDT - Msg ID: 31462)

Hey there Stranger !

Youse young whipper-snapper, just quit gripein bout SocSec bein "welfare" and keep payin them big bucks sews meese can continues ta keep them Hobbits in little round yellow thingies ! Tis "well and fair" fours all usins ol'e ones.
<;-) -- (LOVE YA!)

Journeyman

(05/28/2000; 16:48:00 MDT - Msg ID: 31463)

Use appreciated!! @Leland

"I printed, now let's see, how many grandkids and great-grandkids? Now I remember...and each one
will receive a copy. Thanks!" -Leland msg#: 31458

Thanx to YOU, Leland. It's nice to know once in awhile that some of the stuff I put here may do some good!

Regards, J.

JavaMan

(05/28/2000; 17:13:45 MDT - Msg ID: 31464)

Journeyman, All, SS bashing...

"All EVERYONE in SS now holds at best is the bonds of a potentially bankrupt entity, USA Inc. Not only that, but they are bogus bonds. People THINK they have money in a retirement account. They have none. The money they paid was a tax. That is, every penny people sent to SS was spent, not saved. No one has any money left from the money they paid to SS. They have NO money in SS, they control NO fiduciary medium, SS owes them zero, nada. Period."

JavaMan: Com'on Journeyman... don't sugar coat it for us. (smile)

I can see the commercials now..."this is your future on Social Security", maybe they can show some wino in an alley or better yet, someone who is counting on Social Security for their survival. (In another 10 years they will probably be one in the same.)

You said..."If telling this truth sounds preposterous, or worse, harsh to you, well what's become of America, and particularly it's political establishment?"

JavaMan: what sounds preposterous is the idea of the government telling the truth at all. Does anyone think the president is going to want that message going out on his watch? Especially if he plans to run for reelection. Even if not, the incumbent party isn't going to want to go down in history being associated with "the great betrayal of the American people". The opposition would have a field day and win the next election in a land slide.

Actually, for a long time, I have wondered if Social Security benefits could be phased out. Something like...if you're 64, you get 98% of your "benefits", 63 = 96%, 62 = 94%, etc. Then, at the same time, phase out the contributions in a similar fashion.

Ultimately, what they will probably do is just gradually raise the age of eligibility to 110.

Isn't it the case though that the average individual has been recovering their entire contribution to Social Security in only 3 � years?

Canuck

(05/28/2000; 17:20:20 MDT - Msg ID: 31465)

@ ORO

Thanks for expanding the 'horse race'!!

I walk in the footsteps of giants.

jinx44

(05/28/2000; 17:26:55 MDT - Msg ID: 31466)

To Rugen

In reference to your service in "that" part of the world, perhaps we have common ground--1RLI, 44Para. RSVP alprice@worldnet.att.net . Adios

tedw

(05/28/2000; 17:54:45 MDT - Msg ID: 31467)

China and silver

http://www.usagold.comIll expand a little on my thoughts on China and Silver.Ted Butler quoted from the Silver Institutes report in his recent article "Silver: The Big Lie"

What Ted did not say is that the Silver Institutes Survey attributes OFficial Chinese Sector Bullion Sales for keeping the price depressed during 1999. I dont know what part leasing plays as Ted suggestst but clearly the Silver Institute fingers the Chinese as the culprit keeping the silver price down.

Which is it? Leasing or Official Sector Chinese Bullion Sales?

Surely, a question worth asking.


And as I said yesterday, the war clouds with China are clearly on the horizon and what would that bode for the silver market (assuming a nuclear blast near where I live does not make all this a mute point)?

HI - HAT

(05/28/2000; 18:18:24 MDT - Msg ID: 31468)

tedw msg. 31467..........Silver

"Which is it? Leasing or Official Sector Chinese Bullion Sales?

I think it is criminal manipulation.

War "accidents", are the Joker in the deck.

This is not Memorial Day for nothing.

Trail Guide

(05/28/2000; 19:20:44 MDT - Msg ID: 31469)

Reply

Hello again Michael,

--------USAGOLD (5/28/2000; 10:50:58MT - usagold.com msg#: 31446)
Greetings, Trail Guide. . .Let me Ramble a bit....as we slowly hike the crosscut--------

Yes,
I enjoy it when you "ramble on a bit" as in #31446 today. That post covered a lot of ground! While we are on that crosscut:

I think that between Reg Howe and ORO, the ghostly fog is being removed from our gold markets. If they keep going this way, eventually, the whole world will see what kind black hole it is. These are the same asset-less securities they are buying into by trading (investing) in paper gold. This entire gold derivatives book has been one of the most "unseen", "least understood" paradigm to come along in some time. Most people little more grasp what our current gold arena is than they grasp what that dollar is in their pocket!

I sit down the other day and spent a lot of time writing a very long post to take the next step. But, it became too blunt and outright. After some thought and discussion I withdrew with a firm conviction that this venue is still the right track. No matter how slow, events are unwinding as
others are understanding the gold evolution. Yes, and doing it on their own. Here is the first beginnings of that hike, presented as a backdrop to your post today:

--------
At camp:
Our gold market is in "evolution" not just suffering from the same bear effects old gold bugs promote and have documented from the past? If you agree that it's only a bear market and that it will reverse soon, you're in for a big surprise. The paper gold market you know, trade and love is
about to end.

Onward
Central Banks have leased / lent some gold for a number of years and for no more than a tiny return. Even Alan Greenspan pointed out their willingness to do so. But the majority of that "real" gold never made it onto the "melt down" market as the media portrays. Early on (years ago) most of it was transferred to other Euro friendly CBs while setting a lending precedent for the Bullion Banks. We have made this point over and over and the ongoing CB figures prove it out. Further, what portion of this additional gold supply that went outside the BIS system of CBs, mostly ended
up in real accounts under other names. Yes, these bullion bars are still alive and well. Representing the real wealth of someone, somewhere!

Many try to build a position that this CB gold is gone, melted and will never return to their vaults. Well, it wasn't lend it out for next to nothing so they could count on it's return at today's values! Again, most of it is still in the BIS system waiting for revaluation once our current dollar market fails. The fact that virtually no one can name the physical buyers of all these deals calls into question the often stated premise that CB gold has been melted down for industry use. It wasn't!

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

Michael,
Truly, the whole purpose for starting the Western paper gold markets with initial lent gold was so they (BIS / ECB) could eventually destroy our dollar gold market. But the dollar faction (USA) played this game because they never believed the Euro Bomb could be set off. It's that simple. This
joint play was made on the "Western" weakness to own paper gold substitutes. American dollar backers thought this was just fine. Yes, the more these paper markets could be diluted with supply the lower the paper price would go as the dollar looked ever better. That in turn convinced ever more "old" "long term" bullion holders to give up their metal and hold leveraged positions that required less cash. Using gold stock options, gold stocks, futures options and futures themselves, investors began a long term trend of off loading bullion onto the market. Even sophisticated
investors used "unallocated" bullion accounts that contained only a delivery commitment and no gold itself.

This new "mind set" was, years ago, read perfectly by the political system! Nothing else could identify this trend better than right after the WA announcement. You noted how:

----" " This is when management clamped down in some of the bullion banks, people fired, changes made. Of course that's when the word went out that an investor could sell calls but they would have to be taken in "at market" -- which of course left holders at the mercy of the players. --------

But what happened next? The whole market returned to trading the questioned paper! In the old days it would have been over with. No, they set the hook deeply and have the modern day gold bugs doing their political bidding for them. With every drop in the paper game, players double up to catch up. All the while leaving the real leveraged instrument, physical gold to be ever more acquired by those who understand the dollars current position. Truly, I am not expanding the perception too far when I say, "they don't plan on ever selling again for dollars".

Our recent "TOCOM style default" is absolutely nothing to what is before us!

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

Nuts! MK, I have to quickly go. Will pick this up in early AM and finish.

Thanks

Trail Guide

R Powell

(05/28/2000; 20:06:55 MDT - Msg ID: 31470)

Market overload

From USAGold (31446)

"Of course that's when the word went out that an investor could sell calls but they would have to be taken in "at market"---which of course left holders at the mercy of the players. ... I expect that to happen again the next time we have a big run-up.."

You're entirely right. When any market goes ballistic with more volume than can be handled, the traders respond by accepting buy and sell orders "at the market" only. Remember, transactions are still carried out by open outcry done by real, live people. They can handle only so much.

I usually counter this possibility by placing limit orders (to be filled only at a certain price or better). These are open orders as opposed to day orders and are in place before any market overload occurs. Once the panic starts, most brokers will not accept these orders so place them early. Buying or selling anything "at the market" in times of turmoil is nothing if not risky. I imagine you might prefer accumulating quietly over time and selling, if at all, in a sane manner, but if you have any futures or options positions, plan how and when you can exit your trades Before the panic for the shorts/ celebration for the longs but turmoil for the market starts. Once again, I offer this as food for thought. I have no professional qualifications other than those insights earned the hard way.

Leland

(05/28/2000; 21:27:43 MDT - Msg ID: 31471)

A Timely Report -- Completely Off Topic

High-energy nation could pull the plug on the power grid

By LISA HOFFMAN
Scripps Howard News Service
May 29, 2000

- You grab a few cubes from the ice-maker for your iced tea, nuke a frozen pizza in the
microwave, toss a load of wash in the dryer, notch up the AC, crank the stereo, scan in
a couple of photos to e-mail to relatives, and sit back for an evening cruising the
Internet.

Upstairs, the kids are styling their hair, playing computer games and listening to the
radio, while your spouse is in the basement office finishing the spreadsheet work that
didn't get done that day on the job.

That seemingly serene summer scenario is anything but that for those in charge of
supplying electricity to the nation.

Energy experts warn that the onset of the hot season, coupled with the recent
acceleration in the wiring of America, is likely to bring months of power brownout and
blackout alerts in unprecedented number.

As demand drains supply, the cost of power for companies and consumers is headed
for a dramatic uptick. Peak-time prices hundreds of times higher than usual are forecast
this summer in some regions.

Why? Combine a sizzling economy, an explosion of computer users at home and on
the job, and a proliferation of other electronic devices ruled by microprocessors for work
and play. The result is a ravenous appetite for reliable electricity that must travel over a
lagging transmission system designed for a largely bygone era.

"The system, designed as a two-lane road, is now being used as an autobahn or New
Jersey Turnpike," said James Owen, spokesman for the Edison Electric Institute, an
interest group of private electric companies.

Particularly worried is the burgeoning high-tech industry, as well as firms engaged in
Internet commerce or otherwise dependent on e-mail and similar online ways of doing
business.

For them, a blackout, or complete power failure, can be ruinous. From online stock
trading outfits to such Internet merchants as eBay and Amazon.com, every minute the
power is out can mean millions of dollars lost.

Brownouts _ caused by intentional cutbacks in electrical juice _ also can wreak havoc
on sensitive equipment, including that used by everything from ATM machines to auto
mechanics. Surges or other blips, even those imperceptible to an office worker, can
knock a microprocessor for a loop.

The digital world, according to experts, demands a power supply that is essentially
99.9999 percent steady and reliable. Despite its stresses, the U.S. system is
remarkably dependable, but even so, the average residential customer can count on
glitches causing a cumulative seven or eight hours without power a year.

That would be catastrophic for new economy enterprises, where a disruption as brief as
"one-60th of one second is enough to make everything go blooey," said Karl Stahlkopf,
vice president of the non-profit Electric Power Research Institute in Palo Alto, Calif.

Estimates are that the economy will lose more than $25 billion a year as a result of
power disruptions which, until the digital age, were far from rare but hardly so crippling.

In the past decade alone, the power "load," or demand, has increased 35 percent while
the capacity to get that electricity to users has grown only 18 percent. Conservative
forecasts predict another 20 percent boost in demand ahead, but no more than a 4
percent hike in transmission capacity. A big part of the problem is that no one wants
new power poles or stations near their homes or businesses.

Complicating the situation is the ongoing deregulation of the power industry.

"The country is increasingly sensitive to any type of disruption," said Jamie Wimberly,
vice president of the Consumer Energy Council, a watchdog group in Washington.

Already this summer, the Silicon Valley region of California, broiling now in a heat wave,
is being warned by Pacific Gas & Electric to make a concerted conservation effort or
face significant power problems and financial penalties. Energy experts expect the
same situation to bedevil other parts of the country this summer, particularly in other
high-tech hubs.

Some technology firms are shelling out big bucks to build their own power plants to
insulate themselves from disruptions. In Redwood Shores, Calif., for instance, computer
hardware and software giant Oracle Corp. has spent $6 million to construct its own
generators and substation system.

The Energy Department and conservation groups have begun to amplify their calls for
the country to cut back consumption through more energy-efficient appliances and
power-stingy habits.

Some in the industry are demanding more financial incentives to stimulate investment in
the nation's power grid, coupled with fewer restrictions from the Federal Energy
Regulatory Commission.

"We have to build a type of electrical power infrastructure that will support a
microprocessor-based society," Stahlkopf said. "We have very little choice."

(Fair Use For Educational/Research Purposes Only.)

Journeyman

(05/28/2000; 21:37:54 MDT - Msg ID: 31472)

Mincing words @JavaMan

JavaMan (05/28/00; 17:13:45MT - usagold.com msg#: 31464)
Journeyman, All, SS bashing...

JavaMan: Com'on Journeyman... don't sugar coat it for us. (smile)

Yes, I know. I MUST try and stop mincing words! ;) -J.

JavaMan:Actually, for a long time, I have wondered if Social Security benefits could be phased out. Something
like...if you're 64, you get 98% of your "benefits", 63 = 96%, 62 = 94%, etc. Then, at the same time,
phase out the contributions in a similar fashion.
+
Ultimately, what they will probably do is just gradually raise the age of eligibility to 110.

OK! -J.

JavaMan:Isn't it the case though that the average individual has been recovering their entire contribution to
Social Security in only 3 � years?

Something like that. Until a few years ago, it wasn't too bad a proposition because of benefit creep - - - and, of course, unlike late comers, early Ponzi participants can make out well. But the FICA tax percentage has been creeping too, as has the amount taxed. For those joining the work force today, it's a lousy proposition. -J.

Regards,
Journeyman

Simply Me

(05/28/2000; 22:45:48 MDT - Msg ID: 31473)

Why stock investments won't work in place of Social Security.

I think a recent commercial on CNBC says it best. "2% of stocks listed on the Nadaq will make you money. Why do you keep picking the other 98%?"
While I'm all for prying as much money as possible away from the grabbit and putting it back into the wage-earners' hands, I think the Republican plan for putting Social Security money into the stock market is one of the studidest ideas I've ever heard of. Ask anyone who's seen their million dollar portfolio disappear over the last month. When your social security dollars are whittled down to zero, by bad stock picks, bear markets, whatever, in your 60th year....then what? Develope an appetite for dog food? If you vote Republican this year, stop practicing your golf swing and start rehearsing your lines...."Paper or plastic?" or "Would you like fries with that?"

The idea of Social Security was sold to a generation that could no longer count on their children to care for them in their old age. The industrial age valued strength and youthfulness to run the factories and lured the youngsters to move away from multi-generational living on the farm to apartments and single-family homes in town. To the folks who voted in Soc. Sec. it was made to sound like not only a good solution, but their only option. Saving enough money to support even a median standard of living through all the years of retirement was unheard of. Retirement itself was unheard of. One did what one could until one couldn't do it anymore. Then, it wasn't long till the end. What the sons and daughters of the farmers lost by moving to the newly industrialized city was the their inheritance. It takes generations to build real wealth. They threw away what their parents built. Sold it for money that was soon used up. Sold themselves into slavery to the factory owners. Now, they too became dependent on Social Security to provide for them in old age.

Retirement will simply have to disappear as a recognized and expected stage of life. Folks in their 40's and 50's now will probably have to work until they can't anymore. Which isn't all bad! Someone famous (can't remember who just now) said, "You'll rust out before you wear out." For a real life example, my grandfather worked as a naval architect till he died at age 84; on the other hand, my father retired from a large company when he was 60 and died at age 62.

Social Security Tax. Phase it out and give us our money back so we can buy gold, silver, a home without a mortgage, and educate our children so they are well able to take care of us for that last couple of years after we get too old to work.

Get some Gold for your Golden Years.
simply me

Simply Me

(05/28/2000; 23:17:16 MDT - Msg ID: 31474)

The Republican plan is bad...but the Democrats are worse.

In re-reading my last post, I noticed it could be construed as a rejection of the Republican Party. It is. But the Democrats are worse...far worse! This country is crying out for a party to believe in. That's a fabulous opportunity for someone...and very dangerous for us little folks. Beware of politicians bearing gifts.

Also, in the first paragraph..."studidest" should have been "stupidest".

Haven't seen any movement in the Kitco graphs. I understand that American markets are on holiday...but surely there's something to track from around the world. Can anyone tell me what's up?

By the way, enjoying everyone's posts. Have to admit to mixed emotions about seeing the end of the Gold paper market. Although I have no investments there and long to see gold break it's chains, it looks like gold's leap will be at the eventual expense of the American standard of living. And America's traditional way out of Depression is to cull the herd and put everyone else to work with a war. It's disconcerting to see the stock market go down as political relations with China heat up. I really like the Chinese people and Chinese culture. Just not their government. And the Chinese government has an Ace up it's sleeve...Russia.
If Putin's changed into a democrat, I'm the King of England!

Alot of good reasons to own gold these days.
simply me

Leland

(05/28/2000; 23:26:24 MDT - Msg ID: 31475)

Simply Me

May I add?...America has NEVER recovered from the Great
Depression...But has simply papered-over the problems.

TheStranger

(05/28/2000; 23:51:04 MDT - Msg ID: 31476)

Journeyman and Gandalf

Journeyman - Well at least we have found your hot button!

Gandalf - Hey, old friend, with all due respect to Journeyman, if there were no SS, I would invent it. I think it is a good idea for a couple of very good off-topic reasons. In fact, I will accept it proudly when my time comes. But I don't want it ever to become anything more than what the name implies, Social SECURITY. "God bless the USA", I know, but let's keep it simple, studid, er..stupid!

ORO

(05/29/2000; 00:45:52 MDT - Msg ID: 31477)

TheStranger - Social Scare and Security

Social Security is a useless program designed initially for (1) elimination of corporate retirement obligations, (2) eliminate competition for the young New Dealers that voted FDR into office (for which they were paid handsomely with such things as WWII). Later the program was used by the same generation to (3) take away the income of their children and grandchildren and give it to themselves.

What you are saying is that you are scared of people making investment and savings errors either directly or through dishonest or incompetent investment corporations, and that you are fearful of no one coming to the aid of people holding defaulted pension and insurance plans.

The same economic conditions that would cause the above on a large scale and would prevent charitable assistance to older folks would have the same effect on the social security payments and on eligibility for social security. But during the time in which people pay for social security, they lose what they put in for sure. What they will get out is both subject to political winds and to the same economic effects that would harm private plans.

The aspect of lack of charitable assistance would be more likely and much deeper and broader in nature with social security than without because of the tendency of people to think "there is a government program for it, it is therefore not my duty anymore".

Because of the baby boom demographic bubble, the future American retiree needs to be able to invest abroad, in countries that have younger poppulations and will have them working during one's retirement when the local workforce is too small to support that many retirees on its own. Social security blocks this option from the lower economic half of the poppulation.

The main effect of social security is reverse intergenerational income and wealth transfer and a spreading of the risks of retirement fund insufficiency from the few to the many. Furthermore, it centralizes decisionmaking on retirement issues in the least competent hands ever assembled together in America (1) who will be dead or in dotage by the time their programs have their effect, and (2) who do not share the economic standing of the people they claim to assist, and do not have first hand experience of the recipient's conditions. (3) Do not understand the meaning of the investment opportunity cost of the program.

Finally, instead of using social security funds for building the instruments of future productivity, they are being used to fund current retirement expenses, thus turning what should have been an investment inflow into a running expenditure. Thank goodness most people think they will see nothing of substance from Social Security when they retire and just view it as a write off - just like income tax.

View Yesterday's Discussion.

Leland

(05/29/2000; 03:12:49 MDT - Msg ID: 31478)

Thanks to John Crudele...

http://nypostonline.com/business/4882.htmHello, Michael.

Leland

(05/29/2000; 03:49:37 MDT - Msg ID: 31479)

And From Today's NEW YORK TIMES...

May 29, 2000


Campaigning on Social Security

Social Security has emerged as a
critical issue in this year's presidential
campaign, but neither candidate seems
prepared to address the system's long-term
financial problems. Instead, Gov. George
W. Bush wants to let individuals invest a
small part of their Social Security contributions in the stock market,
where he thinks they will earn a better return, and Vice President Al
Gore proposes to keep the system largely intact with an infusion of
general tax revenues. Neither proposal would really stabilize the system
in the long run. In truth, though Social Security is projected to become
bankrupt in four decades, the system is not all that far out of kilter. It
would not be hard for bold politicians to devise a fix.

Social Security may well be, as Governor Bush has said, "the single most
successful government program in American history." It was created in
1935, during the depths of the depression, to provide a guaranteed
income to retired workers for as long as they live. Unlike private pension
plans, Social Security benefits keep pace with inflation and, unlike
401(k)'s and other popular private plans, Social Security benefits do not
fluctuate with stock and bond markets. Social Security provides the
majority of income for most retirees and all the income for about a fifth of
the elderly.

From its inception, the system has taken in payroll taxes from the
working generation and turned almost all of them over to retirees. At the
core of Social Security are the notions of social insurance -- everyone
participates in a common plan -- and redistribution -- the program tilts in
favor of low-paid workers. The benefits for low-paid workers are about
80 percent of their average lifetime earnings, while benefits for high-paid
workers are about 30 percent of average earnings. The progressive
formula has cut the poverty rate among the elderly by two-thirds,
reducing their poverty to below that of the general population. That is a
remarkable triumph.

The question before voters is whether a program born out of depression
-- when poverty was rampant, few married women worked for pay and
no one had 401(k)'s or I.R.A.'s to provide for retirement -- needs to be
revamped.

One reason for thinking so is the projected bankruptcy -- a sobering but
manageable situation. The system will run surpluses for the next 15 years,
building a large reserve. But in 2010, the first wave of the baby boomers
-- the nearly 80 million people born between 1946 and 1964 -- will
begin to retire and collect retirement checks. The number of people in the
work force for every retiree will fall from about five today to about three
in only 30 years or so. That, and the fact that people are living longer, will
put a strain on workers to support the retirement needs of the elderly.
The system will begin to run deficits around 2015. By 2037, the trust
fund is expected to be empty.

But for all the talk of bankruptcy, the system is not facing irreparable
financial crisis. Even after 2037, payroll taxes will cover about 70 percent
of promised benefits. Deficits over the next 75 years, the planning horizon
for the program, will equal less than 2 percent of total payrolls -- hardly a
catastrophic shortfall. If the economy were to grow only slightly faster
than the actuaries at the Social Security Administration now project, the
deficit would disappear.

One proposed remedy for financial imbalance is partial privatization, the
approach favored by Governor Bush. Under current law, workers and
employers pay a 12.4 percent payroll tax that goes into a public trust
fund. Under partial privatization, workers could divert, say, two
percentage points of that tax to private accounts that the worker could
then invest in stocks and bonds. Workers would collect less money from
the trust fund when they retired, alleviating financial strain on the system.
But they would expect to more than make up for the loss by drawing
from their private accounts.

Mr. Bush's sketchy proposal fails to answer where he would find the
money to pay retirees as payroll taxes were diverted into private
accounts. But there are other fundamental problems with the proposal as
well.

Proponents of private accounts say that investors, based on data going
back to the early 20th century, can expect to earn about 5 percent
annually above inflation on a diversified portfolio of stocks and bonds. By
contrast, the taxes they "deposit" in the trust fund will earn an implicit
return -- measured in future retirement benefits -- of only 1 to 2 percent
above inflation.

But that comparison is highly misleading. Private accounts invested in
stocks and bonds may well earn less than 5 percent because the
economy is expected to slow over the next several decades as the
population ages and because stock prices are now overvalued.

More important, the advantage that proponents cite on behalf of private
accounts is an optical illusion. The trust fund faces the burden of paying
trillions of dollars beyond what payroll taxes raise over the next 75 years
to provide the benefits the system is obligated to pay current and future
retirees. The sole reason that private accounts look like a better
investment than the trust fund is that proponents assume the private
accounts would be relieved of the burden of helping to pay that
obligation. But that just deflects the burden onto someone else, requiring
Congress to slash retirement checks or other government spending, or to
raise taxes.

Mr. Bush cites as an advantage that private accounts can be invested in
stocks whereas the trust fund by law cannot. But if the law were changed
to let the trust fund itself purchase stocks, as President Clinton has
proposed, it could invest in the markets far more cheaply than could
private accounts. The cost of administering 150 million individual private
accounts would be huge, eating away 20 percent or more of worker
deposits. Private accounts could also subject individuals, including the
poor, to unacceptable investment risk at the most vulnerable time in their
lives. Worse, they undermine the principle of social insurance, setting
individuals off to fend for themselves without looking out for the needy.

Vice President Al Gore proposes to leave the basic system unchanged
and would use general revenues to extend the life of the trust fund to
about 2050. He ducks proposing tax hikes or benefit cuts that would be
needed to solve the system's problems after that date. Indeed, he does
the opposite by proposing new benefits for stay-at-home mothers and for
widows and widowers, thereby increasing the financial strain on the
system.

The wiser solution is for Congress to cut benefits and raise taxes
modestly, which is all that would be needed to close the system's financial
gap. Congress could require all state and local government workers to
join the system, boosting its tax revenues. Congress could also raise the
cap on earnings subject to the payroll tax, now set at $76,200, to keep
pace with the rising earnings of high-paid workers. It could invest Social
Security surpluses in private, high-paying bonds, or allow the trust fund
itself to invest in stocks.

Raising the payroll tax by, say, a half percentage point in 20 or 30 years
or transferring a small fraction of general tax revenues into the trust fund
would go a long way toward solving the problem. If these and similar
measures do not close the entire gap, Congress could hasten the
transition to the higher retirement age, 67, that Congress passed in the
1980's. The Social Security "crisis" is less drastic than it seems, and can
be fixed with relatively modest changes.

(Fair Use For Educational/Research Purposes Only.)

Leland

(05/29/2000; 04:24:14 MDT - Msg ID: 31480)

Thanks to NEWSDAY, INC.

number is out
there for the
taking

^dtnbrnhr<

HARTFORD, Conn.
(AP) -- Your Security
Number isn't very secure
anymore and is one of
the critical pieces a thief
needs to steal your
identity.

