thanks Solomon Weaver for your reply, but not quite the answer I was looking for.
Assuming we are heading for hyperinflation as asserted by Trail Guide, why would not a highly leveraged property investment on fixed interest for a fixed period of say 10 years be a better form of long term wealth preservation than gold. The amount of leverage that can be attained that way would be much greater than the leverage you can acheive for borrowing money to buy gold. Also remember that the principal will be eventually repaid in devalued dollarsView Yesterday's Discussion.

http://www.yardeni.com/public/mnynew.pdfThe Ms are just part of the picture. They are the start of an inflation of currency - a direct effect. However, people can use many things other than a checking account to store weekly and daily funds, and more than savings accounts for month to month holdings - and more than CDs for year to year holdings. What is money is in the head of the user limited only by the realities of dealing with volatility, accessibility, liquidity etc.. With the Ms rising you would not necessarilly see prices rise substantially in the real economy at any particular point. You only know that at some time or another prices will blow.
It is like looking at a dead tree. You know it is going to fall because it is dead and is probably rotted. Yet there it stands, year in and year out. Suddenly, a mild gust of wind blows and the tree is on the ground. That is how price inflation goes. If you look more carefully at the tree and do X rays and put in probes you will see where the weak point is, you might be able to tell how much longer it will stand to within a couple of years, but that's about it.

What Volcker did was create a global disaster for the younger economies. When the results of this crept to our shores he stopped this policy and reversed it with the largest and quickest injection of liquidity ever seen in this country, the burst of liquidity that got the stock market rolling. The easy money of his predecessor and the tying of the S&L's hands, as well as an enormous inflationary Keynesian tradition of fiscal stimulus caused the rush of emerging nations to borrow dollars.
When volcker drew down the monetary base he caused US banks to withdraw funds from the Eurodollar markets. The US markets did not see a truely great effect initially, the stock market and bond market were close to being dead at the time and money market funds were all the rage. Volcker squeezed the emerging market economies and destroyed their cash flows while leaving their debts and their need for dollars to buy oil. The dollar skyrocket that resulted and the trade deficit it caused were destroying the foreign debt base that kept the dollar afloat through the past 30 years. The squeeze on the dollar debtors abroad reduced price inflation by unloading tons of imports at our ports. Money supply in the US banking system continued growing as if nothing happened. Only Citi, Continental and a few other banks got their fingers singed as their foreign customers went under. They were bailed out.

When Volcker's policy hit home he immediately reversed.

You can see almost this in the 1980 dip in the monetary base growth chart - it is on page 4 of Yardeni's M report. The year over year change does not do justice to his actions, because they obscure the effects one can see in quarterly data. The interest rates rose from 10% to 17% in 1979-1980, then back down and back up to 19% in 1981. This wild ride was not responsible action. Volcker was destroying the economies of whole continents and brought the "third world" into beggary. Greenspan did no better in 94 and 95.

The thing to understand is that Bretton Woods WAS A WAR REPARATIONS AGREEMENT WHERE WE INHERITED EUROPE'S COLONIES it was designed to provide the US with an endless flow of goods in return for paper chits. It intended to beggar the world as a whole. Europe followed by Japan came out of their debt traps and both the US and Europe transferred the debt load to the "emerging economies" during the oil crissis. Volcker cashed in on our behalf and squeezed these economies for all they had.


You mention the fact that debt loads are not as high as they used to be in the mid 80's. You are right - but there is a reason for this other than the one you imply. The tax reform of 1986 took credit card interest personal loan interest and car/durable goods loans out of the deductibility class and put SS taxes up so that we had a roughly flat tax. For most people this amounted to increasing their interest costs by 30% to 40% over their levels the year before. If you look at the rate charts at
http://www.economagic.com/em-cgi/data.exe/fedbog/fedfund
you will see that the effect of the rate rise was immediate in the monetary system at Yardeni's M charts. Fed rates were in the 6-7% range. Take off the tax advantage and you have a rate of 9-10% for non-housing borrowing - the same rates that we had during the "inflation fighting" days.

The conqueror of US inflation was an amalgamation of small economies from Taiwan to Argentina, who were pushed over the brink into re-colonialization by perpetual debt through the actions of 1. the US, 2. Europe (because they managed to free themselves but did not want to kill the system), 3. OPEC (mostly in a reactive fashion).

Just think about it like this: if your currency is depreciating internally at say, 12% per year and your imports are say, $500 billion per year and they grow by 50% two years later after your currency has doubled in value abroad, and its internal depreciation rate has fallen how much are you importing in terms of volume of goods? If your nominal exports grew 20% how much are you expoting?

You had about 20% internal depreciation over these two years, you have $750 billion in imports and your currency is buying twice as much abroad as it used to, ergo:
750 * 2 / 500 / 1.2 = 2.5
Your volume of imports grew by a factor of 2.5, or increased 150% over two years.

Your exports are at the same level they were before. 120% / 120% = 1

Our great price stability is coming from the productivity of the emerging economies - we import that productivity and it hides the fact of our industrial stagnation. It is not a "miracle" that producers who had just undergone the industrial revolution and the technology revolution of 200 years within the space of 20-30 years could raise the supply of goods to the US 10 fold. It is not a reflection of any great strides in productivity within the US.

Gold as Collateral

At a private bank in Vienna, where you can open an account for $5,000, you can purchase precious metals which the bank will store in Zurich. You can then use the gold as collateral for a loan.

Some banks still take gold. This bank also does not practive fractional reserve banking. You can only borrow up to the amount you have in the bank.

I have a couple of questions for the wise and knowledgable heads. I have with a fair amount of disgust noticed that flattery is the way to go on this forum. I feel it would be worth finding solid answers to the following questions:

1) The paper gold market will default; this is understood. My question is: The gold that has been traded for example on the LMBA and that still is traded there, is this gold paper gold or has it actually been physically delivered?

2) Have the Arabs been buying paper gold?

3) If that is the case, what will happen when they will want physical delivery and there isn't enough to go around?

4) I am familiar with "The Grey Men Tape" where it is brought out how the magicians of the western banking system gypped the Arabs out of billions by transferring funds to holding companies that lent the money to customers that incidentially defaulted on their loans. The Arabs must have disliked this a lot!

5) If the Arabs this time have bought paper gold that cannot be redeemed, what will happen when this fact dawns on them? When they realize that they've been had again, I think the game is up for good!

6) There are big players in the "secondary" private gold market where gold for huge amounts are changing hands, who are these players? Can they be identified?

Please someone who knows the inside facts, let us know the real situation!

In an earlier post to me, ORO offered five points running counter to a premise that is gaining momentum...the premise of gold as a pure wealth/reserve asset removed from the debilitating effects brought on by banking with a hard asset of any type; debilitating to both the good value of the asset itself through financial derivatives, AND debilitating, at times, to the banking system at any scale of examination. (I shall continue to use FOA's term "Free gold" to apply to a system whereby gold has been thusly preserved and spared "forevermore" its current malady). It might prove useful to briefly review these five points with additional commentary to see where we now stand, and perhaps to open the door to where we are going.

<<<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.>>>>

While "an alternative money/currency" may be a convenient manner in which to view "Free gold", in actual practice we may see that "Free gold" would not serve as an "alternative" currency per se any more than daVincis or Picassos currently do, though far more liquid and suitable for the purpose of wealth reserve asset than such paintings, to be sure. And as ORO speaks of the "stabilization" of the debt money, for the benefit of others I must clarify that it is truly the complete interplay of currency with the concurrent banking system that is in discussion. As such, we could speak meaningfully of "Free gold" outside of the context of banking systems and currency, whereas by contrast, discussions of "currency" are meaningless without the context of banking, whether explicitly mentioned or implicitly understood by both parties.

<<<< 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.>>>>

On point #2, I am not certain what it is you refer to as "cash", but if my perception is correct, as you use the term are we not now living in a world in which there is no "cash", and yet the Sun also rises? On point #3, experience in many things shows that there can be a productive life between birth and death, no matter how inevitable that death may be. If a currency has a timeline, the best to be hoped for is a long life without "chronic illness".

<<< 4. The purchasing power of commodity money is limited when the debt induced demand is not available.>>>>

I used to think this, also, that its purchasing power would be limited without the attachment of debt-demand...the need to acquire the commodity to repay a loan. That is, I thought this until only very recently. Then I came to understand what the implications were. In truth there IS a limit as you suggest, but it is VERY much higher than we know it today...a value based on a NEW USE served perfectly.

<<<< 5. The purchasing power of a pure commodity money is completely unstable. There has yet to be a mechanism available to solve that problem.>>>>

In item #1 ORO speaks of "debt money" being unstable whether or not in the presence of an "alternative" commodity money. Now, in item #5 we are told likewise that a pure commodity money is "completely unstable" also. Congratulations, ORO. You have seemingly come to the conclusion that no form of money may exist lest it usher in the downfall of man--or prove troublesome at the very least. This is precisely why we are led in thought to a hybrid system...banking with currency more or less as you know it, and "Free gold" to offer benefits well beyond anything the "old gold standard" could ever provide.

ORO also offers some thought for consideration as follows:

<<<>>>

Certainly, deflation is to be considered with dread, yet absent "free banking", with a central bank we have a quasi-government institution that is both able and inclined to force money creation; admittedly fostering malinvestment, but all the same, preventing deflation at the hands of a cartel--"cartel" being a thing which I tend to discount generally (domestically, that is), no offense meant to your view. As you have said, in terms of a "banking cartel" attempting to act in their best interest, do you not, in fact, lose all sense of corporate "best customers" to a notion of "intended victims"? They cannot be both at once, enduring, or your "cartel" is one in name only, not in practice.

In that text, you also mention the "cartel" having an abilty to create an "immediate shortage" of currency throug the decision to arbitrarily stop lending. You seem to put an overemphasis on the extremes of boom or bust, with no middle ground. My own experience has been one that has seen both, but more middle ground than all else together. In your more recent post #31565, you revisit this (bust) mentality with the thought <<<<"classic monetary expansion...[money supplies] continue to grow so long as the expected nominal return on assets in business is greater than the average available interest rate cost. [...] 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.">>>> Maybe no? Your assessment seems to imply that there is a distinct threshold value, and more, that every decision-maker in "the game" knows it with precision, and is capable of acting accordingly. I have a deep suspicion the marketplace is not quite so efficient and clever as all that. To be sure, shocks can and do occur, but generally as a buildup of systemic pressure imbalances that are not allowed to gradually vent off...the classic woes of the banking system as you express in your five points.

I shall offer more comments in time to build a simple foundation upon which we might all find a place to stand more confidently with the concept of "Free gold".

got lumber?

Source: Bridge NewsAsia Precious Metals Review: Gold flat despite producers sales
By Hiroyuki Fujiwara, BridgeNews

Tokyo--June 1--Spot gold hovered at about U.S. $272-273 per ounce, mostly flat from overnight late U.S. market levels on Thursday in Asia. Light selling from Australian producers did little to depress gold prices in the absence of follow-through selling, dealers said. Bargain hunting continued to underpin platinum prices from slipping below the key $550, they said. Australian producers resumed selling gold early in the morning as the weaker U.S. dollar against the Australian dollar lifted local gold prices to about A$478 per ounce from about $472 during the past few days, the dealers said. But their sales quantity was limited today, while some buying from physical dealers underpinned gold prices in Asia, they said. Spot gold's prices are likely to remain in the current range-bound between $270 and $275 without fresh surprising factors, the dealers said.

Black Blade: Ho Hum.

Russia's Gokhran says won't export PGMs in 2000

Moscow--May 31--The State Depository for Precious Metals (Gokhran), one of Russia's three main exporters of platinum group of metals (PGM), is unlikely to export this year, Deputy Chairman Vladimir Rybkin said Wednesday. He said there was "no need" to export the metals in 2000, while the exports in 2001 would "depend on the situation." (Story .17339)

Black Blade: Yeah, right. Go figure!

Ashanti Goldfields officials face wrath of shareholders at AGM

Obuasi, Ghana--May 31--Officials of Ghana's Ashanti Goldfields Company Tuesday faced shareholders angry at the company's inability to declare a dividend and demanding explanations for last year's gold hedging crisis that brought Ashanti to what acting board chairman Philip Tarsh described as the brink of bankruptcy. Tarsh told the annual general meeting of shareholders here that the company was now "making a steady move towards recovery." (Story .13745)

Black Blade: Oh my, the perils of hedging. BTW, a shareholder lawsuit is in the works. ASL is now under $2 a share. Barrick - Take note!

Shareholders elect new board at Ghana Ashanti Goldfields AGM

Obuasi--May 31--Shareholders attending the first annual general meeting since the gold hedging crisis hit Ghana's Ashanti Goldfields last year opposed the re-election of Nicholas Morrell, director and chief executive of Lonmin plc, who was appointed to the board in 1997 and who was retiring by rotation. The election and re-election of directors is normally a matter of course, but this time a shareholder raised an objection to Morrell on the ground that he held no stock in Ashanti and was therefore not committed to the company. (Story .19497)

Black Blade: These guys just will never learn, will they? Oh yeah, they announced that they are committed to hedging! They should be committed all right!

Production drops by almost 50% at Zimbabwe gold mine

Harare--May 31--Production at Eureka gold mine in Zimbabwe has dropped to almost 50% of the planned amount because of the country's economic crisis. Owned by Delta Gold of Australia, the mine is yielding about 2,500 ounces a month. (Story .19044)

Black Blade: The dictator Mugabe put up the remainder of the countries gold reserves as collateral for a $120 million loan. Well, now less is coming outta the ground. Send in the clowns (squatters).

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

Release Date: May 31, 2000

Rates for Tuesday, May 30, 2000

Federal funds 6.71

Treasury constant maturities:
3-month 5.87
10-year 6.38
20-year 6.50
30-year 6.09

upside-down spread FF vs long bond = (.62%)

Good morning Sir. Your messg. 31618 peaked my interest in that you view the "flattery" exhibited at this forum with "a fair amount of disgust". Interesting. I have hung around here for nearly three years now and this is the first criticism of the gentlemanly conduct required to post that I can recall. I don't stick my head out of the trenches all that often, but when a point is raised that seems contradictory to my understanding of the norm here, I just get curious. My question, what do you suggest as an alternative?
I can't offer you much in the way of answers to your questions other than a "street level" observation of the Arab view of paper gold. I lived and worked in Iran, Saudi, and Kuwait through the 70's and 80's, and I can assure you that "if it is not yellow, it is not gold Sadiqe"
Regards.
No49

This is a first! I have been called every name in the book [some of them justified], and been accused of nearly everything [sometimes, guilty as charged]; BUT I have never been criticized for being polite.

Thank you very, very much for the compliment. I simply hope that I can live up to it.

I guess I am going to have to claim total defeat.

You obviously have an absolute wealth of information at your fingertips. Do you have a source of information on the prices of milk, eggs, butter, etc. over time?

I am ashamed to say that I cannot raise that information, anywhere. It is most surely the operator of my computer that is at fault, but I give up and must ask for help.

Thanks, and at the risk of being polite, thanks for sharing your vast knowledge and understanding.

jctex

I wanted to point out that item 5 in that post was corrected to "debt money". (Thanks again Elwood for catching it)

Aragorn, the main picture I am putting up is that of debt money being managed into mimicking a system of commodity money standards without a central bank is the goal to which responsible fiat money should aim. However, I see no reason for the central banks and the government to seek this policy because there is no profit in it - the main problem with pursuit of a healthy monetary system is that it is fair. A fair system does not provide government nor banking with the requisite advantages over individuals and less well connected businesses.

Without a benefit from escape from market forces that central banks and currencies provide (temporarilly at least) there is no justification for the expenses of managing a debt money/currency - both on the government side and the banking side.

There is a tendency to move towards the deflationary side or the inflationary side. It is only through these deviations that the decision makers can obtain advantage. Even a mild deviation will accumulate to a large overhang that will eventually collapse.

There was a thought put into circulation in the 30s and 40s that one could run an inflationary condition within one country - issuing a reserve currency - and a deflationary condition in the rest of the world - in terms of the inflationary reserve currency. This was the Bretton Woods system and its successor systems. The deflationary condition maintained abroad in dollars is matched with an inflationary condition maintained at home. The central banks of the rest of the world take the excess dollars off the markets in order to maintain the deflationary condition.

When supply is too tight and deflation starts destroying the debt base of the dollar, the Federal reserve allows dollar inflation to occur within the US and seep out through trade and investment flows and thus stabilize the foreign dollar debt base. The IMF is the emergency money arm used to maintain the foreign debt. The World Bank and
the regional development banks are charged with creation of unserviceable foreign debt.

Promoting the idea that a central bank and a national or international currency would be run without intentional distortion is to close one's eyes to the reality of the cause of their existence.

The central bank does not have a good idea of what that rate is, it just raises and lowers interest rates till the shift occurs.

Second, the threshold interest rate is more of a median than a particular exact rate that all are geared to. It is a range of rates for different business fields and regions, but it is quite narrow.

In all businesses that are not protected by copyright, patent, or government enforced monopoly there is a tendency for capital investment to flow to where return on assets is greatest. The capital investments turn into further supply that lowers margins and thus lowers the return on assets. This tends to pull the sectors of high return back to the median and the average over a surprisingly short time.

The one exception to this is non-renewable natural resources where most prospective properties are known and a shortage develops in the characteristic boom-bust cycle of this sector. Even though it might last for 10-20 years, the above market return in this sector is temporary and is limited to ownership of prospective and producing properties in the initial stages of shortage. After that, the high probability excess returns are no longer available to anyone entering the field.

The objection you raised is that the central bank is not quite that good in determining that rate, though it is published by all publicly traded corporations in their reports. The central bank will save itself the trouble of going through a definitive research and just raise and lower interest rates around this figure using a "trial and error" strategy in an attempt to reverse the expansionary or deflationary trend. Because it does so, the central bank is the main source of boom and bust. Its job is to avoid letting market forces limit the expansion of credit, and then attempt to artificially restrain the markets from further expansion into price inflation after the monetary expansion has allready occurred, but without destroying the economy.

Needless to say, I don't expect the Fed's challange to be met with success.

A pair of dust devils entered the Desert Rose on either side of Jake Morningstar adding their filtch of sediment to the dirt floor. The blistering heat of that noonday sun could parch the spit from a llama before it hits the ground. The slam of the swinging doors shattered the dark stillness within. It took awhile for Jake's eye to make out the dim outline of the bar and dusty bottles on shelves behind it. A shabby pianoforte adorned the wall below the ballistrade where a row of doors held the promise of rest in a real bed and pleasures only so far imagined. He lifted the patch from his other distinctly mutilated eye as if it would help penetrate the darkness. A frightened gasp at his left startled him. His quick wit, honed to a but a half heartbeat from years of treading upon basking rattlesnakes, stopped him from drawing down death on the distinctly feminine sound. Jake made a mental note that if he expected trouble, noon was not a particularly good time to make an entry here.

Now he could make out the lusty cups supporting the ample breasts of Mandy LeClair lounging seductively by a table near the doors. His gaze slowly drifted up to the casually scarred but nonetheless attractive face above. "You'll have ta check those guns with the bartender before I kin service ya" Mandy said in a playful tone. This town at the edge of tomorrow had only a few rules enforced by Sheriff Green. These rules evolved over a steady decline of newcomers of the fairer sex due to a reputation of rather curtailed lifespan of any man who might accompany them. No guns to be carried in the bank, the bar or at town meetings. The bar and town meetings Jake could understand. But how is a man to walk out of a bank with his savings for a night on the town without running the risk of being robbed defenseless at gunpoint as soon as he exited. Suddenly the custom of the Desert Rose to only accept bank credit chits made a whole lot of sense. He could not escape the uneasy feeling that the banker, Mortimer J. Foresyth also owned the Desert Rose. His tour of the bank vault with Mortimer, and the two armed guards at the door with double barreled 8 ga. scatterguns had convinced him that his two sacks of gold would be safe there for the time being. Mandy's admonition gave him the distinct impression that there was probably not anyone hidden in the corner with a sixgun drawn waiting to blow him away. No one that knew what a bar was for anyway. An if he didn't it was probably a cowardly scoundrel in any case an that don't amount to sh*t when dealing with real men at play. He began to feel more relaxed immediately. "Why this place is downright homey", Jake admitted. "I think I'm gonna like it here!"

I enjoyed a conversation I had this morning with a super bull who has long maintained he plays with "house money."

A devout high tech investor who first discovered the internet stocks some three years ago and has done quite well whilst I did the exact opposite and got creamed.

Moreover he has never had any fear about the market or Y2k or any "doom and gloom" spin. Does not care for gold too and is certain that computerization spells the end of the metal.

Well, looks like his portfolio has been badly hurt this past quarter and he no longer plays with house money only. He has now dipped nicely into his own savings to ride the Nasdaq back above 5000. The house money is lost but he is quite certain it will all be regained by the end of the year. He urges me to join the Nasdaq bull, Part II, but I think I will still pass.