''Over the years, the
Social Security number
has become the universal
number. It is an entry
key,'' said Chief State's
Attorney John Bailey,
who said identity theft is
on the rise.

And why not? Those
unique nine digits are
everywhere.

The banks have it. So do
credit card companies
and colleges. Even some
fitness clubs and video
stores routinely ask for
the number.

The American Civil
Liberties Union calls it a
disturbing trend.

''Social Security numbers
have become extremely
dangerous things,'' said
Joe Grabarz, executive
director of the
Connecticut Civil
Liberties Union.

''Once somebody has
your Social Security
number, they have the
key to all your records,''
said Grabarz.

The Social Security
Administration began
assigning the numbers in
1936 and uses them to
track earnings and the
benefits people will
receive upon retirement.
The agency has no
official policy on how
other organizations use
the number, said Michael
Blum, an assistant
manager at the Hartford
Social Security office.

''We don't prohibit
disclosure or use of the
number,'' said Blum. ''It's
their number. And if
they want to pass it on,
it's their choice.''

It's also the law that
they don't have to pass
it on.

The Privacy Act of
1974 makes it unlawful
for any federal, state or
local government
agency to deny any
individual any right,
benefit or privilege
provided by law because
of such individual's
refusal to disclose his
Social Security account
number, unless there is a
specific law requiring the
individual to do so. The
law also requires any
government agency that
requests the number to
explain why it is needed
and under what specific
law it is required.

Blum said the Hartford
office fields about one
complaint a month from
people claiming to be
victims of identity theft.

A 1999 state law makes
it easier to prosecute the
crime. It is now a felony
to obtain personal
information on an
individual and then use
that information for
unlawful purposes.

Cecilia Gamble, 46, of
Hartford, was sentenced
Friday to eight months
in prison for identity
theft. The victim was an
older woman with an
excellent credit record.
Gamble managed to get
the victim's purse, then
used her Social Security
card to get a
Connecticut state
identification card.
Authorities said Gamble
opened several credit
cards in the victim's
name, ran up huge bills,
and even tried to take
out a home equity loan.

Gamble was ordered to
pay $47,000 in
restitution to the victim.

Many universities use a
student's Social Security
number for a college ID.
Grades, student health
information, financial
aid histories and other
data can be stored under
that number.

''Why would any school
want to do that to their
students?'' asked the
CCLU's Grabarz. ''That's
almost inviting people
to look at the records.''

But college officials say
it's not that easy because
of many safeguards.

''I work here, but I can't
call up a student's
records,'' said Karen
Grava, a spokeswoman
for the University of
Connecticut. ''A faculty
member cannot call up a
student's records. There
is limited access to those
records.''

There are some checks
and balances in the
credit card industry, as
well, but the Social
Security number remains
an important piece.

''There are a whole
number of factors we
have to look at to make
sure we are matching the
right person with the
right credit report,'' said
Colleen Martin, a
Chicago-based
spokeswoman for Trans
Union, one of the three
major credit reporting
agencies.

''The Social Security
number is definitely a
critical piece (of
information),'' she said.
''In this society, it's the
common medium of
identification.''

(Fair Use For Educational/Research Purposes Only...And Hello, Michael.)

HI - HAT

(05/29/2000; 04:31:26 MDT - Msg ID: 31481)

HATS OFF

I stand humbly before all the Americans who have gone before and created the Country upon whose soft bosom nurtured my bounty.

Hats off to the courageous American Legions, past and present, who have ansuered the call.

I do not confuse the Country with its Government.
UN-American Authorities and Acts are what makes my pen drip venom.

Thomas Jefferson, Thomas Paine, Patrick Henry, ET AL., were either right or they were wrong.

Only by re-embracing their principles and directives do we have any hope of re-righting what is wrong.

Trail Guide

(05/29/2000; 08:28:27 MDT - Msg ID: 31482)

To continue on from my #31469

Our recent "TOCOM style default" is absolutely nothing to what is before us! One has but to read through the internet and see what is only a small fraction of dedicated Western gold bugs playing this paper game. To the last man (and woman), they all perceive the paper tools they work with
has gold on the other side of it. If not that, they firmly believe the human and his wealth on the other side of that trade can be forced to eventually settle in gold. Further, if not gold, then settle in a fashion that deliveries the same "close out" value as the then "currently trading dealer physical".

In reality, all these players (uptick included) are only working within a limited pool of cash margin account wealth. Deposited worldwide, this small pool is the limited wealth that creates the gold perception behind paper contracts. As long as the ebb and flow of gold trading does not leave the
limits of this pool's wealth boundaries, a small fraction of physical can be delivered against it. Giving the entire paper arena credibility. Under these conditions, traders can settle 90%+ in cash, confident that the 10% (or less) of visible physical delivery is available to them if desired.

Once gold values move quickly beyond this margin zone, all is lost. The comming gold moves, we know are coming will dwarf anything seen in the past. Indeed, most think it's impossible for gold to move this much in a genneration.

Without knowing it, the banks and gold brokering industry have built a paper system that has grown in line with American political motivations. Using only a fraction of the money necessary to margin paper gold 100% (mark to the market), our current arena grew into a huge derivative gold
game that dwarfs the real physical gold world. No matter how it's compared; be it to total gold held in the world or the possible real gold supply offered at any particular dollar price, physical gold would need be priced in the many thousands to equal even a portion of our current paper
market holdings. Truly, we could lose two thirds the paper contracts and $5,000 gold would not cover the rest. It's that far out of line!

Obviously, once this system passed certain limits, years ago there was no turning back. Today, world gold could never honor the paper that's out there. At any dollar price! Not even close! Once understood, as it is being understood now, a person blind in one eye could see that this required political backing to build it. There was simply no way anything on an international scale this big could have developed without behind the curtains political support.

This decades long trend was developed as a way to placate "non Western" dollar system supporters. True to life, oil producers and Europeans wanted the dollar to work just as much as anyone. Michael, you have followed this evolution for a long time and know that none of us wanted the American reserve system to fail. I think the big philosophical difference between most of the world and Europe / Oil was that non Americans only wanted cheap gold to legitimize continued dollar use. Americans didn't because the dollar was our internal currency. Our gold value was in the exporting of dollars for real goods, plain and simple. Few US citizens grasp that this business of getting real goods internationally, on this scale, for only an IOU is a new "untested" concept. It's only been around from the late 60s. It's scale only came close to these levels in the 90s.

Today, this dollar IOU system has grown to a size that is completely not measurable. It is to this end that one has to credit these physical gold advocate countries for seeing the future. Right on schedule, the Western dollar supporters built a debt load that could never be covered in real
production. In balance with this debt, they also built a gold debt that is uncoverable. It is at this point that the dollar begins the death march so many expected years ago. The end of our ability to create dollar debt was / is not the end sign. The true end sign is found today. It will be in the failure of our ability to sell paper gold debt on par with physical. This will kill it.

Truly, the Washington Agreement was not about the end of making of all paper gold. I mentioned earlier how it made no provisions to cover or reduce Western held dollar derivatives, but did controll physical flows by using the BIS. The WA is about decoupling the joint political drive to
support low dollar gold prices with Euro Zone CB gold trades. With dollar based derivatives all being seen as eventually thrown in the same default pot, no one is worried about supplying gold to cover them. If the dollar is going to hyper inflate, and it's gold paper is going to default worldwide then writing (shorting) dollar gold paper is free money to anyone that want's it! Euro Zone based
derivatives will be supported through limited gold delivery or with Euro cash. Both will be seen as a mountain of credibility in the storm that is coming. Let's face it, if you held a Euro gold contract for 100 ounces and only ten ounces plus Euro cash are delivered, that settlement will be worth a fortune in today's terms compared to a hyper dollar world.

What is amazing is how so much of this gold debt is held in lieu of bullion by Western investors, both large and small. These last few years, Americans have downloaded their bullion holdings worldwide. This trend is encouraged by industry players. Every paper gold broker that walks and
talks has to believe in the credibility of his domain. His income depends on it! This same confidence travels through the community of brokers / investors until they all support the arena. In the end, once paper gold begins it's discount against physical open interest and trading will fall away. Then every dedicated gold analysts will claim to have understood it all and pointed to this long ago. Leaving the poor gold investor wondering what happened. Oh, there will be a huge spike right at the crisis time as OI surges from panic, but the shut down will happen equally fast and deny exit to almost everyone.

Michael, you commented:

--------Isn't it interesting, TG, that all these mega stock mutual funds (Janus, comes to mind), hedge funds (Quantum, Tiger, come to mind) and trading firms (John Henry) are having to close down or trim operations for essentially the same reason -- because they can no longer find anyone
to peddle their positions to? Big enough to buy everything in site; but too big to find a buyer. These markets do eventually take care of themselves don't they? This is by far the most important development in the investment markets with huge social, economic and political repercussions and
nobody is talking about it.

Now we will have a splintering over the coming months into smaller entities, competitions should be renewed. I think this is healthy for the investment business, but the current "paradigm" will likely suffer. The warning is very clear to those who read the signs. In fact, the process has begun. As I say, the markets do eventually take care of themselves.--------------------

Boy, they sure do MK! All of this is a function of the larger picture, not just the gold markets. Our dollar world and it's markets are changing and we as "locked in citizens" of that world must adjust to what is coming. It's not the end of the world, as so many say our position represents. We only hear that from those that will lose a lifestyle built on everything remaining "as is". A large sector of
American life will adjust to a more realistic level of existence. As in all things past and present, some will do better than others. The "better doers" will see and plan for this change.

More from you"

------A thought that occurred to me recently is that these gold derivative position might have been funneled to Morgan and Deutsch to make it politically possible for a bailout to occur (via the "Too Big To Fail" Docrine) -- that bailout would be on paper products of course, but that could gun the
price as they buy back their positions. In the end though, they will be left as we all know with some huge gold loans to pay at inflated prices -- their worst nightmare will have come to life.----------

I agree MK and that would be the best outcome for paper gold traders. But it would "only gun" the paper price while the physical price would literally skyrocket! The outcome would still be a huge discount of contract value against physical (1% of physical price). Much more than in a total paper
default where what could trade would be perhaps 20% of physical value. We shall soon see (smile).

Also, you say:

--------As for the GoldFields and FrancoNevada, I would like to know what they are thinking. (??) (One thing that comes to mind is that I have had some clever mining people tell me that the best gold is not what you are bringing up now, but what you will bring up in the future. Consider that one!) I do not think the two have enough metal to affect the price by keeping production out of the market. So I think that minesite.com might be overly optimistic there. Besides these are companies not countries. It would be a different story if South Africa were to cartellize and restrict production with Australia, or some such thing, but two companies representing less than 200 tons of production annually won't have anything but a short term effect. How much of that 200 would they be willing to take off the market? They do have bills to pay.

I think they have something else in mind -- like a company with enough capitalization to attract big time mutual fund money. I don't know. Just guessing. I'll be watching with interest along with everyone else.--------------

MK, I think they are trying to position themselves to start a trend others will follow. After reading all of the above we can understand that in the coming situation, it won't take much supply removal to control the physical markets. In the context of our reasoning, certifying that gold is not used to cover contracts would break the bank, literally! Forcing industrial buyers to use gold and not trade it does more than we think in today's super leveraged arena. Only a few will be able to do this (smile).

Finally, about your last words:

-------Gold itself is less ambiguous. Any gold investor entering the gold stock arena should understand that stocks are not really a proxy for gold itself, and resist the temptation to load up because you think gold is going to explode and these stocks are going to rise ten times faster than gold, etc --especially the so-called juniors. We have seen where that type of thinking can land you. Thereseems to be always something unforeseen. My advice would be to take a measured approach'stick with the blue chips, and don't take a position that's going to keep you up at night worrying. -----

Absolutely! When looking back several years at Another's Thoughts and his council to own physical, I see where so much paper value was destroyed right in the hands of modern gold bugs. Most paper gold vehicles are a small amount, if not a fraction of their value then. Even though the
political game evolved differently from his perception then and the great paper burn hasn't happened yet, placing 90% of one's hard assets in paper gold and 10% in physical yielded a disaster. All of the great gold bugs touted their followers right into a failure, then retreated to a stance that said "oh, but you were to have traded it, not hold it"! Their direction was flawed then and will be again for anyone that listens now. For this evolving market, and to counter the dollar failure to come, a position of 90% physical and 10% paper is for both Giants and Dwarfs. I'll hold that for the duration and come out well ahead following their footsteps.

And you close:

--------Enough of my rambling, trusted Guide. Speaking of unforeseen, have you seen any bears on this mountainside lately? What are your thoughts this fine Sunday morning?-----

Michael, this whole unfolding event is going to be an experience to behold and discuss. In convoluted form, our gold markets will begin to lose credibility and disintegrate. All the while as our American economic engine breaks down. Truly, the end of an era as the "American Experience wanes".

As for bears, it time we pause so I may put on my running shoes. You didn't bring yours? Them, my good man, I hope you can out run that bear behind us, because I am certainly going to outrun you (huge smile)!

Thank you for doing your clients and the public a service by allowing our discussion on this privately funded site. A free gift of knowledge from the CPM Group.

Trail Guide.

TheStranger

(05/29/2000; 08:39:26 MDT - Msg ID: 31483)

ORO

Nice post as usual, ORO. One minor correction, however. You say "What you are saying is that you are scared of people making investment and savings errors either directly or through dishonest
or incompetent investment corporations, and that you are fearful of no one coming to the aid of people holding defaulted
pension and insurance plans."

Actually I am fearful of the opposite, that someone will come to the aid and do so with general tax revenues collected from the rest of us. Any attempt at allowing self-directed SS accounts will inevitably result in wildly different results among participants. It would only be a matter of time before we would be imposing another insurance program designed to protect those who malinvest. We don't need more government. We need less.

SteveH

(05/29/2000; 09:20:59 MDT - Msg ID: 31484)

I caught CNBC this morning...

The talking heads were asked, "Where do you think the Nasdaq and Dow will be year end?"

The four people all said higher, with one abstaining from a prediction.

They believed September would be the turnaround and in view of the current market would be a good thing.

None of these people let on that they know or care about the Gold debacle discussed at length here. It is as though there lives continue as they have in the past all focused on the Fed, but not focused on what the Fed is focused on. Such a shame for so many smart people to act so absurdly inane to a market that acts like none they have ever seen before. AND, to ignore the whole commodity side of the house for stocks and bonds, what a set of blinders these people wear.

Leland

(05/29/2000; 09:45:43 MDT - Msg ID: 31485)

Silver Bulls, Let's Applaud Ted Butler

http://www.kitcomm.com/comments/gold/2000q2/2000_05/1000529.113244.ted_butle.htmAll that Bill "Fleck" has to do is apologize...

mhchuck

(05/29/2000; 10:22:36 MDT - Msg ID: 31486)

ARAGORN III

Greetings ARAGORN III. You Wrote in message # 31377.

But we need more voices to weigh in on this, and we shall have them over time. Nearby I see mhchuck speaking to ORO on these matters... Yes, I agree that ORO in that post condensed his case nicely, as I continue to fail to do. Now mhchuck, please provide more commentary. Please share precisely what it is about preserving a degree of gold lending and derivatives that appeals to you as it so clearly does?


Aragorn, How did you arrive at the conclusion that I would want to see the gold derivative debacle continue? No, not after I have seen my hard earned savings devoured by the hannibal cannibals (Bill Murphy's term) of the banking world. So when gold is "set free" to serve as a wealth asset beside fiat, doesn't that mean that bankers and governments will still be expropriating from all those who own no gold? Certainly under that scenario the price of gold could rise to infinity, for how could it not appreciate against ever depreciating currencies. I would have thought it would be appreciating currently, but for all the reasons we know, it isn't.

Now I would like to discuss Media Brainwashing. One of Marshall Mcluhan's classic works comes to mind. Is the "Medium the Massage," or the "Mass age?" The media is the most powerful weapon the hannibals have. If it is the intent of the self proclaimed benefactors of humanity (Central Banks) to free gold, why have millions of people been brainwashed into believing the worldly equivalent of gold is garbage? Why (for years) do the likes of Louis Rukeyser and Ted Arnold wag their poisonous tongues against gold? Why did President Clinton say, when asked about the shaky economy, "I wouldn't go out and buy gold." Why do negative stories on gold permeate all mainstream news outlets? Why has GATA been ignored. Why? If you want a clue, I think it can be found in Mr. Greenspan's reply to a question about his thoughts on the gold standard. I don't have the exact quote, but it went something like, "I have an affinity for the old gold standard, but as you know, I'm in the extreme minority among my colleagues" end quote. Seems to me it's the extreme majority of his colleagues that are waging this war on gold.

How do I know this media brainwashing is working? Because when I talk to my acquaintances about gold, the pupils of their eyes shrink to the size of pinheads before changing to a squint.

I remember in the in the movie "the Exorcist," during the exorcism scene, when one priest turns to the other and exclaims concerning the nature of the demon, "there is only one." I think "there is only one," is how banker's view their demon, (gold) and thus the attempt at exorcism. Conversely, as to the supposed divergent nature of Central Banks, I submit "there is only one."

I know not the subtleties of political maneuvering, but when I see COUNTRIES selling gold to depress its value, then I know this is really big, and in my opinion it's dangerous for the likes of the famed world class investors (Buffet, Soros etc) to get involved in this intrigue... for even if they know they can pressure the shorts and make a "killing," they in turn would be killed. Forgive this digression which might be construed by some as paranoic thinking, as I stated, I know not the subtleties....I only know HOW this will end..... not WHEN.


I have for years maintained that holding gold against fiat was a "Slam Dunk," ...and if life were not so short vis a' vis the sweep of history, I would have no fear of losing the bet. I have been on this trail longer than most, and have occasional doubts that I will live long enough to witness the inevitable collapse of a monetary system that lacks a foundation. I am certain that as night follows day, and vice versa, that this fraudulent system will fail in time; always has, always will.

I am also certain that Trail Guide is going to deliver us, but by what trail and at what time I have no idea. Should the scenario he envisions (the map he has drawn) lead us directly to our destination, it would be another feather in his cap (an Ostrich feather to be sure). But it has been my experience in life that once I knew my destination, often I arrived by roads I never factored into my original itinerary. This is in no way a criticism of Trail Guide, for I hold him in the highest esteem. He has already pointed out a multitude of fascinating landmarks along the trail that I wouldn't have seen if I had hiked it fifty times.

It would be futile to try to put in my own words what Ayn Rand stated so eloquently in Atlas Shrugged. Here it is.

"When force is the standard, the murderer wins over the pickpocket, and then that society vanishes, in a spread of ruins and slaughter. Do you wish to know whether that day is coming? Watch Money. Money is a barometer of a society's virtue. When you see that trading is done, not by consent, but by compulsion--when you see that in order to produce you need permission from men who produce nothing--when you see that money is flowing to those who deal, not in goods, but in favors---when you see men get richer by graft and pull than by work, and your laws don't protect you against them, but protect them against you--when you see corruption being rewarded and honesty becoming a self sacrifice--you may know that your society is doomed. Money is so noble a medium that it does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot."
"Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence. Destroyers seize gold and leave to its owner's a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that doesn't exist, backed by a gun pointed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked: 'Account Overdrawn.'

I remember watching the movie "The Ten Commandments," and when a "Mud Pit" slave is murdered by a taskmaster, Moses (Charlton Heston) comforts the man, who in his last breath says, "My Son, my prayers have not been answered, for I had hoped that before I breathed my last breath, that my eyes would behold the "Deliverer" who would lead all men from bondage." The poetic nature of that scene has always remained with me. Today, we still have taskmaster's, and the "Deliverer" is GOLD!

beesting

(05/29/2000; 10:24:41 MDT - Msg ID: 31487)

The Great Social Security Discussion!

Those Living Outside the US, please explain your retirement plans.Here are a few tidbits that haven't been discussed yet on SS:

This is how the purpose of SS was explained to me back in the 1940's. Where I lived a lot of what looked like elderly people lounged around(drinking Wine or whatever) in the center of town, where there was a small park like area. My parents explained, Social Security benifits will give these unfortunate souls enough money to live a decent life, instead of bringing dis-respect upon themselves and their families.
Has SS worked in that sense?....NO!! More homeless in the U.S. now than ever before in history....Why?..Because the family structure has broken down in many cases.Social Security has totally failed in that respect!

A little known fact:
Lady Leigh, you may want to confirm this:
In the State of Rhode Island, State workers fought the U.S.Federal Government in court and....WON!!!...Rhode Island Government employees pay NO SOCIAL SECURITY TAX!! However the downside is, they all have good retirement plans paid for by the existing STATE tax plans.(A tax burden on everyone who lives in the State.)

Back to Gold:
I have always thought if a person had been able to save one ounce of gold per month during their working days it would(The Gold) have more more value upon retirement than the often re-adjusted SS plans, and the control is in the savers hands instead of anyone elses,(Governments) after all who has the RIGHT to control individual earned income? MY Answer...The Income Earner!
USAGOLD may have some kind of Gold monthly savings plan already? Check it out.
I have already figured out about how many ounces of Gold a worker could save in his/her working life....About 500 Ounces!
At todays depressed prices the dollar value would be about $140,000-$150,000. With prudent planning that should be enough to live on for quite a long time depending on lifestyle.If a family has been a working couple double these numbers.
Now imagine if the price of Gold goes way up in the not too distant future....$1,000 per ounce Gold would equal $500,000.(A couple $1,000,000.)
$10,000 per ounce Gold would equal $5,000,000. What an easy way to maybe become a millionare.
Bottom Line...This would be UNTAXED WEALTH that only you and your loved ones know about.
Thank You for Reading.....beesting.

TheStranger

(05/29/2000; 10:35:32 MDT - Msg ID: 31488)

ORO Again

I don't know what constitutes a livable income nowadays, but suppose a couple in retirement needs a minimum of $20,000/year in order to achieve subsistance in this society. To get that amount reliably from their investments would require a corpus of $300,000 or more. Yet, relatively speaking, very few retirees have that kind of money. And it is not just because of poor investment choices. It is due to all forms of financial unsophistication such as unawareness of rate of return potential or simple lack of foresight. Many, for example, fail to adequately provide for old age while giving generously to their churches year after year. These people often believe that somehow, when the time comes, God will take care of them.

Is it fair to force the rest of us to subsidize such people? No. But having a minimal provision from Social Security at least keeps them fed and off the street. Realistically speaking, can you think of a better solution to the problem? I can't.

Leigh

(05/29/2000; 10:43:35 MDT - Msg ID: 31489)

mhchuck

An OSTRICH feather for Trail Guide? No way!! He shall deserve the finest of peacock feathers, one from each of his grateful readers.

Leland

(05/29/2000; 10:48:39 MDT - Msg ID: 31490)

If You Have Service Medals, Remember, Some Gave More...

GOD BLESS
The Soldier On Crutches


He came down the stairs on the laughter-filled grill Where patriots were

eating and drinking their fill, The tap of his crutch on the marble of

white Caught my ear as I sat all alone there that night.

I turned--and a soldier my eyes fell upon, He had fought for his

country, and one leg was gone!


As he entered a silence fell over the place; Every eye in the room was

turned up to his face.

His head was up high and his eyes seemed aflame With a wonderful light,

and he laughed as he came.

He was young--not yet thirty--yet never he made One sign of regret for

the price he had paid.


One moment before this young soldier came in I had caught bits of speech

in the clatter and din From the fine men about me in life's dress parade

Who were boasting the cash sacrifices they'd made; And I'd thought of my

own paltry service with pride, When I turned and that hero of battle I

spied.


I shall never forget the hot flushes of shame That rushed to my cheeks

as that young fellow came.

He was cheerful and smiling and clear-eyed and fine And out of his face

golden light seemed to shine.

And I thought as he passed me on crutches: "How small Are the gifts that

I make if I don't give my all."


Some day in the future in many a place More soldiers just like him we'll

all have to face.

We must sit with them, talk with them, laugh with them, too, With the

signs of their service forever in view And this was my thought as I

looked at him then-- Oh, God! make me worthy to stand with such men.

Leland

(05/29/2000; 11:15:56 MDT - Msg ID: 31491)

A Grand Expression of Appreciation...From GOLD-EAGLE

ALL:

...suggest everyone might want to read Trail Guide's
posts (yesterday and today) on MK's site. It's a mini
history of where we are and where the gold market is
going. Silver paper will yield to the same end game
scenerio. TG makes a strong suggestion: 90% physical,
10% paper....definitely worth a careful read.

cam7

Leland

(05/29/2000; 11:32:43 MDT - Msg ID: 31492)

To Michael and ALL, a HOLIDAY Worth Remembering...

k)
May 29, 13:25

cam7: What is the URL of MK's site?

Bandit or anybody: Assuming one chooses to
keep Am Eagles bullion in an IRA - that means
one does NOT really have that phsical stuff.
One is dependent on the trustee. What happens
to those Eagles if the trustee encounters ...
er ...'difficulties'? Say 100 folks have 10
eagles held each? Does that trustee have to
have all those eagles on hand, or only a few
(ala fractional reserve)?

And most important - what happens if a person
with Eagles in the account decides he wants
to take physical possession of same?

Why is it restricted to American Eagles?
Gold is gold, as long as the weight and
fineness is verified (has anybody verified
the assay of Eagles or other govt issued
bullion coins? Full 'faith' and 'credit',
and all that)...

It sounds a lot like a miniature form of a
deposit certificate - not even the equal of a
registered warehouse reciept. Just another
piece of paper that can be defaulted on and
therefore carries that added risk.

And if its a 'deposit', instead of a form of
bonded and insured warehouse storage, does
one draw interest on those Eagles, and if so,
in what form? More Eagles, or are these
'deposits' of a cash settlement only form -
possibly cash in amount of face value, rather
than mkt value? How is this deposit valued?

In short, do those 'Eagles' in an IRA really
exist, or is it just a book-keeping entry
listing virtual Eagles? Or just another
'legal tender' fiat scheme?

What certifies and what makes a 'certified'
custodian? Why must these Eagles, once its
known you have them, reside in a 'certified'
custodian?

Never are rules of this sort are there for
the benefit of the person FORCED to make this
deposit... If one desires physical gold
it would seem accepting paper for physical you
never get to see is not a great way to go...
Especially if it doesnt draw real interest to
compensate for the very real added risk.

My cynical side (most of my sides) smells
a rat... which is probably why I suspect
this sort of IRA deposit is not very common.

Nothing is mentioned about this kind of option
in my 401k, I notice (but this 401k seems
to not have much of nuthin for options).

RedNeck
*************************************************



New Era
(goArmy)
May 29, 13:08


Yale economist Irving Fisher declared a few weeks before
the October (1929) crash that stock prices had reached a
"permanently high plateau." Why was this? Simple, he
said. The creation of the Federal Reserve in 1913 had
abolished the business cycle, and technological
breakthroughs had created a "new economy" that was much
more profitable than the old. - The Guardian, London,
3/6/2000 (Sound familiar? � JJR)

"Never before has our nation enjoyed at once so much
prosperity and social progress with so little internal
crisis and so few external threats. My fellow Americans,
the state of our union is the strongest it has ever
been." � Bill Clinton, State of the Union Address,
2/2000

"No Congress of the US ever assembled, on surveying the
state of the union, has met with a more pleasing
prospect than that which appears at the present time. In
the domestic field there is tranquillity and
contentment� and the highest record years of
prosperity." Calvin Coolidge, State of the Union,
12/1928



http://www.cornerstoneri.com/new_era1.htm



Investing Soc Sec, money
(dayrider)
May 29, 13:02

Why not invest social security money in precious metals?
You would be buying in at the bottom,instead of buying
stocks at top dollar!.We would be on a defacto gold
standard and still use paper for convience.We could
restore confidence in the SS system.
The Dollars saved would have more value than Dollars
spent!!!
Are you lisitening Greenie?
Savings and volentary contributions would soar!
Everyone would want to contribute to it ,instead of
being fearful they are being forced to throw money down
a deep dark hole,they would say please allow me to make
additional contributions!!!

lamprey_65

(05/29/2000; 12:14:33 MDT - Msg ID: 31493)

IRA's and Gold

I refuse to use my IRA for gold...I have absolutely NO desire to let the feds know of my holdings, and since I intend never to sell my holdings but rather pass them on to my heirs - I believe the IRA is NOT the proper method for holding physical.

Once again, physical for me is a form of porfolio insurance, never to be sold. Of all the forms of insurance I have (life, health, car, etc.) my precious metals portfolio insurance is the only one which allows me to retain my initial principal.

There was a time when I looked upon physical as just another asset, to be traded when the proper situation arouse. Once I began looking at metals as insurance - never to be sold except in a dire emergency - I become much more comfortable with my holdings. In the first place, now I only buy what I feel comfortable holding for a lifetime, and second, I'm not constantly contemplating when and how to sell.

I urge all here to give my approach some thought...it's done wonders for my state of mind.

goldhunter

(05/29/2000; 13:07:27 MDT - Msg ID: 31494)

Hello Again...

http://www.usagold.comHello...I will first say there has been great writing over the weekend by MK, FOA/Trailguide...

I will also say that I very much feel that fundamentals are shaping up to end the bear/start the bull in gold, and I have this item to share:

If Mr. Microsoft would have called CPM Inc. 2 months ago and exchanged his 98 largelargelarge (BILLION) for MK's inventory of gold, Mr. Microsoft would still have 98 Billion...as gold has hardly moved (very slightly lower...)

There is a lesson here...nothing grows to the sky, and fundamentally, somethings can get over-sold...I believe gold and silver are "too cheap"...I am bullish.

For FOA's Friday post #31367, He can get physical gold from his contracts (our example we're visiting about) he simply needs to remain "long" into delivery period (the short determines the exact date) and FOA's broker will notify him when his account has "stopped" 3 100 oz. contracts of gold...he'll pay a couple very minor charges and instruct BRINKS where to deliver his physical gold to him...It happens just like this all the time for those that want delivery.

The reason there is not "more delivery" is that the leveraged traders (not FOA or BTD: They paid up in full) so out perform physical buyers (IN A RISING MARKET) that fewer
traders pay in full and simply post $1000 or $2000 margin for a futures contract.

A futures trader may be content to "control" the gold and profit from a price rise, However, A "long futures" holder can receive physical if they choose...The gold is there (in Comex approved storage)exactly for this purpose.

My opinion is that 100% paid for futures and 100%paid for coins will perform "almost the same"...the coins have a larger buy/sell spread, but the real difference in our example will be increased buy the "interest received" from the T-bill...A good way to post margin...approx. 31/4% additional return for every 6 months of holding time.

On over $80,000 or margin, this amount will add up to a nice return plus the return (pos or neg) on the gold investment itself.

JavaMan

(05/29/2000; 13:59:47 MDT - Msg ID: 31495)

Must reading about China and WTO

http://www.worldnetdaily.com/bluesky_exnews/20000529_xex_helms_promis.shtmlWhat's this country going to do when Helms is gone?

"By endorsing communist Chinese membership in the WTO, Congress is endorsing not only giving a totalitarian regime an equal vote to that of the United States in an organization of global government, but it is also giving that regime the authority to challenge the legitimacy of laws duly passed under the U.S. Constitution.

Article 1, Section 8, Clause 3 of the Constitution gave Congress the power to "regulate trade with foreign nations." The WTO Charter -- which requires all WTO members to conform to the organization's rulings -- transfers that power to WTO tribunals. Granting China membership in the WTO gives a communist regime a part of the sovereign power over U.S. trade policy that the Founding Fathers reserved for Congress alone."

Found this link at Kitco.

Journeyman

(05/29/2000; 14:35:38 MDT - Msg ID: 31496)

Social Security; Really nailing down the spade - - I hope! @TheStranger, SimplyMe, ORO, ALL

"Actually I am fearful of the opposite, that someone
will come to the aid [of those who lose their
retrirement funds in the markets (or elsewhere, I
presume?)] and do so with general tax revenues
collected from the rest of us." -TheStranger msg#:
31483

It's obvious I didn't make myself clear yesterday. The situation
of which TheStranger is fearful is EXACTLY the way it is NOW.
That is, EVERYONE receiving Social Security checks today is
collecting their SS money from the "general tax revenues
collected from the rest of us." Everyone. Rich, poor, Bill
Gates. EVERYONE.

This seems perfectly fair if you believe everyone paid into a
RETIREMENT FUND. It seems strange on the other hand, once you
understand that the true nature of Social Security "benefit"
payments is that they are WELFARE payments. Why make welfare
payments to Bill Gates? Or the rich. (Yea, yea I know -- poor
guy just lost about half of his billions.) But when the
suggestion to "means test" SS recipients comes up in Congress, it
always loses because some congressional rocket scientist -- who
doesn't understand the programs he administers any better than
his constitutents -- claims that since everyone paid into the
Social Security RETIREMENT FUND, that wouldn't seem fair to
his/her constitutents.

If the current grabbit crew stopped believing the propaganda
inherited from their predecessors and stopped fostering the
notion that FICA was a Social Security retirement fund payment
but was just another tax thrown into the general fund right along
with the PIT ("personal income tax,") etc. - - - and that IS the
way it is - - - the situation would be clear. They could call
the combined PIT/FICA the "Federal Tax On Working" or some such.

They could call the welfare payments "Social Security Welfare
Payments," maintaining continuity with the old program. Then it
would seem perfectly normal to "means test" to see if people were
in need of "Social Security Welfare." Clearly the rich wouldn't
be. Not even poor Bill Gates.

"Any attempt at allowing self-directed SS accounts will
inevitably result in wildly different results among
participants." -TheStranger msg#: 31483

TheStranger, some investors would lose, but if I recall, you're
some sort of broker yourself. SOME of your clients make money
don't they? And even the ones who lose, unless they were
gambling on margin rather than investing by buying and holding
for the dividends, would have something left wouldn't they? And
they'd get dividends wouldn't they? Further, some poor misguided
souls would save gold and perhaps silver as their retirement
fund. This could never go to zero so they would probably be OK
in their old age too. The number of people who actually made it
to retirement with some money wouldn't have to receive money from
the general fund.

In honor of those brave souls who DID lose it all in the markets
because of bad guesses financed on margin, perhaps instead of
"Social Security Welfare Payments," they could call it "Unlucky
Gambler Welfare Payments."

As you can see, there are advantages to calling a spade a spade.
Instead of having EVERYONE on welfare, only those who lost
everything in the market because they were gambling on margin
would need SS welfare. Let's be really pessimistic and say that
there would be what? 50% losers? This would be 50% better than
now.

As a poster (Simply Me?) astutely observed yesterday, however, no
party dares to tell the truth about so-called Social Security.
Telling the people it was originally just a con to get another
tax passed and accepted by the folks might not be greeted with
great electoral success in later elections.

To sum-up: The way it is now, everyone who pays FICA tax -- poor,
rich, Bill Gates -- will also be collecting SS welfare payments.
These welfare payments come from the US Government General Fund,
not from non-existent "investments" made by a bogus "trust fund."
A study by Sen. Phil Gramm of Texas and economist Martin
Feldstein of Harvard estimate such welfare payments now expected
from the general fund will be about $9 trillion. If the "Social
Security Welfare Payments," program was officially treated as the
welfare program which by statute it is, only those old retired
folks in need would receive SS payments. This would be LESS
folks than the "everyone" of current SS. It would, assuming
government honesty (yea, I know), cost the general fund (and thus
those paying the Federal Tax(s) on Working) a lot LESS than $9
trillion.

The best would be to eliminate government from the equation, of
course, and let private organizations like churches, the
Salvation Army, etc. take care of it, as they successfully did in
the past when the economy wasn't nearly as good as it seems to be
today. And eliminate a large part of the >50% tax rate that is a
major factor in creating poor old folks.

Regards,
Journeyman

Leigh

(05/29/2000; 14:47:15 MDT - Msg ID: 31497)

mhchuck

Please don't take my little attempt at humor wrong; I loved your very interesting post! I've just never heard of anyone wearing ostrich feathers.

HI - HAT

(05/29/2000; 14:48:47 MDT - Msg ID: 31498)

Java Man........msg..31495___________TREASON

PUBLIC ENEMIESI will not mention the PIG by name. Only that like his ancient counterpart NERO he be declared a PUBLIC ENEMY.

Of course our Senate is in no position to do this as they are bought and paid Servents of the EVIL POWERS that rule the Nation behind the scenes.

They are undermining our Country, our heritage, our Constitution, our future.

They are usurping the NATIONAL SOVERIENTY.

They are commiting us to TREASON against our own selves.

JLV

(05/29/2000; 15:13:58 MDT - Msg ID: 31499)

Could someone please

point me to a good history of speculative bubbles or manias that is available on the net.

I'm having a problem with a few 'bubbleheads' I know, that don't seem to 'get' it.

Thanks.

HI - HAT

(05/29/2000; 15:28:49 MDT - Msg ID: 31500)

mhchuck

Many thanks for posting the Ayn Rand excerpt.

We are indeed there.

In view of the current DICTATES and FEDERAL DIRECTIVES, if one speaks out for whats just and proscribed under our Traditional Laws and Constitution, one can almost feel like its an act of SEDITION>

Well maybe we approach the old days and the old ways.

If this be TREASON, then make the best of it.

The key will be to STARVE them of the Honey Money they TAKE.

Journeyman

(05/29/2000; 15:33:55 MDT - Msg ID: 31501)

Greenspan quote sought @mhchuck msg#: 31486

mhchuck, I beleive the following may contain the quote you had in mind for msg#: 31486:

"Central banks of necessity determine what the money supply is.
If you're on a gold standard or other mechanism in which the
central banks do not have discretion then the system works
automatically. The reason why there is very little support for
gold standard, you know as well as I in the current context, is
the consequences of those types of market adjustments are not
considered to be appropriate in the 20th and 21st century. I'm
one of the rare people who share a nostalgic view about the old
gold standard as you know, but I must tell you I am in a very
small minority amongst my colleagues on that issue." -Federal
Reserve Chairman, Alan Greenspan, Semi-annual Humphrey-Hawkins
Testimony to US House, CNBC, July 22, 1998, 11:45am

Regards, J.

ORO

(05/29/2000; 15:48:16 MDT - Msg ID: 31502)

Stranger - Journeyman - Social Security

Stranger, as Journeyman pointed out, the Grabbit is doing exactly what you fear it would be doing for those who failed in their planning or execution of retirement. Just that they assume beforehand that everyone had failed already.

I will add one thing, when the time comes and the attempt is made to tax the late Gen X and Echo Boomers in order to pay the boomer and Early X-er's retirement, you will find them quite resistant. Furthermore, once that system collapses, some might take care of their own folks, but many raised in the past environment of near-abandonment of children by their parents in the 70s and 80s will not give a hoot and let their old folks rot in the street. Many, if not most, will not only avoid supporting the aged, they will be contemptuous of them.

Remember this; there is nothing that unifies Gen Xer's more than the hatred of the Boomers. The Echo-boomers are being raised to be self serving social organizers like the WWII generation. They will vote themselves out of supporting the old, and follow through in their personal life.

Like most Grabbit programs, it will achieve the opposite result expected. Social security benefits will be effectively cut to membership in "slow death without dignity" old folks homes where the aged will be fed "gruel", dressed in "rags", and given murderous medical treatment. Boomers will be suffering these indignities of old age because of a retirement system over which they have no personal control - which is what social security is - because they thought they should be due the same treatment as their WWII generation parents, but nobody else did and they did not have the power to force the issue.


Social security past 2005 is a losing proposition, past 2010 it is just plain impossible.

Aragorn III

(05/29/2000; 16:37:48 MDT - Msg ID: 31503)

Mr. goldhunter, and the wise guidance of your post # 31494

Thank you for your recent effort to help those of us visiting these halls to benefit from the long study and insight you have attained on these matters. You are to be admired for the tactful manner in which you have exposed the error of our ways. Certainly, now that we see clearly that which we surely did not see before, we may all seek to sell our non-performing physical gold and capture those elusive returns of T-bill interest through a brokerage account while yet holding our equivalent gold position in the form of bona fide COMEX sanctioned contracts. These contracts you speak of, to be sure, are of such design to obligate us to pay tno more than the originally established contract price upon settlement, regardless the price for contemporary COMEX contracts at time of settlement. A financial stone killing two birds with one throw of such brillance its path is to be written among the stars for all to marvel.

Giving this thought, it is good to see that after we have taken such a position (regardless of leverage use) that the wave of similar action by our fellow gold holders will not depress the gold market price with their flood of metal because they would concurrently be buyers of a COMEX contract, the item used in price discovery. Imagine the high price of contracts if only everyone now holding gold could be convinced of the wisdom of your advice! In addition to our T-bill interest, we would see gains from such buying demand brought upon the COMEX market; the price would surely soar, moreso if leverage were used such that each100 ounces of metal were traded for 10 contracts!

No entity would dare take the short side of such a one-way runaway market! With investment demand thus satisfied, the streets would be awash in physical gold for the benefit of industrial users. This metal would be obtainable, without doubt, at large discounts to the prices reflected by COMEX demand for the more preferable paper variety plus T-bills. Woe is the metal holder late to this party, finding that he is left to sell his metal to an industry being choked with inferior investment supply. But not to worry, for the use of leverage (and T-bill interest) in the COMEX gold play will surely help those late arrivals recapture their paper losses from holding their metal so long and thus selling at a discount. Who is to say how long such a scheme could be maintained? Perhaps forever! When those with their COMEX contracts see how much the marketplace has discounted the metal, only a fool would call for delivery...so even at ten times leverage of paper against all available metal, there would be no threat at popping such a bubble! And there is no need to stop there. Contracts would be bought even by those who had no metal to begin with, in the wisest of all possible moves!

But no. You surely would say that prudence would see an end to such an investment scheme; "...nothing grows to the sky" you said. And upon reflection, it would seem that what I have described is not a look forward, but rather, it is a look immediately back at where we have already been! And most notably and importantly, this very real transition of investment gold into your COMEX play did NOT result in the higher prices, nor could they...by design! So even as old investment gold flowed "into the streets" by those seeking the T-bill interest, leverage, and the bona fide COMEX "price guarantee" contracts, history shows prices kept low and lower. Meanwhile, very strong hands (not industry) lost no dignity and saw no disgrace in a temporary profession as "street sweeper". The futures markets devised for gold did, and continue to, function as a "well-oiled" threshing machine, one now driven by Stephen King.

I offer you this perspective so that you may help your clients with open eyes step aside and be safe, or steer your course and be...Next!

got Goldberg?

Solomon Weaver

(05/29/2000; 16:50:59 MDT - Msg ID: 31504)

Memorial day greetings.

Hello

Everyone...just sitting here with my grandparents showing them the internet for the first time...although being in their late 80's they have used gold and silver as money...so what do we really have to teach them?

Poor old Solomon

Leigh

(05/29/2000; 17:08:28 MDT - Msg ID: 31505)

Grandma and Grandpa Weaver

Welcome to the Forum! Glad to have you visit! If you decide to get hooked up to the Web, please join us -- we could probably benefit from your experience and advice.

Solomon Weaver

(05/29/2000; 17:16:28 MDT - Msg ID: 31506)

Thanks, Leigh

Grandma Weaver's comment to Leigh....."oh, isn't that nice."

TheStranger

(05/29/2000; 17:33:40 MDT - Msg ID: 31507)

What A Way To Spend A Three-Day Weekend

Journeyman and ORO - My Statement ("I am fearful of the opposite, that someone will come to the aid and do so with general tax revenues collected from the rest of us.") does not contradict your message. I admit, however, I might have been clearer on this point by saying "further" aid and "more" general tax revenues.

Yes, I agree, SS is what you both say it is, although my assessment of its future solvency is substantially brighter than either of yours' evidently are.

My concern is that large numbers of self-directed accounts will get wiped out every once in a great while when naive investors get carried away (as has been the case recently in the Nasdaq). Yes, accounts most certainly do go to zero. I have seen it time and time again, and neither margin nor options are required to make this happen. For this reason, I say, if Bush wants us all to get in the stock market, he should just reduce the SS tax and let us do it ourselves. If you don't want the great equalizer to come back and tax you FURTHER when vast numbers of investors lose their nesteggs, then keep the system out of the stock market.

Right now, the chat rooms are filled with angry idiots who blame government (actually the FED) for their terrible losses in the current bear market. Many of these people, I am sure, would gladly vote for any populist who came along promising restitution. NO, I say don't get rid of SS, but emphatically, keep the system as small as is practicable and keep it out of stocks.

One question: What the heck is the grabbit? (I'M JUST KIDDING!)

Aragorn III

(05/29/2000; 17:40:17 MDT - Msg ID: 31508)

mhchuck and Leigh

First, my warmest greetings, also, to the Weavers.

mhchuck, in your post to me you inquired "Aragorn, How did you arrive at the conclusion that I would want to see the gold derivative debacle continue?" Over recent days you may be aware that I have participated with ORO in a discussion covering, seemingly, three sides of an issue. My principle focus in these discussions has been to "champion" the cause for "free gold" as the fundamental and necessary starting point for any and all financial/banking restructuring that may follow. If, one future day, I could convince ORO to lay aside (if only momentarily!) his predilection for the related but following subject of banking, we might cover some ground, and I might better tap into the vast financial resource and intellect we have come to know ORO to be. Speaking to your question, against my efforts to put forth the germ of a "free gold" discussion in which I contend that gold must not be subjected to future lending or derivative operations, ORO concisely provided his position whereby (if my interpretation is correct) gold must be retained within the realm of banking and currency attachments (and hence the lending/derivative continuation) for the purpose of enhancing market discipline upon the banking system. To ORO's post, and its implications against my "free gold" you said:

<<<>>>

Hence, my request to you, "Yes, I agree that ORO in that post condensed his case nicely, as I continue to fail to do. Now mhchuck, please provide more commentary. Please share precisely what it is about preserving a degree of gold lending and derivatives that appeals to you as it so clearly does?" To that end, I thank you for your clarification of position in post # 31486 today.

While I am at this same post from mhchuck, Leigh, it may be of some service to you to know that when properly arrayed at a desk with blank parchment and a full ink well, an ostrich feather is less inclined to tickle noses or menace eyeballs than is a peacock feather. I'm sure Trail Guide took no offense at this gentleman's kind remark: <<<<"I am also certain that Trail Guide is going to deliver us, but by what trail and at what time I have no idea. Should the scenario he envisions (the map he has drawn) lead us directly to our destination, it would be another feather in his cap (an Ostrich feather to be sure).">>>>

got quill?

lamprey_65

(05/29/2000; 18:25:33 MDT - Msg ID: 31509)

JLV

Some links for you:

http://www.contraryinvestor.com/
http://www.usagold.com/gildedopinion/crbturk.html
http://www.siliconinvestor.com/insight/contrarian/index.gsp
http://prudentbear.com/homepage.htm
http://www.bibliomania.com/NonFiction/Mackay/PopDelusions/
http://www.tocqueville.com/brainstorms/brainstorm0058.shtml
http://www.calneva.com/money/frb/frb1.htm
http://www.fiendbear.com/
http://itulip.com/

Happy Surfing! :-)

Trail Guide

(05/29/2000; 18:38:21 MDT - Msg ID: 31510)

Aragorn III, it's my turn now! (smile)

Hello Goldhunter,

I'm glad you read and commented on my post to you. It opened more ground for discussion.

You say:

--------goldhunter (05/29/00; 13:07:27MT - usagold.com msg#: 31494) For FOA's Friday post #31367, He can get physical gold from his contracts (our example we're visiting about) he simply needs to remain "long" into delivery period (the short determines the exact date) and FOA's broker will notify him when his account has "stopped" 3 100 oz. contracts of gold...he'll pay a couple very minor charges and instruct BRINKS where to deliver his physical gold to him...It happens just like this all the time for those that want delivery.-------

This is very good Mr. Hunter and sounds just like their printed literature. It describes the mechanics of a small trade such as in our BTD example, but by extension your reply about the delivery process is out of context. It does nothing to address how this market could fulfill a delivery demand "in mass" and the risk that entails.

In my post to you #3167 I pointed out:

-------we all know that this "Real Stuff" (gold in approved warehouses) has no play to make credible my (3) or others outstanding "longs" unless the owners of that "real stuff", who are not "the comex operation", wish to sell it.--------

-------just because one of these "players" (The largest commercial producers and consumers of commodities) have placed some cash down and taken the other side of my (3) or others contracts in no way secures any gold to honor delivery. Right?-----------

--------In fact the entire total comex outstanding contracts mostly represents "margin" money on both sides of the contracts. ------

-------Do they have "uncommitted gold" to deliver? Usually not! The bulk of commercials only hold the paper version as a hedge against wholesale and retail operations. If they suddenly were called to deliver, they would have to buy outright most of the gold. That's because their customers
would demand them to cover their deals too-----------

In effect, a large demand delivery would be meat with the same official reaction that recently happened with "TOCOM" or further back with the Bunker Hunt scandal. There is no possible way paper futures today could retain credibility in the face of serious delivery demands. For a demand of three contracts such as mine or in amounts less than 10% of outstanding Open interest, the markets work. In a serious crisis, it does not.

Further you say:

----The reason there is not "more delivery" is that the leveraged traders (not FOA or BTD: They paid up in full) so out perform physical buyers (IN A RISING MARKET) that fewer traders pay in full and simply post $1000 or $2000 margin for a futures contract. -----------

Mr. Hunter, the reverse of this statement is more in line with today's realities. Let's try it my way:

" " the reason there is not "more delivery" is that the leveraged traders so "UNDER" perform physical buyers (IN A " " FALLING " " MARKET) that fewer traders pay in full and simply post $1000 or $2000 margin for a futures contract." "

That truly does a much better job of presenting the feelings of modern paper gold traders, no? In fact, many on the net can relate to having started with enough cash to buy 100 ounces of physical at say $400/oz. But after dropping margin after margin over several years they lost the entire
$40,000! Compare that to the awful realities of someone that still has $27,000 in 100 coins today and retains the physical option of still being "IN THE GAME"! Even here I do not nickel and dime the thoughts of readers by using $360 as the entry point. (smile)

Further, your words:

----A futures trader may be content to "control" the gold and profit from a price rise, However, A "long futures" holder can receive physical if they choose...The gold is there (in Comex approved storage) exactly for this purpose.------

Tell me sir, if I placed $20,000 down and shorted (sold) ten 100 ounce contracts,,,,,, and had no gold of my own to back up my bet,,,,,, and I failed,,,,, Exactly how does Comex go about extracting 1,000 ounces from others accounts to make good on my bet? Do they buy it? Or do they just take it? Or do they keep a buffer of several thousand ounces to cover failed traders? It seems to me that in the event of a crisis, "noone" that owns all that gold in approved storage might want to sell it? I guess this begs the question, if all that gold is owned, what good does it do in making credible excess, outstanding contracts? Those above and beyond "eligible" holdings sold outright. You know, the ones that far and beyond represent gold, as you say! But only have margin cash behind them. (smile)

Also:

I really did sell those coins for $270 and it was not through CMP. Can't help if the price wasn't higher. In addition I brought the (3) contracts for $283.30.

Again my example is not designed to represent what a "broker" or I consider fair. It represents what happens in a "real life" context. The kind of experience an average person would encounter. I'm showing (among other things to be presented as this unfolds) why it will be a very bad trade to sell paid up coins to pursue a paper trail. Again, as I said before, ten or twenty bucks per ounce will not mean a thing, later.

Thank you for continuing this eye-opening discussion. It is my sincere hope that everyone will follow along.

Trail Guide

Cavan Man

(05/29/2000; 18:59:49 MDT - Msg ID: 31511)

TG

Whoever you are (and I really don't care who you are), you have helped me become a "clear thinker". Thanks.

Remember one thing please; we will all stand naked before the Master (some day). Kind regards....CM

lamprey_65

(05/29/2000; 19:00:41 MDT - Msg ID: 31512)

Look what I found!

http://itulip.com/#CommentaryWhile reviewing my links for JLV...check out the latest commentary at itulip, specifically, scroll down to the "gold is dead" chart. Some things just never change.

Aragorn III

(05/29/2000; 19:03:43 MDT - Msg ID: 31513)

To Stranger, my last post for now

Replies to your comments to me in TheStranger (5/27/2000; 20:10:02MT - usagold.com msg#: 31428)
<<>>

After encountering a similar difficulty with PH in LA whereby my core points apparently become lost between the thought and the keyboard, I can only pause to reassess my overall efforts at communication. To be sure, your follow-up point is one of importance, and one that I endeavored to address in the original post, perhaps clear as it stands alone here, but lost in the total effort? I wrote...