Classic gambler syndrome, staying at the tables too long, the hallmark of a dying bull market.

What a huge economic disaster this miserable Democrat administration is creating for America!

Another 20 -40 billion of IPO lockup stock ready to be unleashed on the market starting next week.

Have you placed your short positions yet?

Thanks

F*

ORO, you said:
"...There is a tendency to move towards the deflationary side or the inflationary side. It is only through these deviations that the decision makers can obtain advantage."

It seems to me that with the advent of instantaneous money movement on a global scale, the advantage given the central planners disappears. That advantage only existed due to the lag time allowed the central banks by the slowness of the original system and the movement of money within it.

They were previously able to foresee the advance of either an inflationary or deflationary environment and react before the overhangs developed.

Now we see "virtual" overhangs that present a series of red herrings to the decision makers from which they are to react and direct the course of currency manipulation to the advantage of those who create the illusion of prosperity. Is it any wonder that Greenspan can no longer define what a currency unit is?

The financial markets operate much more quickly than the rest of the economy.

The advantages that are lost in the financial markets in this era are still there in the real economy where stuff has to be built, made and installed, where even an internet company needs time to put things together (a few months, most of which are spent on the business plan and on finding financing). People need training and experience. All of this means that advantages that can be obtained are in the allocation of the real stuff of the real economy. Furthermore, the swings of the financial markets are part of the opportunities that central banks and their larger members and associated clients are taking advantage of - when they manage to turn markets their way.

The only limits on them are those imposed by their own lack of solidarity, credulity of the public, and by the real economy - of which gold and silver are a part.

"USAGold: gold and silver spots, plus gold lease rate,
Comex stocks, and a cool daily market report"

I think there is a new kind connection now.
I looked at the public debt website and noticed a pretty big drop, something like 20 billion or so in the last 5 days. The gov is buying back a lot of bonds, which puts a lot of money out, which in turn comes into the stock market.
possible?

I suspect that the action is related to two possible issues:

1. I think (but could not ascertain) that there is a dollar value agreement with the foreign central banks where there is a minimum price at which the US - either by Fed or by Treas will buy back bonds.

2. Since US bonds are heavilly owned by foreigners, it is important to keep treasury interest rates as low as possible in order to prevent further escalation of foreign dollar income flow through this instrument. Of course, this will push holders to sell treasuries and buy the much higher yielding mortgage and corporate bonds.


In context of a theory I have been working on [that takes the possibility of gold - particularly as gold banking - being in the center of the currency universe according to a modified version of Greenspan's gold bond method for returning to a gold standard] the interest rate on the long bond goes into the banker's pool that keeps gold prices in check. Part of it is a given when considering that the treasury rates go into the Black Scholes models for pricing derivatives as it is the "risk free interest rate". However, the core of the supposed gold derivative in the center of the currency universe is that the POG in any currency is a falling function of (1) the lowest interbank interest rate (now Japanese) dictates the absolute POG in that currency and in dollars. (2) the country with the lowest rates gets the lowest gold price (so that it would be getting an opportunity to buy gold at a better price in its currency) and in return it becomes the source of borrowing to support the dollar by "investment flows" into the US, and thereby provide goods and services to the US markets. (3) conversion of dollars into gold is dependent on the agreed upon balances of US treasuries held in the banking system of the country with the favorable price.

The problem this causes (within this theory at least) is that if US long bond interest rates rise then the amount of gold (paper form?) that must be delivered to the bond holders when they convert interest payments into gold will increase. If there is competition within the gold market for this strream of dollar to gold conversions, then the POG will go outside the agreement's tolerance limits, given a tight market and the impending break of parity between gold accounts/derivatives and physical gold.

I will add some details for this theory later, in the post for TG. TG - the computer I was composing that post on went on the fritz, so I can't complete it yet.

A friend of mine ran across this on a newsgroup today.

============================================================
The True Nature of Government
============================================================

I think it is very important that we teach our children about the true
nature of government. Now, at last, there is a way to give your children a
basic civics course right in your own home!

In my own experience as a father, I have discovered several simple devices
that can illustrate to a child's mind the principles on which the modern
state deals with its citizens.

You may find them helpful too.

For example, I used to play the simple card game WAR with my son. After a
while, when he thoroughly understood that the higher ranking cards beat the
lower ranking ones, I created a new game I called GOVERNMENT. In this game,
I was Government, and I won every trick, regardless of who had the better
card. My boy soon lost interest in my new game, but I like to think it
taught him a valuable lesson for later in life.

When your child is a little older, you can teach him about our tax system in
a way that is easy to grasp and will allow him to understand the benefits.
Offer him, say, $10 to mow the lawn. When he has mowed it and asks to be
paid, withhold $5 and explain that this is income tax. Give $1 of this to
his younger brother, who has done nothing to deserve it, and tell him that
this is "fair" because the younger brother 'needs money too'. Also, explain
that you need the other $4 yourself to cover the administrative costs of
dividing the money and for various other things you need.

Make him place his $5 in a savings account over which you have authority.
Explain that if he is ever naughty, you will remove the money from the
account without asking him. Also explain how you will be taking most of the
interest he earns on that money, without his permission. Mention that if he
tries to hide the money, this, in itself, will be evidence of wrongdoing and
will result in you automatically taking the money from him.

Conduct random searches of his room in the small hours of the morning. Burst
in unannounced. Go through all of his drawers and pockets. If he questions
this, tell him you are acting on a tipoff from a mate of his who casually
mentioned that you had both earned a bit of spare cash last week. If you
find it, confiscate all of that money and also take his stereo and
television. Tell him you are selling these and keeping the money to
compensate you for having to make the raid. Also lock him in his room for a
month as further punishment.

When he cries at the injustice of this, tell him he is being "selfish" and
"greedy" and only interested in looking after his own happiness. Explain
that he should learn to sacrifice his own happiness for other people and
that since he cannot be relied upon or trusted to do this voluntarily, you
will use force to ensure he complies. Later in life he will thank you.

Make as many rules as possible. Leave the reasons for them obscure. Enforce
them arbitrarily. Accuse your child of breaking rules you have never told
him about and carefully explain that ignorance of your rules is not an
excuse for breaking them. Keep him anxious that he may be violating commands
you haven't yet issued. Instill in him the feeling that rules are utterly
irrational. This will prepare him for living under a democratic government.

He is too young to understand the benefits of democracy, so explain this
wonderful system as follows:

You, your wife and his brother get together and vote that your son should
have all privileges removed, be caned, and confined to his room for a week.
If he protests that you are violating his rights, patiently explain his
error and tell him that the majority have voted for this punishment and
nothing matters except the will of the majority. When your child has matured
sufficiently to understand how the judicial system works, set a bedtime for
him of, say, 10 p.m. and then send him to bed at 9 p.m. When he tearfully
accuses you of breaking the rules, explain that you made the rules and you
can interpret them in any way that seems appropriate to you, according to
changing conditions.

Promise often to take him to the movies or the zoo, and then, at the
appointed hour, recline in an easy chair with a newspaper and tell him you
have changed your plans. When he screams, "but you promised!", explain to
him that it was a campaign promise and hence meaningless. Every now and
then, without warning, slap your child. Then explain that this is
self-defence. Tell him that you must be vigilant at all times to stop any
potential enemy before he gets big enough to hurt you. This, too, your child
will appreciate, not right at that moment, maybe, but later in life.

If he finds this hard to accept, you can further illustrate the point as
follows. Take him on a trip across town with you, to a strange neighborhood.
Walk into any random house you choose and start sorting out their domestic
problems, using violence if that is what is required.

Make sure you use overwhelming force to crush the family into submission -
this avoids a protracted visit and becoming involed for long periods of
time. Explain to your son that only a coward stands idly by whilst injustice
is happening across town. Tell him we are all brothers and problems left to
fester will eventually spill over into your neighborhood. Use some of the $5
you took from your son as bus fare and to purchase a baseball bat.

Drink a bottle of whisky and then lecture him on the evils of smoking dope.
If he points out your hypocrisy remind him that the majority of people drink
and that, as already explained, the needs of the majority are the only moral
standard.

Break up any meeting between him and more than three of his mates as being
an 'unlawful gathering'.

If he strokes the cat without the cat giving its express perission, slap him
hard for feline harassment.

Mark one designated spot in the yard where he can leave his bike. If he
leaves it anywhere else, padlock it and demand $50 to reease it. If he
offends more than three times, confiscate the bike, sell it, and keep the
money.

Install a CCTV system in your son's bedroom and also record all his
telephone conversations. If he protests, accuse him of having something to
hide. Explain that only criminals seek privacy and that good, dutiful
children relinquish their privacy in exchange for the advantages which
protective parenthood offers. Remind him of the boy across town who was
caught smoking dope in his bedroom by just such a CCTV system, and explain
that this case justifies installing CCTV in all teenagers' bedrooms.

Lie to your child constantly. Teach him that words mean nothing - or rather
that the meanings of words are continually "evolving", and may be tomorrow
the opposite of what they are today.

Have a word with his teachers at school and ask them to share any merit
marks your son achieves, with any ethnic minority students who did not get
any merit marks. If he questions this policy, explain that long ago we
abused the ancestors of these people, and so it is only fair that he shares
the merits around to compensate their descendants.

This is also probably a good time to tell him that his energy, talent and
enthusiasm will not secure him a job if the quota of such 'abused' people
has not yet been filled. Tell him talent stands for nothing - it is fairness
and sharing which are important. Remind him that his primary duty is the
happiness and welfare of people he does not know, and will never meet.

Ban cutlery from your home and make your son eat with his fingers. If he
asks why, remind him of the youth who stabbed a cat to death last week with
a fork. Explain that if just one cat is saved by the banning of cutlery,
then this prohibition will be worthwhile. If he protests, question him
closely about why he is intending to kill innocent cats, or accuse him of
being a cat hater.

Issue him with a pass card which he must show before he can enter the house.
Stand guard at the front door. When he comes home, politely but firmly take
him into the spare room and question him about his movements. Ask him how
much cash he has on his person. If in excess of $50, confiscate the lot as
it exceeds the house rule for maximum cash allowed. Then search his rucksack
and pockets. To keep him guessing, do the occasional strip search. If he
protests, detain him for longer and make the search more thorough. If he
gets really angry at this, hold him in a locked room until he misses his
next outing or party.

If these methods sound harsh, I am only being cruel to be kind. I think it
is important for children to understand the nature of the society in which
we live.

I hope you found that amusing. I did when I wrote it, but on second reading,
I feel a bit sick. It makes the point too plainly to avoid.

http://www.usagold.com/onlinestore/special.htmlIn a shorter span of time than Michael had expected, our entire cache of these uncirculated German 20 mark gold coins have been spoken for and are now on their way to some very futunate, and fortune-minded people. If this is your first exposure to these coins, I am sure you will be well pleased when they arrive at your door...from my personal experience they make very nice additions to your personal cache of gold sovereigns and francs and whatnot. Congratulations to those of you who staked this fruitful claim! And to everyone who missed this offer, the rumor mill has it that Michael is in talks to secure a golden cache of pre-33's from Argentina and possibly Uruguay. Now this I gotta see!

Ho hum... there's nothing for it... I think I'll have to go
and read The Crash of '79 by Paul E. Erdman.

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

Release Date: June 1, 2000

Rates for Wednesday, May 31, 2000

Federal funds 6.83

Treasury constant maturities:
3-month 5.63
10-year 6.29
20-year 6.42
30-year 6.02

upside-down spread FF vs long bond = (.81%)

The post is just grand.

Love it.

Haven't you heard the latest? Nobody's buying paper anymore. Well, that's the gist of things. With their eye on the COMEX markets, Bridge News today quotes Bill O'Neill, analyst at Merrill Lynch, saying of the markets: "It's dead, I mean really, really dead." Estimated futures volume today was only 15,000 contracts, while total trade volume for yesterday was just 15,839.

Knowing that these COMEX contract-trading markets serve as the means for price discovery for the real metal (with the proper mathematical adjustments in price to account for the interest rates on both the currency and the gold,) you've got to admit that it is not that difficult these days for price-minded entities with determined shorting interests to keep the COMEX prices at bay or to drive them lower. That is, until lack of real metal fails to satisfy the real global demand at these prices. (Be sure to get yours while the getting is good.)

Following yesterday's delivery notices for exchange of futures postitions with physical metal on 3,579 of the remaining June contracts, open interest in June fell by 3,850 in total trade, leaving 3,010 positions at the end of the day. Meanwhile, there was nothing to be done with August, which declined by 353 contracts to an open interest level of 88,419.

Delivery notices this morning called for metallic conversion of another 1,015 of these remaining June futures postions.

July crude futures rose over 3 percent, closing $1.13 higher at $30.14 per barrel following unexpected declines in U.S. crude stockpiles as reported by both the American Petroleum Institute and the U.S. Dept. of Energy.

I've now lost $20,000 dollars since coming to this forum more than a year and a half ago, because of listening to certain people telling all the World that Gold is going to $30,000/oz??? In hind sight i can't believe i was stupid enough to believe it! Is anyone else still believing in this Fairy Tale! They sure talk a good story and are very intelligent and articulate, BUT where is the proof i ask? how do we really know? Maybe these people are "Gold pushers"
because they know Gold is heading lower in a deflationary spiral of some kind? I have noy seen any Gold shortages at all nor has any been reported?
I agree the paper market might not be totally fair but it works and people still get the GOLD. Also the Middle East are nothing but cowards and i have my doubts about Europe as well. O.K sure maybe GOLD will be $5,000 dollars per oz in 20 years,but how many are still going to be here?

I bought in at $290.00/oz and today it's $273/oz i can't even sell to break even!!!!!!!!!!!!!!!! More lost money.


Gold is going to be a VEEEERRRRYYYYYY LONGGGG Hold.
Sorry i,am selling and buying a house before they go up "another"??? 8% and gold goes down again!

P.S Long live the STOCK MARKET BULL it's what the people want as Gold owners are nothing but a bunch of FREAKS!!!!!!!!

Thanks for the STRONGEST BUY signal I have seen in a while.

They gona lose it all!

Thanks again for your insite!
Tom

I sympathize with your dilema. It is a chore to get the investment Porridge, just right.

My problem is that I have been buying gold since 74, and can never get myself to sell. Funny thing, all I want is more. It's gold fever and I sleep real good ever since I contracted it.

Hope your afflictions all turn out as kind to you.

http://www.usagold.com/goldenchalkboard/gc_turkey.html"Long live the STOCK MARKET BULL it's what the people want as Gold owners are nothing but a bunch of FREAKS!!"

Call me the leading "freak", then. But truthfully, I do not much care whether the numbers posted as the various stock market indices are getting larger or smaller.

You also suggested "i can't even sell to break even!!!!! More lost money."

Have your scales malfunctioned? Did your gold evaporate? How did you lose money? What you've "lost" is a currency position should you now choose to unwind the original exchange. If you find that you are in dire straights over your savings in the form of metal instead of paper, it would seem that you overcommitted, leaving yourself with precious little "walking around money." Perhaps a more well-reasoned assessment of the amount of funds you wanted to take off the table as tangible asset savings would have put you in a better frame of mind right now. What would be your reaction had you borrowed money for a house only to see the real-estate prices continue to fall. Would you call home owners "FREAKS" and cry over your lost currency position? Or would you live in your house for the nice protection it offers against rainy days?

Click the link above and carefully consider everything found there.

Sir R Powell etal

For my part this looks like the real thing. Boy oh boy is it ever difficult to get this information transferred from the treasury web site to a manipulatable spread sheet and then post it to our wonderful forum in a format which can be read with eyes uncrossed. The last time the Fed made a move and sustained it in this manner was in 1989 and the result was a persistent recession which in turn resulted in the unseating of George H. Bush. I will try to do some comparisons between the current period and 1989 to see just how alike or different the two Fed squeezes are. This is real information. No speculation here. There are tons and tons of numbers to be looked at. We have time. I believe that at least a year will pass before we will begin to see the real economy begin to tank as a result of the current Fed squeeze. I think we may be looking at debt liquidation by the Fed. Those who have debt will lose thier collateral and it will not be pretty.

HBM

30 yr FF FF vs
Bond rate 30 yr
01/03/2000 6.61 5.43 1.18
01/04/2000 6.53 5.38 1.15
01/05/2000 6.64 5.41 1.23
01/06/2000 6.58 5.54 1.04
01/07/2000 6.55 5.61 0.94
01/10/2000 6.59 5.74 0.85
01/11/2000 6.68 5.63 1.05
01/12/2000 6.71 5.59 1.12
01/13/2000 6.65 5.58 1.07
01/14/2000 6.69 5.56 1.13
01/18/2000 6.75 5.83 0.92
01/19/2000 6.72 5.47 1.25
01/20/2000 6.74 5.44 1.30
01/21/2000 6.71 5.36 1.35
01/24/2000 6.65 5.53 1.12
01/25/2000 6.64 5.46 1.18
01/26/2000 6.60 5.52 1.08
01/27/2000 6.53 5.61 0.92
01/28/2000 6.45 5.58 0.87
01/31/2000 6.49 5.87 0.62
02/01/2000 6.43 5.79 0.64
02/02/2000 6.32 5.64 0.68
02/03/2000 6.17 5.71 0.46
02/04/2000 6.23 5.70 0.53
02/07/2000 6.34 5.76 0.58
02/08/2000 6.22 5.67 0.55
02/09/2000 6.32 5.76 0.56
02/10/2000 6.35 5.79 0.56
02/11/2000 6.29 5.71 0.58
02/14/2000 6.22 5.79 0.43
02/15/2000 6.26 5.85 0.41
02/16/2000 6.27 5.67 0.60
02/17/2000 6.23 5.66 0.57
02/18/2000 6.16 5.70 0.46
02/22/2000 6.08 5.81 0.27
02/23/2000 6.14 5.77 0.37
02/24/2000 6.13 5.76 0.37
02/25/2000 6.17 5.73 0.44
02/28/2000 6.16 5.81 0.35
02/29/2000 6.15 5.85 0.30
03/01/2000 6.16 5.78 0.38
03/02/2000 6.15 5.76 0.39
03/03/2000 6.13 5.72 0.41
03/06/2000 6.16 5.73 0.43
03/07/2000 6.16 5.68 0.48
03/08/2000 6.17 5.77 0.40
03/09/2000 6.16 5.79 0.37
03/10/2000 6.19 5.75 0.44
03/13/2000 6.17 5.81 0.36
03/14/2000 6.11 5.80 0.31
03/15/2000 6.07 5.90 0.17
03/16/2000 6.05 5.77 0.28
03/17/2000 6.01 5.76 0.25
03/20/2000 5.99 5.82 0.17
03/21/2000 5.97 5.81 0.16
03/22/2000 5.97 6.03 (0.06)
03/23/2000 5.92 6.04 (0.12)
03/24/2000 6.00 5.98 0.02
03/27/2000 5.99 6.07 (0.08)
03/28/2000 5.98 6.02 (0.04)
03/29/2000 5.99 5.98 0.01
03/30/2000 5.89 6.11 (0.22)
03/31/2000 5.84 6.17 (0.33)
04/03/2000 5.84 6.15 (0.31)
04/04/2000 5.77 5.98 (0.21)
04/05/2000 5.81 6.08 (0.27)
04/06/2000 5.80 6.05 (0.25)
04/07/2000 5.71 5.95 (0.24)
04/10/2000 5.69 6.05 (0.36)
04/11/2000 5.77 5.97 (0.20)
04/12/2000 5.84 5.93 (0.09)
04/13/2000 5.81 5.97 (0.16)
04/14/2000 5.79 6.08 (0.29)
04/17/2000 5.92 6.18 (0.26)
04/18/2000 5.92 5.93 (0.01)
04/19/2000 5.85 5.93 (0.08)
04/20/2000 5.83 6.05 (0.22)
04/24/2000 5.86 5.90 (0.04)
04/25/2000 5.95 5.99 (0.04)
04/26/2000 5.95 6.00 (0.05)
04/27/2000 6.00 6.00 0.00
04/28/2000 5.97 6.06 (0.09)
05/01/2000 5.98 6.17 (0.19)
05/02/2000 6.03 6.05 (0.02)
05/03/2000 6.11 6.05 0.06
05/04/2000 6.19 6.05 0.14
05/05/2000 6.20 5.94 0.26
05/08/2000 6.25 6.01 0.24
05/09/2000 6.22 5.92 0.30
05/10/2000 6.18 5.95 0.23
05/11/2000 6.16 6.05 0.11
05/12/2000 6.20 6.11 0.09
05/15/2000 6.17 6.34 (0.17)
05/16/2000 6.12 6.13 (0.01)
05/17/2000 6.18 6.25 (0.07)
05/18/2000 6.24 6.49 (0.25)
05/19/2000 6.22 6.51 (0.29)
05/22/2000 6.18 6.52 (0.34)
05/23/2000 6.17 6.47 (0.30)
05/24/2000 6.19 6.48 (0.29)
05/25/2000 6.11 6.56 (0.45)
05/26/2000 6.06 6.40 (0.34)
05/30/2000 6.09 6.71 (0.62)
05/31/2000 6.02 6.83 (0.81)

GT!!!