Aragorn III (5/27/2000; 18:28:51MT - usagold.com msg#: 31427) "...consider this example ... shared "out loud" for the benefit of all to see how quickly we may let the productive genie inflate outside of the bottle of STEADY population." [emphasis added on repost]

You continued:
<<>>

Indeed. And you may judge yourself how likely we shall see "an inordinate diversion of the world's productive resources into gold mining". But yes, I cannot hope to give coverage to all angles within a single post, and the implications of your scenario were to be found in my offering of the previous day...

Aragorn III (5/26/2000; 15:51:20MT - usagold.com msg#: 31377) "where gold serves a use (storing wealth) that does not [and will not!] diminish in importance as the rest of economy grows and inflates, the purchasing power of gold will not only hold steady in the future, but will gain in purchasing power IN ACCORD WITH REAL ECONOMIC GROWTH AGAINST REAL GOLD GROWTH. [emphasis added on repost] Any use in banking--lending, derivatives, etc, --would provide additional, artificial growth of gold supply, thus hurting the gold holder's value. The effect to brace for, in the system I "throw tantrums for" is the initial adjustment for "free gold" to rise to its proper relative level among the real economy--which has raced ahead as PAPER gold called the tune"

As you will see, the implication of that passage was that such an increase in production (gold supply growth) as you postulate would indeed be reflected in reductions of gold's relative purchasing power against the supply of items it is outpacing. Any yet, given the potential growth of currency, it's price could be seen as rising, nontheless. I hasten to add, such an unsustainable period of most rapid growth in gold supply would be of scant more interest then as the fluctions of bananas to CheeriOs are seen today. I expect the role and benefits of its use will be well known by all at such a time as we would see "an inordinate diversion of the world's productive resources" put into gold mining, Even with a period of easier "bananas", man's "use for breakfast" will not be shaken. The key aspect of "free gold", and again the event to brace for, is the tremendous initial adjustment upward for the relative value of gold against all things...such that even a period of mining effort as you suggest would be only a cool breeze to one who has just passed through a blast furnace. From that point forward, you may at your leisure apply any reasonable projections of gold production against any reasonable projections for growth potential of global civilization to surmise whether the short, medium, or long term weather report would call for warm or cool breezes...little consolation for the time traveler who brought paper for the journey.

got golden braces?

JLV

(05/29/2000; 19:20:24 MDT - Msg ID: 31514)

Thanks lamprey_65

Off ta' give 'em hell!

Canuck

(05/29/2000; 19:34:44 MDT - Msg ID: 31515)

@ JLV

http://www.gold-eagle.com/editorials_00/stack052400.htmlI love this one. The speculative madness of 1929 in the new 'medium' radio parallels the internet of the new millenium.

Check the R.C.A. graph 3/4 through the article; $5 in 1924, $110 in 1929 and back to $5 in 1934, a perfect inverted 'V'.

Send this to the 'bubbleheads' and ask them whats really different, how is the internet going to bring rise to the NEW economy.

Solomon Weaver

(05/29/2000; 19:35:16 MDT - Msg ID: 31516)

goldhunter....let's discuss the difference between theory and reality.

goldhunter says "If Mr. Microsoft would have called CPM Inc. 2 months ago and exchanged his 98 largelargelarge (BILLION) for MK's inventory of gold, Mr. Microsoft would still have 98 Billion...as gold has hardly moved (very slightly lower...)"
............
1. Mr. Gates could not sell all of his Microsoft for anything near $98 billion (unless he was bought out during a mega-merger with a giant like ATT.

2. Mr. Gates could not buy $98 billion of physical gold (approx. 10,000 tons) (unless he was buying out the United States Government.....which I do believe he could do if he would be willing to assume the multi-trillion dollar national debt). By the way....Goldman Sachs or J.P. Morgan might like to "sell Mr. Gates $98 billion worth of paper gold for 100% cash on the Barrelhead".

3. The carry-trade you describe (selling tech stocks and buying gold) does not appear to be in fashion just yet....but it may come into vogue soon.

Poor old Solomon

Trail Guide

(05/29/2000; 19:35:39 MDT - Msg ID: 31517)

comment

Cavan Man, thanks for your comments and for all the others that note my posts.. Indeed, thanks to everyone else that gains and offers something to these pages. Truly, some fine minds gather here. No matter how we agree or disagree, all of us are on the "The Gold Trail"!

will return later

Trail Guide

Solomon Weaver

(05/29/2000; 19:37:57 MDT - Msg ID: 31518)

goldhunter, forgot to mention

Point 4 from post below:

If MK had an inventory of $98 billion worth of gold, I bet this website would be one of the most popular on the web....and we wouldn't need GATA anymore....

glad you are a goldbull too.

Poor old Solomon

Journeyman

(05/29/2000; 19:44:27 MDT - Msg ID: 31519)

Social Security & moral hazard @TheStranger, ORO, ALL

"Journeyman and ORO - My Statement ("I am fearful of
the opposite, that someone will come to the aid and do
so with general tax revenues collected from the rest of
us.") does not contradict your message. I admit,
however, I might have been clearer on this point by
saying "further" aid and "more" general tax revenues."
-TheStranger msg#: 31507

I THOUGHT you might have that in mind, Stranger. Given the
political realities, your fears are more than well-founded.
One of the main problems with SS is, as the SS Administration
admits, it's not just for retirement anymore. In fact of about
44 million beneficiaries, only 27 million or 61% receive
retirement welfare payments. The rest, 17 million or about 39%
of SS recipients aren't receiving welfare payments because they
are retired but for some other reason.

This is one reason a lead-pipe-cinch money-maker that set
retirement age to _begin_ four years after most recipients would
be dead is now a $9 trillion liability. Clearly, SS welfare
payments may be extended again at any time for any reason, and
the costs put off to be paid by Gen-xers, etc. as ORO points out.

Or perhaps the costs will be put off just long enough to create
the second American Revolution, as all costs are put off onto our
kids and grand kids. This is done via the government debt, on
budget and off budget, estimated to be as large as $24 trillion,
which will theoretically be paid by those future "taxpayers."

By the way, when I claim SS recipients are welfare recipients,
I'm not speaking figuratively; that's EXACTLY how the statutes
are setup.

"Yes, I agree, SS is what you both say it is, although
my assessment of its future solvency is substantially
brighter than either of yours' evidently are." -TheStranger
msg#: 31507

There's been a lot of propaganda out of DC lately about how
strong the dollar is. Ditto low inflation. Ditto what good
shape SS is in. For some strange reason, I just can't bring
myself to believe any of this. Here's one reason I can't:

"... in the last several decades Congress has had to
tinker 51 times with either raising Social Security
tax, adjusting [raising] the income on which it's
levied, or tinkered with the benefits. And that's got
us into the problem we're in today. Would you see
there would have to be even higher taxes, less
benefits, and greater income levied against -- in order
to maintain even the present 'pay as you go' [the
current SS Ponzi system]?" -Sen. Rod Grams,
(R-Minnesota), to Alan Greenspan
+
"Well, the current Social Security Administration
projections indicate a gap which would have to be
closed either on the revenue side or on the benefit
side." -Federal Reserve Chairman, Alan Greenspan, semi-
annual Humphrey-Hawkins testimony to Senate, July 21,
1998, 11:23am EDT

You can figure out what this Fed-speak means fairly easily.

"...if Bush wants us all to get in the stock market, he
should just reduce the SS tax and let us do it
ourselves." -TheStranger msg#: 31507

Here here! How about gold and silver too?

"Right now, the chat rooms are filled with angry idiots
who blame government (actually the FED) for their
terrible losses in the current bear market. Many of
these people, I am sure, would gladly vote for any
populist who came along promising restitution." -
TheStranger msg#: 31507

Everyone who makes a bad gamble -- or even loses a well
calculated risk -- wants to be bailed out. So what. People in
you-know-where want ice water. The expectation that they will be
bailed out causes what bankers call "moral hazard." People come
to depend on this "moral hazard" bail-out, and take bigger
chances than they would otherwise, causing more bad outcomes than
would otherwise result. If you're going to help people, you have
to do it in a very sporadic and unpredictable manner, or you get
the moral hazard effect. This includes retirement gambles.

Regards,
Journeyman

goldhunter

(05/29/2000; 20:01:09 MDT - Msg ID: 31520)

Some Answers?

http://www.usagold.comFOA, In your example: 10 contracts on $20,000 margin (short)... If you are on the wrong side, price rising against you, you have two choices, post additional margin funds, or, your brokerage firm will liquidate (buy) your short position in a timely manner...you will be out of the trade, lighter in cash, but no liability to deliver gold.

Sancho

(05/29/2000; 20:06:36 MDT - Msg ID: 31521)

(No Subject)

ORO: Regarding your post 3l502 to Stranger and Journeyman with respect to the societal problem of OASDI "needs" exceeding in future either the capacity or the willingness of the populace to pay more money for same, you are quite right. This problem alone(there are others) will cripple the economy for years, a lower standard of living being an inevitable result. The Social Security fund also fritters away an ungodly amount of money on various SSI programs to 30 year olds who have claimed they hurt their backs but put shingles on roofs for "cash only" to not affect their benefits, not that the government ever checks up on these type of things. I have sometimes rented to them, they pay better, and I get some of my money I give the government back. I would far rather seee a better run government. More people should be willing to support their elders at home but that is a dying trait, and, if they are somewhere else (Preferably far away) the relatives have emotionally and economically distanced themselves adequately to assuage their conciences, what is left of same. Having now spouted off and irritated a few, I have to say I do not know of many good solutions.

Solomon Weaver

(05/29/2000; 20:20:21 MDT - Msg ID: 31522)

SS when retirement age is 100

It is almost useless to argue the future of Social Security (which seems to be the only time the government is willing to talk about dates like 2037 or 2054) without understanding the dynamic of increasing life spans.

Lifespans in the ex Soviet Republics are falling...and their state pensions aren't worth anything anymore....let our discussion "assume" that the "system" in the G7 is really there in 30-40 years..(something I doubt).

At the time when SS was introduced, the retirement age and the life expectancy were both approx. 65 years. After correcting for early deaths, this implies that about 30% of the population never lived to take more than a year or two in "retirement". Now, with life expectancies moving into the early 70s and retirement age still 65, 80% of the population is expecting to "finance their lifestyle" for as many as 10-20 years.

But here is the real hidden problem....already today there are close to 2 million Americans in their 90s and over 1 million of them are expected to live to over 100. There already is, and will continue to grow, a subset of the population who will live to 100+...35 years past today's retirement age....there are very interesting advancements being made in biomedical understanding which will allow the "subset" of the population who can live to be over 100 (I estimate it could be as high as 20% of Americans by 2040).

There is even a "surreal" aspect that at some point in the next 100 years, we may begin to have an acceleration of the human life expectancy (for optimum participants) which advances faster than 1 year per year....meaning that you age 10 years but life expectancy has moved 20 years farther. It does not imply immortality, but it does imply some people living to 200 or 300.

Now some of you will think this is absurd, but for an "elite", there is no telling what lies ahead....and in a world where almost all healthy people live to over 100, what happens to SS programs?

Poor not so old Solomon

Leigh

(05/29/2000; 20:25:35 MDT - Msg ID: 31523)

Sancho

You mentioned that willingness to take in elderly relatives is a dying trait. I chuckled at that because my husband and I would be amenable to take in either his father or mine if needed. However, neither dad would be willing to give up his independence to move in with us! Their independence means more to them than the chance to have a free, comfortable home with loving kids and grandkids. My husband and I just shake our heads.

mhchuck

(05/29/2000; 20:28:18 MDT - Msg ID: 31524)

FEATHER BUSINESS.

Leigh, I'm with you, Trail Guide deserves the very best. Just to clarify, I was thinking that an ostrich feather is a very big feather. Largest bird = Largest feather.

Journeyman: Yes, that was the quote. Thanks.

Greetings HI-HAT, thanks for your comment.

Aragorn III, thanks for your response.

Canuck

(05/29/2000; 20:30:02 MDT - Msg ID: 31525)

@ JLV

I saw an interesting article in the Nation Post about six months ago. The theme was the upcoming saturation point of internet users. Maybe someone can find the article or a related one.

In the article the author points out that in the USA (highest internet users) nearly half of the population are 'wired'. Canada, England are close, Europe and Japan are gaining. What happens to ISP's etc. when everyone that is going to get wired is wired. He speculates that the saturation point will be early/mid 2001, less than a year.

I posted a couple months ago that it makes sense the AOL/Time Warner merger, " ...now that we got them, we better
entertain them.."

The previous link I posted perhaps aludes to this. Every man, woman and his dog got into radio and its endless applications throughout the early '20's ("...children will be taught at home through the marvels of radio, schools will be a thing of the past...") and once the novelty wore off, bust went the radio boom.

The internet has flourished, zillions of applications and when the dust settles how many will be profitable? The on-line book junkies after reaching mega-millions in revenue suddenly realized warehousing and shipping is the same Achilles heel of their traditional competitors. Doooh!!

My office sells telephone systems and its peripherals. It has done so for 25 years. The traditional sell involves the initial sale, installation, warranty follow-up and future service contract revenue. Now head office opens up an on-line 'do-it-yourself' kit for low end systems. The prices are 10-30% lower than the traditional purchase. I asked my manager a) what happens when our customers connect our office to the web site and find out they can buy the identical phone 25% cheaper? b)how are going to compensate for the lost revenue in i) the sale of the hardware and ii) the loss of all the labour installing? His answer, everyone else is doing it; we have to compete. Compete yourself into bankruptcy is how I see it.

goldhunter

(05/29/2000; 20:31:36 MDT - Msg ID: 31526)

More...

http://www.usagold.comA question first please...FOA, in your "crisis question" is your crisis sufficient so that MK can no longer buy gold in the market place to re-sell to his customers?

You might expect a rising gold price (not a crisis for all of us that own the stuff) to curtail supplies? That could happen, but some may have an opinion that as prices rise, more mines are experiencing greater profits, and therfore are able to devote more capital to upgrading technologies and exploring additional ore deposits that were not profitable at the lower price. Could you see more gold supply at higher prices (until we run out...)

Also, an opinion could say prices today are restricting supplies because some mines are having higher costs than others and have restricted production...Yet physical dealers have pruduct to sell...

Did dealers suffer from lack of product as gold and silver soared in 1980? Many sold tea sets, watches, rings, and coins, some too soon and some too late...

My opinion is that supply and demand meet at a variable price...Gold mines will mine gold until prices decline to below profitable levels, and physical dealers will hire clerical staff, sales and shipping staff to sell the product as long as there is sufficient demand and margin for them to stay in business.

Does the price soar anytime soon? I am not certain.

One more...I do wonder how a physical dealer or large gold holder would protect ones wealth at the top of the gold market if there were no futures market to hedge in (be short gold in).
What would you have done in 1980 if someone would have rung a bell at the top of the gold market @ approx. $830/ oz?

A gold mine hedges to protect margins just like oil and grain commercials do.

Good evening.

Chris Powell

(05/29/2000; 21:32:38 MDT - Msg ID: 31527)

Washington, Paris, and then Johannesburg

http://www.egroups.com/message/gata/470?GATA's plans, reported by 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

Solomon Weaver

(05/29/2000; 22:10:25 MDT - Msg ID: 31528)

Trail Guide - thought I would answer this one...since you signed off (smile).

goldhunter (05/29/00; 20:31:36MT - usagold.com msg#: 31526)
More...
http://www.usagold.com
goldhunter: A question first please...FOA, in your "crisis question" is your crisis sufficient so that MK can no longer buy gold in the market place to re-sell to his customers?
.......
Solomon: To those customers who are willing to pay $2000 per ounce (when we know not if the price from there is going to $5000 or $1000)
.......
Goldhunter: You might expect a rising gold price (not a crisis for all of us that own the stuff) to curtail supplies? That could happen, but some may have an opinion that as prices rise, more mines are experiencing greater profits, and therfore are able to devote more capital to upgrading technologies and exploring additional ore deposits that were not profitable at the lower price. Could you see more gold supply at higher prices (until we run out...)
.......
Solomon: DEVOTING CAPITAL (Dollars or Euros) to UPGRADING and EXPLORATION takes several years. Now, let us say that in the face of a paper default and "apparent" gold shortage, a new Europaper gold market has been established which requires real metal backing all commitments including futures. Let us also assume that in this new market, gold is trading much higher than today and with much higher volatility, and that much of the financial world is reeling from a massive gold derivatives crisis. Oddly enough, for the unhedged blue chip gold mining company, the much larger cash flows are going to be very nice improvements and may allow them to increase development and exploration, but to small and undercapitalized gold mines (especially those whose upside is milked by having to meet forward sale obligations) until it is "clear that very high gold prices are here to stay and not simply a mania" it could actually be difficult to get capital, or to find counterparties who are willing to "buy" future gold at high prices to finance mine expansion.

At this point in the game, the physical owner has an anchor: He has gold sitting in his hand.

But the others who are trying to understand the "new price or gold" have no anchor....the "high gold price" will be destroying the credibilty of some nations so they will fight against it..and yet to reestablish systemic credibility, gold may start to back a much larger percent of international obligations...thus supporting a high price.

We all may agree that $250-300 is a bottom in the gold market..but we will all disagree heavily on the coming top...$600, $1000, $5000????? Who will be willing to loan against gold then?
.......

goldhunter: Also, an opinion could say prices today are restricting supplies because some mines are having higher costs than others and have restricted production...Yet physical dealers have pruduct to sell...
.......
And yet there is a supply deficit in gold year after year. How can we see the price of gold falling year to year and at the same time see the supply deficit growing. There is only one function of price in today's gold market...to convince owners of physical material to let go of their ownership. There has been a large restructuring of where gold is and who owns it...and for better or worse...it seems Americans have less gold..and owe a lot more gold.

Goldhunter: Did dealers suffer from lack of product as gold and silver soared in 1980? Many sold tea sets, watches, rings, and coins, some too soon and some too late...
........
Solomon: There were scandals where newly founded silver banks (scams) had absolutely no silver on hand. The truth of the matter is that particularly for silver, and also for gold, most people do not want physical delivery...at best they want physical delivery to another bullion bank.


Goldhunter: One more...I do wonder how a physical dealer or large gold holder would protect ones wealth at the top of the gold market if there were no futures market to hedge in (be short gold in).
.....
Solomon: Exactly...here you have understood the fact that at much higher gold prices the "value of gold" will be much more unclear.....

But the phrase we have to look at is "protect one's wealth". If you believe that wealth is "dollars" then there is a very good way to protect at the top of the market...sell some of your gold for dollars. Others think that gold itself is wealth and will be glad not to have to pay a much higher number of dollars to get an additional increment of that wealth.

goldhunter: A gold mine hedges to protect margins just like oil and grain commercials do.

Solomon: Oil and grain companies will typically hedge a small fraction of their production and primarily to assure that near term cash flow stays positive.....the forward sales obligations of the gold mining industry is currently on the order of 4 years total worldwide forward production...try to convince me that the oil industry or grain commercials do this.

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

Goldhunter...I think that we all enjoy the spirit of debate (as long as it remains factual and cordial - which you adhere to). Just be aware that most of the longtime posters and lurkers here have a feeling that the larger picture in world finance is having troubles...I remember a while back hearing that in China, all values were measured against gold...today, we are doing it backwards...almost all worldwide trade (commodities, gold, currencies, stock, etc.) are measured in dollars. The price of gold "appears" to have fallen from $300 to $275 in the last couple months...but in almost all currencies except yen and dollar, gold prices are the same or higher.

Many of us expect that when gold returns as a reserve asset and value store (or when existing gold loans are called) that the demand for gold will rise and thus the price. Well, we are now in a world where liquidity and asset problems are happening all over...flight to quality...means flight to dollar....as dollar rises, dollar obligations are more expensive...

So can you not see that we are not in a world where the price of gold is really falling?? It is the price of the dollar which is rising? Any paper contract for gold is making an assumption that the "price" and "value" of a dollar is going in a single direction which benefits the owner of the contract. A physical gold or silver postion is honoring the fact that the dollar is either strong, or in a bubble, and that the sheer momentum of the dollar may allow it to beat out the Euro, or the opposite. By holding paper trades, you are placing yourself in a position where the "value" of your future profits (if you have any) volatile. By having a physical position, you "protect one's wealth" (as you are fond of saying) through a highly unpredictable midterm future.

Investment is a combination of capital appreciation (returns) and capital preservation....most of us here at the time being are "preservationists".

Poor old Solomon

Solomon Weaver

(05/29/2000; 22:47:20 MDT - Msg ID: 31529)

Why does the Director of Securities at Deutsche Bank plead to have options sold back before expiration???

http://mny.co.za/BusToday.nsf/Current/422567D900452FF8422568EB0056FEEEgidsek posted this link which was an interview between MONEYWEB and Niall Smith: Director, Deutsche Bank Securities

Here is a company which has a gold derivatives position over $50 billion dollars and this guy is out trying to convince the world that DB is trying to minimize their "exposure" in 50 million warrants on Gold Fields calls which at the time of the interview were still 4 Rand out of the money...he was almost pleading that holders of these "worthless calls" should be happy to sell them back at an interesting premium of a few pennies per call.

Obviously, one and a half years ago, when they wrote these options, they did not expect the "share price recovery" of unhedged miners!!!!!

So now suddenly, Gold Fields has a time window in which they can do DB some real pain...

I would like to propose (in advance and predicting the future) that these calls moving well into the money will be included as one of the 5 most important events in the 2000 gold market (along with Bill Murphy getting mugged from behind with brass knuckles).

Actually, this shows an important development that even the HannibalCannibals didn't forsee: As the word gets out that the gold markets are being manipulated, and open interest dries up because nobody (except delta hedgers) are willing to go long, the next best goldpaper long investment is coming back strong: unhedged gold mining Blue Chips.

Poor old Solomon

elevator guy

(05/29/2000; 22:57:30 MDT - Msg ID: 31530)

(No Subject)

Anyone ever hear of a former gold trader called Richard Barnes?

He said he was one of the biggest gold traders in the country. (USA)

MarkeTalk

(05/29/2000; 23:09:49 MDT - Msg ID: 31531)

Euro and Swiss Franc on the move

Friday's sharp jump in the Euro and Swiss Franc was just the beginning of things to come. First of all, the charts here at Centennial say it all. In the Euro, there is a textbook double bottom which usually acts as a springboard to higher prices. The Swiss Franc has a rounded bottom which is similar to a double bottom. Both presage much higher prices. Now all of this technical chart action comes amidst talk from Ernst Welteke of the ECB about intervening to prop up the value of the Euro. One only has to look at the price of crude oil (which is priced only in U.S. Dollars) to see that higher crude prices with a simultaneously higher U.S. Dollar means BIG inflation ahead for Europe. Now couple that fact with the fact that every European country has been inflating its currency--"priming the pump"--to jump start their sluggish economies. After all, they all want some of the "prosperity" that the American model has provided. (Has anyone seen the growth in M3 or the adjusted monetary base? Scandalous, simply scandalous, as Dr. Moneywise would intone.) Anyway, you now understand why the ECB has really no choice but to intervene and buy Euros. It could raise interest rates in line with recent U.S. actions but such a move would throw their economies back into recession.

Finally, from a seasonal perspective, the Memorial Day weekend usually marks a turning point for certain markets. Will the U.S. Dollar turn down as the Euro and Swiss Franc turn up? It appears to be the case. Of course, expect some backing and filling before prices resume their rise. All of this presages higher gold and silver prices. Charts indicate we are at multi-year lows and that we should not see these low prices for years to come. Fundamentally, some event somewhere (what fundamentalists call "the news") will act as a catalyst to propel prices higher. If nothing else, the major news story about the huge drought that, despite some little rain, is ready to engulf the Midwest will certainly cause food price inflation. Just imagine if grains skyrocket and food prices increase by 15-20%. And if crude oil prices continue to hover around $30 per barrel with $1.70 per gallon gasoline. Will anyone believe the government's CPI number when food and energy are excluded? Just how dumb do they expect people to be? My advice: Don't be part of the dumb sheeple. Buy gold now.

lamprey_65

(05/29/2000; 23:26:46 MDT - Msg ID: 31532)

OK, Folks...

...Been here a while, so I think I can ask the following since even I'm getting confused --

Who are all these people posting from Centennial? Some I know, others(??)

USA GOLD -- MK, OK, got that one.
Marke Talk -- ?
Town Crier --?
Someone else who was in charge of the website (sorry, forgot your handle).

Trailguide (alias, FOA...ok -- not from Centennial)
Another (Been gone many moons -- not Centennial either).

Geesh, I feel like I'm back to net diagramming for M.I.! Or as Bullwinkle would say, "What the ding-dong's going on here, anyway!"

No wonder people from GE and Kitco get confused over here, I browse the site daily and I'm not sure who some of you guys are!

At Gold-Eagle the articles are signed.

How about a page with a little bio for everyone?

Leland

(05/30/2000; 03:04:17 MDT - Msg ID: 31533)

It's AMAZING What Sharefin Has Found to Help...Re-Posted From Kitco

Date: Tue May 30 2000 04:40
sharefin (Economic Time Series Data) ID#284255:
http://www.inform.umd.edu/EdRes/Topic/Economics/EconData/Econdata.html

Date: Tue May 30 2000 04:40
sharefin (Free Time Series Data) ID#284255:
http://www.lmt-expo.com/sources.htm

Date: Tue May 30 2000 04:40
SlangKing (not reached 10 yet either fin) ID#274240:
?

Date: Tue May 30 2000 04:40
sharefin (Asian & International Stock Exchange and Stock Market Information)
ID#284255:
http://www.ntu.edu.sg/library/biz/sxsm.htm

Date: Tue May 30 2000 04:40
sharefin (Financial Data and Resource Locators) ID#284255:
http://www.ntu.edu.sg/library/biz/financial.htm

Date: Tue May 30 2000 04:39
sharefin (Data Library Sources: Downloadable Data by Subject) ID#284255:
http://datalib.ed.ac.uk/sources3.html

Date: Tue May 30 2000 04:39
sharefin (The Financial Data Finder) ID#284255:
http://www.cob.ohio-state.edu/fin/fdf/osudata.htm

Date: Tue May 30 2000 04:39
sharefin (CRSP - Center for Research in Security Prices) ID#284255:
http://gsbwww.uchicago.edu/research/crsp/

Date: Tue May 30 2000 04:38
sharefin (Harvard - Economics Research Data) ID#284255:
http://www.economics.harvard.edu/data/

Date: Tue May 30 2000 04:38
sharefin (RFE Economic Links ) ID#284255:
http://rfe.wustl.edu/sc.html

Date: Tue May 30 2000 04:35
sharefin (Business & Economics Numeric Data) ID#284255:
http://www.mnsfld.edu/depts/lib/ecostats.html

Date: Tue May 30 2000 04:34
sharefin (ED&L - Economic Data & Links ) ID#284255:
http://www.csufresno.edu/Economics/econ_EDL.htm View Yesterday's Discussion.