Take two tolas and call us in the morning.....

gf

Spread only

Hope this is easier to read. I cannot tell how it will look on the forum until I post it.

Yours truly

low-thechie HBM

01/03/2000 1.18
01/04/2000 1.15
01/05/2000 1.23
01/06/2000 1.04
01/07/2000 0.94
01/10/2000 0.85
01/11/2000 1.05
01/12/2000 1.12
01/13/2000 1.07
01/14/2000 1.13
01/17/2000 0.00
01/18/2000 0.92
01/19/2000 1.25
01/20/2000 1.30
01/21/2000 1.35
01/24/2000 1.12
01/25/2000 1.18
01/26/2000 1.08
01/27/2000 0.92
01/28/2000 0.87
01/31/2000 0.62
02/01/2000 0.64
02/02/2000 0.68
02/03/2000 0.46
02/04/2000 0.53
02/07/2000 0.58
02/08/2000 0.55
02/09/2000 0.56
02/10/2000 0.56
02/11/2000 0.58
02/14/2000 0.43
02/15/2000 0.41
02/16/2000 0.60
02/17/2000 0.57
02/18/2000 0.46
02/21/2000 0.00
02/22/2000 0.27
02/23/2000 0.37
02/24/2000 0.37
02/25/2000 0.44
02/28/2000 0.35
02/29/2000 0.30
03/01/2000 0.38
03/02/2000 0.39
03/03/2000 0.41
03/06/2000 0.43
03/07/2000 0.48
03/08/2000 0.40
03/09/2000 0.37
03/10/2000 0.44
03/13/2000 0.36
03/14/2000 0.31
03/15/2000 0.17
03/16/2000 0.28
03/17/2000 0.25
03/20/2000 0.17
03/21/2000 0.16
03/22/2000 (0.06)
03/23/2000 (0.12)
03/24/2000 0.02
03/27/2000 (0.08)
03/28/2000 (0.04)
03/29/2000 0.01
03/30/2000 (0.22)
03/31/2000 (0.33)
04/03/2000 (0.31)
04/04/2000 (0.21)
04/05/2000 (0.27)
04/06/2000 (0.25)
04/07/2000 (0.24)
04/10/2000 (0.36)
04/11/2000 (0.20)
04/12/2000 (0.09)
04/13/2000 (0.16)
04/14/2000 (0.29)
04/17/2000 (0.26)
04/18/2000 (0.01)
04/19/2000 (0.08)
04/20/2000 (0.22)
04/21/2000 0.00
04/24/2000 (0.04)
04/25/2000 (0.04)
04/26/2000 (0.05)
04/27/2000 0.00
04/28/2000 (0.09)
05/01/2000 (0.19)
05/02/2000 (0.02)
05/03/2000 0.06
05/04/2000 0.14
05/05/2000 0.26
05/08/2000 0.24
05/09/2000 0.30
05/10/2000 0.23
05/11/2000 0.11
05/12/2000 0.09
05/15/2000 (0.17)
05/16/2000 (0.01)
05/17/2000 (0.07)
05/18/2000 (0.25)
05/19/2000 (0.29)
05/22/2000 (0.34)
05/23/2000 (0.30)
05/24/2000 (0.29)
05/25/2000 (0.45)
05/26/2000 (0.34)
05/29/2000 0.00
05/30/2000 (0.62)
05/31/2000 (0.81)

and Jinx44 # 31466Rugen: Today I read your post.

Could you answer a few questions about it I wonder ?

Throughout the post there are numbers, as if to suggest points of discussion or paragraph markers or such.

Q1 - What is the purpose of the numbering ?

Q2 - Is the content of the post your own statement or does it come from some document / book ?

Q3 - If it comes from some document / book, Then would you please indicate which and also where such document / book may be acquired ?



Jinx44 -

Please identify the refernce "1RLI, 44Para." of you post of the same date.

There will be No-one short at the top.

There will be NO-one long at the bottom.

There is too much bullish sentiment in gold, now and for the past two years, to indicate that the TIMING is absolutely correct to be long gold.

Gold is not for profit ( IMO )
Gold is for keeping want you think is yours, if that is possible

and I am not convinced it is possible .


ss.

SIR GT:

If you get enough for your physical to buy the house debt-free you will be just fine. Otherwise I fear you will lose both your gold and your home. 20 more years is a long time and if I even thought that were possible I would do as you are doing. It took guts to do what you did in going physical. Of course you would not have made a dime if gold went up unless you sold. Neither did you lose a thing in this case until you sold. It also takes guts to take your licks and change horses in mid-stream. I salute you. You have guts. I wish you the best. Somehow I get this feeling that you will fare well even I am pulling for gold to rise. I'm looking at less than 10 years. Otherwise I would have sold before you. Nay, I would have never have bought physical if I had not been committed to hold for 5 to 15 years. If nothing happens in 10 years from now I will probably keep my physical and buy other hard assets as I go with cash just as I bought physical with cash from earnings in excess of expenditures.

HBM

Totalamateur:
It's often frustrating to ask questions or opinions of others and get no response. I know, I've been the ONLY poster on a cotton market forum for going on two weeks. (It's www. cottontrading.com for anyone interested).
However, I'm not convinced that the gold paper trading markets are going to cease to function so I can't help much with your questions. Those among us with strong opinions have discussed your questions at length and I believe, with study, your answers are in the archives and the hall of fame sections of this forum. Perhaps others can be more specific about whose writings to look for and when.
HBM, good to hear from you again. The inverted curve usually portends danger well in advance, does it not? But it has been persistent, like the pain in my old bones after a particularly hard day. Fortunately, I've learned to work a little smarter and not quite so hard.
To all, I will no longer be swayed by flattery, especially from freaks. GO GATA

I feel your pain, but don't complain.....GT..Although we've never conversed here I've read your many posts and sensed your disgust with Gold markets......Let me share from the "Other" side of the equation....
In 94/95 I invested $350 K (yes 1000's) of hard won stock market winnings from 4 yrs of involvement in the Lac De Gras Diamond play. Gold was around $455.00 when I began the first season and declined to $350. by the next and you know the rest. Now I have 24 miles of Placer Gold Creeks, give or take, lots of equipment and infrastructure and "both" my wife and myself work at other jobs to stay alive. Should I sell out at rock bottom or hang in? Decisions like this are very hard. I figure my choices were very right to this day, but as with all markets (you know this better than most) timing is the key. So what to do about it? Well I found lemetropole cafe, Gold-Eagle and USA Gold, GoldWorldNet & Kitco and along came GATA. Major moral support came from all to hang in there and wait out the carnage. The amount of $$$ you've lost seems paltry compared to that of my family and they still believe in Dad and his vision of a family run Gold Mining operation. Imagine a 17 yr old Grad saying "Dad don't worry about an expensive Grad present cause I know you need all your cash for start up this summer"......Gold Bugs and Gold Believers aren't freaks, they're FAMILY....and that's the Golden Truth. I truly hope you also hang in there......Ken (YGM)

http://www.lemetropolecafe.comLe Metropole Members,


The "Gold Derivative Banking Crisis" document that
the GATA delegation presented to one of the most
powerful politicians in Washington, Dr. John Silvia,
Chief Economist of the Senate Banking Committee,
Alabama Congressman Spencer Bachus (Chairman of
the Subcommittee on Domestic and International
Monetary Policy) including six of his staff members
and to every Congressional member of the House and
Senate banking committees is now available.

It is in PDF format at the http://www.GATA.org
web site:

In addition to the original document, two recent essays
on gold derivatives by Reg Howe have been added. These
essays were also sent to the appropriate individuals
in Washington. That now includes the Subcommittee on
Technology, Terrorism and Government Information.
This Subcommittee reports to the Select Committee
on Intelligence and requested all our documents
related to the manipulation of the gold market.

The "Gold Derivative Banking Crisis" document is
lengthy, comprehensive and somewhat technical at
times. It is the nature of the beast. However, there
is no more bullish report anywhere on gold than this
one. The Gold Anti-Trust Action Committee hopes
that the internet will send it to money managers,
the press, and governments around the world.

Various forces are repressing the true equilibrium
price of gold by hundreds of dollars. This cabal of
bullion banks, with the probable assistance of the
ESF or New York Fed, is being found out. As this
information, that we are presenting to you, is
understood by investors around the world, they will
start buying PHYSICAL GOLD in earnest.

The shorts are trapped. There will be a buying panic
when they try and cover those shorts.

It is only a question of time - weeks, months, a year.

One of the most favorable risk/reward trades in history
(buying gold, now) is staring you right in the
face. This document explains WHY that is so.

The Gold Anti-Trust Action Committee needs
contributions from gold companies and individuals
from all over to get this message out there. For
example, Reg Howe, Frank Veneroso and I are headed
for the FT Paris Gold Conference on June 26, 27. That
is not cheap. We need your support. Contributions in
all amounts are welcome. Please give us your
consideration if you like what you read in the
"Gold Derivative Banking Crisis" document.

Along that line, most of you know that the theme
of www.LeMetropoleCafe.com is the French cafes of
the early to mid 20th century; Le Moulin Rouge
(Pigalle), Les Deux Magots (St. Germain), Le Flore
(St. Germain), La Coupole (Montparnasse) and Brasserie
Lipp (St. Germain). Paris was a place where artists, intellectual figures, public personalities, etc.,
all met to engage, share, and learn.

The popular drink at that time was Absinthe, an
emerald green hallucinogenic drink, which was ultimately
banned worldwide. It was believed to stimulate
creativity and was long associated with intellectuals
and artists such as Van Gogh, Toulouse-Lautrec,
Hemingway, Picasso and others.

In what I consider to be an incredible irony, The
Arts District Gallery just issued this press release
about GATA artist, Alain Despert:

Arts District Gallery
Fairmount Hotel, Dallas Texas
June 1, 2000

FOR IMMEDIATE RELEASE

Alain Despert has been commissioned by the legendary
Absolut vodka marketing genius Michel Roux, Chairman
and CEO of Crillon Importers Ltd. to create a painting
for Roux's latest endeavor "Absente."

Despert's image of "The Green Fairy" is scheduled to
appear in national magazines as part of the Absente
advertising campaign this Fall.

Absente is a dazzling emerald green spirit distilled
in the tradition of Absinthe, a drink long associated
with artists of the late 19th century caf� society.

Michel Roux has distinguished himself as an
exceptional marketer, philanthropist and supporter
of the arts. Importing and marketing Absente is a
perfect fit for Mr. Roux.

Alain Despert and Michel Roux were first associated in
1990 when Roux selected Despert's work for the renowned
"Absolut Artists of the Nineties" advertising campaign
which featured leading edge artists of the decade.
Despert, originally from France, relocated his studio
base to Dallas last year. His paintings are featured
at the Arts District Gallery located at the Fairmount
Hotel in Dallas.

Contact Karen Brown: adgdallas@aol.com
phone: 214 220 3266
End.

Early last year, I approached Alain to do a GATA
painting, explaining to him at the time what the Gold
Anti-Trust Action Committee had discovered about what
was really going on in the gold market. I said nothing
about the kind of painting he should do or what GATA
wanted to convey in any specific sense. I left that
all up to him.

In my opinion he came up with a MASTERPIECE in relating
GATA's quest to that of Don Quixote. Don Quixote De
La Mancha (based on Cervantes' character, and in part
on Cervantes himself) personifies romantic idealism
(a state of mind which exists just this side of madness)
in its purest form. His story "becomes an inspiration
to pursue our personal quests with unfailing dedication,
unbridled optimism, unwavering courage, and
unparalleled chivalry."

That story has endured for hundreds of years with
increasing popularity.

Despert intuitively understood the GATA camp was
throwing "light" on a "dark" situation.

That man on the horse in Alain Despert's painting
(which may be viewed at the http://www.GATA.org web site)
represents ALL the GATA supporters around the world.

By the time GATA is done, there will be an enhancement
to the Man of La Mancha story that also may last
hundreds of years. That is because WE ARE GOING TO WIN.

While our adversaries have the power and the big money,
we have the TRUTH and the INTERNET on our side. The
cabal of bullion bankers is going to be vanquished!

The Impossible Dream (The Quest)

From Man of LaMancha
Lyrics by Joe Darion

"In this song, Quixote explains his quest and the
reasons behind it ... in doing so, he captures the
essence of the play and its philosophical
underpinnings."

To dream ... the impossible dream ...
To fight ... the unbeatable foe ...
To bear ... with unbearable sorrow ...
To run ... where the brave dare not go ...
To right ... the unrightable wrong ...
To love ... pure and chaste from afar ...
To try ... when your arms are too weary ...
To reach ... the unreachable star ...

This is my quest, to follow that star ...
No matter how hopeless, no matter how far ...
To fight for the right, without question or pause ...
To be willing to march into Hell, for a Heavenly cause ...

And I know if I'll only be true, to this glorious quest,
That my heart will lie peaceful and calm,
when I'm laid to my rest ...

And the world will be better for this:
That one man, scorned and covered with scars,
Still strove, with his last ounce of courage,
To reach ... the unreachable star ...



As our effort to expose one of the great
financial scandals in American history is ongoing,
we continue to seek financial support so that we can
expose the truth about what is really going on in
the gold market.

GATA is a civil rights and educational organization
incorporated in Delaware, U.S.A., and contributions to
it are tax-deductible in the United States under the
Internal Revenue Code.


GATA accepts financial contributions in three ways:

By mail:

Gold Anti-Trust Action Committee Inc.
c/o Chris Powell, Secretary/Treasurer
7 Villa Louisa Road,
Manchester, Conn. 06043-7541
USA

By bank wire:

Gold Anti-Trust Action Committee Inc.
c/o Savings Bank of Manchester
923 Main St., Manchester, CT 06040 USA
Bank routing number 211-170-185
For Account No. 9500-574-053

And by E-Gold:

http: www.e-gold.com
Gold Anti-Trust Action Committee Inc.
Account No. 110915

To build excitement for our cause and our fund
raising, GATA has produced a print of the colorful
GATA painting.

The GATA painting is the work of Absolut vodka artist
Alain Despert. Only 300 limited-edition copies of
the GATA painting have been produced from the original.
Each of these is of the highest quality: a Fine Art
Giclee print on Hand-Torn Arches paper, 20 1/2 inches
by 32 inches, signed and numbered by the artist.

We will ship a print of the GATA painting to GATA's
first 300 donors of $500 or more, including those
who already have donated that much. For the purpose
of qualifying for a print, we'll count donations
cumulatively. That is, if you've sent less than $500
already, we'll send you a print if you donate further
and reach $500, for as long as prints remain in stock.

If you would like a print (there are only 170 left),
please let GATA Secretary/Treasurer Chris Powell
know by emailing him at: GATAComm@aol.com and
include an additional $25 for shipping to addresses
in the United States and Canada, and $75 extra for
shipping elsewhere. Who knows, maybe the GATA
print itself will be quite the investment some day!

BILL MURPHY
CHAIRMAN, GOLD ANTI-TRUST ACTION COMMITTEE
Le Metropole Cafe

All the best,

Bill Murphy
Le Patron
www.LeMetropoleCafe.com

G.T. - here we go again, brother. I am sure you will do fine no matter what you do, but I just want you to know that your kind words to me in the past have meant a lot. Maybe we are all nuts. I don't know. But I'm not goin' anywhere.

YGM - Incase you haven't already figured it out, that was your best post ever!

Welcome Sir to "The Greatest Freak Show On Earth" ! Isn't it amazing how the contrarians of the various markets are always seen as the outsiders, the "freaks" of society. That is, until the sheeple of those same mainstream markets discover it's shearing time, and the "freaks" suddenly take on a whole new intelligence. "Gee, wish I'd have done that".....

The old axiom that "even a broken clock is right twice a day" holds alot of esteem for the contrarian crowd, as eventually every facet of the investing world "has it's day". Gold is no different in that way, and although the "shortages" may not be readily apparent at present, just wait until the first indication of "FIRE !!!" when the "smart investors" begin heading for the theater doors.

Being in a position of owning one's home free and clear (sans taxes) is certainly a noble endeavor, not only for self, but for family. And you will still be just as "comfortable" as we "Gold Bugs" while at some time in the future we are buying up the rest of the houses on your block.....(grin)

First time poster.

November is a month of indecision. Fear will be in the markets. Expecially hard assets, oil- everything the farmer produces.

Yes, I am a goldbug, silverbug and anything that will hold its value or better still hold its own.

December will be the beginning of peoples buying power coming to an end.

Good time will be hard to find.

A new administration will be taking over in January 2001 and all the mistakes and lies will force a shutdown of almost everything.
Thats my poke to take to the bank.

I may grit my teeth and post again sometime in december.

The average spread for Fed Funds int rate vs 30 yr Treasury Bond rate for Jan thru May 1989 and 2000 was as follows:

1989 = 61 basis points negative
2000 = 27 basis points positive

The average spread for Fed Funds int rate vs 30 yr Treasury Bond rate for Feb thru May 1989 and 2000 was as follows:

1989 = 70 basis points negative
2000 = 09 basis points positive

The average spread for Fed Funds int rate vs 30 yr Treasury Bond rate for Mar thru May 1989 and 2000 was as follows:

1989 = 81 basis points negative
2000 = 03 basis points negative

The average spread for Fed Funds int rate vs 30 yr Treasury Bond rate for Apr thru May 1989 and 2000 was as follows:

1989 = 89 basis points negative
2000 = 14 basis points negative

The average spread for Fed Funds int rate vs 30 yr Treasury Bond rate for May 1989 and 2000 was as follows:

1989 = 96 basis points negative
2000 = 12 basis points negative


Lest there be those who might think this is a trivial matter average annual spreads for the following years were:

1989 = 80 basis points negative
1990 = 58 basis points positive
1991 = 260 basis points positive
1992 = 409 basis points positive

I am still working on data for 1993 thru 1999 and prior to 1989. As this information becomes quantifiable by me I will post it on this forum.

When I get all info in my guess would be that a positive rate spread between the 30 yr bond and the Fed Funds rate would normally be between 150 and 250 basis points. I do hope this information will stimulate some discussion.

My opinion at this point would be that, if Sir Alahad were to become frightened and abandon his tightening mode in the near future that the economy would continue humming along for a while; however at some point and I think we are at this point now, the true price inflation which is now excellerating and becoming harder and harder to disguise will force Sir Alahad to stay the course, force recession, and try for a soft landing which will be nowhere to be found.

Good for gold. Bad for the $.

What think ye.

hbm

Sirs Trail Guide & ORO,

You've convinced me so far (I can't help that I'm "skeptical,"
and inconstant in that I change my mind frequently ) that
COMEX & LBMA will change the rules, not allowing defaults in
their market place, which will ultimately marginalize them.

What I'm trying to understand is how price discovery for physical
gold (as separate from CONTRACTS to deliver physical gold) will
occur AFTER this marginalization occurs. Once the process that
produces the "spot" price as outlined by TC a week or so ago,
(which requires futures prices) collapses, as it must if the
futures prices are discounted to the price of physical gold
actually delivered outside COMEX & LBMA, what will replace the
traditional spot price source? And will it truly reflect
physical supply-demand?

Normally price discovery requires an essentially public bidding
venue where a large number of the interested parties can,
relatively quickly (one group offering a product, the other group
bidding on it) reach a consensus price-of-the-moment. If LBMA &
COMEX no longer function to do this, where will it happen?

Are the BIS & European "marking to market" the substitute venue?
Is that where MK will look to find the prices he should charge
for his wares?

Or will gold price discovery be driven underground and thus
rendered inefficient by being largely hidden from view? If so,
this would "balkanize" the gold price, as it would vary depending
largely on local supply-demand perceptions, etc.

How long do you think it will take people to get used to no
longer looking to the traditional "spot" and London Fixing as the
source for the price at which to buy and sell physical gold?

Or am I somewhere out in left field??

Regards,
Journeyman

post to alprice@worldnet.att.net explaining your interest, por favor, and I will respond .

TestView Yesterday's Discussion.

http://sfweekly.com/extra/beyond/absinthe2.htmlGATA may like to know that, although according to
publications as recent as 1995 (Absinthe: The Cocaine of
the Nineteenth Century, by Doris Lanier, McFarland &
Company, 0-89950-989-4), it was banned throughout the
world (1912 in the US), absinthe is legally available in
Britain, Spain, Portugal and the Czech Republic.

"In the cafes where it was enjoyed, an absintheur would
balance an ornate slotted silver spoon on the rim of his
glass and slowly drip water over a sugar cube placed on the
spoon"

I wonder if MK would consider adding silver absinthe spoons to his inventory?

You will find very easilly that even without a "place" to trade there is no reason to believe that price discovery would not occur. The discovery process does not need centralized exchanges. Most items are priced outside exchanges. Even the gold market sees most of the trading done outside the exchanges "OTC". Same for the currency markets and the debt markets.

The main advantage of exchange trading is its efficiency which has the following effects:
Narrow Bid/Ask spreads
Quicker trade
Greater Liquidity (the exchange is simply where everyone goes in order to trade)
No need to find out where and who the buyers and sellers are in order to trade

Internet exchanges.

Following the Nasdaq network model, nearly every financial item but for stocks (Nasdaq being the excepiton) is traded on a network of computers - futures, currencies, bonds, deposits.

The news is filled with announcements of new exchange web sites for everything from screws to sheet steel presses and specialty chemicals as well as grains and animal feed.

Retail gold exchanges are around the corner. E-bay style auctions are too slow because all items are treated individually. Standard forms of coins and bars can be traded instantaneously on retail gold exchanges using a depository service who's job is to confirm that the item is there and that it is what it is claimed to be.

Summary of price determination with futures and debt markets

In the futures markets, price discovery is predominantly done off the exchanges. The exchanges - even the LBMA - pale in the face of the OTC markets. What trades are two classes of items. Title to gold bars and delivery contracts for various terms in the future (from current month - i.e. "spot" immediately available for delivery and up to 10 and more years in the future. The futures markets serve mostly for the purpose of index like price bets. The gold accounts serve the same purpose.

The whole of the gold marketplace sees turnover of these fiduciary instruments at a 50 to 100 fold ratio to the turnover of the physical metal. It is not a market for gold proper, it is a market for gold obligations and a market for the price of the metal. The bulk of the market is not related to delivery of gold just as the SP 500 futures is not related to delivery of stocks.

Companies raising capital on the markets account for a very small fraction of trading, same with distribution of capital (way rarer, outside of Mergers and Acquisitions). In any given week there are 10 to 30 companies doing this, the rest of the trading is among investors and speculators and has no direct bearing on raising capital for business - which occupies 0.01% or less of trades. The trading has to do with various views of stock values relative to a particular price, and with diversification and allocation strategies - as well as arbitrage to the futures and such odds and ends as SPDRs, HOLDRs, WEBs, calls, puts, LEAPs, and PERCs. The same goes for currencies and any other financial asset.

One has to understand that these markets all deal with fiduciary instruments, not with "means of payment", not savings, not capital investments. The drivers for trading are changes in expectations and particular circumstances.

The gold market has an element of delivery in which it is very different from commodities - the fact that bankers do most of the distribution from the miners to the industrial and retail investment markets - something they don't do for other commodities. The reason is that banks use gold for monetary purposes and gold is simply a currency. Oil does not bear an interest rate. Gold does.

However, gold (and silver, Platinum and Palladium) differ from other currencies in that the cash form can not be created out of nothing. The infinite liquidity models of Black-Scholes can't be used in this kind of market without the creation of potential pile ups.

As a currency, the bulk of gold is not traded as title to physical metal, but as debt. Some want to lend and borrow in gold. Borrowers like gold's low interest rates, and lenders like the long term stability in gold purchasing power, particularly for the likes of commodities. Investors use gold accounts and derivatives to diversify into an asset that is negatively correlated to both stocks and bonds.

As TG/FOA and Another pointed out, the key here is that there is a disconnect in the minds of most gold investors between gold's role as cash and its role as a denomenator of debt. People tend to assume gold is like cash currencies. What is not realized is that the currencies are all debt receipts - an obligation, while gold is not.

Gold as cash is completely different from currency cash. The currency cash is sensitive to inflation and deflation. The gold cash is not. Gold's price in other currencies is not at all immune to the effects of inflation and deflation in gold banking. However, it is not subject to arbitrary supply as currencies are. Furthermore, the lenders of last resort for the gold market tend to renege on their promises when called to lend during crissis.

Though not completely prepared, I have been moving towards a gold-centric view of the banking system that derives currencies from gold debt. I won't detail it now.

However, I will say that the fractional reserve gold banking system tends to skid into irresponsible expansion when a central bank is introduced, as has happened with the EU members during the last 10 years. The expansion continues until there is not enough gold mined to pay interest, and the realization of this condition hits the markets as borrowers find it excessively difficult to find gold in order to repay loans. As a result, some borrowers default and soon after, no further net borrowing occurs, though loan rollovers may continue. Under these circumstances, a bank finds itself facing "liquidity problems" once the incoming gold flow from existing borrowers has fallen while the bank's liabilities have continued to expand with compounding of interest in gold accounts.

Even if a bank has greatly increased its gold denominated assets relative to gold denominated liabilities, what is important for banks is to obtain sufficient reserves to meet withdrawals and transfers. What banks have always been vulnerable to as a whole is this point where a withdrawal can not be executed and all attempts at borrowing gold from other banks or from physical gold holders does not provide sufficient gold for the bank to meet withdrawal demands. The panic to withdraw gold that is created by this among depositors that want to eliminate the risk of the bank defaulting is called a "bank run". This is how the great depression was created.

In the debt currency + gold debt system of today, the threat of gold borrower insolvency (the precursor to bank insolvency) increases as the POG grows. As POG falls, the annual mining supply at first increases, but then stops rising and stays low, the lower POG also creates greater physical demand. The supply/demand balance in the physical markets develops into a huge threat of a price spike. In order to prevent this, banks will attempt to restructure their future delivery obligations into longer terms. But gold accounts and CDs are equivalent to demand accounts and some gold must be available in reserve for the occasional withdrawals. But in order to provide the market with gold to fill the supple deficit, reserves must be emptied into the gold market. Eventually, reserves are depleted and withdrawals not possible and the bank run begins.

Fortunately for bankers there is a great number of depositors in fully allocated accounts and in bonded pools from which to obtain gold, so long as the holders are willing to transfer this cash gold into unallocated accounts. The gold is transferred into reserves and from there into the markets. The number of people holding gold in this form and who would consider giving up their cash gold into a fiduciary gold is limited, this pool of potential supply is probably tapped out. At this point, the only way to get more gold from those remaining people would be with assured supply - namely from the announced sales from the EU central banks and from gold mining companies.

Another source is the hedging strategy some fully allocated gold account holders and some regular gold account holders use in order to generate income from their gold holdings. This is the sale of covered futures and covered calls. Though many use spreads in order to avoid having to deliver the gold, bankers have probably managed to call some of it during price spikes and sell it into the market.

Infallible Lender Of Last Resort Is MISPLACED CONCRETIONAs the quip goes, "Interest rates are not the most important thing, They are Everything".

I appreciate your work in this area.

An egg careening off a rock and a hard place can not statisticaly have a soft landing.

Monumemtally complex mathematical equations that are the "system", may indeed reach a timeline point whereby functional continuance is a mathematical improbability.

I guess the morbid fascination now is when will the Pinball Wizards TILT the MACHINE.

Questions
I have a couple of questions for the wise and knowledgable heads. Sorry if I said harsh things about man worship, if the shoe doesn't fit, it probably isn't yours! I appreciate the polite tone on this forum, let's keep it that way!

Let's dig a bit deeper for some relevant facts! I feel it would be worth finding solid answers to the following questions:

1) The paper gold market will default; this is understood. My question is: The gold that has been traded for example on the LMBA and that still is traded there, is this gold paper gold or has it actually been physically delivered?

2) Have the Arabs been buying paper gold?

3) If that is the case, what will happen when they will want physical delivery and there isn't enough to go around?

4) I am familiar with "The Grey Men Tape" where it is brought out how the magicians of the western banking system gypped the Arabs out of billions by transferring funds to holding companies that lent the money to customers that incidentially defaulted on their loans. The Arabs must have disliked this a lot!

5) If the Arabs this time have bought paper gold that cannot be redeemed, what will happen when this fact dawns on them? When they realize that they've been had again, I think the game is up for good! We can not expect very gentlemanly behavior then!

6) There are big players in the "secondary" private gold market where gold for huge amounts are changing hands, who are these players? Can they be identified?

Please someone who knows the inside facts, let us know the real situation!

http://www.cnsnews.com/ViewEnviro.asp?Page=\Enviro\archive\ENV20000529a.htmlScientists to Debunk UN Report on Global Warming
By Scott Hogenson
CNS Executive Editor
29 May, 2000

(CNSNews.com) - Scientists from around the world will descend on Capitol Hill Tuesday to voice their objections to some of the conclusions made by an international panel studying global warming. The Cooler Heads Coalition, which includes physicists, meteorologists, geneticists and geochemists from the US and six other nations, is ready to make its case before Congress and refute summary conclusions of the United Nations Intergovernmental Panel on Climate Change and its Third Assessment Report.

Data collected and distributed by the IPCC is often cited as further evidence of significant global warming, a topic that has resulted in both scientific and political disagreement. But scientists delivering their briefings Tuesday say the Earth's temperature has not warmed over the past 20 years, that the use of fossil fuels has not had a significant impact on the world's climate and the Kyoto Protocol on global energy use restrictions will cause more economic harm than environmental good. Many of the experts participating in the briefing were part of the pool of scientific talent that contributed to the research in the IPCC report, but "a lot of them disagree with some of the report's conclusions," said Andrew Grossman, an assistant research fellow with the Competitive Enterprise Institute, which is one of the groups sponsoring the Tuesday morning briefing. "A lot of things (in the IPCC report) are written by bureaucrats and functionaries instead of scientists," said Grossman. According to the Cooler Heads Coalition, the IPCC summary "is a political document" that "seriously distorts and misrepresents what is in the actual report."

The briefing will be broken down into three parts focusing on whether the climate is in fact warming, the human influence on the climate and computer models used to predict the climate's future course, and whether the Kyoto Protocol will help the environment or hurt the world's economy. Implementation of the Kyoto Protocol already has come under fire from some in Congress, who are concerned about the cost of the climate treaty to the US economy. The Clinton Administration signed the climate treaty in 1998.

The treaty seeks to address what some environmentalists consider to be the global threat of greenhouse emissions, which are claimed by some to be caused by a variety of human activities. But opponents of the Kyoto treaty claim if the US adopts the environmental requirements it will cost Americans as much as $30,000 in lost income per family and up to 2 million lost jobs each year. The Tuesday briefing comes less than three weeks after two officials with the US Environmental Protection Agency denounced a major government study on global warming by saying the draft report has an "extreme/alarmist tone" and does not "appear to fairly reflect the scientific literature and the historical record."

Black Blade: Junk science could take down the econmony. You got to love it when politicians and bureaucrats fancy themselves as scientists. Sometimes it really is funny. I doubt that the media will give any coverage to these proceedings though, its just not politically correct to examine the facts and come to an unbiased conclusion.

ORO says:
SNIP
The financial markets operate much more quickly than the rest of the economy.

The advantages that are lost in the financial markets in this era are still there in the real economy where stuff has to be built, made and installed, where even an internet company needs time to put things together (a few months, most of which are spent on the business plan and on finding financing). People need training and experience. All of this means that advantages that can be obtained are in the allocation of the real stuff of the real economy. Furthermore, the swings of the financial markets are part of the opportunities that central banks and their larger members and associated clients are taking advantage of - when they manage to turn markets their way.

The only limits on them are those imposed by their own lack of solidarity, credulity of the public, and by the real economy - of which gold and silver are a part.
UNSNIP
________________________________________

So, in your opinion, is it possible for there to be a major blow-off/rout in the Lightning fast financial markets and still retain the stability of the "real markets"? These are the same players. Are they not?

http://www.usagold.comWhat is Gold worth?

I am a real estate appraiser by profession and some of the
principles regarding real estate are, I think, applicable to gold. Permit me to think outloud and clarify my own thoughts.

One of the methods used to appraise real property is the cost approach or the cost to build a house. It is not the primary method but it does have some relationship to reality. If a builder cannot recapture his cost to build (plus a profit) in the marketplace then he stops building.
No new supply of homes limits supply, and demand (backed up by the ability to purchase) eventually causes prices to rise. Obviously, no new homes would continue to be built if they were always built at a loss.

The gold mining industry is now in a similar situation. Although the cost to mine gold (at a profit) varies from mine to mine the average price needed to mine is somewhere around $340 an ounce (please correct me if I am wrong). Common sense would tell us that miners will not continue to mine at the current levels long term.

The market approach is another method used to value real estate. A willing buyer and a willing seller (acting without duress) agree upon a certain price and that is the market price. Gold too acts like this. When you go to Centennial Precious Metals or any other willing seller, and you negotiate a price for kruggerands that helps establish the market price.

The income approach is the other approach to value and that does not apply to Gold as it is not an income producing assett.

One can readily see there is a large discrepancy between the market price and the reproduction cost of gold. Why?

Market manipulation? Probably on some level, but the forces of supply and demand are operating here.

If there is sufficient demand for homes in an area and a limited supply, then the price skyrockets.

IF THERE WERE SUFFICIENT DEMAND FOR THE PRICE OF GOLD THE PRICE WOULD ALSO SKYROCKET. This is elementary I know, but still true.

In the recent News and Views newsletter (thank you for my e-mail copy) it says "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 and NASDAQ high tech markets frighten investors into hedging with Gold as well as bonds."

I too think this is the case.

Not too long ago one of the vice presidents of microsoft said it was overvalued and the next day the stock dropped precipitiously. As an appraiser, I cannot walk into a neighborhood and announce the houses are not worth what they are selling for and cause the houses to drop precipitiously in price. The fact that can happen in the stock market is indicative of something seriously wrong.

Real estate competes with other investment vehicles for the investment dollar. Income producing property that is. You would not invest in real estate with say a 10% return if you can get a higher return elsewhere ( the stock market for example). You might invest in Bonds with a lower rate of return if the liquidity or safety were more important to you. In other words, you might take less of a return for security.

The extreme volatility in the stock market has investors worried,but not worried enough.Many NASDAQ stocks which are inflated are doomed to fall again. Real value does have something to do with income, and these stocks fail the test. Irrational exuberance if you will.

In my opinion, the stage is set for a market crash. Its been trying to happen all year.When the market crashes other investments: real estate, bonds, and gold will begin to look attractive.

Gold is a safety haven. A crashing stock market, perhaps war with China, and inflation will cause frightened people to invest in gold. When that happens the market value of Gold will change. And that is beyond the power of the Fed, the Bank of England, or anybody else to control.

So looking at gold objectively, I would say it is currently undervalued. You can buy it now for less than its reproduction cost,and the forces which will stimulate demand and its eventual price increase appear to be on the horizon.

Source: Bridge NewsEurope Precious Metals Review: Gold stuck in $272-273 range

London--June 2--Gold continued to trundle along in a U.S. $272-273 per ounce range in lackluster conditions this morning and is expected to remain range-bound for the rest of the day. Silver also remained subdued, still bearing the scars of the recent stale long liquidation but holding above lows around $4.89. Platinum and palladium were unchanged from overnight levels. (Story .2270)

Black Blade: Slow going overnight. Time to pile up some Ag maybe - Buy the Dips!

Asia Precious Metals Review: Gold flat despite weak sentiment

Tokyo--June 2--Spot gold still stayed at about U.S. $272-273 per ounce with sluggish trade on Friday in Asia, dealers said. Players are discouraged from buying gold as prices have been capped at the key resistance of $275 in the past couple of weeks under weaker sentiment, however, few try to dump gold without fresh factors, they said. Platinum hovered at around $550 with thin trading volume ahead of the weekend, the dealers said. (Story .2200)

Black Blade: The forecast of a normal harvest and monsoon season is predicted for India this year, add to that a lower import tax and wedding season coming up, and you have a brighter picture for Au and Ag.

NY Precious Metals Review: July silver nudged to 1-year low

New York--June 1--COMEX Jly silver futures ended unchanged after marginally undercutting lows made this week to slip to $4.91 -- a one-year low on continuation charts. Silver is now seeing technically driven weakness after it falling last week in a negative reaction to Gold Fields Mineral Services release of supply/demand figures. (Story .2333)

Black Blade: There appears to be some controversy about this. I will try to post some info counter to this report. BTW, Morgan Stanley is touting a large deficit in Ag supplies, Hmmmn����..

Leigh: I notice that this year, the two finalists in the national spelling bee are home schooled, and the winner was second place last week in the national geography competition. Says a lot about public education doesn't it?

In this post I foresee no profound content, no revealation of obscure truths to be offered. Those of seasoned economic thought are encouraged to scroll beyond lest your time is not best spent. As promised, these comments are offered "to build a simple foundation upon which we might all find a place to stand more confidently with the concept of "Free gold"". With the master carpenters away on their own projects, I hope to sit down for a time or two with this "How-To" book and a few helpers gathered around so that we might work together to finish this project.

The beginning portion of ORO's 5/30 #31565 provided a nice clinic on the economic tool of thought called "marginal utility" for goods. Very often the "usage value" (utility) of additional items declines as a person finds his needs to be satisfied or satiated by earlier acquisitions. To paraphrase ORO's good example, the value of a 2nd car to a user is less than the value realized by acqusition of the first car. This individual phenomenon of marginal utility may also see varying degrees of expression in the overall pricing of production when output satiates market demand.

Building a small model to assist comprehension: When the tanks are full, extra oil offered at day's end will be bid for less earnestly than when fuel is needed and storage space available. But seeing the big structure as it is more often, it is production-cost that provides an absolute pricing floor, with higher prices seen wherever competition among suppliers is absent or where market demand is not satiated by the supply.

Many more details may fine-tune the end picture, but this general sketch is offered as building blocks and raw materials for independent thought to anyone newly arrived to such economic contemplation as these days require. Speaking to the camera: "The stunt you watching is being performed by a trained professional. It is NOT extremely dangerous (unless performed improperly by someone with policy power). Please DO try this yourself at home." This is done so that you need not ask what "price" and relative value is to be expected for "Free gold" offered in a free market removed from derivative and lending distortion. You can be the expert and apply your own thought.

Please pick up that tool of "marginal utility" and examine it. Take a swing or two, it will not smash careless fingers. Ask yourself, to an individual, does "marginal utility" decline with each additional dollar you acquire? Certainly at first, to have "some" money is vastly better than having zero money. Though as you attain a level of basic survival, what then, of "marginal utility" beyond? Is each next deposit in savings or pay raise considered with less and less value? Not appreciably so. Unlike the 2nd car, which can be only another car, the "2nd money" finds good value as an interchangeable proxy for an "infinite" choice of ANYthing that may be wanted or needed, now or in time.

A curious thing about money, though. Watch that trailing edge...it is rough and will make a mess of your hand if you do not exercise proper care. I suggest gloves. While accounts are seen to hold up well against the evaluation of the marginal utility--first dollar to millionth holding a similar good value and esteem--these same accounts in their entirety are subject to sudden and thorough changes in valuation based upon changing perceptions of what I shall call "marginal obtainability (or replaceability)". The perception that money spent today may be easily replaced tomorrow will tend to be discounted in relative value by the holder. Yet it does not end so neatly there. Commerce requires two parties. The "value discovery" of the money will be dictated not alone and downward by the party that discounts its value, but rather, its value is supported by the party that finds it to be harder to come by.

To my point, and to lay out the planks we have carried to here: "Free gold", being a monetary asset, would hold steady against the "reliability test" of the Marginal Utility we all now wear comfortably upon our tool belt. "Free gold" would be a universal, liquid proxy for everything, and each "2nd gold" would be as good as the first. But is see you looking around, where is it to be supported? Where will it be priced/valued, high or low, and on whose terms? Will a low cost of production by efficient miners, and competition among suppliers, act in concert to assure that gold is priced nearest possible to its "easy-to-come-by" "marginal replaceability" floor value? Or, will demand be unsatiable, ensuring that the "value discovery" of the marketplace dictates the higher value?

A review of our substrate data may prove useful before concluding our work on this portion of the foundation. An even distribution of all previously-mined gold would provide each person on Earth with three gold sovereigns (totaling two-thirds to three-fourths an ounce). Setting aside such a preposterous notion of equal redistribution (given only to foster your full appreciation for its above-ground rarity), imagine if you will a "Free gold" environment in which each person would naturally seek to increase their personal gold assets. Modern production levels would provide less than a half gram each new year per person. Such an amount may be acquired today for the low price of less than four dollars ($4). Given a wealth reserve asset superior to any known before, you might surely seek to utilize it to the extent possible. What value of annual productivity are you capable of generating to be stored in this asset for future use? Somewhat more than the current value found in four dollars each year, I trust? For new production, there will indeed be demand competition dictating the value.

got cheap headstart?

http://www.silverinstitute.org/The following is found at the link above. A little long and probably better suited for a weekend "educational series". However, with the recent interest in the subject on this and other PM forums, the following is of interest and provides a very good case for silver investment. Another good article on the Silver investment picture, look up the Wall Street Journal, May 30, 2000, p.C17. The article is a fairly good summary over silver fundamentals. The article at WSJ is titled "Silver Refuses to Shine Despite Bullish Outlook" by Peter McKay. Now you know what Warren Buffett, Bill Gates, George and Paul Soros know. Cheers, Black Blade.