Leland

(05/30/2000; 03:12:39 MDT - Msg ID: 31534)

Profound...From Madscientist at GOLD-EAGLE

dayrider
(Madscientist)
May 30, 02:12

I think you missed one feature of the meaning of the
trade deficit.

The deficit is cumulative and instead of being $300
billion, the total cumulative trade deficit is about 10
times that or $3 trillion. To pay it all in gold would
require a gold price of $10,000 per ounce.

Actually, this debt appears in many forms including an
inflated stock market as well as a massive government
debt total and other dollar denominated debts.

What happens if foreign investors and governments decide
that dollar denominated assets hold much greater risk
than assets denominated in their own currency? All US$
denominated financial instruments will collapse.

What happens if foreign holders of the trade deficit for
the current year decide they want to buy real USA
merchandise or raw materials instead of carrying the
trade deficit? The result would be immediate, severe
inflation of all sorts of consumer and industrial
products. They really should be smart enough to get a
full measure of value for their exports rather than
collecting worthless paper for a major part of them.

Truly, paying an ounce of gold for $280, or paying a
bushel of soybeans for about $7 means that the market
for the dollar is a bubble market waiting for a pin to
prick it.

Cheers

TownCrier

(05/30/2000; 03:14:50 MDT - Msg ID: 31535)

A new feature has been added to USAGOLD!

http://www.usagold.com/centralbank/current.htmlCourtesy of Central Banking Publications Ltd we are now able to offer you this weekly look behind the doors of the world's central banks. For future reference, you may find this link on the USAGOLD HomePage, and also soon to be on the top of MK's Daily Market Report Page new the link for the WGC Week in Gold report (as soon as I have a chance to coordinate this with Michael).

TownCrier

(05/30/2000; 03:48:39 MDT - Msg ID: 31536)

Hello sir lamprey_65, I saw your who's who question...

The scorecard is really quite simple. If you had ever had need to contact the sitemaster for any reason, you would surely be acquainted with me already, Randy, at your service. I am not in the Centennial office, but am actually holed up in this here Tower on the edge of the wilderness. In addition to general website upkeep, I offer pertinent news whenever possible, etc. Jeff posts as "Jeff" (rarely much more than such words as "testing, testing..."). He handles the hardware tech stuff and the most tricky coding issues, and is the big cheese at the web hosting company MK contracts with.

The Centennial office is a nice, intimate group, and you probably already are familiar with the staff to be found there. Sir Cavan Man recently paid tribute to them each by name. You know MK well enough as USAGOLD, and MarketTalk would most clearly be his Centennial associate, George. If Marie, the Centennial office manager, were to post as I have seen in the past for such items as requesting contact information from a contest winner, she appears as "Admin." We have no idea who FOA or another is. For that matter, we have no idea who most of you are unless you have made an effort to get acquainted. I've offered plenty of tech assistence to people attempting to get the knack of downloading the News & Views newsletter, but have no idea if I would know them from the forum or not. I hope this helps you out.

HI - HAT

(05/30/2000; 04:10:35 MDT - Msg ID: 31537)

Leland__msg. 31534..........Digitol Legal Tender

Madscientist__________ORONot only of concern, the cumulative deficit digitol money that can be electronicaly wired in a heart-beat for sundry legal tender exchanges, but the freeze-up or inflation volcanoe that would occur if only a fraction of the dept-based fiat existing in digitol bank accounts were mobilized.

That all this dept-based money credits on the books only exist in electronic land is basis for the "conflicted" posts to ORO last Sunday, concerning is there an edge to having in hand the actual limited issue "legal tender", currency notes.

Trail Guide

(05/30/2000; 05:37:20 MDT - Msg ID: 31538)

Comment

Hello again Goldhunter!
If we are to discuss this issue, each of us must attempt to address all (or most) of our replies in a somewhat point / counter point fashion. I am trying to do this with your posts. Otherwise readers never can grasp our position in it's presented context.

You say in #31520:

---------FOA, In your example: 10 contracts on $20,000 margin (short)... If you are on the wrong side, price rising against you, you have two choices, post additional margin funds, or, your brokerage firm will liquidate (buy) your short position in a timely manner...you will be out of the
trade, lighter in cash, but no liability to deliver gold.-------------

Mr. Hunter,

My example was not in the trading context. The thrust of the argument was that of a short investor being called at this point. If the price had been static (not moved enough to warrant much more margin money), as recently has been the case and my short position ran to the end. Assume I did
not make any motion until someone "stopped" my position with a delivery intent. I then stand firm with no more money or gold to apply.

My point and example goes to the inability of Comex to supply gold to cover my short position and attacks your use of their warehouse stocks as a "symbol of security" for investors.. They (Comex) must "buy new gold" to cover me in order to make the "stopping" long position whole (Note to all: that's the guy on the other side of my trade). Whether they buy gold from existing approved warehouse stocks or go into the open market, they do not have "standing supplied" to draw from without expending "their (comex) capital" to do so. In the event of a "fast market", many such short
failures leverage any gold price increases against comex capital.

My friend, please address this in your discussion. My argument has challenged you to defend your position. I present that approved comex warehouse gold is nothing more than "investor owned" metal and would require the expending of comex cash to deploy that stored metal, or any metal to
cover my default.

Further and extending this:

In a crisis, with enough demands on their resources, many positions such as my 1,000 ounce example would completely overwhelm and shut down their operation. Because they could not secure enough physical gold to buy and / or they do not have the resources to do so. (please address this by point so we may proceed). (smile)

Trail Guide

goldhunter

(05/30/2000; 05:41:43 MDT - Msg ID: 31539)

Solomon...

http://www.usagold.comHi Solomon...
A couple of your points: That mines may find it difficult to get capital, or find difficulty in selling their gold...

I may offer that at a high enough price, a mine would borrow less...either rely on their "windfall profits" for capital or some may sell more stock to the public for capital. Otherwise, banks do lend to companies that are earning large profits...

If in fact YOU are RIGHT, that gold cannot be sold at the higher price (by ANYONE)...We truly have "AN ANCHOR"...a boat anchor (humor)

Your function of price statement: to convince owners to "let go"...exactly. An equilibrium price based on supply and demand in the marketplace in order to effect commerce (transactions)...no different than you inducing the gas station to "let go" of some physical so you can go to work.
The "market price" of gold does not know if you choose to buy or sell...Your decision to buy may be influenced by your opinion or bias that you are able to sell for more in the future or less. Up till now, the bears have been winning...

Your opinion on oil, grain and mine hedging...a short one...

Let's say you are hired today by EXXON to be the director of risk management OIL division. Price today: $30,.00 ea.

You are now responsible to insure profits for this company (actually the margin between the raw crude and refined product)for each employee and Shareholder...still want the job?

Now, the price goes against you (crude price goes up)Do you expect me to believe that you will have your job next week because you only hedged 3 months production? hedging is fluid and ongoing...Commercials are experts, and hedge accordingly to offset adverse price risk.

Finally, your supply deficit opinions...almost every oz. of gold ever mined in history exists today...fact. The gold sitting out there in your hands and mine probably are held for wealth creation (profit) at these prices per oz. And when the price rises there will be buyers and sellers all the way up to the top and past the top...
The buyers at $2000 will buy so they can sell at $3000...
The sellers at $2000 will sell in order to buy a dip or a Lamborghini, or "Dream" Home...it really doesn't matter.
There will be both buyers and sellers ...my opinion.

lamprey_65

(05/30/2000; 06:22:19 MDT - Msg ID: 31540)

TownCrier

Thank You for the clarifications.

Black Blade

(05/30/2000; 06:31:31 MDT - Msg ID: 31541)

Morning Wakeup Call!

Sources: Bridge News, Reuters.Asia Precious Metals Review: Gold flat with sluggish trade
By Hiroyuki Fujiwara, BridgeNews

Tokyo--May 30--Spot gold hovered at about U.S. $273 per ounce in sluggish trade on Tuesday in Asia after overnight U.K. and U.S. market holidays, dealers said. The absence of sellers underpinned prices today, while few tried to boost gold without fresh incentives, they said. Platinum was depressed by profit-taking, the dealers said. Gold has been underpinned at the key support level of $270, although buyers are hesitant to lift prices, the dealers said. The market sentiment still remains weak due to the scheduled European central bank sales and fears of another round of selling from producers, they said. Meanwhile, there are few factors likely to trigger players to dump gold below $270 in the near future, the dealers said.

Black Blade: We shall see what happens as Wall Street starts up for the week. At least we can still get PMs on sale - "Buy low - Sell high", well at least buy low at bargain prices.

Canada's Franco-Nevada denies acquisition talks

TORONTO, May 29 (Reuters) - Canadian gold mining royalty company Franco-Nevada

Mining Corp. (Toronto: FN.TO - news) denied speculation on Monday it was in takeover talks with South Africa's Gold Fields Ltd , the world's second largest gold producer. ``We're talking with lots of companies. We're always working on projects and we have a pipeline of projects, but there is no agreement or arrangement with anyone,'' said David Harquail, senior vice-president at Franco-Nevada in Toronto. ``We have nothing material to announce,'' he added. Speculation surfaced last week that Franco-Nevada was a takeover target of Gold Fields which is eyeing the Canadian company either as a potential takeover target or as a potential partner. The speculation heightened after Gold Field's issued a cautionary notice to shareholders that it was ``involved in discussions with a number of parties'' and warned that ``the price of Gold Fields' securities may be materially affected''.

Shares of Franco-Nevada were up 10 Canadian cents to C$18.40 in Toronto in midday trading on Monday. Gold Fields was up 80 cents to 25.80 rand on the Johannesburg Stock Exchange. Mining analysts said on Monday it made sense for Gold Fields to be looking to Toronto-based Franco-Nevada, given that its
chairman had long expressed interest in expanding into North America, home to world-class gold mining companies and sophisticated capital markets. Franco's Ken Snyder mine in Nevada's Carlin is considered a prized asset in which many companies have expressed interest in acquiring. The mine in the rich Carlin Trend area last year produced 230,250 ounces of gold at a cash cost of $98 per ounce. ``Obviously something is afoot. Whether it's specifically Franco, I don't know,'' said David Davidson, an analyst at Newcrest Capital, in Toronto. ``Obviously there is circumstantial evidence that suggests they have had discussions, but that shouldn't surprise anyone.''

Black Blade: The speculation should really heat up now, Who will merge with who? ;-)

Europe Precious Metals Review: Gold edges higher, others quiet
By Andrea Hotter, BridgeNews

London--May 30--Gold trading resumed in Europe in a somewhat subdued manner following the long weekend in the United Kingdom and Memorial Day holiday in the United States, with the market bouncing slightly to fix at U.S. $274.20 per ounce in the morning session Tuesday. Silver saw thin trading conditions with the market remaining flat around recent levels, while platinum and palladium held steady in the absence of players from the market. Gold market sources said the prospect of a further bounce towards $280
looks unlikely in the absence of a fundamental market catalyst, while the location of the 30-day moving average at $275.53 is expected to place further pressure on prices. Most players are still sitting on the sidelines, sources said, although further professional selling is likely to resume in the near-term, with this expected to place downward pressure on prices. "There is steady physical demand and buyers are happy to enter the market at around the lows at $270," one trader said. "As prices pick up we'll see profit-taking and light liquidation towards the $280 level, with this keeping an upside check on prices," he added. Range-bound activity between these levels is likely to continue, sources said. Silver found support on the downside around the $490 level, with the market touching a high bid of $493 in the morning session Tuesday. Resistance around the 10-day moving average at $495 is proving a cap on the upside, with the 30-day moving average above this at $498. Further sideways activity between $490-95 is likely, sources said. Elsewhere, the funds remained absent from the platinum market Tuesday, with several players saying current trading levels are more realistic. "The market is returning to more sensible levels as fund buying runs out of steam and some Russian material is being seen in the market," one source said. "However, the much longer-term price outlook for platinum is still a good way below prevailing levels," the source added. Platinum fixed at $550 in morning trade Tuesday from $549 previously. Meanwhile palladium held firm in range-bound trade throughout the morning session, with demand steady and supplies said to be forthcoming. Palladium fixed at $566 from $564 previously, with little movement in either direction expected.

Black Blade: Yet Au is up +$2.00 at $273.30, Ag up $0.03 at $494, Pt down -$2.00, and Pd up +6.00. S&P Futures are up 11.70 close to fair value, should be an interesting start at the open on Wall Street.

goldhunter

(05/30/2000; 06:47:15 MDT - Msg ID: 31542)

Answer to FOA

http://www.usagold.comGoodmorning.You have the position a little mixed...
The short issues notice or intent to deliver...If you are short 10 or 1, you through your brokerage acknowledge your intent to deliver physical against your short contracts and advise of the intended delivery date (within delivery period)

Your questio to me ...what if you have no intention to deliver gold against your short contracts? Your broker will insure that your position is liquidated by last trading day, or consequences for your broker and brokerage...brokers do not like consequences...

You are right...Comex gold is "investor owned gold"...the reason there is so little delivery is the exact reason we discuss this here...leveraged futures out-perform physical in a rising market...my opinion...

RossL

(05/30/2000; 07:01:46 MDT - Msg ID: 31543)

Sir Goldhunter

You have been skirting around the answer to the obvious question. What happens when 35,000 gold contracts are purchased by longs with the intent for delivery. If the speculator shorts are closed out of their positions by their brokers, where does the 3,500,000 ounces gold come from to deliver on the contracts?

goldhunter

(05/30/2000; 07:19:15 MDT - Msg ID: 31544)

No skirts here

http://www.usagold .comI am trying to answer a question as asked...

For the "skirts"...alot of "shorts" (commercials) do have gold available for delivery...Why? because they have supplies coming on stream every month or Comex price cycle...

The mine for let's say $220 to 260 per oz but hedged (4 years ago according to Solomon) for $440...so today they sell cash gol for $270 and collect (440-270)or $170 from their Comex hedge ...not a bad bet (back then)

The answer is: commercials can and do sell (deliver) as long as they are making profits... Given similar circumstances, perhaps you would too.

Folks...I am not the bad guy...we are team-mates on the gold market bull...I am trying to offer news or explanations and opinions that may be useful...you decide...

Please correct or add or read or don't read...I am trying to help...

Hipplebeck

(05/30/2000; 08:01:23 MDT - Msg ID: 31545)

is this related?

Since the English and Swiss began selling gold, their currencies have come down.

USAGOLD

(05/30/2000; 09:14:22 MDT - Msg ID: 31546)

Today's Gold Report: Could Be an Interesting Week for Markets

5/30/00 Indications
�Current
�Change
Gold June Comex
272.90
+0.70
Silver July Comex
4.95
-0.01
30 Yr TBond Sept CBOT
95~02
-0~04
Dollar Index June NYBOT
108.48
-0.52


Market Report (5/30/00): Gold improved moderately in the early going in New York
responding to the weakening dollar, continuing solid physical demand and a building inflationary
psychology. Over the weekend New York Senator Charles Schumer, in an attack reminiscent of
the political response to the 1970s inflationary crisis, predicted that gasoline would go over $2.25
a gallon and warned that OPEC had a dagger pointed at the heart of the U.S. economy. He failed
to mention the inflationary monetary policies of the Federal Reserve that prompted the OPEC price
hikes. The euro is trading higher on expectations that the European Central Bank will raise interest
rates at its next meeting, according to a Reuters report. Gold was quiet in both Asian and European
trading overnight. Standard Bank London summarizes the technical picture on gold this way: "Last
week's sell-off to $270 has now completely filled the gap on the charts created last September
when the yellow metal embarked on its amazing rally to $340. Technically $270 is key support
and gold needs to hold this level to prevent fresh weakness and avert fears of a return to last
summer's 20 year lows ($252). On the upside there is stiff resistance between $275 and $277,
while the long term moving averages (100 and 200 days) have converged at $285 and only a move
above this price would signal a return to a bull market." This week we have New Home Sales and
Leading Indicators tomorrow and then the Unemployment Rate on Friday. Investors will be
watching for signs of inflation. For the stock market could see its best days early in the week and
run into trouble as the numbers come out. Gold's starting the week on a solidly positive note is
something we haven't seen for awhile. This could be an interesting week.

Have a good day, fellow goldmeisters. See you back here tomorrow.

Nightrider

(05/30/2000; 09:15:25 MDT - Msg ID: 31547)

SS

I must responed and give my thoughts regarding SS
Frist of all SS in its historical form is a JOKE! the only thing the FDR did which was correct was to force the workers into paying half of the FICA tax ( Its not half by the way the worker pays the intire amount, He just doesnt know that).
Second Their is NO way that we Boomers are not going to get are SS checks their are 70 MILLION of us and we will Vote! our kids and our GrandKids are going to pay for our retirerment PERIOD.Unforuantly for them Their FICA Taxes will double.

Your SS Dollars should be Treated No different that your 401K's or your IRA's Yes if one invests their is a change of Lose But thats the risk one takes. For myself I would rather have the oppsion of directing a portion of my SS tax into my own account.

Nothing is Free and either is SS

Journeyman

(05/30/2000; 09:38:19 MDT - Msg ID: 31548)

Re: No skirts here @goldhunter #31544

Goldhunter, I hope you won't be put-off by the reaction of some of the posters here to your input. It's tough to come into new turf and attack the perceived honchos, even in small matters.

But FOA/TrailGuide welcomes you, and for what it's worth, so do I.

No one knows in advance how this all (economy) will work out -- not you, not me, not Trail Guide -- until after it does. Hearing all viewopoints is VERY valuable, as it causes people to keep their eyes open to this inescapable fact.

You're definitely NOT a badguy from my viewpoint.

Regards,
Journeyman

Journeyman

(05/30/2000; 09:48:40 MDT - Msg ID: 31549)

Skirts & bank runs @goldhunter

Perhaps I mis-understand this whole gold paper thing, but isn't the real issue here at some point _how fast_ physical gold can be delivered? If those seeking delivery can't get it on contract settlement date and word gets around, doesn't the confidence which must be there to make the paper-gold market work evaporate? The players don't care that they can get the gold they were expecting today a week from now. When that happens, won't that cause the equivalent of a bank run?

Regards,
Journeyman

Nightrider

(05/30/2000; 09:48:53 MDT - Msg ID: 31550)

SS

If one does the math one will find out quite quickly want a Joke SS is. Take your FICA tax of 12.3% of income and compound that amount at only 5% (and if you realy want to get sick compound at 11% the average stock market return for the past 50 years) over your working life time and then compare want you would have add versa want your kids/Grandkids will pay you in retirment.

DaveC

(05/30/2000; 10:12:32 MDT - Msg ID: 31551)

Hipplebeck (05/30/00; 08:01:23MT - usagold.com msg#: 31545)

Swiss Franc began coming down 5 yers ago. It almost reached parity. Nothing to do with selling gold (since the Swiss gold will not hit the market) but more to do with the Swiss wanting "a more competetive currency" (their words, not mine).

The Franc will move back up as the dollar falls.

Leland

(05/30/2000; 10:54:58 MDT - Msg ID: 31552)

A Timely Subject From Colin J. Seymour in London...

http://www.users.dircon.co.uk/~netking/finan.htm#quotns"Stock Market Crash

Most stock market bears don't look forward to a large-scale collapse in the markets because, even
if they are hedged against such an occurrence by contrarian investments, they know that the larger
picture will be wholesale destruction of wealth; followed by suffering, bankruptcy, foreclosure,
homelessness, civil strife and depression, as well as inevitable losses in their own life style.

If an economic collapse is coming, wouldn't the big players do something to exploit it, as Soros did
with the British Pound a while back? For instance, why don't people who can afford to corner the
markets in gold (where there is alleged to be a huge short overhang and latent physical illiquidity) do
so? Could it be that is it because they have the majority of their interests in the conventional types of
investment house and would not want to shoot themselves in the feet? Likewise, it is one thing to
short the life out of South East Asian currencies but any such action on another artificially strong
currency would be hitting too close to home. So, they quietly arrange contingency investments and
watch and wait.

Some may even go so far as to continue to play the equity markets and attempt to reassure the
public that all is well, even as they begin stockpiling "emergency rations".

Remember Warren Buffett's silver... and Gates' stake in a silver mine?

Bears hope that, should the worst come to the worst, they have recognised the dangers and taken
sufficient precautions to safeguard their families from the worst of the crisis. And some try to get
others to recognise and think about the risks."

"Prepare for the worst, and hope for the best"

beesting

(05/30/2000; 11:00:20 MDT - Msg ID: 31553)

@ Sirs FOA/Trailguide and goldhunter

http://biz.yahoo.com/rf/000330/bce.html
Thank you so much for the in depth discussion concerning the COMEX futures markets. Yes, we are on the same team if we want and expect the price of Gold to rise.

Mr. goldhunter, I think the disagreeing opinions may be summerized by saying some here(Sir FOA and others) feel the COMEX exchange may at some point in the future DEFAULT on Gold delivery.It seems you disagree,which makes a good discussion.
There have already,this year been TWO defaults. The first was the TOCOM Palladium default, which shut down TOCOM for a period of time(no palladium to deliver).

The second Gold default'since it happened 03/30/2000 has for some reason been almost entirely hushed up by the news media. The above link was the news story but has been outdated with no further updates. So, from memory; Handy & Harman a world class P M refiner defaulted on delivery after announcing GOLD(not silver)was missing from a Peru delivery.
A partial list of entities who did not receive P M's (presumingly payed for) included:
The U.S. Mint.( A division of the U.S. Gvt.)
Credit Suisse First Boston.
The Bank of Boston( a U.S.Federal Reserve Bank)
And others.

Now, doesn't it seem strange that a financial story gets front page coverage day after day until people are sick of hearing about it(The Microsoft Case), but a default include-ing no less than 2 U.S. Government entities and a world wide Gold Banking firm Credit Suisse( a recent seat on LBMA,one of only 7 seats?) gets almost NO press coverage at all.
Oh, by the way Handy & Harman declared bankruptcy.
Thanks again for the posts.....beesting.

goldhunter

(05/30/2000; 11:07:38 MDT - Msg ID: 31554)

Mr. Journeyman...a good question

http://www.usagold.comYou ask a mile-stone one...confidence issue.

Might I ask how long would it take if CPM Inc. collected funds from customers but sent out NO Gold, for regulators, police, BBB or other to get the "word out" and soon...NO BUSINESS...
Fortunately, CPM Inc. is a REPUTABLE agency demonstrated by many years of good service and no doubt, an impressive client list.

I offer this response...The CFTC, a like agency to the SEC oversees all trading, long and short, and impose office hours of operation for commerce (trading). If a long desires delivery, he will receive delivery as stated previously...it happens to be coming up...

Maybe Mr. TownCrier would be good enough to keep tabs on the current June delivery period (starts Wednesday).

Since there has been not one cheated, confidence remains.

TownCrier

(05/30/2000; 11:14:45 MDT - Msg ID: 31555)

COMEX Rotation continues...

Results from Friday's trading have been made available, and it comes at no surprise that there was a continuation of massive rotation out of the June gold contract in order to settle positions ahead of this Wednesday's arrival of the delivery window for those same contracts.

Open interest for June futures fell to 25,007 as 9,904 contracts were settled.

In the meantime, 11,683 new contracts were written as the open interest in August futures climbed to 77,380 positions.

In total, COMEX open interest stood at Friday's end at 164,935 contracts through December, 2004.

Gandalf the White

(05/30/2000; 11:15:10 MDT - Msg ID: 31556)

The Hobbits are "Wondering" !

Hail KING Aragorn III -- One wonders the price of success ? -- Could the advance of the level of "USAGOLD Forum" discussion and start of the walk down a trail of education, cause Sauron to send Nazgul, dressed in sheep's clothing, to cause disruption by spreading the half-truths of "evil" thoughts, and not directly respond to challenges of the Knights of the TableRound ? -- Why have they arrived now and continue to push the COMEX string, when one knows that it is only the game of the Orcs ?
<;-)

Chris Powell

(05/30/2000; 11:18:56 MDT - Msg ID: 31557)

Dallas Morning News features GATA

http://www.egroups.com/message/gata/471?Unusual for mainstream U.S. press.


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

goldhunter

(05/30/2000; 11:26:22 MDT - Msg ID: 31558)

Mr. Beesting

http://www.usagold .comThe TOCOM incident is one I know almost nothing about, except palladium could be seen as very different than gold...1 or 2 major world-wide sources of supply, and also, very small amount of trading (thin...if you will)Also, I'm not certain, but I do believe trading carries on via cash settlement...Sorry, as I do not follow TOCOM...

The other incident is one of "counter-party risk" that Mr. TownCrier visited about awhile back...but, the risk this time was with a Physical dealer...not Comex contract.

A bankruptcy probably will cause loss to shareholders or folks that kept their gold on deposit at the above firm.

Also, If you have your gold in a safety deposit box, and your bank gets robbed, and your box gets emptied, you loose too.
Can't happen...you say? Some feel the gold in Fort Knox is missing...

Folks, There is risk in all we invest in...I certainly admit there is risk of loss in trading derivatives...To say otherwise would be untruthful.

Buena Fe

(05/30/2000; 11:26:45 MDT - Msg ID: 31559)

beesting (5/30/2000; 11:00:20MT - usagold.com msg#: 31553)

Bingoooooooooooo! Beesting!
Goldhunter, someone has thrown a piano (gold-paper) out the 120th floor of the world trade center. The guys here are trying to warn all who will listen that when it impacts the pavement, it will not longer play a tune!!!! It seems to me the core of the issue is "has the piano (paper-gold) been thrown out the window or not?"

Christopher

(05/30/2000; 11:59:01 MDT - Msg ID: 31560)

Question from the back of the class

Good Afternoon friends:

Lets say that at some point in the forseeable future ANOTHER'S scenario comes to pass and one ounce of Gold becomes valued at 30,000 USD. In my limited understanding this would happen not from gold going up in Dollars, but in Dollars decreasing with respect to their buying power.