World Silver Fabrication Demand Surges Ahead 5% in 1999;
Global Mine Production Down First Time in Five Years
May 24, 2000


NEW YORK (May 24, 2000) � World silver fabrication demand rebounded strongly in 1999, increasing 5%. Moreover, for the first time in five years, mine production in 1999 did not increase, but instead declined. This created a sizeable structural deficit, with fabrication demand exceeding supply from mine production and recycled scrap by nearly 156 million ounces (Moz), according to World Silver Survey 2000, released here today by The Silver Institute. Silver demand overall grew by 5% in 1999, with growth recorded in all of the major sectors. Booming industrial demand for silver, principally in the electronics sector,
together with strong jewelry and silverware growth, pushed demand to a record high last year. Photographic demand for silver, long a mainstay, continued to edge higher as well.

On the supply side, mine production slipped marginally, while supply from recycled scrap dropped by 10%. Supply gains were posted from official sector sales, principally a result of stock disposals from the People's Bank of China. According to the Survey, had there not been such a large reduction in Chinese bullion stocks last year, the silver price would probably have been forced higher for the market to have been in balance. Silver's average price in 1999 was $5.22.

Fabrication Demand

Overall fabrication demand expanded by 41.4 Moz to reach 877.4 Moz in 1999. Recovering demand in East Asia and India, where demand rose 11% and 5% respectively, following a weak performance in 1998, generated much of the overall increase. Fabrication demand in North America was up an impressive 8% to 232.0 Moz, compared to 214.4 Moz in 1998. Industrial applications of silver, which accounted for over 39% of all fabrication demand, surged ahead in 1999 on the back of very healthy offtake in the United States and Japan, which contributed to an overall increase of more than 8% in this sector. Silver use in electrical and electronic products provided much of the rise in overall fabrication demand and absorbed 148.5 million ounces, benefiting from the robust economic environment, as well as the development of new products and end-uses. Worldwide demand for industrial applications reached 343.2 Moz in 1999, compared to 316.7 Moz in 1998.

Strong growth was also reported in demand for jewelry and silverware. After under performing in 1998, silver usage in this sector increased 5% last year to reach 260.8 Moz, recovering much of the ground lost in 1998. This result came about despite the fact that demand for jewelry and silverware in India, the largest consuming country in this sector, was virtually flat year-on-year at 70.7 Moz. On the other hand, a major recovery was recorded in the East Asian markets, up 16%. European domestic fabrication demand also posted strong results in the jewelry and silverware sector, with offtake expanding by 7%. Italian jewelry and silverware manufacture used 13% more silver in 1999, reaching 51.2 Moz, exceeding the peak set in 1992. Jewelry and silverware fabrication in the U.S. was up nearly 4% to 13.1 Moz, with jewelry demand the driving force. Silver jewelry imports into the United States which soared during the 1990s, were up a further 11% in 1999.

Photography, the third major area of silver fabrication demand, increased again (up 1% to 246.4 Moz) lifting fabrication in this area to a new record level. Modest gains in 1999 masks significant growth in individual markets, with silver use in photography in the United States, in particular, increasing nearly 5% during the year to 92.3 Moz. Declines in a number of the major European and Asian manufacturing markets effectively neutralized the growth in the U.S. market. Digital photography, though expanding rapidly, thus far has not had much of an impact on the continuing growth in the market for silver-based photographic products. Fears of a "Y2K" inspired crisis seems to have been the major driving force behind a 3.5% increase in the market for silver coins and medals in 1999 to 27.0 Moz., which accounted for 3% of all silver used last year.

Supply

Total supply of silver to the market increased in 1999, but not due to increased mine production or scrap, the "traditional" sources of physical supply. Instead, more silver was mobilized through sales by the official sector and disinvestment by the private sector. These increased physical flows were met by robust demand, but nevertheless resulted in a lower average price being required to bring the market into balance. Total supply of silver to the market in 1999 was 6% higher year-on-year at 888.2 Moz, compared to 836.0 Moz in 1998.

Globally, silver mine production dipped fractionally in 1999 due to a large drop in North American silver output. In 1999, Mexico was again the biggest producer, producing 75.2 million ounces. However, that figure represents an 18% decline, or 16.4 Moz from 1998, primarily due to highly unusual circumstances which prevailed in the Mexican mining industry. Mexican producer Industrias Pe--oles again topped the list of silver producing companies worldwide, alone contributing 42.1 million ounces to the market.

Central and South American production was up 6%, primarily due to increased silver by-product from a number of gold mines. Peru is the second largest producing country, and recorded a 10% increase to 71.3 Moz in 1999. In the United States, the third largest silver producing country, silver production fell last year by 5% to 62.9 Moz. Primary mines, which generate more than half of the country's silver, produced 7% less than the previous year. The European continent contributed 10% of the world total last year, recording 53.3 Moz in 1999, down slightly from 53.5 Moz in 1998. Chinese silver mine production is estimated to have grown by just 2% to 44.2 Moz in 1999. Overall, China generates 8% of global silver mine output.

The most significant change in the supply/demand balance last year was the increase in official sector sales, which leapt 117% to 87.0 Moz, standing in stark contrast to the average annual level of sales from 1990 to 1997 of 2.4 Moz. Chinese official sales, estimated to have totaled 61 Moz, were the principal factor. A large amount of metal was exported to arbitrage the difference between prices in China and the rest of the world.

Fortunately, for the silver price, fabrication demand was sufficiently strong to absorb the increased supply available from the outflow of Chinese bullion. Scrap supply receded last year to 174.9 Moz, compared to 193.7 Moz in 1998. This was the predictable result of lower prices in most silver-consuming countries, as well as the absence of distress sales seen primarily in East Asian markets in the prior year.

Implied net disinvestment from private sector sources increased 62% to 79.5 Moz last year; however, considering the disappointing price performance in 1999, this was not altogether surprising. But this was still below the disinvestment levels of the period 1992 to 1997.

Producer hedging did not generate accelerated supply to the physical market last year despite market rumors to the contrary. Instead, the net impact of producer hedging was 10.8 Moz of accelerated demand.

Price

After a rather eventful 1998, last year's silver price performance was subdued with the average price off by 5.8% to $5.22 in 1999. It traded in a narrow range between $4.88 and $5.79. Silver's average price for the period 1990-98 was $4.80. Again, the substantial flows of silver out of China helped keep the price in check in 1999. Going forward, a key question for the market is whether Chinese government sales will continue on the level seen in 1999. Given the very promising prospects for strong demand this year, the absence of such disposals on the same scale as seen in 1999, could offer strength to the silver price in 2000.

The 2000 edition of the World Silver Survey was independently researched and compiled by London-based Gold Fields Mineral Services Ltd., the precious metals research company. The Silver Institute has been publishing this annual report on the global silver market since 1990, to bring reliable supply and demand statistics to market participants and the public-at-large.

Founded in 1971, The Silver Institute is an international industry association. Its members include leading primary silver producers, the industry's premier refining companies, manufacturers, dealers and bullion banks.

Interesting questions, but the information may not be known,
and those that know in detail may value it more kept to
themselves.

1) It has been suggested that LMBA paper gold trades in far
too high a volume to represent the movement of physical.
(It has also been suggested that the appearance of LBMA
gold volume statistics was done for some undisclosed
strategic purpose). This has been "reading between the
lines" of LBMA statistics so represents supposition. A
default is only an event with a probability... however, the
recent TOCOM event has been a salutary warning shot.

2) Have the Arabs been buying paper gold?
I am sure the Arab people do not act as a cohesive whole,
i.e. some trade paper, some follow the physical trail.
Some have even been noted for their interest in certain
high-tech Western stock market paper.

3,5) Arabs with connections who have been slighted by a
default will have recourse to both economic and strategic
retaliation. This will not be undertaken lightly, because
of the mutual damage that it could cause. An eye for an
eye...
Following my comment on (2), this could also cause divisions
within the Arab nations.

4) "The Grey Men Tape" appears to come from the lunatic
whacko fringe of the internet.

6) Don't know about the "secondary" private gold market, so
I will reiterate this question from others on the forum:
When central banks sell, who are the buyers?

http://www.cnnfn.com/markets/morning_call/The S&P Futures are up an astounding +31.50, fair value +31.15. The market will likely scream upward at the open. The CNBC crowd are going to be gloating today. Also, Au is a bit frisky this morning already up +$2.60 at $274.60, Ag is up +$0.03. Could be an exciting and wild ride this morning. I'm going to crack open a six-pack, tie some flies for this weekend, and watch the fire-works!

Sir Usul:

Might we freeks also be considered lunatics and wackos.

Romans 2:1 "Thou art inexcusable O man, whomsoever thou art that judgest for wherein thou judgest another, thou condemnest thyself; for thou that judgest doest the same things."

HBM

As Reg Howe said a few weeks ago, "Its the Dollar Stupid". Now that wall street is sighing with relief about interest rates not going any higher.............(so they pump up the stocks)............they'll soon turn around and face the fact that their currency is headed for the toilet..cause rates are not going any higher ..right?????? Hee Hee!!!!!!

The trap has been sprung!!!!! rates gotta go up to protect the US$......but rates gotta go down to protect the market!!!!! Its a no win situation! Got Gold!

Duck up
Dow up
Gold up
Platinum up
Silver up
Euro up
Oil up
Nat.Gas up
Dollar down

http://www.usagold.comHappy Friday every one...HAPPY DAYS are here again, gold up very nicely.

http://www.usatoday.com/money/gold.gifBe sure to hit reload to update.

http://www.shoah.free-online.co.uk/801/NWO/GreyMen.html Sir HBM: Let the article not be denied a fair hearing - above URL and alternatives below:

http://www.cia.com.au/serendipity/eden/hatonn.html
http://www.darkconspiracy.com/conspiracies/bank/other/grey.txt
http://www.l0pht.com/pub/blackcrwl/patriot/bankers_rob_you.txt
http://sunsite.doc.ic.ac.uk/packages/Online-Book-Initiative/Conspiracy/Gray.Men.Tape

I remember that there was talk a couple of years ago that Argentina was selling their Au reserves and that this consisted of Argentine gold coin. Could this be some of what Townie was alluding to last night? Will this be offered online as well? Sounds interesting. BTW, what was Golden Truth saying last night about a Freak Show? I will probably give my take tonight - right now, going across the yard to the stream and try out some nymphs I just finished.

He sticks by his story...Well who the hell knows, maybe June 2nd is the beginning. Hopefully it is the beginning of the end for the Gold Cabal....This spike seems different somehow....But then there's wishful thinking front and centre....Only $220.00 to go for my wishes to be answered.....I won't hold my breath tho....YGM.
GO GATA>>>>>>>

(Big Smile!)

A gambler always try to get another dollar before he quits.
You only buy money with paper. The fuse will burn slowly.

I,AM A SUPER FREAK GOLD OWNER AND PROUD OF IT.
100% PHYSICAL GOLD, GO BABY GOOOOOOOOOOOOOOOOOO!

And weren't those tolas delicious?

gf

Hmmmmmmmmmmmmmmmmmmmmmmmmmm

Yesterday you were complaining about how much
FIAT you thought you had lost.

Now, it appears you are happy at the place you exist.

So, now that you are apparently happy,

maybe you could try to think

"outside of the Box"

ie

get a bigger picture.




Yes / No ?

Yes very tasty and nutritious to! I really liked the pure GOLD ones though 24karat. Yummy, yummy, yummy i got GOLD in my tummy! B.T.W Thanks all, for the Glorious support yesterday. I,am sorry if i stepped on any toes but when i lose Money i turn into a big fat BABY??
GOLD TO THE MOON!!!

http://www.bulliondesk.comI've been watching the trades uptick and downtick for half an hour and it seems somebody-s buying with vengence.....I do hope it's BIG GEORGE or WARREN....Squeeze the paper whores til they bleed....No pity for those who loose trading airy nothing.....YGM.

The trap has been sprung!!!!! rates gotta go up to protect the US$......but rates gotta go down to protect the market!!!!! Its a no win situation! Got Gold!

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

Yes, I agree wholeheartedly and have been saying so for months (along with several others on this forum). No one outside of of the group here has wanted to even try to understand this....oh, well...they'll learn soon enough!

Greenspan has been raising rates more to allow for a strong dollar and hence a SLOW market meltdown than any real fight against inflation.

If you think your gold is going to do you any good,

other than BUY YOU TIME



HOW ?


and under what circumstances ?

http://www.thebulliondesk.com/Sorry, it's my irrational exuberence. Hello Golden Truth. Do we have ignition on the launch pad????? Tick,Tick, Tick, Tick.....YGM

Conditions of stagflation:
Characteristics of stagflation:
Rising production costs, rising commodity prices.
Rising unemployment,
Declining capital investment
Consumer goods prices rise
Declining real wages.

Cause:
Reaction of central bank to a previous expansion of debt - A monetary inflation to the point where personal income and cash flows of business can not pay interest and principal in full and new lending is insufficient to supply the monetary units needed to pay interest. As a result, defaults on loans threaten the viability of banking. The central bank provides funds through the monetary base to maintain bank solvency.

In short, it is an attempt to fight a deflation of the monetary system by printing money.

The market signs of stagflation expectations:

Expectation of defaults: High spreads between interest rates on government and corporate and personal (mortgage) debt. Stocks of highly leveraged financial institutions falter. This is a deflationary expectation.

Expectation of rising prices: Key commodity prices rise. Stocks of resource producers rise, stocks of durable goods producers at first rise and then fall. Retail stocks fall in expectation of both higher cost growth and restrained sales growth leading to falling margins.

The common misunderstanding of stagflation arises from the observations by market participants of their business' difficulties with credit leading them to conclude that deflation is coming, and their difficulty with reconciling this with observed rises in prices. This difficulty is a result of a misunderstanding of money and credit.

Gold: Long term enjoys both investment for hedges against default and hedges against price rises. At the initial stages, gold suffers as both price inflation and monetary deflation expectations are competing with each other for investor's attention, and the investor is trying to comprehend how deflation and rising prices may occur simultaneously.
In addition to this, our gold banking system has returned full circle to the late 1920s in leveraging physical gold reserves - both by expanding banking's gold obligations and by reducing reserves (selling reserves into the industrial markets) in an attempt to restrain the price of gold.
The deflation of this leverage is coinciding with a stagflation in the debt money arena and threatening a rise in purchasing power of gold as happened in the 1930s. The purchasing power of gold went up 40% before the dollar was devalued, and an additional 60% in the devaluation, providing a 130% increase in purchasing power. The last episode of gold leverage deflation was with the 1971 cessation of the gold exchange with the dollar. This caused a growth of gold's purchasing power 10 fold as it coincided with a round of stagflation. One factor differentiating today's gold market from 1971 was that the banking system had not leveraged its gold reserves, only the US government did that. Needless to say, a 10 fold increase in the purchasing power of PHYSICAL gold is the least one should expect.

Anyone that needs a better grasp of trading please read ORO's answer to Sir Journeymans question,"how will trading be done if paper gold markets seperate from physical?"

An excerpt:
<that bankers do most of the distribution from the miners to the industrial and retail investment
markets - something they don't do for other commodities. The reason is that banks use gold for
monetary purposes and gold is simply a currency. Oil does not bear an interest rate. Gold does.>>

ORO, that was another great post to add to your other great posts.
Acknowledgements are hard to come by here, but believe me, I think everyone who has been reading this forum for a while really appreciates all of your work and all the fine educational posts found here.


Hey my wife, whats all that cheering and yelling going on down the road by the miners house?
Whaaaat......the price of Gold is going up!!!!.......Well that is something to cheer about around here. Time will tell!!!...beesting.

http://cbs.marketwatch.com/archive/20000602/news/current/metals.htx?source=blq/yhoo&dist=yhooExcerpt:
The US dollar's weakness against most foreign currencies Friday also contributed to Gold's strength, according to Bridge News,,,,(beesting comment; is this next line a misprint, or am I missing something?),,which boosts the "selling" of dollar denominated precious metal.

Another comment:
Don't prices rise when "BUYERS" overwhelm sellers?...Or is this a different kind of free market system?....When people sell prices rise??? Give me a Break...Bridge News......beesting.

The initial reaction in the bond market to the upside (lower yields) in reaction to the first signs of people losing jobs is reversing as the realization that this may eventually stop "inflation fighting" by the Fed seeps into the markets. Thus the bond markets are expecting a rise in market rates to compensate for price inflation while the Fed maintains the same interest rate levels.

Mortgage rates have fallen from over 8.5% to 8% and back to 8.25%. Liquidity (i.e. selling of bonds to finance stock purchases) and change in the view of inflationary expectations is competing for investor attention with the story of Fed "tightening".

The currency markets display a fear of a loss of high interest rates in the US relative to the EU, as a result of the Fed letting interest rates go. The interest rate differential has been pushing up the dollar. Without it, the recycling of the current accounts and trade deficits back into the US would stop and the dollars would be sold on the international currency markets.

The gold market is ralying on the fall of the dollar. The lower rates make the return on selling covered gold calls lower and has a temporary upward effect on gold prices as well.

Markets are still trying to "think through" the coincidence of higher international commodity prices, higher import prices because of a cessation of the dollar's rise (quite steep actually), and a drop in the nominal growth rate of economic activity within the US.

Date: Fri Jun 02 2000 11:41
midvinternatt (Now if you wanted to be a FIAT KING, what would you have to do?) ID#345338:
Copyright � 2000 midvinternatt/Kitco Inc. All rights reserved
Supress natural money and supress other FIATS.
The rest is mechanics.

How do you realistically supress natural money?
Feed the fizzical demand outside of monetary demand,
and lock up the productive resources. Cannot allow
any other minting ( printing ) presses to exist.

The hedging by miners then makes sense, from the other
side, if you own the delivery obligation.

Since the nature of debt based ( usury operated ) FIATS,
mathematically require an ever increasing supply, why
wouldn't a FIAT KING partake in the leasing of gold, and
also buying for his own acount that which is leased. His
cost of funds approaches nil, and the net result of the
operation, is a necessary injection of FIAT, doubled with
a noose around the lessee. No loss of natural capital.

Economic analysis that attributes value to FIAT, does not
necessarily apply when dealing with the owner of the intaglio,
paper and ink. The value equation does not cross that line in
a linear fashion.

You stated: "no winners but GOLD!"

I would say: "no winners but TRUTH"

IMPOV

TRUTH is the ONLY thing that will PREVAIL

Mexico
IPC
^MXX
12:54PM
6534.310
+356.250
+5.77%

It is simpler than 20 thousand pages of discussion.

Answer: It is not definable in FIAT !

Oro, Thank you for all your postings.

Ted, nice post.

Oro you say:

The gold market is ralying on the fall of the dollar. The lower rates make the return on selling covered gold calls lower and has a temporary upward effect on gold prices as well.


Me: Why TEMPORARY?

Thanks to GoldFly --- here is the best chart on the WWW !
Add GLD= to the blank square at upper left and hit the REQUEST button !
<;-)

http://www.forextrading.com/forexartists/page1.htm<;-(

My, how the markets are responding to the cycle framework which I mentioned in my last two posts. Here at Centennial I read many newsletters and study charts and graphs. Kudos to Steve Puetz, R.E. McMaster, among others. Occasionally, everything seems to come together and the markets respond as forecast. Hopefully, this is one of those times.

On to market action: Gold surged higher overseas in London trading, not New York. Rumors are that someone is in trouble and that someone wanted to cover short positions quickly. To see gold and silver gap open on the Comex is gratifying, to say the least. I think that the drop in the U.S. Dollar along with higher crude oil prices back above $30 per barrel are beginning to convince big money people it is time to re-allocate their money. Moves like today usually begin in London where the big international money does its trading. Inflation is back everywhere in terms of all currencies. Gold has been in a steady uptrend in terms of most currencies except the U.S. Dollar. Now that appears to be changing.

Also interesting is how Reuters news service, which usually spins gold negatively, reported that today's gold rally had already discounted the Swiss gold sale of 120 tons by this coming September. When the bears can no longer trot out the old news to beat down the market and finally admit such news has no further effect, then we are at a turning point. I mentioned in earlier posts how Memorial Day weekend usually provided turning points (either tops or bottoms) for various markets. With the CRB Index having corrected down into this time frame, today it is up and flying again. Finally, don't rule out further attempts by the PPT (Plunge Promotion Team) to smash gold back down. However, I think that their success will be blunted by today's action. Now is truly the time to seriously consider adding to one's gold positions, as the inflation bandwagon picks up speed.

All systems are necessarily incomplete,

according to the author around 1935 or so,

it is a mathematical theory.

It has not to this day been shown to be

other than correct.


Sooooooooooooooooooooooooooooo,

Pick your monitary( sp ) system and then

It is necessarily incomplete !



Soooooooooo


Then what is it you are counting on to save you ?

Temporary because the covered call writers are interest sensitive and will be back in the market when rates rise.

If they sense that they may end up losing their gold positions they may stop selling calls. Some may buy them back or hedge with long futures.

So far, there seems little indication outside today's price action that would indicate that the gold banking business is going belly up within the next few days or weeks. Before this happens, I expect a concurrent rise in treasury interest rates and POG, and possibly a rise in short term lease rates - particularly 1 and 2 month. Also coin premiums should rise. It must be pointed out that the gold banking business may keel over in a matter of minutes and make it obvious that it is dead by having the gold markets seize up - either with or without any price action or any of the indications above. The thing to understand is that it is and EVENT. Given sufficient time to react, there would be some small players with enough huzpah to break ranks and start covering themselves - which we would see in the above. Without time to react, it would be "every man for himself" and the markets would lock up immediately as the tiny physical gold stream is clogged with bankers trying to obtain by prospecting what they promissed to their clients.

The current news of a distressed short covering is a good start. It does not mean that we are heading into the main event immediately, though we may.

gold, the topic of this page,

what will it do for you when THEY bring guns

and put those guns in the face of your children.

---polycarp---

And what do say for or against

THOU shall not kill ?



Let not the evil tickle your ear and say that you

may NOT kill,

The time will come ( soon or otherwise ) when you

( and/or yours ) will have to choose.


Do not allow your self to have your ears tickled,

the time will be that you have to put your life

on the line( ARE YOU READY ) ?

footnote:

The gold you may hold MAY be capible of buying some unknown amount of time.



and nothing else.


imo



ss.

Two questions#1. You write: "If you think your gold is going to do you any good, other than BUY YOU TIME"... Buy time before WHAT happens?

#2> Where, exactly, does anything like "Thou shalt not KILL" appear?

(I know this is probably a pointless exercise, but I couldn't resist. Sorry.)

http://www.usagold.comSir ss of nep...I would offer that many will trade gold "winnings" for much: "dream homes" Lamborghinis even,and much more...

Gold too (my opinion) will cycle up in value...some will cash out sooner, some later, some not at all...but "more" is coming, and if you care to have more, you may want to get your share...

Fundamentals support "more" value for gold than the present dollar price indicates (my opinion)...You'll buy more than "time" if we see 1500...

who are you ??????????
before you respond to this post examine the correlation
between 'maurice joly' and 'moses joel'


or () are you already aware of the correlation

in which case YOU will not post !


If you do not post then you are exposed !


Gold's revenge is God's revenge !
(plagarized from Kitco - just LOVE that phrase!)

http://biz.yahoo.com/rf/000602/l02190306_2.htmlI haven't seen this posted anywhere so I thought I'd post and see if anyone has any responses. This article came across Yahoo on nickel as I was surfing during lunch, but it may have something to do with the scramble in metals across the board.
-------------------------------------
Friday June 2, 12:49 pm Eastern Time

LME nickel soars 10 pct, revved up by options play

(UPDATE: Updates with closing nickel price para 7)

By Camila Reed

LONDON, June 2 (Reuters) - Industrial metal nickel was catapulted 10 percent higher on Friday as an options play reversed this
week's earlier vertiginous decline in prices.

Trading conditions are expected to remain treacherous ahead of Wednesday's option declaration on the London Metal Exchange
(LME) as players scramble to cover short positions in fear of further price hikes in the 1.4 million tonnes a year market.

``You have some Commodity Trade Advisor shorts who need to cover, people who got out of their positions, think damn, and now
want to get back in, stainless mills who need to buy and certain producers who need to borrow,'' one senior nickel trader said.

Earlier in the week, LME nickel prices had plummeted 13 percent to reach a low of $8,600 a tonne -- just three months after hitting
five-year highs above $10,000 a tonne on hefty demand for the metal used to make stainless steel.

Nickel began to slide on Tuesday after the western world's largest nickel producer Inco Ltd(Toronto:N.TO - news) unexpectedly
reached a last minute contract deal averting a strike at its 200 million pounds of nickel a year Sudbury complex in Canada.

``People were hoping for a strike at Inco to use this as the perfect excuse for the squeeze but then you had the market collapse but
everybody still wanting to buy and believe in it,'' the senior nickel trader said.

On Friday, three months nickel rose $800 a tonne to a peak of $9,480 a tonne as a result of the options strategy. By the close it
had fallen back to $9,080 a gain of $50 on Thursday's close on profit taking by the longs.

There are other signs of market tightness. LME stocks are now at eight-year lows and fell again on Friday by 96 tonnes to 22,158
tonnes.

**[BEOWULF: 8 year lows? Sounds like silver, platinum, gold and paladium doesn't it?]**

And the cash/three month spread, a measure of the market's tightness, ballooned to $500/600 from Thursday's $320/360 levels. A
backwardation occurs when the cash price exceeds the forward price and suggests tightness in nearby supplies.

``It could get very nasty, it is a very illiquid market,'' one LME floor dealer said.

One dealer said that a particular U.S. investment house along with a couple of European trading houses with Russian links were
behind the options move.

An analyst said the play was a last ditch attempt by U.S. funds to shore up the market before exiting long positions as the industrial
cycle hits its peak and starts to decline.

OPTIONS PLAY

Traders said a bullish min-max options strategy was at the root of the market turmoil. In this case, it was designed, to use the profits
from selling puts to finance the purchase of calls in a bet that the nickel price will rise.

On Thursday, there were 3,630 lots of June $9,500 calls traded, which traders said were part of the min-max plan -- $8,800 and
$9,000 puts against $9,300 and $9,500 calls.

As a result of the play, June nickel option volatility traded at a huge 50 percent from 30 percent last week, illustrating the market's
susceptibility to price fluctutations.

Dealers said they could the see the min-max call buying through bank activity.

``The banks are going around trying to buy the June calls,'' one trader said.

LME brokers Amalgamated Metal Trading said, ``With under a week to expiry this will keep most traders on their toes and will
definitely exarcabate the recent volatility.''

NICKEL PREMIUMS RISE, FUTURES PRICE TO SPIKE

Physical nickel dealers said that prices will not fizzle out after Wednesday's options declaration but could spike as stainless mills
work flat out through the summer cancelling shutdowns.

``You still have a deficit and falling stocks and strong demand, plenty of people who have not bought enough and hoped the price
would come off,'' a London-based trader said.

**[BEOWULF: Doesn't this last statement also sound like gold, silver, platinum, and paladium? I think it does, but then again I'm one of those FREAKIN gold-bug LOONIES]**

``When they see they have missed their chance then you will get the real panic -- then they will come in and pay the higher prices,''
he said.

**[BEOWULF: The same will happen with gold and silver. The sheeple will come a runnin to the next quick money makin fix only it'll be too late. Get it now, while their attentions are focused elseware.]**

A German-based trader said, ``If the market holds here and the stocks shrink then I think we will see another wave of consumer
buying.''

Rotterdam stores from where most nickel is bought have dropped by 16,000 tonnes since February 1 to 2,598 on Friday.

``We could see zero, and if we do then I think people will start to panic and we will see forward buying,'' he added.

**[BEOWULF: This is why it's so important to show that there are some metal stocks in the COMEX, even though they are alread owned by someone else.]**

Physical premiums, the price paid over LME cash for nickel, are rising despite the backwardation.

**[BEOWULF: I just might pick up a roll of nickels at the bank. Who knows, maybe it'll turn out the price of the nickel in the currency is worth more than the face value very soon then I'll just make a quick visit to the smelting plant to exchange it for a extremely small profit.]**

Dealers said nickel cut cathode was trading over $40 a tonne from $30 last week and metal was starting to be drawn down from
Gothenburg in Sweden, which is costly. Traders said to get metal out of the warehouse and to Central Europe would cost above
$100 a tonne.

Another dealer said that even if consumption slowed by the stainless steel sector in the second half from levels above 10 percent in
the first half the market would still face a deficit of 30,000 tonnes this year.

**[BEOWULF: that's looks like a big deficit to me.]**

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

Release Date: June 2, 2000

Rates for Thursday, June 1, 2000

Federal funds 6.65

Treasury constant maturities:
3-month 5.74
10-year 6.20
20-year 6.33
30-year 5.95

upside-down spread FF vs long bond = (.70%)

TED spread turned backward today, indicating a little respite in the squeezed Eurodollar markets.

This was probably due to dollar selling because of the expectation that the Fed would not raise rates significantly going forward. It could be due to a burst of borrowing, or a Fed injection. A dropping dollar would induce immediate action on the part of US corporations to fill inventories, particularly if rates drop as they have. If this is so, I would expect the next Monetary aggregate report to show a substantial rise in borrowing.

The stock rally saw a return to "normal" high volumes, particularly on the NASDAQ. I take it as indicating a rise in leverage is occurring. This new money created by leverage will seep into the economy in no time. People no longer max out their exposure to stocks so profit taking will appear next week with the expiration of a few more IPO lock-ups, as Farfel reports.

The bulk of this move seems to have been a short squeeze on the stock markets, not in the futures. This, and the rapid decline in the VIX would indicate that the summer rally might be over within a week or two if the Tech stock market does not correct ASAP. Both the VIX and the futures action indicate that there is no hedgeing of stock purchases going on. This would indicate that institutional buyers are not in the market. Considering some statements that came in March from some institutionals, they still view the stock markets as overvalued relative to the return available on bonds.

By the way, nearly 20% of the private market workforce drop is from manufacturing, where the effect of the strong dollar is very pronounced.

UPDATE 2 - Gold storms upwards, hits highest
since April



Updated 12:17 PM ET June 2, 2000

By Martin Hayes

LONDON, June 2 (Reuters) - Gold bullion prices rose
sharply on Friday afternoon in Europe, hurdling $280.00 to fix
at the highest since April 18.

Gold was fixed in London at the second of the twice-daily
fixing sessions at $281.60 an ounce, well above the morning
fix of $272.95 an ounce.

Traders said an explosive upward move took place in early
afternoon, when the spot bullion price soared from neutral
chart levels of $273.25/273.50 underpinned by investment
fund buying and strong New York futures.

"It is down to fund buying -- it has gone through $278 and
$280 and the next target is $282.00," a trader said.

The sudden price move took the market by surprise as bullion
had been quiet all week in a narrow range around
$272.00/$274.00.

"It is a classic situation -- it is Friday afternoon, it is very thin,
and everbody seems to be holding the same positions. So it
gets frothy when everyone starts covering," a senior bullion
trader said.

Above $280, the market ran into expected resistance in the
$280.00/$285.00 region, with profit-taking driving prices
back under $280.00 at one stage. But given the extent of the
rally from midsession levels, signs are promising for gold in the
medium-term now.

"If we get a good close today then it will set us up for a
positive week ahead," the first trader said.

Spot gold closed the European session at $279.40/$280.15
an ounce at 1515 GMT, well above from New York's
Thursday close at $272.50/$273.00 and just within the
$280.00/$285.00 constructive chart region.

Earlier on Friday, the market was unmoved by Swiss National
Bank (SNB) data detailing steady progress towards its target
of disposing of 120 tonnes of bullion by the end of
September, analysts said.

In its third regular 10-day statement since it began sales on
May 1, the SNB said its gold holdings and claims against gold
lending operations had slipped by 135.8 million Swiss francs
to 39,273.7 million francs.

Analysts said the figures suggested the bank had sold between
eight and nine tonnes since the release of the last set of figures
10 days ago, when the amount was almost the same.

The SNB is among 15 European central banks which last year
agreed to limit their combined sales to 400 tonnes per year
over five years in order not to destabilise the market.

Traders said the gold market has shaken off some of its
bearish technical pressure, with short-covering and fresh long
position building emerging in New York.

Other precious metals piggy-backed higher with gold. Silver
was pulled above the $5.00 level for the first time since May
23 and palladium was fixed at $590.00, its highest since early
May.

(Fair Use For Educational/Research Purposes Only.)

"TRUTH is the ONLY thing that will PREVAIL"........I agree, God has stated that His Word/Salvation/Wisdom/etc. are "much more precious than fine gold (or silver)", therefore if gold is not precious in the hearts of men (as is largely the case in the US today) how can anything that God compares to it (gold) be considered/perceived to be precious either(truth)!

So I believe that the revival of God's Truth in the hearts of men (spiritually) will have a physical manifestation accompanying it......i.e. higher gold prices! (hence corresponding preciousness)

Go Revival!

**[BEOWULF: This is why it's so important to show that there are some metal stocks in the COMEX, even though they are alread owned by someone else.]**

You are so right!!

"The show must go on" if it stops, confidence fades and the bank run begins.

There are many stories of bankers' tricks used to show gold at the counter so that depositor's confidence is retained during a bank run. They range from putting up bales of iron with a thin layer of gold coins on top, to running circles (putting bank employees in line at the bank's open and having them make mock withdrawals, which circulate back onto the counter when the employees return the gold through the bank's alley door.

Yes, the COMEX stock is for display purposes. Perhaps it is time to buy comex futures en masse and take delivery. If ever there was a Soros play this must be it.

"KAPLAN'S CORNER: QUESTION #1: What do you think are the implications of a rising
U.S. stock market and a falling U.S. dollar? ANSWER: This is often the final stage before
a substantial stock market drop, as we saw in Japan in 1989, or in the U.S. in 1987 or 1990.
To foreign investors, the sliding greenback will make it seem as though U.S. equities are
actually flat to lower, rather than rising, so they will gradually invest less money in the U.S.
This cutback in U.S. fund inflows will cause a further drop in the U.S. dollar, which will lead
to a continued reduction in net foreign investment, which will lead to a renewed drop in the
dollar. Eventually even domestic investors will see U.S. equities falling in price and the rout
will be underway. Although today's economic data hinted at an economic slowdown, the real
test will be over the next few years as an actual recession is likely to occur and equities
worldwide will go out of favor. A falling U.S. dollar will also reduce net foreign investment
interest in U.S. Treasuries, though this will be partly offset by money exiting equities for
the relative safety of U.S. government paper. Gold, of course, loves the prospect of an
economic slowdown and is therefore likely to continue to rally sharply over the next few
years. Its rise will be assisted by the fact that domestic U.S. inflation generally increases
moderately when the U.S. currency is weak, as imports become more expensive in dollar
terms."

Name
Bill Murphy
Member
Since 05/08/98
Company
Le Metropole Cafe
Occupation/Title
Le Patron
Age
52
Location
Rye, N.H.
College
Cornell
Degree
B.S. Hotel Administration
Favorite Stocks

Investment Style
Aggressive
Investment Experience
25 years
Interests and Hobbies
Athetics
Additional Info
Former Professional Athlete, Patriots
Favorite Links
http://www.letmetropolecafe.com, gold -eagle

{From SILICON INVESTOR.)

http://www.bearguardfund.com/charts.htmlClick on each chart to enlarge.

NEW YORK (AP) -- The dollar fell across the board against other
major currencies Friday as further proof that the economy is slowing led
traders to believe that the Federal Reserve may scale down its
credit-tightening efforts.

In late New York trading, the euro was quoted at 94.21 cents, up from
93.25 cents late Thursday. The dollar also was quoted at 108.14
Japanese yen, down from 108.55.

In the latest sign that the economy is cooling to a manageable pace, the
Labor Department reported Friday that the unemployment rate rose to
4.1 percent in May as businesses cut 116,000 jobs, the biggest reduction
in nine years.

The report provided more evidence that the Federal Reserve's efforts to
slow down the economy with rate increases is getting results. The Fed
has raised rates six times over the past year, including a half percentage
point hike last month.

The rate increases have been increasing the cost of borrowing but also
keeping the dollar strong against other currencies by boosting the yields
available on cash investments. Interest rates in Japan and Europe are
relatively low compared to U.S. rates.

With the likelihood of more large rate hikes from the Fed becoming more
remote, currency investors sold off the dollar to pick up other currencies
including euros, which have been badly oversold in recent months.

The Fed next meets to consider interest rate levels on June 27 and 28.

Currencies of the 11 countries participating in the euro are no longer
traded separately and are tied to the euro by a fixed rate. Based on
Friday's euro rate, the dollar was worth: 2.0755 German marks, down
from 2.0971; 6.9609 French francs, down from 7.0333; and 2,054.73
Italian lire, down from 2,076.10.

In other trading, the dollar also was quoted at 1.6702 Swiss francs,
down from 1.6852, and 1.4760 Canadian dollars, down from 1.4904.
The British pound rose to $1.5058 from $1.4939.

(From THE NEW YORK TIMES, Fair Use For Educational/Research Purposes Only.)

http://www.siliconinvestor.com/insight/contrarian/"Christmas in June. . . I'm sure a lot of folks will be all lathered up for next
week thinking that the start of the summer rally is upon us, and hoping that
Santa Claus is back in town and we're off to the races again. I seriously
doubt it will play out that way. As powerful as this rally is, I think it's a rally in
the early phases of a new bear market. Folks that are overextended should
use this rally to lighten up at prices they might not see again for a long time."

Delivery notices for the June gold futures this morning totaled 560 contracts of the 1,646 postions that remained in open interest after yesterday's settlement of 1,364 June contracts.

Also in yesterday's trade the open interest in August gold climbed by 2,321 to 90,740 contracts...in which total volume was only 15,300 contracts traded on the day.

Estimated COMEX trading volume today was 65,000. It will be interesting to see the final numbers (posted Monday) regarding how today's brisk trade affected the levels of open interest on the June and August futures. Stay tuned.

Thanks

Thank You for responding to my email query...you've made things much clearer. :)

Lamprey

http://www.jonesheward.com/commentary.cfmReaders of the Forum will find Don Coxe's discussion this week interesting, as it is focused solely on the Euro, and the possible implications of its rise, among them: a bear market in US equities, and the conversion of Eurodollars to Euros.

http://skybluemonthly.freeservers.com/sbm/sbm00m.htmGold Carry Trade, of course, will be no difference. Those who involve in the Gold Carry Trade will most likely be destroyed financially when the carry trade is unwound. We are good at analyzing macroeconomics, not precious metals. We plan to use our economic analytical skills on gold in next issue of Sky Blue Monthly. But we need some help. If you know any good information, articles, links or websites on Gold Carry Trade, please e-mail us at tinyeung@home.com. Thank you very much!

http://news.excite.com/news/r/000602/14/clinton-germany-cigarsThe link to the Prez's trip in Europe. You just can't make this stuff up! I guess Billy-Bob has his legacy now. This guy is an embarassment ;-)

http://www.egroups.com/message/gata/476?What did YOU do for the gold cause today?


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

Thanks, canamami, for posting the Don Coxe link.

How fascinating markets can be. Oil is up 200% in a year. The CRB is up 25% in the same time period. All Fed districts are now reporting wage pressures. Yet the slightest hint of economic cooling and the crowd panics back into the same old overpriced tech stocks. Boy, that was a soft landing. Well, so much for the theory that the wealth effect had been cancelled anyway.

For those who haven't tuned in yet, Coxe believes the really important event these days isn't what's going on at the NASDAQ but what's happening in the forex markets. The euro has advanced nearly 6% against the dollar since the bottom last week. Meanwhile, today's big news was supposed to be that the inflation scare in the U.S. is over. Don't you believe it. If it were true, bonds would've held on to more of their gains, and gold wouldn't have taken off like a jackrabbit.

It is hard to argue against the kind of breadth and volume we saw on Wall Street today. I just hope stocks aren't setting folks up for another plunge. Like Coxe, I remember 1987 very well. The stock market collapsed because bonds wouldn't stop going down, and the bonds wouldn't stop going down because foreigners wouldn't stop selling them, and foreigners wouldn't stop selling them because the dollar kept falling. And the dollar kept falling because...

When will they ever learn? Oh, when will they ever learn?

http://www.prudentbear.com/credit.htm"What is all the excitement about? Well, the bulls are clearly crafting the
perception of an omnipotent Federal Reserve orchestrating a perfect
'soft-landing.'"View Yesterday's Discussion.

Flambeur)
Jun 03, 05:28

After reading the paen to gold (thanks for the link), I
thought, has anyone presented a balanced argument on the
merits and de-merits of fiat money on the forum? As most
of the arguments for a gold standard are based on a
world gone by, why not examine some of these issues in
the modern context. I then add some thoughts about the
future. Now that we have a solid and exciting gold
up-day behind us, and are in good spirits, I hope this
viewpoint is of interest.

The gold standard grew out of universal banking, where
banks issued money notes that were backed by gold -- the
notes were convertible to gold on demand. Due to rampant
abuses, where paper notes were debased with excessive
printing, the only way to control for this abuse was by
linking the value of the notes to gold. With the threat
of debasement out of the way, the trust between banker
and depositor was focused on remaining aspects of the
banking relationship, i.e. prudent lending/borrowing
practices and other factors important for long run
profitability of the banks.

Gradually, note issue became a government affair, with
states issuing their own notes. During the many economic
and financial crisis of yesteryear, many state notes
lost their value, and became worthless pieces of paper.
In this century, note issue was finally centralised,
with the central bank assuming the role of issuing money
notes, and functioning as a national clearinghouse for
the balancing of money claims and gold reserves
throughout the banking system.