If this scenario happens, how will we PGA's be better off than others? Say Bob owns 10 oz. in gold coin at that time. 10 oz. X 30,000USD =300,000 USD. What does Bob do next? HOw is Bob better off than NOn-Gold Guy who has 300,000USD fiat in hand. What options does Bob have that NGN does not have? Bob would still have to buy gas and bread and pay the house note, all at the same inflated dollar prices that NGN would, right? It seems that something else would have to change relative to the scenario for BOB to be better off than NON-GOLD GUY.

I see that this scenario would be hard on everyone, am just looking for the Golden lining in the cloud. I hope some one, or ones sitting closer to the head of the class will provide me with a more learned grasp of such a situation than I have now.
Lets discuss.

Sincerely,

Christopher

JavaMan

(05/30/2000; 12:10:23 MDT - Msg ID: 31561)

(No Subject)

Buena Fe... "It seems to me the core of the issue is "has the piano (paper-gold) been thrown out the window or not?" "

You have a gift for analogy!


Christopher...Bob may have paid less than $300 for each of his 10 coins. (smile)

Trail Guide

(05/30/2000; 13:16:32 MDT - Msg ID: 31562)

Comment

Mr. Goldhunter.
Thanks for your many replies. No, you are certainly not the / a bad guy here. We are discussing and dissecting the concept, not each other (smile). I do feel sorry for the points of contention as they are being slowly dissected while still alive. Awful site to behold, rated X.

You say in #31542:

---You are right...Comex gold is "investor owned gold"--

Ok! For what it's worth, I agree. This is the heart of a paper perception that's always presented to modern gold bugs. Usually, the existence of gold in storage at some bank , warehouse or dealers vault is suppose to give the investor a feeling of security. As if to imply that that gold could be used to make their "unallocated" or "futures" paper account good if needed. Many average people walk away with the impression that that gold is in storage just for such crisis use. With this grasp of the mechanics, it's no wonder that quite a few investors think holding futures is of the same security as owning physical gold.

To all:
Yes, that vault gold can serve a security purpose but someone or some entity must still use "their" cash to pry (bid) said gold from it's current owner before it's used to cover your long contract. In the case where a "short" has no gold to cover and will not (or cannot) close his position the market place (comex acting through his broker) will attack his margin wealth and even his other wealth. But that can take some time and legal efforts. All of this works fine during normal trading like we have seen over the last decade.

Reading my last two (or more) posts one gets the flow of the real context of what future gold really represents. Almost entirely, it consists of the cash margin placed as security against existing contracts. Today, of the appx. 150,000+/- contracts open, 150,000 of those are shorts. Yes, some of those shorts may be using their owned, existing gold residing in Comex vaults. But, by far most are not. Again, yes, these other shorts may also have real gold to deliver. It may be newly mined, refined or held in a dealers vault. Very often this very gold is "in trade" and may have been
committed. In fast markets major commercials can be caught selling their hedged gold and not being fast enough to cover their paper futures hedges also. So, unless it is "delivered" against a contract, it isn't there! My position all along has been that in a crunch most of the real gold that could be delivered, will not be. The prime precedent for this position comes from the Bunker Hunt silver fiasco. Many of you have read the account so I will not repeat it.

Further:

Mr. Hunter, your post:

-----The short issues notice or intent to deliver... If you are short 10 or 1, you through your brokerage acknowledge your intent to deliver physical against your short contracts and advise of the intended delivery date (within delivery period)--------

-------Your question to me ...what if you have no intention to deliver gold against your short contracts? Your broker will insure that your position is liquidated by last trading day, or consequences for your broker and brokerage...brokers do not like consequences...----------

Yes, I know the short stops the waiting long. But, I always felt this nomenclature was used wrong. In real life who stops who? Who is demanding the asset? Not the gold short!

In usual trading, it's the unfortunate long that waited too long with a long position that gets delivered into (stopped). I say unfortunate because the vase majority of Western future traders don't want gold. Indeed, I suspect most of them do not have the assets to pay for the contracts they hold. You see the entire future system is based on trading the price of gold not gold itself. In this respect, the price of physical,,,,, derived from paper future trading,,,, is discovered from the trades of players that cannot fully buy! Therefore in my opinion, price discovery through this venue (and others like it) is fraudulent. Fraudulent from the standpoint that deposit money, placed as margin security does not constitute real demand dynamics. Further, it tends to discount whatever "asset usage" price is prevalent at that time because futures traders must sell to distance themselves from real supply. In other words, paper trading lowers discovery prices.

My point to your secure contention is that once real demand enters a futures system, this real, 100% money is the side doing the stopping (demanding delivery by holding fully and holding strong)! In this situation where crisis reigns supreme,,,,,,, where a known large long makes a stance
to take delivery,,,,,, here, it's the hapless shorts that are frozen and stop nothing. They cannot, in mass cover by buying an offsetting position as it guns the contract prices further against their already failing margin. Yet they cannot supply physical because they didn't have it anyway. It becomes the classic Bunker Hunt market where the exchange must protect "it's" capital by locking down trade. It's trading for liquidation only! Happened before, I was there. Been there and done that (smile).

So, will my BTD trade prove that selling out paid up coins and positioning myself futures make me more money. We shall see!

More on Goldhunter's post's later.

Trail Guide

onlychild

(05/30/2000; 13:38:07 MDT - Msg ID: 31563)

Christopher (5/30/2000; 11:59:01MT - usagold.com msg#: 31560)

Christopher, To understand you must start with GG (gold guy) an NGG (non-gold guy) on a level playing field. Say NGG has $3000 fiat under his matress and GG has 10oz AU ($3000 worth at today's prices). Now, say things go to hell in a handbasket, there is uncontrollable inflation, the dollar tanks, and a gallon of gas costs $100. NGG can now buy 30 gallons of gas. On the other hand, at $30,000 per oz GG can now buy 3000 gallons of gas. GG could also opt to pay of his $150,000 mortgage with half of his gold and be debt free. Of course, when GG runs out of gold, he will no longer be any better off than NGG. OC

aunuggets

(05/30/2000; 15:36:19 MDT - Msg ID: 31564)

Christopher and OnlyChild

Christopher - You are confusing future value of future assets with future value of current assets. In other words, as OnlyChild illuded to, you have to consider current assets after the poop has hit the fan -- i.e. devaluation, inflation, dollar tanking, etc. "in the future".

If the gold guy starts TODAY with $300,000 in gold, and the non-gold guy starts with $300,000 in cash (fiat) on today's level, the advantage comes as the two take separate future paths, as the gold increases and the paper falls in terms of purchasing power. In your description, you are considering the scenario of buying the gold or obtaining the dollars "after the fact", in which case neither would have the advantage, just as neither would have the advantage if each were given the respective assets "today". It is after the onslaught of the respective valuation movements (up for gold, down for the dollar) where the advantage or disadvantage comes into play.

OnlyChild, you stated that after the gold guy's gold has been expended, then he is no better off than the non-gold guy. Again, you have to look at it from the standpoint of present value vs. future value, and which asset escalates as the other plummets. If gold guy does indeed pay of his mortgage with only $1500 in "present value" at a "future date", then obviously he WILL be in a much better position than the non-gold guy still holding a mortgage.

In either scenario, present value and future value in terms of real purchasing power should be the benchmarks of comparison, not present or future "like comparisons" of "equal value assets". If gold guy's "present value $3000 gold" becomes worth $300,000 cash value in the future, non-gold guy's "present value $3000 cash" will obviously never attain the same level of purchasing power in that same time period unless it is a very LONG time period and non-gold guy just happens to be making some astronomical investment returns on his "cash".

In the mean time, gold guy has immediate and constant possession of his "investment" (the gold), while non-gold guy invariably has to give up possession and control of his "cash" in the meantime to ever hope to receive a return on his "money"....."can't have your cake and eat it too" style.

With the gold, not only can you HAVE your cake, you can savor it all the way ! (grin)

ORO

(05/30/2000; 16:24:06 MDT - Msg ID: 31565)

Aragorn III, Stranger - Marginal utility and value

One of the points I had been making before is that of accounting for marginal value. That is the value of the next unit of supply of any particular product tending to dictate the price of the whole volume of production.
Examples:
The value to the user of the second car is not as high as the value of the first.
The value of that extra grain which farmers can't sell as bread or flour for pancakes is its value as cattle and chicken feed.
The value of the 15th room in your house is much less than the value of the second bedroom. The addition of a familly room and dining room had lesser value than the addition of the original Living room.
The value of the computer power that was added to the refinery to control and optimize the production of gasoline and ethylene for plastics was 100,000 times more valuable than that to which the new computing power is applied - playing Doom and running the familly accounts as well as posting the latest barbie cam pictures by your 6 year old on the net.

Gold and other commodity moneys allow the monetary system to account for these falls in value over time as advances in technology makes available more of the end products/services using lesser inputs of labor and materials for each unit. Thus you will be tempted into buying a third car, say for your teenager, when his pestering you for the keys and occasional magical appearance of dents on your main car get to you. The marginal value of that third car is a function of the differential in utility to you between the protection of your main car from more rapid ageing and having some imaginary control over your teenager (who probably has more copies of your keys than you do) and the used jalopy your teenager would drive, all this relative to the new curtains your wife wanted, the mega-screen TV you look at when you walk through the electronics store, etc..

The point is that the utility of your items expenditures is completely subjective and different from one person to the next. The one thing that is universally true is that a growing supply of anything will have less of a use - or a less important use - for the next item than the previous one.

The growing output of the economy in units must be reflected in the fall in price relative to that which has a constant marginal utility. The items that have constant or rising marginal utility are those that tend to become repositories of wealth. They are characterized most by their rarity or limited supply relative to constant or rising demand. Those that are uniform and have recognized value everywhere tend to become money in one or more uses - as means for exchange and for accumulation of wealth in liquid form.

The monetary system that tries to grow with unit output will tend to destroy the value of savings as the number of monetary units grows with the number of output units, each of which has a lower marginal value than the previous one. The marginal value of the products/service one can buy with savings and future income would necessarily be lower per unit than that obtainable today. So why wait? This would reflect in the tendency of people to finance the purchase of items with debt rather than monetary savings.

In a pure debt money universe, that would mean that interest rates/returns on savings would reflect the expected loss of utility in future inflation of the currency to match future unit output. Since cash savings (whether restricted in CDs or accessible in savings accounts or money market, checking, or liquid securities) are the other side of debt, the interest rate will reflect the point where expected returns on savings vehicles and growth of debt to match unit output meet. Thus the expected return on equity, the expected return on borrowed assets (both in business and in private debt financing), will have to equal the expected return on savings - or be slightly higher - and would have to be equal to or greater than the expected fall in marginal utility of that output to which the ammount of currency is matched.

Since expectations of unknowable future output are key to the valuation of monetary units by all market participants, there is a purely subjective nature to these valuations that are delayed relative to the realities of the markets. Common opinion on these expectations dictates the choices people make as to the choices of debt purchases relative to savings purchases, and of investment relative to spending. As the expectations change, so do the choices. Since the expectations are purely conceptual, the advance of a change in expectations can be communicated in minutes and saturate the opinions of market participants in the time it takes to change an opinion - from seconds to years.

Thus the whole monetary system is subject to wild swings in opinion that may happen overnight. However, the obligations of people and businesses in debt do not change with these expectations, since there is little one can do in this area. Furthermore, people and business will act somewhat like banks do, leveraging their current monetary holdings and income streams into durable real items, consumed items and services, and wealth proxies. Many will have both debt and monetary savings, e.g. both a mortgage and a portfolio of savings and investments as well as the durables - house and auto. Many will increase debt payment obligations ahead of income growth without changing their savings allocation at all. Many will do the Asset and liabilities balance for themselves and make decisions based on the possibilities this opens. The increased value of the home and stocks will induce further borrowing, say for a car, with the understanding that the car can be abandoned for reposession if income is insufficient, or refinanced into tax favored home equity. If expected stock investment returns of 20% are legion, then people should be expected to borrow so long as their borrowing costs are less than 20% and the debt balance is growing more slowly than the investment balance.

If businesses have a return on assets of 10%, they will borrow so long as interest rates are lower than 10%. If the price to cash flow of a public corporation is lower than the cost of borrowing, they will eventually borrow and buy back shares if the return on internal investment is not substantially higher, if they don't somebody else will. If the shares trade at a substantial premium to interest rates, the corporation will do its utmost to pay expenses with shares through stock options (to defray labor cost) and stock acquisitions (to replace capital expenditures).

Enter cental bank

The central bank's role in this monetary system where overall unit output and monetary growth are matched, is to dictate non-market interest rates so as to maintain the relationship.

If people and business are not borrowing (increasing debt money supply) the central bank lowers interest rates in banking so as to induce fresh borrowing by reducing debt service costs for current and new borrowing.

If people and business are borrowing too heavilly, and money supply is growing at a greater pace than unit output, the central bank will raise interest rates.

However, (there had to be one, of course) the central bank has to guage what it is that people and businesses think money is. Are stocks money? are bonds money?

Money markets funds/accounts turned short dated bonds/notes into perfect equivalence to bank account money. Mutual fund growth into huge stock and bond warehouses have turned much of the stock wealth into liquid money for the small and medium investor. Clear evidence of this is in the advent of mutual fund "famillies" and brokerages offering checking services. Mutual fund withdrawals are settled the same day or next, stocks are settled withing one week. Credit card balances are settled in one month (for the many who consolidate purchases on credit cards). Thus, the liquidity of cash holding equivalent assets is now greater than the liquidity of expenditure liabilities, leaving the spender a few weeks to unload stocks before the balance (or payment) is due on the credit card.

The situation above is such that credit cards create the money while we spend (all pure cash in a debt money system is created by new debt) and the money created in this way flows through the economy so that a portion of it is turned into pension fund and 401k contributions and income before the payment is due. Thus falling into the stock market and (usually, but not allways) raising the prices of whatever stocks real estate trusts and bonds are owned by the various funds, before we have to cash out of them in order to pay the bill. The availability of 401k loans is another trick of liquidity in this system that allows you to be directly your own debtor rather than indirectly (have a mortgage and own a mortgage backed securities fund in your 401k/Pension/IRA).

The central bank must evaluate these things in order to come up with a policy on interest rates. Since so much subjective choice is involved and the choices so dependent on the particulars of odd monetary loopholes available for different people/businesses, as well as well as the change of opinion between overly exuberant and panic stricken, it is impossible to make a decision as to what is money supply, how much is there, and which portion of it is controllable by the central bank, in what way and to what extent.

The markets have learned how to move the monetary base arround with such speed as to make many "long term investments" into cash equivalents. This makes central bank decisions as to the size of the monetary base too dangerous to contemplate (by my measure it is leveraged into cash and equivalents at nearly 100 to 1). The central bank must supply and absorb monetary base cash as demanded by the markets, having only the resulting interest rate as a guide.

Even with this power over interest rates in hand, the central bank has limits upon it as to how it affects interest rates of just 3 months down the yield curve. Now lower than the Fed funds rate - as is the whole of the yield curve but for the 2 year note for US treasury debt, and above this rate for consumer and corporate debt - indicating a disparate set of expectations for savers and debtors - as the treasury market is a seller's market because of the small supply - and the consumer/business market is a buyer's market because of the large supply. The Fed funds rate is avoided by taking longer term obligations instead of short term, and by use of alternative loopholes in the moneraty system.

An interesting anomally of the rise of interest rates by the Fed and market action alike is that of mortgage refinancing flows and business borrowings. Higher interest rates add to product and service costs. They also stop the refinancing of mortgages as a source of new disposable income. But the higher rates bring about higher incomes on the bond portfolios of savers/investors. Thus businesses with heavy pension obligations can rely on income from these bonds to cover some of the costs of these pension funds, even while these same high rates lower the values of these pension holdings. This will tend to lower the amount of investment needed to produce the same nominal return.

Thus we have the situation where the central bank has a mass of tangled monetary flows to contend with and has no idea what the actual results would be but by following the indicators of future prices - so far is it can recognize them. Ultimately, it would look at actual prices of a selected (and probably incorrect and inappropriate) basket of goods and services to determine whether policy has been successful in matching the growth of unit output and monetary expansion.

However, the demand and supply of pure debt-money balances (bank liabilities to consumers and non-bank business) operate in abrupt shifts. (1) While growing (i.e. bank debt is growing - classic monetary expansion) these balances provide their own supply to debt induced demand for money. These continue to grow so long as the expected nominal return on assets in business is greater than the average available interest rate cost. This flows into debt expansion mechanisms in the rest of the securities markets - through bonds and equity issues as the efficiency and speed of the motion of the monetary base through both the economy and the financial markets grows due to technological advancement. (2) While shrinking, the only supply available for debt repayment comes from the "open
market operations" of the central bank. This occurs so long as the return on assets for business is lower than the prevailing interest rate available. The markets will accellerate the adoption of technologies that raise the efficiency and speed of movement of the monetary base before the lack of expansion in the banking system starts hitting the markets in a cash squeeze.

Prices tend to rise when the supply and demand for money are not in balance on the excess supply side. They tend to fall when demand is in excess.

The monetary supply and demand balance is affected so that when the central bank raises rates from a state at which rates were lower than the return available to business on borrowed funds to a rate at which it is higher, the transition is characterized by the abrupt shift from expansion to contraction. The non-bank markets seize up suddenly as the liquidity is no longer pouring in from the excess supply of the banking system. The reason is that each bank debt currency unit circulates through the real and financial economies at much higher rates than the banking system sees in its balances, and this currency may be leveraged 10 fold in the securities markets. The same is true for the monetary base (strictly defined as the liabilities of the central bank) relative to the bank balances, now also averaging a factor of 10 or so. These compound to a 100 fold leverage of the monetary base in the financial markets.

What the central bank must do in order to prevent a chain of defaults due to market seize-up is to lower rates immediately and/or supply monetary base currency in large quantity and in immediate response so as to supply the demand for money in both banking and in the debt securities markets which will effectively lower the borrowing cost to business before prices are affected. The new currency money (added to the monetary base) will move rapidly to expand into both the banking and the securities markets and will soon after leak into the real economy in the form of higher prices because the monetary supply - demand balance is back into surplus.

Failure to "save the markets" will result in a very noticeable and immediate rise in defaults in the financial markets, particularly abroad, but also (to a small extent) at home. The results soon become noticeable in a cascade of events that depends somewhat on the action of the central bank after it started.
(1) First, foreign prices of economic goods in the cash squeezed currency abroad fall and defaults on the currency in the real economy abroad rise. Businesses and governments abroad that were indebted in the currency that is in a supply deficit will attempt to retain solvency by selling anything possible for the purpose of raising foreign currency reserves.
(2) Foreign interest rates in the currency will rise to a large premium over the local interest rates because of fear of default. Currencies who's central banks have a lower interest rate will see much borrowing in their currencies that is aimed at obtaining the "missing" currency supply.
(3) Imports into the source country of the currency which is in short supply would explode as the prices of foreign goods would fall steeply - both from the debtor countries and the creditor countries. The nation with the currency that is in short supply becomes a heavy debtor as a result of the imports and the flow of funds into it due to the high interest rates relative to other currencies.
(4) The foreign debt in the currency would start falling just as the supply of currency from the country (through a severe trade deficit) blows into the foreign currency markets. The debt levels would fall (a) because of the fall in prices obtainable by businesses would prevent further borrowing in the currency, (b) because of refinancing of debt into currencies bearing lower interest rates. (c) Currency reserves at the debtor countries would start rising sharply (therefore reducing net debt) in order to retain enough currency for future debt payment and to buy necessities on the international markets with cash rather than debt.
(5) As foreign debt levels fall and currency supply rises in the international markets, the supply demand balance in the foreign currency market equalizes and is then reversed. Sooner if the central bank leaves rates unchanged or lowers them, later if rates are raised further.
(6) The indebtedness of the currency issuer grows to the point of supplying a net flow of currency to the foreign markets that is sufficient to overwhelm the flow of investment funds. This is due to (a) accumulation of trade deficits, (b) accumulation of investment flows into the aprreciating currency with the high apparent return (interest rate).
(7) Soon after the supply demand balance moves out into excess in foreign markets, the central bank must raise interest rates so as to avoid higher prices of imports by exacerbating the currency demand for repayment of foreign debt. However, the reduction in foreigner's debt balances and the rise in domestic debt owed to foreigners has changed the situation so that higher interest rates just increase the supply of currency through the increased interest on debt owed to foreigners.
(8) The buildup of liabilities in the other currencies eventually brings them to a supply/demand imbalance relative to our currency whereby borrowers in foreign currencies own assets producing a flow of the currency and have export businesses supplying currency, while debt is denominated in the other currencies.
(9) As a result of the rise of the currency reserves, the debt to foreigners, and the decline of foreigner's debt, prices abroad will start rising - at first despite the central bank's actions, but later because of the central bank's action.
(10) The supply and demand balance for the currency switch first in the international real economy as currency supply exceeds goods supply and is no longer absorbed into debt payments (see 9) resulting in import price inflation. Some time later, the flow of funds ceases to rise with interest rates as the former situation of a short supply of currency turns into a glut of supply with a large number of borrowers having currency assets to sell and having liabilities in other currencies (see 8).
The rise in the currency stops and its value in other currencies and in term of goods reverses rapidly - more rapidly than it rose.

Our central bank is now at the point where it will induce higher prices of goods and services no matter what it does.
A. Raising interest rates increases supply of currency abroad and raises local demand for monetary base currency at the same time. The central bank must supply the required monetary base additions or see a market seizure and economic collapse such as it has induced abroad - occur at home. The higher monetary base supplies will induce price rises both at home and abroad. More so abroad.
B. Lowering interest rates will reduce the flow of currency abroad and prevent further growth of debt to foreigners but will raise local borrowing activity and money creation so that imports may rise, but local prices will be sure to rise.
C. Follow a sequence of raising and lowering rates like the Japanese did. "Pop the bubble" - or at least stop its expansion - then make recovery easy. This does not work because .A. will immediately occur, and will be followed by a total collapse where both currency value and defaults are cascading downwards in a vortex - like vicious circle.

SUMMARY

The debt currency system has only two modes: Boom and Bust because of the way the mathematics of interest and debt interact with human behavior.

In an international debt currency system, a boom in one major country/region will coincide with price stability only if the other regions experience a bust. During this circumstance, the booming economy may indebt itself enormously to external creditors. The result would be a great currency collapse.

There is no way for a central bank to know if monetary expansion is going beyond unit output growth because of the shifts in people's use of various assets as money. The central bank can only make observations of local and foreign prices in order to come up with such an assessment.

The fall of prices with the growth of output is the appropriate response in a healthy economy and monetary system.

A healthy monetary system will see a series of booms and busts confined to separate localities and industries and it will include banks. In a boom/bust cycle including the whole of the country or the whole of the world, the absence of central banks would allow the cycle to be short lived as the result of falling prices is that indebted businesses with bad operations or markets fail very quickly. This causes banks with bad lending policy/criteria, to fail too. This causes people to excercise judgement as to the viability of their employers, banks, and profession.

People will complain of the need to think and the burden of making choices, although competent advice can be had for a very small fee. However, (there it is again) there is no benefit to letting incompetent politicians and dis-interested bureaucrats make these decisions for us.

Finally, central bank spells "moral hazard". This means that the measure of success of a debt money system is equal to the extent of its upcoming and inevitable demise.

ORO

(05/30/2000; 16:34:19 MDT - Msg ID: 31566)

Trail Guide - On Howe and Gold - upcoming comments to your posts and others

I have been working on a post addressing your comments. Could not finish it before, will do my best to put it on ASAP.

TownCrier

(05/30/2000; 17:38:28 MDT - Msg ID: 31567)

The June On-line News & Views is now available!

http://www.usagold.com/newsviews.htmlFor those of you registered for this complimentary subscription of the latest news, trends, and commentary in the precious metals markets, the e-mail is being sent now with your access codes needed to download the new June pdf file.

For anyone--registered or not--that would like free access to some of the pdf back issues, just visit the link above...which can always be found as the "(Newsletter)" link located at the top of each USAGOLD page.

Anyone desiring to register to receive access codes for the latest issues may do so at the "(Order Form)" link also located at the top of each USAGOLD page.

TownCrier

(05/30/2000; 18:00:25 MDT - Msg ID: 31568)

Last call for these uncirculated German 20 mark gold coins!

http://www.usagold.com/onlinestore/special.htmlI have just concluded a phone conversation with Michael who informed me that he is down to his last couple hundred coins from the original cache he secured. In addition to the on-line orders that have come in steadily (at all hours of the day and weekends, too) throughout this special offer's brief lifespan, a substantial number were taken off the table by folks phoning the Centennial offices directly, in order to exceed the 50 coin on-line maximum.

Michael passes along his thanks to everyone who made this first forray by Centennial into accepting orders on-line a pleasant success. So there you have it, folks. This chapter is nearly one for the history books...orders will be filled first come, first served on these few remaining coins...they won't last the week. (And remember, Father's Day is just around the corner, so act now and give your dear ol' Dad a stable piece of financial history!)

Bonedaddy

(05/30/2000; 18:24:47 MDT - Msg ID: 31569)

So GATA has the ear of someone in Congress...

I say the current Congress lacks the guts to act! On Thursday, May 27, 1999, Darrell Scott, the father of Rachel Scott, a victim of the Columbine High School shootings in Littleton, Colorado, was invited to address the House Judiciary Committee's sub-committee. What he said to our national leaders during this special session of Congress was painfully truthful.
They were not prepared for what he was to say, nor was it received well. It needs to be heard by every parent, every teacher, every politician, every sociologist, every psychologist, and every so- called expert!
These courageous words spoken by Darrell Scott are powerful,penetrating, and deeply personal. There is no doubt that God sent this man as a voice crying in the wilderness. The following is a portion of the transcript:
"Since the dawn of creation there has been both good & evil in the hearts of men and women. We all contain the seeds of kindness or the seeds of violence. The death of my wonderful daughter, Rachel Joy Scott, and the deaths of that heroic teacher, and the other eleven children who died, must not be in vain. Their blood cries out for answers."
"The first recorded act of violence was when Cain slew his
brother Abel out in the field. The villain was not the club he used. Neither was it the NCA, the National Club Association. The true killer was Cain, and the reason for the murder could only be found in Cain's heart.
"In the days that followed the Columbine tragedy, I was amazed at how quickly fingers began to be pointed at groups such as the NRA. I am not a member of the NRA. I am not a hunter. I do not even own a gun. I am not here to represent or defend the NRA - because I don't believe that they are responsible for my daughter's death. Therefore I do not believe that they need to be defended.
If I believed they had anything to do with Rachel's murder, I would be their strongest opponent. I am here today to declare that Columbine was not just a tragedy--it was a spiritual event that should be forcing us to look at where the real blame lies! Much of the blame lies here in this room. Much of the blame lies behind the pointing fingers of the accusers themselves. "I wrote a poem just four nights ago that expresses my feelings best. This was written way before I knew I would be speaking here today:
"Your laws ignore our deepest needs, Your words are empty air.
You've stripped away our heritage, You've outlawed simple prayer.
Now gunshots fill our classrooms, And precious children die.
You seek for answers everywhere, And ask the question 'Why?'
You regulate restrictive laws, Through legislative creed.
And yet you fail to understand, That God is what we need!

"Men and women are three-part beings. We all consist of body'soul, and spirit. When we refuse to acknowledge a third part ofour make-up, we create a void that allows evil, prejudice, and hatred to rush in and reek havoc. Spiritual influences were present within our educational systems for most of our nation's history. Many of our major colleges began as theological seminaries. This is a historical fact.
What has happened to us as a nation? We have refused to honor God, and in so doing, we open the doors to hatred and violence. And when something as terrible as Columbine's tragedy occurs--politicians immediately look for a scapegoat, such as the NRA.
They immediately seek to pass more restrictive laws that contribute to erode away our personal and private liberties. We do not need more restrictive laws."
"Eric and Dylan would not have been stopped by metal detectors. No amount of gun laws can stop someone who spends months planning this type of massacre. The real villain lies within our own hearts. Political posturing and restrictive legislation are not the answers. The young people of our nation hold the key. There is a spiritual awakening taking place that will not be squelched!
We do not need more religion. We do not need more gaudy television evangelists spewing out verbal religious garbage. We do not need more million dollar church buildings built while people with basic needs are being ignored. We do need a change of heart and a humble acknowledgment that this nation was founded on the principle of simple trust in God!"
"As my son Craig lay under that table in the school library
and saw his two friends murdered before his very eyes--He did not hesitate to pray in school. I defy any law or politician to deny him that right! I challenge every young person in America, and around the world, to realize that on April 20, 1999, at Columbine High School, prayer was brought back to our schools. Do not let the many prayers offered by those students be in vain. Dare to move into the new millennium with a sacred disregard for legislation that violates your God-given right to communicate with Him. To those of you who would point your finger at the NRA, I give to you a sincere challenge. Dare to examine your own heart
before casting the first stone! My daughter's death will not be in vain! The young people of this country will not allow that to happen!"
Be courageous enough to do what the media did not -- let the nation hear this man's speech. Please send this out to everyone you can!!!

Trail Guide

(05/30/2000; 18:48:46 MDT - Msg ID: 31570)

Comment

Journeyman (05/30/00; 09:48:40MT - usagold.com msg#: 31549)
Skirts & bank runs @goldhunter

Perhaps I mis-understand this whole gold paper thing, but isn't the real issue here at some point _how fast_ physical gold can be delivered? If those seeking delivery can't get it on contract settlement date and word gets around, doesn't the confidence which must be there to make the paper-gold market work evaporate? The players don't care that they can get the gold they were expecting today a week from now. When that happens, won't that cause the equivalent of a bank
run?---------------

Hello Journeyman,

In real life, this run or lock up we have been discussing will never happen! The exchanges have the right to make rule changes to protect the marketplace. Read that as "protect their best interests".

Goldhunter mentioned in #31554 that ------Since there has been not one cheated, confidence remains.------.

Well that is actually a play on words and how we as investors receive these words. During the Hunt silver bust, the major longs stood strong to receive silver. They had the cash to do it, too! But in order for the shorts to "stop" longs positions and deliver into them, these shorts had to go into the world markets and buy real silver. The actual exchanges did not have the "owned" material to do it. Same situation that exists today in gold (and silver?)

You see, this was the process that I extended my last post from. As long as the futures markets are traded using margin funds, most of the short players are not prepared to actually deliver real metal against "REAL" standing longs. Sure, some metal is traded and delivered every settlement period, but it's only a small percentage. Once a real bull market takes hold, the futures cannot and will not transition into a major physical trading arena. Mostly because there isn't enough extra metal around to fulfill the contracts in a real physical run. In a real physical run, all contracts are discounted against physical. Only, to date, the marketplace has been able to change the rules before that discounting begins in force! We watched this happen while involved in both silver and gold in the
late 70s.

When push came to shove, the rules were changed to demand "liquidation" trading only in silver (it never got to gold because so many silver longs got their cash wiped out before the gold fact). You could not stand long for metal delivery and you could not deliver against your short position. In other words you could only paper trade the positions to cancel them out. In addition position limits were imposed. If my memory is correct we went from total position limit of 10,000 contracts to 1,000 or something like that (anyone that remembers help me out here). We had to close out! In profits, yes, but no metal!

So," sure" no one was cheated because you had to play by the rules, and that is not cheating. Right! Only later, after all the rule changes, did the banks close down the Hunts by restricting their credit. Funny how everyone still thinks that the public's selling of silver at retail dealers did it in. Ha! The Hunts and quite a few other boys were still ready to buy a load of gold and a half billion ounces of silver. It was political. New supply had almost no impact until after the political deed was done.

This bit of hindsight provides a foundation of why the big boys will not be had again. They will let the paper exchanges hang themselves this time by not being involved.

Further, what do you think of a marketplace that sets the price for gold but the traders run from delivery? Look at Towncriers #31555 and see how the "rotation" is in effect a run from buying gold. This ritual is the same "bailout process" that allows traders with only "margin security
deposits" to help set the gold prices. They never take real gold off the market in any proportion that's equal to the "price discovery" function their trading imparts. This same process is acted out on a worldwide basis on other paper exchanges. As I said in my #31562,

-----You see the entire future system is based on trading the price of gold not gold itself. In this respect, the price of physical,,,,, derived from paper future trading,,,, is discovered from the trades of players that cannot fully buy! Therefore in my opinion, price discovery through this venue (and others like it) is fraudulent. Fraudulent from the standpoint that deposit money, placed as margin security does not constitute real demand dynamics. Further, it tends to discount whatever "asset usage" price is prevalent at that time because futures traders must sell to distance themselves from real supply. In other words, paper trading lowers discovery prices.---------------

The political machine has used this process to their advantage over the last decade or so. Now it's about to use that same power to kill the currency that's so dependent on the gold price value perception.


OK, enough of my going on. I'll read more of others good words along with waiting to read ORO when he posts again. (good stuff ORO)!

THanks
Trail Guide

White Hills

(05/30/2000; 19:26:18 MDT - Msg ID: 31571)

Trail Guide Msg #31562

Trail Guide, I have to thank you for this post as it has really cleared the cobwebs out of my mind. For the first time I begin to see the big picture as put forth by yorself and the other posters here, AS I see it ,the Comex where the trading sets the price of gold consists, mostly ,of traders selling gold they don"t have in the future to buyers that don't have the money to buy it. Maybe that is too simple and surely the whole business has to be very complicated but doesn"t it get right down to what every body can understand? No wonder the Market can be manipulated to keep the price of gold down. Thanks again White Hills

Christopher

(05/30/2000; 20:07:10 MDT - Msg ID: 31573)

Gold Guy vs. Non-Gold Guy

Thank you AU and O.C.,
I see that my comparison was confusing. What I am trying to get at is this: GG has 10 oz of Gold now equal to 300,000 USD, but that 300,000 USD has decreased in value proportionately, right? So GG is status quo compared to where he was when his gold was worth only 3,000 USD. So, if I am right, then to make the TRUE value of his gold more readily apparent, we must make the comparison of that value to something other than the worth-less dollar. Because he would be STUPID to trade his gold in for those dollars. So what does he compare his gold to? And if he did decide to trade them in for USD via an exchange or barter, I feel that they would bring way more than JUST 300,000.

But then again, after stopping and thinking, there IS a premium to holding gold, and maybe I answered my own question. The Gold stayed put, didn't it? It didn't move, the dollar did, and now GG still has 100% of what he started out with while the others around him have seen their assets respond in direct proportion to the drop in the dollar. What once cost them 300 now costs them 30,000 to keep.
But old GG, he don't pay that much. He is 29,700 ahead of the game on everybody that has had to pay the piper. He can afford 100 gas, or (insert crazy # here)bread or (have mercy I won't even hazard a guess)house note, and have some left over to buy NGG's house off the courthouse steps after the foreclosure. That is, if the bank is still open. Then someone in REALLY dire straits finds out that GG just might have the answer they are looking for, and they line up to give him every thing they own just to pay off their debts so they can stop running and get a decent sleep at night.

Ad so on and so on...
So by standing fast while all others around him sink to the bottom, GG, in his own little world or town,(after all he only owns 10 oz of gold not 100)has come out on top. Not only has he shown foresight by holding the wealth of KINGS, he has inherited the KINGdom.

What was it that Another said about small men walking in the footsteps of giants?

YGM

(05/30/2000; 20:37:38 MDT - Msg ID: 31574)

Omnipotent Eyes and Ears .......

Looking into Muddy Waters.......***Wait and See, where the Great Gold Caper leads after what GATA started has been fully exposed.....

From the Cafe-----
Le Metropole Members,

Midas du Metropole has served commentary at The James
Joyce Table.

GATA received a call today from the staff director of
the Senate Subcommittee on Technology, Terrorism and
Government Information, which falls under the Select
Committee on Intelligence. They wanted to know all we
had to tell them and asked for all written documents
sent to the Fed and Treasury and for all responses to us.



Le Metropole Cafe

All the best,

Bill Murphy

Solomon Weaver

(05/30/2000; 20:49:05 MDT - Msg ID: 31575)

Christopher - on the purchasing power of gold.

I admire your initiative to intuitively understand the value of gold against the dollar...a worthy mental past-time.

The figure of $30,000 per ounce is close to 100 times the current dollar/gold price ratio.

Let's stop and think about this for a minute.

America has 250 million diverse citizens, rather open markets, a well structured business environment, rather modern infrastructure for highways, airports, harbors, etc., a decently literate subpopulation of engineers and professionals....and so on.

To believe that the dollar could suffer a 100 fold devaluation and still remain the US fiat currency is absolutely absurd. A rapid reduction in the value of the dollar to 1/2 or 1/3 would be chaotic....to 1/4 or 1/5 would devastate the world economy.

What is much more likely is that in a world where monetary investments are endangered by dramatic volatility in exchange rates, and pending defaults on government debts of large nations, gold as a monetary reserve as well as a private store of wealth regains enough popularity to drive its price in all currencies much higher.

So the benefit to gold guy in owning gold is not only that he will stand to "loose less" than non-gold guy, but that he will control a financial instrument (physical gold) which may appreciate significantly in value compared to all liquid wealth forms.

I am not sure that gold will actually circulate much in those future days...I see it more as a form of collateral. Perhaps in the future, when a private, corporate, or national gold holding is the ultimate form of collateral, it will be considered absurd that gold should trade in a market where fiat margins represent the collateral for taking charge of a specified amount of gold.

I remember once reading that the best way to become a millioniare is to borrow a million dollars, invest it in a business and use the business to pay it back. So now imagine that we are in economic hard times, and gold guy is able to place a portion of his gold into an account as collateral which allows him to borrow enough dollars to buy an interesting business at a steep discount. A few years later, he could pay of the fiat loan, own the business and still have the gold.

Don't be surprised if in the future, the gold holdings of large publicly traded companies are considered a neccessary part of a "healthy balance sheet".

Best wishes in your hunt for the gold value of "freegold".

Poor old Solomon

Solomon Weaver

(05/30/2000; 21:07:50 MDT - Msg ID: 31576)

Message to Bill Murphy

GATA received a call today from the staff director of
the Senate Subcommittee on Technology, Terrorism and
Government Information, which falls under the Select
Committee on Intelligence. They wanted to know all we
had to tell them and asked for all written documents
sent to the Fed and Treasury and for all responses to us.
............
To Bill Murphy

Are you supplying information to an agency which is able to regulate the Fed and Treasury or are you supplying information which can be used to cover-up and hide...at least getting certain people out of harm's way.

I suggest that all information which is sent to that Committee is itemized, and that they are required to personally sign for each document received. In addition, GATA should overtly and clearly retain the right to place any and all of the communications between GATA and any public government agency in the public domain (declassify so to speak). It would be advisable to have all this information already available in web-site format ready to be published at multiple sites. (Does GATA have an overseas office which is able to operate in the event that you were forced to shutdown in the USA?)

I personally doubt that the topic will be of much real interest until there is a dramatic global financial event, and whether gold market appears to be the disease or the symptom is less important than the pain levels in the electorates of G-7 nations....but by that time, you do not want to be in the position of being subpoenaed and having your files impounded.

Good luck out there you GATA warriors!!!

Poor old Solomon

Solomon Weaver

(05/30/2000; 21:15:55 MDT - Msg ID: 31577)

Farfel - a link for you and others who think about stock market corrections

http://www10.nytimes.com/library/financial/columns/052800col-watch.html"An enormous amount of damage has been done to investor psyches," Mullins said. "But the new-issue market continues to be fairly resilient. My expectation is we will see the market continue to be much more selective about what issues will be brought out. The window will shut completely before the correction is done." - L. Keith Mullins, head of emerging growth research at Salomon Smith Barney.

Journeyman

(05/30/2000; 21:58:25 MDT - Msg ID: 31578)

Look out GATA!

Taking a cue from Solomon's rendition of the Select Committee's request, make sure you know who their "target" (that's what they call who they're investigating) is. Knowing how perverse these folks can be, could the target be GATA?

Regards,
J.

Journeyman

(05/30/2000; 22:04:20 MDT - Msg ID: 31579)

Re: Skirts & bank runs @ Trail Guide

Thanx for your comments on the above. I've been struggling with the process whereby the anticipated AU run-up happens, and I think your post will help me with this. It at least may point me away from the wrong direction.

I remember they put some of the Hunt Bros. associates in prison under highly un-just procedures. I believe one of them was a fellow by the name of Johnathan May. It's clear "they" will go to extreme measures to protect their markets.

Thanx again,
Journeyman

ORO

(05/30/2000; 22:58:11 MDT - Msg ID: 31580)

Solomon - 100 fold

A 10 fold drop in the value of the dollar has occurred in your lifetime.

I grew up (in part) in a country that saw 1000 fold depreciation in the currency withing the space of a few years in the 70s and the 80s, and finally reached a better than 10000 fold depreciation.

The currency had some 0s knocked off and was renamed. Then the currency inflated again and again a couple of 0s were knocked off - and the currency renamed.

Everything was indexed to inflation, wages, some prices, debt - it became institutionalized and it was very difficult for all involved to stop it.
One could never tell whether people were predicting inflation in their behavior, reacting to it, or both.
I can say also that foreign accounts, gold and silver holdings were illegal during this period (and before).
Finally, to those of you who believe it was plain monetary inflation, I will tell you that the price inflation was accompanied by many banks and businesses going under, particularly housing contractors and banks. Practically the whole of the banking system had to be restructured. Deposits were "guaranteed" by the government. At no time was anyone lacking for his checking account balances - because the funds were available and besides that, they would lose most of their value in a couple of months anyway.

Finally, people in many countries had high inflations that destroyed the currency. Many still have the same currency under the same name with 1000 unit coins commemorating the inflation of the past. Italian lira and Yen are but two examples.

Leland

(05/31/2000; 00:54:17 MDT - Msg ID: 31581)

Something That Will Greatly Affect the Strength of the U.S. Dollar

Past shines light
on future of inflation

05/30/2000

By Scott Burns / The Dallas Morning News

I'll go out on a limb here: In the next few months the
rate of inflation, as expressed by the Consumer
Price Index, will rise.

Grimaces will be seen.

Brows will furrow.

This is not supposed to happen in election years.
Prior to elections the economy is supposed to be
well-behaved, if a bit uppity. Maybe even
insouciant.

Babies are supposed to smile, prices should be so
benign that everyone has two fat chickens to stuff
into the family pot, and the public chorus on all
matters should be three little words.

"What, me worry?"

Instead, we'll have rising prices.

We will not be able to blame this on Houston's -
purveyor of the $9.50 martini cited in this column
some weeks ago - because, under pressure from a
crusading press and a boycott by talking crocodiles,
it has rolled the price back to $9.

Then who will the villain be?

The Consumer Price Index itself.

The reason is simple, though very few people think
about it.

When the Bureau of Labor Statistics releases its
much-awaited CPI figures each month, something
fundamental happens. A new month of data is added
to the annualized rate and an old month is eliminated.

On May 16th at 8:30 a.m., for instance, the bureau
released the Consumer Price Index information for
April.

Prices on the entire index were unchanged for the
month and "core inflation" (prices not including trivial
things like food and energy) rose by only 0.2
percent.

12-month rate

As a consequence, the trailing 12-month rate of
inflation for all items was only 3 percent, down a
surprising 0.7 percent from the worrisome 3.7
percent figure reported for March. Grimaces and
furrowed brows disappeared.

How did this happen?

In April 1999 the CPI rose 0.7 percent. So when
the figure for this April was 0 percent, the annualized
rate calculation rolled forward, dropping the old 0.7
percent month and adding the new 0 percent month.

Presto, the annualized rate of inflation fell from 3.7
percent to 3 percent.

Isn't science wonderful?

Basically, if you and I know what happened each
month last year - and we do - we're in a pretty good
position to guess how the rate of inflation will appear
to develop this year.

Last May there was no change in the index; the
figure was 0 percent. Ditto the month of June.

So if there is any inflation at all this May or this June,
the annual rate of inflation will rise above 3 percent.

Since gasoline prices have risen again, two months
of rising inflation is a pretty good bet.

After June of last year we had two months at 0.3
percent, one month at 0.4 percent, and three months
at 0.2 percent.

So what will the inflation rate be by year-end?

Try 4 percent.

I get that by assuming that each month from May to
year-end will average 0.3 percent. The
accompanying table shows how the annualized
inflation rate would change.

What does it mean?

Inflation alarms

Gird yourself for some inflation alarms between now
and Labor Day, because 4 percent inflation gets a
lot more attention than 3 percent inflation.

Some, noting that the official CPI inflation rate
bottomed at 1.6 percent in 1998, will announce that
the long cycle of declining inflation is over.

Real inflation is back, they will say.

Others will add the walking-around evidence, the
price frights that readers are sending to the
InflationMan discussion page on my Web site.

The real question, however, will remain unanswered:
Is the inflation we're seeing a temporary blip or is it a
return of the full-time, killer inflation that dogged the
'70s and early '80s?

The answer will determine how we spend and invest
in the future.

(Fair Use For Educational/Research Purposes Only.)View Yesterday's Discussion.

Topaz

(05/31/2000; 00:57:43 MDT - Msg ID: 31582)

White Hills: TG/ Goldhunter

Mr Hills,
Your:- (paraphrased)

"The Comex"
......step right up!!.... where trading- setting the price of gold consists, mostly ,of traders selling gold they don"t have in the future to buyers that don't have the money to buy it....... {is just beautiful and deserves repeating!}

TG / Mr Hunter:
Can you please explain how the futures operations of the "Comex" and the London "Spot" are different Kettles of Fish, or otherwise? TIA

Oswald Murphy

(05/31/2000; 01:13:12 MDT - Msg ID: 31583)

Gold manipulation

http://www.goldminingoutlook.com/In today's Kaplan letter, he claimed that POG is not manipulated. Moreover, he explained the reasons why he believes the aforesaid.

I was inclined to believe that there was manipulation after reading for a year the Gold-Eagle Forum bugs. They reminded me of kids in a candy factory without supervision, jumping up and down with joy, not knowing what candy to grab, when gold hit $320. in 1999.

I even thought at one time that TA on gold was fruitless, when Greenspam may have the power of calling the shots in the POG, and maybe with Rubin's help at Goldman Suck's desk.

For instance, why Kuwait sold its 70 tons of Gold a few months back? Is it possible that somebody made a phone call from Washington, DC.?

Kuwait does not need the money, do they? But they need the American war power defense to stop Iraq's aggression. It makes sense to be in good terms with King Bubba. Indeed, all of this is only speculation on my part.

However, when one is finding out how to put together a puzzle by assuming the unassumable, and then somebody like Kaplan, whom I respect dearly, comes out with a statement like today's, one feels like that day when we discovered Santa Claus was not real. One must face reality and truth, yet the dream was not that bad at all (in the case of this endless gold bear market it gives hope to us gold bugs that one day we will have our revenge -- an opportunity to get even.....--).

I am somewhat dissapointed by having read Kaplan, yet he makes a lot of sense. Does anyone with knowledge care to comment in the matter?

Topaz

(05/31/2000; 02:11:41 MDT - Msg ID: 31584)

Oswald Murphy

Yes , it's a tricky business isn't it? Far be it for me to disagree with Mr Kaplan but the currencies he mentioned could all suffer a flow-on effect if you had a handle on AU.
That is, they're percieved Gold currencies. (chicken and egg thing) From the $A's perspective- it's been doing pretty weird things over the last 12 mth's both supporting and contradicting his argument.

Black Blade

(05/31/2000; 05:58:16 MDT - Msg ID: 31586)

Morning Wakeup Call!

Source: Bridge NewsAsia Precious Metals Review: Players are hesitant to buy gold

By Hiroyuki Fujiwara, BridgeNews
Tokyo--May 31--Spot gold stayed in a range-bound between U.S. $272 and $273 per ounce on Wednesday in Asia after prices failed to break over the resistance of $275 overnight, dealers said. A lack of supportive factors expecting for the weak U.S. dollar discouraged players from buying gold, they said. Meanwhile, platinum trimmed overnight recovery on profit-taking, the dealers said. Gold was traded in the sluggish market as players were hesitant to decide near term certain price directions, the dealers said. Prices had rebounded after being supported at the key psychological level of $270 over the past few days, but few try to boost prices above the near term resistance of $275 here without surprising news, they said.

Black Blade: Little bounce here, little bounce there. Nothing new here. Glad to still be able to buy low for now. Also adding to my Energy and NG producer stocks. But hey, there's no inflation right? Well look at oil (north of $30/barrel) and NG (storage levels at record lows!). It's not in the core CPI so we won't worry about though ;-)

BRIDGE INTERVIEW: Russia's Norilsk in talks for PGM joint ventures

Moscow--May 30--Russian metals giant Norilsk Nickel plans to increase domestic sales of platinum group metals (PGMs) by establishing several joint venture companies to produce the metals, Norilsk Chairman Yury Kotlyar said. He told BridgeNews in an exclusive interview that Norilsk is considering various partnerships for the production of automobile catalysts with world leading automotive manufacturers. (Story .19063)

Black Blade: Might as well, the Russians are way too incompetent to go it alone and still be productive. The old Soviet way of doing business dies hard. Better get some professionals to show these amateurs how its done. Of course the Russians will then set about to rob em' blind!

By Melanie Lovatt, BridgeNews

New York--May 30--COMEX August gold futures got a lift Tuesday as the dollar weakened against other currencies. However, by the end of the session the dollar managed to claw its way off its lows, thus draining away some of gold's upward momentum, with the Aug contract settling up only 50c at $275.50 per ounce. Jly silver ended down 1.5c after a one-year low of $4.915 per ounce. While the dollar's weakness earlier in the session had pushed gold higher, Bill O'Neill, analyst at Merrill Lynch, noted that there was no follow-through. David Meger, senior metals analyst at Alaron Trading said that gold was mostly up on a technical bounce, climbing on short covering after becoming oversold last week. O'Neill pointed out that buoyant energy prices were having little upside affect on gold. "Energy prices are roaring higher. Crude and natural gas are 50% higher than last year even on top of the gains we had last year and despite that the [gold] market is showing no reaction," he said. The strength seen over the last few weeks in the Commodity Research Bureau index has also had little impact on gold. "Gold remains an enigma to some people because of its lack of movement," O'Neill commented. He anticipates further weakness and predicts it could test the $267-268 area. "There is no significant central bank selling right now, no undue pressure on the market, but there is also no sponsorship on the long side either," he said. Traders noted that silver is also looking weak technically and many are expecting further selling. "It's had a long time at a set level and people have grown tired of it, so it's time for a sell-off," said one trader. O'Neill warned that it may drop as low as $4.75. One trader said that demand for precious metals is not typically strong at this time of year and he therefore predicts that they could see further price erosion, with silver looking especially vulnerable in the short term. Platinum appeared to be benefiting from a weaker dollar and edged higher after pulling back on profit-taking towards the end of last week after recent strong gains. Palladium also got a boost from the weaker dollar and strength in platinum.

Black Blade: Yet several say that there is no PM manipulation. I can't say for sure, but the circumstantial evidence continues to get pretty thick, don't it? Meanwhile S&P Futures down -4.50, fair value -3.15 - could be a reversal of fortune at the open maybe? Hmmmmm... ... ..

Trail Guide

(05/31/2000; 06:48:50 MDT - Msg ID: 31587)

Comment

ORO (05/30/00; 22:58:11MT - usagold.com msg#: 31580)
Solomon - 100 fold
----A 10 fold drop in the value of the dollar has occurred in your lifetime.-----

----I grew up (in part) in a country that saw 1000 fold depreciation in the currency within the space of a few years in the 70s and the 80s, and finally reached a better than 10000 fold depreciation. -----

---The currency had some 0s knocked off and was renamed. Then the currency inflated again and again a couple of 0s were knocked off - and the currency renamed.-----------

Hello ORO,

Your background life has helped build a real working perspective about currency inflation dynamics! I wish more Western Gold Bugs could have spent some time in these "real life" countries. Or at least study their currency history. Far too many of them dismiss these awesome figures as a function of said money being in the "third world".

Most people understandably draw a complete blank in trying to see the dollar doing the same. Truly, as the dollar "reserve" function is politically removed, this real inflation will begin. Just as you witnessed, we US citizens will continue to use our dollars no matter how many 0s are added. I use Mexico as a close relation to this event because so many Americans travel there or have close business ties to that country. It's very common to use pesos but dollars are the mainstay. In the next event in our currency experience we will eventually use Euros as the Mexicans use dollars. Hard to accept but easy to prepare for.

This brings me to Journeyman:

Journeyman (05/30/00; 22:04:20MT - usagold.com msg#: 31579)
Re: Skirts & bank runs @ Trail Guide

Hello again Journeyman and thanks for considering.

I used the Comex as an example because, like my Mexican peso example above, it's a market most Americans look at. The key to understanding our gold markets is in placing paper gold
trading in a correct perspective. It's not gold trading, it's leveraged currency trading with a little physical delivery thrown in. What hurts the public most is when Gold Mine investors and supporters bash the manipulated paper dynamic but fight to keep it in place for the gold mining industry sake. Most of the front lines battles are aimed at retaining the same paper trading concept, but "cleaning it up". Then, in their mind gold can return to it's proper "futures determined price range" of around $400 - $600.