Earlier, due to the use of money in international
transactions, the gold standard evolved into an
international monetary system, functioning as a fixed
exchange rate system. The Pax Brittannica of the 19th
century, ultimately gave way to Pax Americana of the
20th century. As there were difficulties in arranging
for every country to set a fixed price of gold in its
currency, ultimately, the US dollar was set as the sole
anchor to gold (at $35/oz in the mid 1940s), in what
became known as the US dollar:gold exchange standard.

While the liquidity constraints were overcome with
additional money (dollar) printing, this created
concerns about a "dollar crisis", and eventually led to
a breakdown of confidence in the system, as crucial
participants in this arrangement (France) cashed in
their dollar holdings for gold, which led to the US to
abandon the $ parity to gold in 1972. Without this
anchor, the fixed exchange rate system broke down, and
the era of freely floating exchange rates was ushered
in.

At this point, the "threat of debasement" materialised
and the inflation of the 1970s took off in a real way,
reflected in the market price of gold rising more than
20-fold by the end of the 1970s.

Since then, central banks have been fighting a pitched
battle to provide enough money issuance while reducing
the inflation, and then keeping prices stable. At the
same time, given the complexity of the economy, they
have been hard pressed to manage the quantity of money
in the system. Even if by the banker's main criteria
(stable consumer prices) the amount of money is
adequate, by other secondary criteria (asset prices only
reflecting expected earnings, and not becoming a
euphoric bubble) there may be an excess. However, the
evaluation of the secondary criteria is ultimately
dependent on inflation showing up in consumer prices
(through wealth effects on demand and resource
utilisation). So far this is not strongly in evidence --
inflation is only beginning to stick its budding head
out of the ground.

The central banks have succeeded spectacularly based on
their main criteria -- low and stable inflation -- in
managing the amount of paper money in the system. To be
fair, during the past 20 years the rapid changes in the
global economy -- the liberalisation of capital and
goods market, with new global rules to guide peaceful
commercial relations -- have created tremendous global
economic growth and profit possibilities. In the first
instance, the large multi-national corporations have
been the main beneficiaries and the gains from trade
have not lifted all segments of society out of poverty.
In my view, a more stable inflation environment, with
ample financial liquidity, conjoined with this
development are the primary forces behind the share
price boom since the 1980s.

In short, it is missing a major point -- the phenomenal
structural changes in the global economy in past decades
-- to blame the central bankers for reckless money
growth in driving asset prices ever higher. On that
point, however, it is likely monetary accommodation
plays a significant role. A rhetorical question could
then be asked, if inflation doesn't show up, who is
being hurt (aside from the goldbugs)? The issue then
soon turns to other aspects of Capitalism (which I
allude to at the end).

The final aspect of the monetary picture are the
phenomenal financial imbalances involving the US
economy. Simply put, these have been ushered in because
the US is the leading investment market in the world.
Everyone is willing to invest in the US, in return for
consistent and high gains. As in South East Asia in
1997, the only risk to this beautiful picture is the
risk that the exchange rate will shift. The big question
is, will the dollar drop? Perhaps, it is not if, but
when. Moreover, foreign investors may begin to worry
that not only are their high gains at risk in their own
currency, but also in terms of US dollar, if a stock
price correction, declining real estate prices and
rising bond yields occur. They will then quickly start
thinking about moving their assets out of the US. We may
have seen a foretaste of that on Friday, when eurodollar
deposits were liquidated, not in favour of US
treasuries, but in favour of Euro-area and Japanese
assets, and also Gold. The dam may have sprung a leak.

Interestingly, the fiat monetary system may not
necessarily fail based on its classic criteria of
"debasement", but due to its "achilles heal" of
financial success, that turns out to be unsustainable.
In turn, if there is a massive correction, that has real
effects on the economy, inflation may emerge as
liquidity is infused in the economy to save the
financial system and maintain financial intermediation.
However, that is hard to predict. As Keynes said, due to
the complexity of financial systems (with all their
financial istruments, financial institutions, financial
markets, and numerous participants), what happens in
financial markets "not one economist in a million can
predict".

The basic conclusion I draw is that the fiat money
system has not been so terrible (yet). But it shows
clear symptoms of fragility. Moreover, these are
strongly linked to national vested interests, and the
ceaseless struggle on this planet over our common scarce
resources. Without fair and respected rules in the
international community, there is a tendency for the
winner to take all. Today, the winners seem to be North
America, Europe and Japan. However, todays advantages
may quickly become tomorrows disadvantages. The
countries of Asia are growing in strength and capacity,
Africa and South America still have unexplored riches.

Looking ahead, let's hope we reach more balance on this
planet. Otherwise we risk continued geo-politcial
upheavals. Moreover, to break down national vested
interests in the international monetary system we may
need a reformulated "gold standard" for the
international monetary system.

Looking further still, I think we need much more than
stable money. We need to somehow turn our focus away
from profit driven investments as an organising
principle (due to its limitied attention to environment,
community and our children). We need to rediscover a
paradigm of sustainable consumption lost in the mad dash
through the 20th century. The sustainability I am
talking about is not low and stable inflation (as that
would largely be gone in a gold standard), but that
which preserves our planet; our common heritage under
the sun: soil, water, air and glacial caps. Today, we
are perilously close to loosing a very precarious
balance. Should we loose it, much more will be lost than
financial stability.

Sorry this got a bit long. Have a good weekend.



@Wisebeard: Slight Correction to my previous 01:40 post. . .
(TheBox)
Jun 03, 02:21

@Wisebeard: Inadvertantly typed "SSI" when i meant to
type SSRI, aka "Silver Standard Resources."

I don't think Friday's U.S. POG spike will go unnoticed
by other investors on Monday. . .However, will probably
be pushed back down with a bat by the PPT. . However,
there will still be "alternative investors" looking to
gold for investment possibility, at least enuf to cause
some continued upward movement of the XAU, if not
Monday, then probably a bit Tuesday, and then POG will
probably be beaten down by the ultimate powers who
ultimately abuse their complete power. . .

http://www.publicdebt.treas.gov/opd/opdpenny.htmI have been mulling this over, and I think it is the reason for the rise in all the markets this week.
If you look at the above link, you will see that there has been a large drop in the public debt, most of it coming in the last 6 days. (Before the end of May, the daily figures showed this.)
I think the government has bought back a large chunk of treasuries. This shows up in the large drop in yield in the treasury market.
This also floods money into the entire investment market.
Since that money is primarily investment money, and the treasury yield drops, it is not reinvested in treasuries, but looks for somewhere else to go, thus the sudden unexplained rise in the stock market.
Those savvy investors who realized this also realized this flood of cash pushes up inflation and thus a rise in gold.
Anyone else have a better idea for what happened this week?

Store Owner Kills Assailant With Trigger Lock
http://www.frii.com/~buchanan/triggerlock/

Still out of breath and adrenaline pumping through his body, Smitty
Wesson
sat on the curb outside of his family owned grocery store described his
near death ordeal at the hands of a knife wielding felon.

At 9:15 this evening Mr. Wesson noticed a young man enter his family
owned
grocery store. The man walked around the store in a deliberate manner
before approaching Smitty at the cash register where he reached into his
coat and pulled out what Mr. Wesson says is the biggest damn knife he
had
ever seen in his life. Mr. Wesson said that it reminded him of the
scene
in Crocodile Dundee when Dundee produced his knife and said "Now this is
a
knife!" The next few minutes seemed like an eternity" explained Smitty.
"I
reached under the counter for my trusty Smith and Wesson model 19. As I
tried to get my finger on the trigger I realized that I had installed a
brand spanking new trigger lock on my gun. There was a pause in time as
the would be robber looked at me and I looked at him and we both looked
at
the useless gun in my hand".

"I didn't hesitate," said Mr. Wesson. "I started running up and down
the
aisles of the store with my gun in my hand trying desperately to
remember
the friggin combination to the trigger lock. I ran down the soup aisle
knocking Campbell's soup all over the floor. I saw all of those red and
white cans rolling around, hoping it would stop the mad man, but he kept
on
coming. Next I ran down the baking isle where I was sure the Wesson
corn
oil would stop him, but he jumped over the slippery puddles and
continued
to pursue me.
666!, 123!, 357!, I kept trying different combinations of numbers to
open
my trigger lock, to no avail. I set the combination myself last week,
but
I never thought that I would have to open it in such a hurry. I always
thought that I would have time to reach into my pocket for the slip of
paper with the numbers on it." "I ran down the feminine hygiene aisle
and
saw my life begin to flash before my eyes. Is this where it ends," I
thought, as I saw the blur of Tampax and Kotex Maxi pads while running
past? "I decided to take flight into the parking lot and as I
approached
the automatic doors I remembered that I needed to make a service call on
them because they opened too slowly. I burst through the doors with my
attacker close behind. I could hear him breathing hard. Suddenly I
remembered the combination.
911! I yelled 911 at the top of my lungs as my fingers scrambled to
spin
the tumblers of the lock. I remember how hard it was trying to unlock a
combination lock while running for your life. My head was bobbing up
and
down like a little red and white bobber with a big bass on the line as I
desperately tried to remove the blasted lock from the trigger of my
357."
"Finally, as I rounded a van in the parking lot the lock came free from
my
only means of defense. I went into horror though as I looked at the
back
end of the cylinder and realized that the gun was unloaded because it is
a
safety hazard to use a trigger lock on a loaded gun. I yelled out
'shucks! and knew that the gun was not going to do me much good without
some ammunition, which was back in the store behind the counter." "I
didn't
have time or any more energy to out run the punk for that distance so I
threw my gun at him and he ducked as it sailed over his head. I heard
glass break as it hit a windshield of a small car in the lot. I started
for the store anyway when I had a strange thought that perhaps I should
call
911 and wait for the police to arrive.

As I was sprinting for the store, the robber was still chasing me. He
was
about fifteen yards behind me as I neared the doors. Suddenly and
instinctively I recalled the trigger lock still in my trembling hand. I
stopped, spun around, grabbed the trigger lock tightly in my right hand
and
with all of the desperation of a pitcher with two out and the bases
loaded
in the ninth I hurled a fast ball at him. I will never forget the
puzzled
wide-eyed look on his face as the trigger lock approached him at a high
rate of speed. It hit him right between the eyes and he dropped like a
piano fell on him. He was dead before he hit the ground!

Smitty went on to say that he sure was glad he had his Gun-Blok trigger
lock. "I don't know what I would have done without it," he said as he
wandered back to the store.

Yesterday in my post # 31670 we became familiar with an evaluation tool for goods called the "Marginal Utility". If you have not been idle during this time you have surely discovered that the fourth doughnut is not enjoyed as the first one, though it was an identical product of the baker's art. We also learned that "money" is a different kind of good, that in being a proxy for all goods, it stands firm against our test using the Marginal Utility. We also learned that money does not suffer nearly so much from abundance as it suffers from the perceived ease at which it may be obtained, or replaced if spent. It matters not how difficult your fortune (big or small) was built...if the future money/dollars come easily, the value of the entire account suffers from discredit as though it were built easily today. Accounts have no memory. At last, we considered the important geology of our foundation...that expanding the wealth account in gold is not easily done. In fact, as competition grows for acquiring each additional gram, the value of the entire account will *benefit*...NOT remembering how *easily* you built your fortune measured in kilograms or ounces in these past recent times.

In 1923, the German people were not happy to find themselves suddenly millionaires, but there were those few others made happy to find themselves with pockets of gold. The scene has been repeated many times in various degree elsewhere. Though adequate alone, protection against currency crisis to maintain your purchasing power is not the sole reason to build your accounts with gold. The transition to an undistorted "Free gold" system (no use of gold lending or derivatives in banking) around the world would provide remarkable gains in purchasing power. Gold as we see it will stand alone, unmatched, offering the real wealth of kings. Taking a seat upon the peak of Amon Hen is not required to share such a sight as this, as I hope you are now coming to see from the comfort of your own home.

Modern gold as a "wealth reserve asset" shall stand alone to be marveled for the perfection with which it serves its modern use. When put to use direct from nature with no modification by the hand of man in the form of financial attachments, it shall surely leave many to ponder how a supreme gift known through history could lay with hidden potential so long, ill-used in the inartful clutches of banking. But where does the transition to "Free gold" leave banking and currency? Not terribly different than we find banking and currency today.

Simple thought reveals the strength of banking in debt-currency (the currency we all know very well today) is found in the inherent deflationary structure, giving value to a unit of currency that may not be as easily repaid as borrowed...each dollar created in the systemwide lending process must, by contract, be repaid to the lender, with interest according to the governing rate. In opposition to this built-in tendency toward deflation, we also see many goldhearts cite the fault that this "money from thin air" has also an unmistakable tendency toward inflation with nothing "real" to restrict its expansion from the borrowing/lending process.

Granted, and as mentioned, when deemed by all to be easier to repay, hyperinflation is the result if all borrowers are accommodated. This condition is not in the lender's best interest--it destroys the profit margin of their enterprise as the time-value of money now would work against them. They lend "good money" today only to be repaid "weak money" later in time. Under stable operation, their profit margin is not the full interest charged on lent currency as many are reckless to think. Such business profit for the enterprise of lending is that interest charged to borrowers, minus the interest paid in turn to their original depositor (the original "lender", as it were), and minus staff and operating expenses, and minus funds for coverage of defaulted loans, and effectively, minus the lost time-value of money (real price inflation rate).

And if the balance tips toward deflation? While inflation tends to erode accounts of saved currency, the sad tendency of deflation is that it often results in canceled contracts with ripple-effect economic slowdown and failing loan performance. This condition is, also, not in the lender's best interest--it destroys the profit margin of their enterprise as the defaulted loans now would work against them, eating past accumulation of profits. Refer again to the "profit equation" provided above. They particularly risk collapse and bankruptcy here because on a dime they cannot make "borrowers" appear from the woodwork and borrow, nor make the economy turn again upward on their schedule (witness Japan).

Savers of currency may indeed prefer some deflation for purchasing power gains, yet they dislike the economic effects and employment risks--as most others would share in that concern, also. Borrowers may like ample inflation to repay with easy dollars, but lenders prefer inflation only as adequate to "keep the contract sprockets greased".

Thus fairly evaluated, a lender's best interest are not at odds with the "economy's" best interest. Yet, natural harmonics may give rise to inevitable swings of boom and bust on occasion...whether ii be at a small scale (single bank failure) or large (national speculative investment bubble, hyperinflation, or recession/depression). This is an irrefutable consequence of banking...whether the currency is pure gold or pure paper, it matters not as history testifies. To this end recognition, it becomes important to provide ourselves with access to a meaningful wealth reserve asset that is safely and completely outside of the banking system. Give me "Free gold", and I give you a brighter prospect for tomorrow; the cornerstone of civilization--people--sufficiently bolstered against systemic risk.
-------------------------------------
Much ado about fiat currency
-------------------------------------
In 1933, the U.S. citizens were certainly force-fed a fiat currency, a paper note that was not as money had been known to be, and could therefore only be replaced by government decree. Paper gold currency one day, paper fiat currency the next. To be sure, such a gold confiscation action as that was an unmitigated tragedy. I am thankful to this day that I was not alive to suffer the indignity. Conduct a mental exercise today. Toggle a switch to eradicate all currency accounts of surplus and debts, but leave people their real property--including gold--and you can surely watch in wonderment as the free-willed people resurrect for use the same debt-based currency they know so well today, even as they also come away with new appreciation for tangible property!

Think about this also with your modern perspective...as seen prior to 1933, would not a borrowed amount of gold currency today also become effectively a "debt currency", to be passed from one to another more often than not as duly accounted ledger entries? To toil and repay, you may never once lay hand to gold, and a check settles the account! Or think about this...in a further blur of the old lines, would not a paper currency that may at any time be freely exchanged for its market value in "Free gold" effectively provide the benefit better than ever functioned in a fixed gold standard--that being a safe haven against bank failure AND against ALL manner of currency inflation! Can you see, when gold passed AS the currency, there was no escaping from bank system inflation short of a continual "controlled burn" of bank failures as the free market would dictate...and yet there would still remain an inflationary effect. And you would still risk loss of your accounts if it were your bank's turn to fail and you were late lacing your shoes for the bank run that day.

What to make of this line of thought? With this freedom of exchange today, paper for gold, please survey your associates. What number rush with each paycheck to make the exchange? For sake of debate, one might easily claim on solid ground that the "fiat" aspect of modern currency has become only a relic of economic evolution...reduced to a word from history that has lost its significance. That is NOT to say that gold has lost its significance, as anyone joining me in these two "Foundation" posts will surely know by now. It is also not to say that "fiat" currency is a relic in all places today, for it surely exists wherever there in not a natural evolution of experience, but rather an abrupt change in currency usage forced by government decree.

"Free gold", as held in my view, offers you the gold "standard" as it was "meant" to be--but never could be by the very nature of banking. With "Free gold" on one hand, on the other banking systems may be left to pursue long-term price stability in terms of their currencies within their operational geography for the purpose of fostering reasonable expectations for the future which enable nominal contracts to function well within the economy, and further, that expectations of change do not become significant factors in key economic decisions. Long-term lenders of all compositions will know reasonably what their real returns will be, and the long term borrowers of all types will know what the value of the payments will be under the terms of the contract. Reasonable? In the words of Bank of England Deputy Governor Mervyn King, "the view that price stability is the overriding objective of monetary policy is now common to both industrialized countries and emerging markets. ... A commitment to price stability is now seen as the key to achieving broader economic stability."

Provide "Free gold" (a pure property wealth reserve asset removed from lending and derivative instruments) in all nations, I shall not be troubled by the color, faces, and number of zeros appearing on your foreign currency. The foundation is in place such that we can do fair business evaluated in the international language of gold. A dreamer's dream...or a peek through the keyhole as opportunity knocks? Consider it a birthright. Mankind deserves "Free gold" and will not reach its full potential without it. The timing has never been better than now for the commitment and follow through. The foundation is in place.

A nice thing about gold: it bolsters you against the worst of times, and it steers a true course for the best of times.

got vision?
got gold?

www.kitco.comfrom Rhody (a repost):

Date: Sat Jun 03 2000 07:18
rhody (CARRY TRADES: although it's early, Friday's fall in the USD ) ID#410367:
Copyright � 2000 rhody/Kitco Inc. All rights reserved
particulary against the EURO, may signal the beginning of the
end of what is left of the carry trades in the forex markets.
The EURO has dropped about 25% since introduction against the
USD. This was virtually guaranteed by EU's 3% interest rates
vs the 5-6% rates available in the US. EUROs were borrowed
at 3% and sold to purchase USDs to purchase bonds yielding
over 5%. This generated a yield profit of 2% plus and with
the fall of the EURO the effective short sale adds 24% more.
Not bad. The problem is, 5% of that 24% disappeared in less
than one week, much of it last Friday in ONE DAY.
So 6 months of FOREX speculation against the EURO may be
unwinding now in just a few weeks, resulting in a dramatic fall
of the USD against most major currencies. US stock markets
rose on Friday on speculation that the FED would not raise
US interest rates further based on non-inflationary unemployment
data released. DREAM ON. The fed will continue to raise,
to counter the unwinding of the EURO carry. They will protect
the USD, even if it means trashing American equity markets.
I don't think the Fed can control this. The debt trap has
been sprung. The USD is trapped. If the Fed raises, it
trashes the stock market, and foreign money cashes out.
Where does it go? If the USD continues to slide, it will go
home, aggravating the outward dollar flow from the current
account deficit. The rate of decline in the USD will accelerate.

This is the most bullish scenario possible for gold. The
result must be that next week we will see tremendous pressure
applied against the gold markets, even as the USD slides.
American Authorities can do no other! If I am correct, next
week and over the coming weeks, we will see dramatic evidence
of monetary intervention in the gold market resulting in
dramatic buying opportunities in gold priced in non Federal
Reserve Note currencies. To put this another way, the
USD will continue to slide against other currencies, while
the US Fed. intervenes to push back the US dollar price of
gold. FWIW, Rhody

Chris Powell (6/2/2000; 22:33:26MT - usagold.com msg#: 31728)
GATA busts the shorts and gold rallies
http://www.egroups.com/message/gata/476?
-------What did YOU do for the gold cause today?---------

Hello Chris Powell,

To simply answer your question: Myself and others brought more Physical Gold"! If one can only understand the implications of the paper derivatives tonnage your figures present, then real gold is the "Cause" to reach for. It carries the same 100 to one leverage any form of paper play can produce. This is true because it must eventually represent the entire gold ownership position our present world paper gold market entails, once said paper defaults! Physical gold cannot default or be entangled in the coming "workout" of this mess.