This amounts to returning to a gold standard after a financial crisis wipes everyone out. Then the governments can start the same decay all over again.

We want to avoid this in the gold trading arena of the future by forcing the concept of "free gold". This has been approached by the next reserve currency backers. By trading physical only as the price making medium, gold will act as a real currency outside the established fiats. It's value surge will make it deep enough to actually carry a good proportion of world financial trade. But do it as a "wealth money", not a borrowed, lend able, bankable, government fiat system. A true natural vehicle for holding ones wealth. Most likely the way gold was meant to be used in the beginning.

I fully accept the political motives for getting us to this point. They are using gold to destroy an aging, failing, over debted dollar reserve system and doing it to promote their next fiat arena. The only difference is that they are structuring their system to take advantage of a surging gold price, not be destroyed by it!

All of this points to a breakup of the old paper gold trading business as a physical crisis eventually crushes their derivatives based equity. This is why we point everyone to look in that direction. All paper trading contracts along with their "price discovery" function are going to fail as the dollar begins it's "great price inflation" destruction. The vast majority of Western gold bugs are all watching and waiting for this event but reject the political certainty it will bring about. That being the
failure of most all paper gold substitutes to shelter an investors dollar depreciation. As such, the leverage in using these vehicles is lost while said leverage moves to physically held gold!

I'm going to place this post on the Gold Trail with reference to my discussion posts about futures trading. I hope it continues to give readers a new perspective as we hike this path.

Thanks

Trail Guide

Gold Trail Update

(05/31/2000; 06:54:54 MDT - Msg ID: 31588)

The Gold Trail Discussion has been Updated

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

USAGOLD

(05/31/2000; 09:43:42 MDT - Msg ID: 31589)

Today's Gold Report: Weak Currencies Lined to Strong Worldwide Gold Demand

5/31/00 Indications
�Current
�Change
Gold June Comex
271.70
-0.60
Silver July Comex
4.95
-0.01
30 Yr TBond Sept CBOT
95~16
+0~27
Dollar Index June NYBOT
109.00
+0.15


Market Report (5/31/00): Gold moved quietly to the downside in the early going as the dollar
improved against the yen with traders saying that the metal was "suffering from long liquidations
associated with closing out the COMEX June contract." (Yawn. . .) The yen found itself in trouble
when Japanese regulators closed down the essentially bankrupt Daihyaku Mutual Life Insurance
Co. This pretty much ended all hopes for an increase in Japanese interest rates which in turn
would have helped the yen. So its back to square one as the depression scenario continues to
unfold in the land of the not-so- Rising Sun. One would think that with this sort of thing becoming
common place in Japan -- this is the the third major insurance firm to bite the dust in Tokyo in as
many years -- that savers there would find solace in the yellow metal. However, the World Gold
Council reports precisely the opposite. Japanese gold demand was down 39% in the first quarter
2000 -- one of the worst performances in the 27 countries covered by the Council in its otherwise
reassuring quarterly Gold Demand Trends publication. Halfway around the world a decidedly
different picture was emerging in France where unemployment finally dipped below the 10% mark
causing the socialist French government to do handstands. Fighting unemployment was one of the
top priorities of the leftist French government after winning the parliamentary elections in 1997.
So it continues. . . in their leftist drift, the world's governments have orchestrated ever cheaper
currencies all contributing to an artificially strong dollar and providing cover for our own central
bank to engage in some out-of-the-box money printing of its own. Over the past six months, M3
has grown at an annualized rate of 10.6%. Today's events auger more of the same as the world
economies move in concert to the beat of the same low unemployment drummer -- to what end no
one can say at the moment. None of this is lost on the world's gold accumulators who watch all of
this with some disdain and continue to acquire yellow metal as a hedge. The World Gold Council
reports that around the world -- Japan aside -- the record numbers posted in 1999 remain at that
level or slightly higher in 2000. As most of you already know gold is in a bull market in most of
the world's currencies for reasons aligned to the short analysis above, and the best buy on the
table in light of the dollar's strength if you happen to live within U.S. borders.

Many investors are taking advantage of that while they can with a prudent diversification into the
yellow metal. Gold buying has been steady at Centennial Precious Metals over the past 30 days
and we are happy to announce the success of our German gold mark offer (now nearly sold out).
We would like to thank all who participated in this our first internet gold offer and making it a
success. We have had good reviews from our clientele on this new service and hope to find a new
offer soon. Those who would like to own the German coin should contact us soon or place your
order using our secure system link below. We'll probably be sold out in the next day or two.

Have a good day, fellow goldmeisters. See you back here tomorrow.

USAGOLD

(05/31/2000; 09:44:47 MDT - Msg ID: 31590)

Headline Should Be: Weak Currencies Linked To Strong Gold Demand

Sorry.

Al Fulchino

(05/31/2000; 10:46:32 MDT - Msg ID: 31591)

Leland

What is your email, I have info for you.

Al

Leland

(05/31/2000; 11:00:17 MDT - Msg ID: 31592)

Al...It's leland@netarrant.net

And, thanks for your help!

White Hills

(05/31/2000; 12:00:11 MDT - Msg ID: 31593)

Inflation

Leland-Msg 31581- A interesting article about inflation. It does sound like the author believes the CPI statistics as put forth by the Labor Department. None of the statistics that are put out by the current administration can be trusted as I feel they are "cooking the books" and will do almost anything to keep what is really happening in the economy under wraps at least until after the election. Many years ago an old timer told me that if you wanted to know the actual % of inflation to subtract3%(Money rents for 3%)from the interest banks charge their best customers and you would have the correct figure. Anyway, that makes as much sense as their system. White Hills

wolavka

(05/31/2000; 13:03:42 MDT - Msg ID: 31594)

june gold contract was holding price down

thursday and friday gold will rise.

280 for december will not be seen again.

TownCrier

(05/31/2000; 14:30:01 MDT - Msg ID: 31595)

COMEX action

Yesterday marked the last trading opportunity for COMEX players to exit their June contracts ahead of today's First Notice Day, marking the opening of the delivery window and with it the theoretical obligation to honor the contract postions with physical settlement.

It comes as no surprise that open interest (outstanding contract positions) in the June futures plummetted by nearly 75% with the settlement of 18,147 contracts, leaving 6,860 in open interest to start today's trade.

This morning, 3,579 of those June contracts were held up for delivery.

Meanwhile, as yesterday's trade of June contracts were being wound down, open interest in the August contract--now immune from any possibility of delivery requirements--increased by 11,391 positions to 88,771 contracts.

Leigh

(05/31/2000; 17:05:19 MDT - Msg ID: 31596)

ORO

Dear ORO: I enjoyed your currency horse race story the other night! It opened my eyes to a few things, and it was so interesting that I showed it to my husband.

About your inflation post last night -- How did the people in your country act when inflation really got going? Were there thefts and riots? Did people secretly use gold, silver, and foreign currency even though that was illegal? I'm trying to get a mental picture of what could happen here.

Thank you!

MarkeTalk

(05/31/2000; 17:18:39 MDT - Msg ID: 31597)

Euro on the move

As mentioned here over the weekend, I expected the breakout in the Euro last Friday to be the harbinger of things to come. After a day of backing and filling, the Euro is again higher today. In the aftermarket, it is currently trading at 93.74, up 4 ticks. It has surpassed two hurdles lately: 90.90 and 93.30. Old rule of thumb in markets: foreign currencies are the first to move when the dollar breaks down, followed quickly by gold and silver. Will that relationship remain the same now that all countries are inflating their currencies against gold? Perhaps in the very beginning but, as posts at this Forum have shown, the old rules will be out the window when the gold shorts get squeezed and have to cover at any price. Stay tuned for more dramatic developments unfolding in the months ahead.

Finally, you know that the world is changing when you can't even take a vacation to an exotic island paradise without some rebels wanting to overthrow that government, declare martial law, etc. Such is the case with the island of Fiji. Who would have ever thought of this sleepy backwater bursting on the scene of international politics. Good grief. Now you not only need your sunglasses and sunblock lotion but perhaps a flak jacket as well when you are lying on the beach taking in the rays. The times, they are a changin'!

R Powell

(05/31/2000; 17:46:57 MDT - Msg ID: 31598)

Some information on futures

http://www.e-analytics.com/fu1.htm Some basic information for those of us following the debate among Town Crier, Goldhunter,Trail Guide and others. I've been looking for more specific info concerning delivery but as yet haven't found too much. Most All futures markets contracts ( about 98%) are settled in cash. This is true with grains, precious metals, meats and the so-called softs. The market index futures have to be settled in cash. Most everywhere I've looked, it seems to be understood that the market price will adjust until enough contracts are settled (in cash) so that there is ample supply for those demanding delivery. Remember, those playing the futures' are not die-hard goldbugs. They will let go their positions given enough profit. How many physical holders even, would be tempted to sell if POG were $1000 next week without any price increase in goods or services. Okay, how about $5000! I'm not suggesting anything, just pointing out that most futures traders are looking for profit not gold. This still doesn't answer the question, what happens if price change alone can not equalize the balance between buyers and sellers? Then I quess we'd see gold.com pricing or default.

SteveH

(05/31/2000; 18:08:09 MDT - Msg ID: 31599)

Observation

First, if I recall correctly, just after the Kuwait gold was sold into the market, they received a sweat arms deal from the US for over (I believe) $168Million.

Next, Bill Murphy is expousing more of the US-side of the gold equation that will bankrupt major banks and be a national security item. This is the inverse of what FOA says, in other words, the dollar is about to tank, this is how it will affect the US -- Murphy is now getting interest from US officialdom on the effects this gold market manipulation will have on the US.

Very interesting developments indeed.

Note also the great swing in the Nasdaq in the last two trading days. Extreme volatility.

Leland

(05/31/2000; 18:16:33 MDT - Msg ID: 31600)

White Hills

There are many stories about inflation more interesting than
any that I can relate. In my family there is one that I'll
never forget...My dad graduated from the University of
Wyoming in 1925. His total tuition for four years was
around $2,000. When I enrolled in a similiar school in
1949, my first SEMESTER tuition was over $2,000!

I don't even WANT to know what a college education costs
today. I probably couldn't believe it!

R Powell

(05/31/2000; 18:17:06 MDT - Msg ID: 31601)

The TED Spread

http:/www.e-analytics.com/fued23.htm Mucho talk about the TED spread over at Gold-eagle. The consensus is that it is forcasting market doom and, of course a POG boom. There are also predictions of a weakening U.S. dollar. It seems many indicators are not positive. HBM said he would be away this week but the yield curve won't correct itself because of his absence. The DOW and NASDAQ have been faltering of late but not with a declining dollar. Perhaps this has been the missing ingredient. I have the sense that something should happen soon and, if not, then not until after the summer has past. No logic here, just a feeling. (B.J.Thomas)

R Powell

(05/31/2000; 18:23:50 MDT - Msg ID: 31602)

Linkage

http://www.e-analytics.com/fued23.htm Sorry, try this one.

Al Fulchino

(05/31/2000; 19:22:24 MDT - Msg ID: 31603)

Leland

30k/yr at a nice engineering school in mass...ugh

SteveH

(05/31/2000; 19:58:16 MDT - Msg ID: 31604)

College

When I went to college in the early 70's my tuition was $4K per year for four years. My daughter's tuition next year will be $23K per year for four years, with COL increases I'm sure.

tg

(05/31/2000; 20:06:12 MDT - Msg ID: 31605)

quetion for FOA and anyone else with a view

In the coming inflationary enviroment as you expouse-

1/ what makes gold a better investment than a property investment.

2/ wouldn't it be better to be highly leveraged against property (with a fixed rate of interest)and pay back the initial borrowed capital with devalued dollars at the end of the loan term.

Take into consideration the fact that banks won't loan money against gold

goldhunter

(05/31/2000; 20:29:20 MDT - Msg ID: 31606)

Thanks for "THE TIP"

http://www.usagold.comSir Wolavka, Thank you for your tip on gold (Thurs/Fri.).

If you are right, all of us golden team-mates will be celebrating this weekend.
Great "luck" with your prediction!

Leland

(05/31/2000; 20:53:33 MDT - Msg ID: 31607)

Thanks to Sharefin for Finding This

sharefin (Email chatter) ID#284255:
-
John Hathaway
The Tocqueville Fund
JCH@Tocqueville.com
May 31, 2000

Conspiracy And The Gold Market: A Clarification

Over the Memorial Day weekend, a story in the Dallas Morning News discussed the
activities of the Gold Anti-Trust Action Committee ( GATA ) . Reporter Bill Deener,
who seemed to have some difficulty grasping the subject, interviewed me at great length
for the article.

Unfortunately, my contributions were used selectively and out of context in a way that
would seem to discredit the activities of GATA. That was certainly not my intent, and it
appears that the reporter either did not understand my point of view, or used what I said
to prove a point that he was trying to make that did not reflect my views.

It is impossible to regard the behavior of the gold market without raising questions as to
whether it is totally free. For example, in September of 1999, the anecdotal and
circumstantial evidence of official intervention to relieve the short squeeze is powerful.

In addition, the substantial expansion of derivative positions by bullion dealers in the
period subsequent to the short squeeze, as detailed in my recent report "JP Morgan to the
Rescue?" raises many questions that still remain unanswered.

Gold is a currency. Intervention in currency markets by various governments is common
and in some cases overt. It should not come as a surprise that this sort of activity exists in
the gold market. Currency dealers play games with their currency positions. It should not
be surprising if certain bullion dealers do the same. What is different about gold is that a
structural short position has arisen out of the desire of gold producers to hedge forward
prices. Compared to paper currencies, the physical market for gold is very illiquid. Even
though derivative contracts settle for cash, they must be delta hedged in the physical
markets. The potential for an epic short squeeze rests largely on the imbalances that have
arisen between an illiquid physical market and the rapid expansion of paper gold or
derivatives. The commercial interests and position of the bullion dealers originated as an
accommodation of desire of the mining industry to hedge future gold prices. In the
Ashanti workout, it became clear that these positions could not be extinguished easily and
would in all likelihood remain on the books pending future, and in some cases, long-dated
deliveries from mine production. It goes without saying that these bullion dealer positions
could be damaged by another spike in gold prices comparable to September 1999. It is
therefore possible to infer that certain dealers may have an incentive to enter the market
to keep the gold price tame. Since the market is thin, and the technical chart points well
known, it would not be difficult to keep the gold market in a prolonged state of being off
balance.

Note that these possibilities for manipulation can exist only in a thin, dispirited market
lacking in strong investment money inflows. Any such scheme would be easily
overwhelmed if the current sickly investment flows turned positive. Therefore, the
overwhelming investment question to me is whether and when such flows will occur, not
whether or not there is a certain amount of dirty pool going on now or in the past. It is
possible in a short-term context that market manipulation can keep the market off
balance for an unknown period simply by discouraging investment flows. Gold has so far
been excluded from the party in commodities, which has seen the CRB Index rally 20%
over the last year. The dynamics of the gold market appear different today than in similar
past commodity market cycles. Can the aberration persist forever? Not if the
macroeconomic fundamentals say otherwise. If anything, the delayed response should
mean an adjustment of greater, more violent magnitude than if unnatural forces had never
been at work in the gold market.

As for conspiracy, do the bullion dealers take regular, coordinated instructions from US
or UK Treasury agents? While nothing is impossible, it doesn't seem to me that such
activity would be necessary to explain why the gold market is in a funk. Excessive
producer hedging ( see The Folly of Hedging, ) a bull market in financial assets, and low
reported inflation would do just as well. Does the Treasury intervene at crisis points?
Such intervention seems highly likely, as in the case of LTCM, or the already mentioned
gold market rescue. Sporadic, reactionary intervention could be taken as a signal by
private parties such as bullion dealers to continue to increase their derivative activity in
the expectation that future intervention would occur in the event of market adversity.
This familiar pattern of behavior by the government in the context of moral hazard is too
obvious to be debated. One does not need to subscribe fully to conspiracy theory to
support the activities of GATA, however. There is too much strange, unexplained activity
in the gold market not to welcome energetic efforts to come up with some answers.

(Thanks! Sharefin. Thanks! John Hathaway.)

Richard640

(05/31/2000; 20:53:56 MDT - Msg ID: 31608)

The great Contraryinvestor--another masterpiece-here's a teaser

http://www.contraryinvestor.com/mo.htm Put'em Up...It used to be that quarter end's were institutional window dressing extravaganzas. Now it's month end periods. Today's little ramp job was no disappointment. Relatively light volume, gaps in pricing, mark-up's of the big cap institutional favorites. The institutional "fever" was helped by multiple cheerleading routines. Breathless Maria. (We'll soon be setting up an oxygen tank for her right on the trading floor for those special days when MU opens higher.) The trotting out of "broken clock" Joey B. on CNBC. Tom Galvin calling for a super rally (for the ninth attempt in a row). Ralph Bloch declaring that the summer rally will have "officially" started if the indices closed on or near their highs today. (Whew! We can stop wondering as it's now official.) Claim-jumper Dan Niles spouting from his new $6-7 million perch at Lehman on the wonders of semiconductor stocks. (We know there is inflation when we see the rates for shoveling garbage being raised for Lehman.) Over the weekend, even Bearish Bob Brinker called for a quick 20% upward move in the NASDAQ. If today is any example, Bob's has about two more days left. He's already half right for the NDX. Just remember, most of these are the same folks who have been calling for a bottom about every 200 points over the last 2000 point drop for the NAZ.

ORO

(05/31/2000; 21:00:59 MDT - Msg ID: 31609)

Leigh - inflationary behavior

http://www.mises.org/humanaction/chap17sec8.asp
I gave the above link for the most inteligent explanations. But let me go through some things I had seen.

One of the first signs is that when something is discounted significantly (say 15% or more) the stocks in stores disappear. People hoard canned food, old cars, antiques, collectibles, toiletries and other dry goods.

Businesses reduce the size of packages and the extent of service before raising prices.

Areas that have benefited most from the injections of new money see spot shortages. We see this in US housing, particularly in California and NYC, but elsewhere too.

The most powerful interests get their income or revenues indexed to prices first - in the US it was WWII generation seniors who got SS indexed. Businesses that can't move to outsourcing see a sudden demand for indexing or automatic wafe hikes.

Spot shortages of commodities turn into continuous shortages as each business attempts to secure supplies by hoarding. A stripped down JIT inventory model is the most sensitive because of the awareness of there being no cushion against prices.

People rush into stable currencies, some prices are quoted in these currencies.

Institutionalization:
Wage contracts are indexed to prices.
Government benefits get hitched to them too.
Interest is charged on top of a price index adjustment.
Taxes get indexed.

People stop bothering to remember prices in the local currency and remember them only in terms of the more stable currencies that are still available.

If forex is illegal, a large segment of the economy will move underground where all trading is done in "secret". If taxes rise during this period, many will move into "official" income jobs that serve as cover for the "real" income production in small production and service operations.

In my experience whole buildings and neighborhoods can be built in the underground economy. Some places have seen the underground economy grow into the whole of the economy. The reported incomes costs and revenues serve as cover for the actual economy.

Since the bulk of operations are underground and there are no enforceable contracts, one finds many falling for fraud. Not surprisingly, for anyone reading Rothbard or David Friedman, and even Mises, there is no need for worry - people figure out whom to trust, where to go, and how to exact reparations for unfulfilled contracts - all without government intervention.

Government officials participate in these shenanigans and become part of the underground economy. Soon, everyone has a dossier of "dirt" on everyone else and minor law enforcement is eliminated because no one complains fearing revalations of this "dirt".

Chris Powell

(05/31/2000; 21:10:54 MDT - Msg ID: 31610)

Gold mining company merger speculation grows

http://www.egroups.com/message/gata/473?From the National Post.

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

Chris Powell

(05/31/2000; 21:12:21 MDT - Msg ID: 31611)

Hathaway says gold market is probably manipulated

http://www.egroups.com/message/gata/474?A big boost for GATA from an internationally
recognized gold expert.


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

Solomon Weaver

(05/31/2000; 21:34:13 MDT - Msg ID: 31612)

ORO - all wondering what form of hyperinflation will ensue

ORO (05/30/00; 22:58:11MT - usagold.com msg#: 31580)
Solomon - 100 fold
A 10 fold drop in the value of the dollar has occurred in your lifetime.

I grew up (in part) in a country that saw 1000 fold depreciation in the currency withing the space of a few years in the 70s and the 80s, and finally reached a better than 10000 fold depreciation.
...........
Well ORO, I hope you will agree with me that if this comes to pass that we are talking about devastating destruction of financial and business contracts all over the world.

I will not rule out the possibility...especially when you point out the precedential events you have lived yourself.

You are right!! I remember nickle candy bars and $0.20 gasoline and my dad's first shiny new VW Beetle bought the year I was born was $2000.

Russians saw their life savings in rubles vanish in this way.

But wouldn't it be better for a new hegemony of the Euro to have the dollar bleed to death slowly over a generation???

For the sake of the millions who do not hold gold today let us all pray in earnest that things go chaotic in a managed fashion of sorts.

Poor old Solomon

TheStranger

(05/31/2000; 22:02:52 MDT - Msg ID: 31613)

ORO #31565

ORO - thanks for addressing your post partly to me. I read it carefully, and, as usual, marveled at the depth of your insight. I find myself wondering, in fact, where else someone like you can go to share ideas such as these.

I don't have sufficient time or intellect to address all of what you said. Dare I call into question, however, a couple of your conclusions? First, isn't it one thing to say monitoring the money supply is greatly complicated in this modern day and quite another to claim that it's impossible? You say, "There is no way for a central bank to know if monetary expansion is going beyond unit output growth because of the shifts in people's use of various assets as money. The central bank can only make observations of local and foreign prices in order to come up with such an assessment." Yet the recent re-emergence of inflation was clearly foreshadowed in the "M"s more than a year ago, was it not? In fact, wasn't the approach of inflation apparent months before it even began to show up in producer prices? I sure thought it was.

Second, you say, "Our central bank is now at the point where it will induce higher prices of goods and services no matter what it does." You then go on to analyse the probable outcomes of a policy of either raising or lowering interest rates. Yet you leave out the Fed's most important inflation fighting tool of all which is the control of liquidity itself. To heck with how much the money is going to cost, how 'bout if you just plain can't have any?

You also say, "...the measure of success of a debt money system is equal to the extent of its upcoming and inevitable demise." In my dictionary, "demise" means death, which is no measure of success at all. Perhaps that's your point. I suppose everything dies eventually, but do you speak of this inevitable demise as being in any way imminent? And, if so, didn't the Volcker Fed prove in the 1980s that even spiraling inflation can be reversed with a simple policy of tight money?

Yes, Greespan's current policy of nudging up interest rates is likely to fail, in my estimation as well as yours. But, once that failure becomes self-evident, what's to stop the Fed from just tightening money the way Volcker did all those years ago? And why wouldn't the results be substantially the same?

Solomon Weaver

(05/31/2000; 22:43:59 MDT - Msg ID: 31614)

inflation or deflation

tg (05/31/00; 20:06:12MT - usagold.com msg#: 31605)
quetion for FOA and anyone else with a view
In the coming inflationary enviroment as you expouse-

1/ what makes gold a better investment than a property investment?

First, the value of a home or property is related to where it is, and how liquid the local market is at the time you want to sell. Second, you need a single buyer for a home...where you could sell your coins as needed one by one. Gold is also more portable than land or home. Also, gold is much more rare today than land or home. Just off the top of my head let us just say there are $1 billion modern homes worldwide with an average value of $60,000 each...that's a $60 Trillion market cap. The Total market value of all the world's gold is about $1 Trillion today. Given the relative boom in realestate and bust in gold over the last 20 years...we would expect that at the other end of a crisis that the "relative" value of gold vs. real estate should improve on the side of gold.

2/ wouldn't it be better to be highly leveraged against property (with a fixed rate of interest)and pay back the initial borrowed capital with devalued dollars at the end of the loan term.

Paying back with inflated dollars is nice...but, could it be that under a hyperinflation that destroys the value of a mortgage payment to a bank, that a certain mandatory "renegotiation" of the principle might ensue? Usually what has happened here is that the bankers notice how much new equity you have in your home and entice you into a new home-equity loan...you know, to build that new addition that cost 10 times what you paid for the home.

Take into consideration the fact that banks won't loan money against gold.

Times may change. There certainly have been times in the past when gold was considered collateral for a loan...



By the way.....there is no certainty that the coming crisis times have to be inflationary (in the sense of price increases). Price is determined by money supply and money velocity. Price inflation does have an element of self fulfilling prophecy in the sense that when one believes that savings (or holding cash) are eroded by constant price rises, then one tries to liquidate cash as fast as possible (high velocity) and buy tangibles. Severe recessions and depressions have a strong potential to be deflationary, since spending and borrowing slow dramatically (decrease in money velocity). Also consider that with so many citizens of G-7 nations working for their governments and with so many others getting "transfer payments", any large crisis which caused severe insolvency in governments would tend to create governmental unemployment and reduced social payments at a higher rate than corporate unemployment...and since corporations are where the goods are produced, there is a natural chance for glut circumstances in various sectors.

Also consider that loan defaults destroy money and loan payment stops (delayed payment) reduce monetary velocity. Deflation is actually much more destructive because the "perceived" (or even real) value of savings rises, and further slows spending. Much more of the population is able to understand and lament about price inflation....most don't understand the terrible bear that serious deflation is.

Gold is generally viewed as an indicator and hedge against inflation...but it also has tended to hold its value well during periods of severe deflation.

But, as a final note...I personally do believe that we are more likely to see inflation in the near term if for no other reason than it makes the US collective debt easier to pay back....just that when the real dislocation starts, then all bets are off about which direction it might really take worldwide.

And I feel that it was probably a lucky break that I bought a decent home with a fixed 30 year loan and rate of 7.25% in early 1999. Could be the bottom of that market for quite a while.

Poor old Solomon

Permission to reprint is hereby granted where the USAGOLD name is cited along with our web address, mailing address and phone number. For electronic reproductions, citing the post heading and the http://www.usagold.com/cpmforum/ website address as the source is sufficient.

The USAGOLD logo and stylized gold coin pile are trademarks of Michael J. Kosares.

© 1997-2012 Michael J. Kosares / USAGOLD All Rights Reserved