Support yourself and the Gold cause, become a Physical Gold Advocate in action first. Then send some money to GATA! (smile)

Trail Guide

Be back later

Thanx much for your response on gold price discovery outside COMEX & LBMA. I need more think time, but my mental model of things at the process level in the expected gold melt-up are beginning to come together for me. When they do, I'll share.

High regards,
Journeyman

Sir Aragorn III,

Your work on your "Foundation" series has not gone unappreciated!

Regards,
Journeyman

http://www.richardhoskins.com/bkwolf.htm

Rugen,

Did you take yor post from the indicated site ?

Trail Guide, thanks for your remarks to
me of this day and infinitely more so for
your observations generally over the long
term. I don't mind your knowing, and
everyone else's, that I did as much gold
shopping as my limited means allow right
here from CPM over the last two weeks.
Got some of the Imperial German 20-mark
coins for their historical value and got
an absolutely GORGEOUS Liberty gold piece
pendant on a gold chain for my wife. I'm
afraid I like it more than she does. But
that's OK, because I got her some other
gold jewelry too. Yes, gold will be
precious again and we can all do a little
to hasten the day. Thanks again.

"snot nosed 20-something portfolio manager here.....
(winecountrydude)
Jun 03, 11:26

Hey Richard640-

Regarding your message of 07:16, we're not ALL
overextended CNBC viewing, NASDAQ following sheeple.
Just turned 30 and I can reflect on my 20's as a time of
paying off school loans, moving to the west coast and
working my way to a nice position managing bond funds
for a major bank. I've been poor and well off and I can
tell you I've made sure I'll never go back. Out of
stocks, out of debt, got gold, fishing, hunting and
outdoor gear, a big library, and varied skills in case
banking busts. Currently scouting land in California's
northern wine country.

Granted I know many people like you described, usually
the types that had everything handed to them on a
platter and were never satisfied. I think you would be
surprised how many of us in that age bracket are wary of
the government and it's promises to take care of us when
we're older. I'm doing everything I can to end up on my
own 40 acres of Merlot grapes with wife and faithful
hunting dog rather than wasting away on a Social
Security check that may or may not exist when I'm ready
to start collecting what was taken away.

Thanks to all for the lively debates and information
I've enjoyed as a lurker. I'll chime in again now and
then when I have something to offer.

Enjoy the weekend y'all."

I have been thinking. Some would call the process dangerous. There are those who would prefer common folk like me not to do it. Not only will I think but I will think out loud via this forum. Let us call it a form of rebellion, this thinking for ourselves. As I think out loud I would ask that those of you who read feel free to offer some good old fashion criticism.

During the 1992 presidential campaign I believe a sign bearing the words, "it's the economy stupid" was placed in the democratic presidential campaign headquarters. I may have the wrong headquarters and I may have the wrong campaign in mind; however the point was that one must not miss the prize by concentrating on the wrong cause and effect.The single most important issue to the electorate in any society is the economy and failure to recognize this brings on certain defeat politically.

Now if one is saving (accumulating assets) over the long term it seems that one would be more interested in the direction of the economy than any other thing, for by having a good sense of the direction one can have an understanding as to what assets would be best to accumulate. Now I know that are those of you out there in forum land who take the position that the storing of wealth need not depend upon the direction of the economy. Well I would disagree with that position. To every thing there is a season, and a time to every purpose under the heaven.. There is a time to accumulate precious metals. There is a time to hold and there is a time to convert a portion of that which has been held into other assets. Now is the time to accumulate. During the 1980-1981 period conversion was in order and accumulation became the obvious thing to do beginning in the mid 1990's and continuing up to the present.

Why would one watch the direction of the economy in order to determine timing as to accumulation and conversion of accumulated assets? The answer is quite simple. The direction of the economy tells one what is hot and what is not, or should I say what will be hot and what will not be hot.

The maxim of buying low and selling high will never fail because it is a simple "derivative" of the immutable law of mathematics. It is not difficult to discover what is high (hot) and what is low (not) in the present. One simply accumulates that which is not hot and converts that that which is hot into that which is not hot. Of course one cannot convert that which he has not accumulated, therefore accumulation of that which is not hot is a prerequisite to future conversion of that which is hot to that which is not hot. We cannot know the future thus we must accumulate and convert in the present. The problem for others and myself, I think, is the temptation to accumulate and convert in the future (high stakes gambling).

Let us define what is hot and what is not hot. Hot is that which is in relatively high demand and relatively short supply. The tendency for that which is hot is to become overpriced. When something is overpriced then something else must be under priced due to the immutable laws of mathematics and economics. What we have here described is a market in disequilibrium. The market is always in disequilibrium and is always pursuing equilibrium. Therefore one who accumulates assets always has something to accumulate and one who has already accumulated will eventually have something to convert from that which is hot to that which is not hot.

The problem is not what to accumulate or what to convert. The problem is that of knowledge and information and having the guts to do what the herd is not doing, or should I say, not do what the herd is doing. This takes guts and tenacity and sometimes a very tough outer layer of epidermal tissue. I have described Warren Buffett, the consummate contrarian. If one stays with it long enough his success will eventually eliminate all criticism and he will no longer be recognized for what he is, a contrarian. I hope for that situation some day, perhaps soon, when I will no longer be considered a contrarian. Hopefully I will continue to be a contrarian as Buffet has and always will be. I also hope this for GT.

There are three broad categories of assets available for accumulation - commodities, paper, and real estate. Two of these, commodities and real estate, have such enduring worth that they need never be converted. The purpose of conversion, a form of turbo-charged accumulation, I will discuss later. It is my opinion that only the commodities store wealth indefinitely and that of the available commodities only gold and silver can be depended upon to do the job. Real estate will not do for obvious reasons. (lack of liquidity, portability, and intrinsic value ie. indestructibility). The last great category, paper has liquidity and portability. Problem is, it is not only destructible but also can self-destruct. (Actually it is not true that paper can self-destruct. It just appears to do so when the irresistible law of mathematics destroys it.)
One has to be very careful with the paper due to its lack of durability. Its lack of durability is reflected in its volatility and volatility is anathema to accumulators. Just watch the bondholders. No, I did not say bond traders, I said bondholders. Bond traders get mad. Bondholders get even. Sir Alahad does not fear the bond traders, he fears the bondholders. I must quit rambling and get back to the subject. Let's accumulate.

The should be no interest in the future of markets for accumulators of PM's unless that accumulator plans to convert. Why, because his accumulation or cessation of accumulation is always based on present conditions. One who plans to convert any portion of PM's at some point in the future should be very interested in the markets. The reason for this is liquidity and volatility. Land is seldom volatile and never liquid. Gold and silver are always liquid and seldom volatile. Paper is not always liquid and most always volatile. If you think paper is always liquid refer to the "Weimar (sp) German experience. When paper vaporizes it becomes a gas and loses its liquidity and wheelbarrows become liquid.

Now if you plan to convert a portion of your accumulated PM's to, let's say, Standing Timber I would say that you would be very interested in knowing the direction of the markets, for in recessions and depressions new housing dies wooden pallets are not needed and standing timber becomes to say the least, not hot. The problem of liquidity, and volatility make it so that there is normally of very small window of opportunity for conversion from PM's to standing timber. Of course the land and standing timber will and may go down in value very quickly and stay down for a very long time, but the price of PM's will be volatile and be up for a comparatively short period of time and the paper will be so volatile that conversion must be executed post haste, else the window of opportunity will close and although land will still be under priced PM's will no longer be overpriced. If the paper were to vaporize before execution there might exist a longer than normal opportunity for conversion..

What is the point. If there are those of us who plan conversion it would be very helpful to get a glimpse of what the future holds. When will PM's rise? When will paper fall? When will real estate, ie standing timber fall? What are the chances of these three occurring simultaneously? Has it ever happened before? When will it happen again? Is there anything, which we can watch which will with any degree of reliability indicate future economic conditions?

I keep telling myself, "It's the economy, stupid". I truly believe that we have a tool, which will work. We have U.S. Treasury Dept. releases which give us exact information as to what the Fed is doing. Not what the Fed is planning to do, not what the Fed says it is doing, but what the Fed is doing. Information is power. We have access to this information and we have access to the historical information and we have access to the history of the economy. We can correlate the past actions of the Fed with the historical economic consequences of those actions and with a great degree of reliability we can project the future economic consequences of the current Fed actions. Listen to Sir Alahad if you must. He speaks in code for reasons of deception. Watch what Sir Alahad does if you will. He cannot act in code. He cannot deceive with his actions.

I will do my best to truthfully and accurately provide as much historical and current information as I can on this wonderful forum. I ask that those of you who are like minded please pay close attention and offer your thoughts and comments. At the risk of exposing our ignorance we may gain some knowledge and wisdom.

I would suggest that we be careful to avoid fallacious arguments ie. "Post hoc ergo propter hoc - after that therefore caused by that" and stick to logical arguments ie. "Propter hoc ergo post hoc - caused by that therefore after that. It would help clear up much misinformation bandied about.

The economy does not collapse because the stock market crashes as some suppose happened in 1929. The stock market crashed in anticipation of a failed economy, a market place that no longer will function properly. The bursting of the "bubble" will not cause economic collapse; however a bubble will burst in anticipation of economic collapse. Just because the economic collapse appears after the bubble bursts does not mean that the bubble caused the collapse.

Economic engines stall and die when they have no fuel. Economic booms are caused at least in part by the availability of high-octane fuel. The engine is fueled and maintained by the Fed. Watch the Fed. Economic collapse will be caused by the Fed's actions. "Propter hoc ergo post hoc" - caused by that therefore after that. I state my case: "Fed actions will cause the collapse therefore the collapse will occur after the Fed takes the necessary actions or else commits the inadvertent blunders to effect the collapse. It is my strong opinion that recessions are never accidents but intentional. I am not as certain when it comes to depressions but I suspect that depressions are the result of intended consequences of Fed actions getting out of control which cause the "out of control" Fed to commit the inadvertent blunders.

I am thinking, "Propter hoc ergo post hoc", caused by that therefore after that. I am thinking, "It's the economy stupid." The law of supply and demand is controlled by God. The economy should be controlled by these laws and they are. However these laws are being circumvented by a usurper, The Federal Reserve Chairman and his secret bosses. Sir Alahad is doing as he is told. We must watch what he is doing as he is at the controls. The ultimate authority, God, who made the immutable laws will not allow His laws to be broken with impunity. Each time the Fed acts the results are determined by these immutable laws. That is why the Fed cannot engineer an inverted curve without a recession. That is why we can rely on the information. It tells us what will happen when certain actions are taken because the laws of supply and demand are immutable.

I repeat the lesson in paragraph two above. Let us not miss the prize by concentrating on the wrong cause and effect. The single most important issue to the economy is, "the actions of the Fed and the results of those actions which are dictated by the immutable laws of supply and demand. Failure to recognize this brings on certain defeat to the prognosticator.

Please forgive the length of this post. I must warn you that there is more to come; however I will try not to be so wordy.

HBM

Sir Aragorn III, a quibble with major ramifications. Not to pick
on you in particular, but one of the points you made has been
made by other posters. It's just that your post caught me with a
few free minutes.

"Yet, natural harmonics may give rise to
inevitable swings of boom and bust on
occasion...whether ii be at a small scale
(single bank failure) or large (national
speculative investment bubble, hyperinflation,
or recession/depression). This is an
irrefutable consequence of banking...whether
the currency is pure gold or pure paper, it
matters not as history testifies." -Aragorn III
msg#: 31734

The fact that swings, "booms and busts" are inevitable is indeed
irrefutable. However the SEVERITY of these booms and busts is
the real question. With due respect, Sir Aragorn III recognizes
this in his posts. The quibble is with the emphasis on the
inevitability of the booms and busts rather than their relative
severity.

With truly redeemable gold-backed currency loaned by independent
banks without a central bank cartel using government T-men to
enforce their monopoly, the boom-bust swings would be much much
smaller. They were in the past. For example, in the worst pre-
Federal Reserve panic, the panic of 1873, only 2.8% of banks
failed (and that was due, largely I believe, to the loss of a
huge gold shipment off the East Coast), while after only 20 years
of Federal Reserve operations (1913-1933), about 50%, that is
fully HALF, the nations banks were unsound. This is what turns
"small scale (single bank failure)" into "large (national
speculative investment bubble, hyperinflation, or
recession/depression)." This is where "too big to fail" comes from.

If every once in awhile a neighbor's house burns down, the
neighborhood can help out fairly easily; if the whole
neighborhood burns down all at once there are way fewer resources
left to help with. What's more, if enough houses burn at the
same time, the whole infrastructure goes up too -- the telephone
poles, the blacktop street, the trees, everything sort of like
the fire-bombing of Dresden. At any rate, it's better, if
burning is unavoidable, that it happens in small increments and
at separate times - - - like bank failures did before the Federal
Reserve Act.

When you create a banking cartel, only done effectively with
government complicitly, and usually in the form of a "central
bank," you prevent the small fires but when things finally burn,
they all go up at once. This is NOT an improvement. Better to
let the banks fail naturally in small numbers, at different times
and places caused directly by the decisions made by each bank's
officers.

Regards,
Journeyman

http://www.lemetropolecafe.com"Excerpt" from Bills Sat Commentary (membership req'd...2 week free trial offer at site)....Go GATA, we will win!!!!
....YGM

From Bill...

What else could be going on that is giving the gold manipulators fits in their fraudulent rip off of gold investors, gold producers, miners and the poor gold producing countries?

First, I suggest to you that the "Gold Derivative Banking Crisis" Document that was presented to every banking committee member in the United States Congress, to members of the Subcommittee on Technology, Terrorism and Government Information, to a powerful Washington politician and made available to the world via the internet on THURSDAY LATE AFTERNOON, is starting to HIT HOME.

Note the following:

From Marc Trimble at International Strategic Assets Inc. in Minneapolis: "We have printed 50 Gold Derivative Banking Crisis reports bound w/cover for our larger institutional clients."

From Europe:

"Dear Bill Murphy,
I am a Portuguese journalist writing about management and technology trends and I am preparing an article for next week before the oil meeting of 21st June and the FT Gold Conference of 26/27 June and I would like to interview you via email about this document, the GDBCReport.
Please let me know if you are interested.
Best Regards,

Jorge Nascimento Rodrigues"

And in a very related way, this came in Thursday from Caf� member Alfred Hill of Wyoming:

"Today I spoke up at a small town meeting sponsored by Sen. Craig Thomas. In Wyoming, they are all small! I briefly described the gold mess, and told him I was giving him a heads up, not asking for a response. He looked concerned as I I related the tons to Fort Knox and the Western World's reserves.

"At the instant of the end of the meeting, his staff person was already over asking me for written material, and said she had already phoned Washington and asked their intelligence person to check with the Senate Intelligence Committee. I gave her a copy of the Roll Call advertisement and of your writing on the reason for the Intelligence Committee to be concerned. On he paper I had noted that the politicians that were checking into it, and verbally mentioned Dick Armey's bill on the Eco Stabilization Fund accountability."

From my email on Thursday announcing that the GDBC document was available for the internet at the www.GATA.org web site.

"The "Gold Derivative Banking Crisis" document is lengthy, comprehensive and somewhat technical at times. It is the nature of the beast. However, there is no more bullish report anywhere on gold than this one. The Gold Anti-Trust Action Committee hopes that the internet will send it to money managers, the press, and governments around the world.

"Various forces are repressing the true equilibrium price of gold by hundreds of dollars. This cabal of bullion banks, with the probable assistance of the ESF or New York Fed, is being found out. As this information, that we are presenting to you, is understood by investors around the world, they will start buying PHYSICAL GOLD in earnest.

"The shorts are trapped. There will be a buying panic when they try and cover those shorts.

"It is only a question of time - weeks, months, a year. "One of the most favorable risk/reward trades in history (buying gold, now) is staring you right in the face. This document explains WHY that is so." End.

To date, NO ONE has refuted the findings of the GATA delegation in this report.

Something else may be up, too. I smell gold production cutbacks coming. Ones that may even be announced. This many be VERY important, so I will rehash recent Midas commentary even more - from a week ago:

"Dow Jones: Normandy Mining Ltd. said Thursday it will deliver a total of 450,000 ounces of gold borrowed from bullion banks from up to five years ago, Colin Jackson, group executive corporate told DJN.

"In the fourth quarter ending June 30, 450,000 ounces of gold from the Normandy Group and the Great Central Mines, whose books we manage, will be delivered back to bullion banks. It won't be sold into the spot market," Jackson said.

We don't anticipate new positions and no new replacement positions," Jackson said. Normandy's hedged positions declined by 356,000 ounces in the March quarter." End.

Further to my comments earlier this week regarding Normandy, I'm told Colin Jackson made a couple of interesting observations about their hedge book at a Merrill Lynch Global Minerals and Metals Conference in Phoenix two weeks ago. He indicated that Normandy Group companies had delivered into maturing hedge contracts for the last six months without refreshing (replacing) them and that a similar situation was likely in the current three months to June 2000. This means Normandy has reduced its book by nearly 1.2 million ounces!

It prompted him to reflect that Normandy, a hedged company (where hedged is past tense, that is the hedging activity was completed some time ago), is not having any impact on the spot market because the contracts are not being replaced, whilst an unhedged producer selling gold at spot, was influencing the market. Interesting thought!

PS. The misunderstanding with Robert Champion de Crespigny, Normandy Chairman, has also been satisfactorily resolved."

This is why Barrick Gold is such an aggravation. They are rolling over their hedges, thus adding gold supply to the market. Normandy and some other big hedgers are delivering into their hedges, thereby RETURNING gold to the bullion banks, not selling it in the physical market which naturally tends to depress the price.

There is more though. Word out at that Merrill natural resource conference was that the question most asked of resource producers was "are you cutting back production." The oil production cut backs and resulting tripling in the oil price has made a significant impact on resource analysts. They are looking to promo resource industries that are now supply conscious.

These increasing queries by these institutional analysts is surely making an impact on the CEOs of the major gold producers. Recently, the gold market has been rife with rumors about a Gold Fields Limited merger with other producers. Names such as Newmont, Placer Dome, Euro-Nevada and Normandy are names being bandied about. I am convinced something grandiose is going on behind the scenes. A merger of some of the big producers would make it much easier for the NEW ENTITY to cut back production. A vibrant, mega gold company could also deal more assertively with the bullion dealers and not be pushed around - especially by the "Hannibal Cannibal" types.

Stay tuned on that front!

From former CEO of the London Bullion Dealers Association, Peter Fava, now head of precious metals trading at HSBC Bank Pic in London:

New York, June 2 (Bloomberg) -- "The stock market is blazing, the gold market is blazing," Fava said. "This market makes no sense. By Monday, the market will be down $4 or $5 from here.

FAVA has been an outspoken critic of Caf� commentary and the GATA camp.

Gold basher Wayne Angell is having his own troubles these days.

New York, June 2 (Bloomberg) -- "In testimony to a federal jury in New York on May 5, Chief Executive Officer of Bear Stearns, Jame Cayne, said the 69-year-old economist "is an entertainer" and can't be blamed for $300 million in currency trading losses incurred by a customer who said he relied on advice from Angell and others at the firm�...

Nice try, but it didn't work. A jury ordered Bear Stearns to pay Canadian investor Henryk de Kwiatkowski $111.5 million in damages. The firm's liability may grow to $163 million if U.S. District Judge Victor Marrero grants a request of interest of roughly $52 million." End.

When the gold investing public realizes what the likes of a Goldman Sachs has done to them by their activities in the gold market, I suggest to you that the lawsuits are going to be like something never seen before on Wall Street.

Does JP Morgan know what is coming and that is why they are letting traders go in both New York and London.?

In the days to come, the Caf� will be presenting some gold numbers, analysis and information to you that are so bullish, you will be beside yourself.

Midas

TheStranger (6/2/2000; 23:43:11MT - usagold.com msg#: 31729)
Where Have All The Flowers Gone?

Nice one, Stranger.

You might want to re-post when more eyes will see it!

Regards,
j.

http://www.richardhoskins.com/hrempir.htm
several good articles here

stuff most history books do not contain.

What is the dang deal here, anyway? Are you folks in Benton county completely nuts? Did you know
there are people in Crossett, at the diagonally opposite Arkansas geopolitical spectrum who think
that
Bentonville is in Missouri? In fact, some don't believe Benton county is even in the United States.

I got a pass the other day from the state hospital where I've been staying for awhile (just till my
nerves
settle down) and got one of the orderlies to drive me down to Crossett so I could do an informal
survey
of sorts. I took my collection of press clippings about the Benton county Prosecutor and a whole
bunch more on his old 'podnah the Sheriff and I took to the streets of Crossett seeking insight and
advice.

It didn't take long to find what I was looking for.

Daisy Mae Peaburper was the first. "Lordy be. Why if we had folks like that running loose here in
Ashley County I'm just afraid to tell you what the men folk would do." I asked what that was and
she
just blushed and excused herself.

According to the clippings I took the prosecutor has his career caught in his zipper and the sheriff
has
his hands caught in a cookie jar in some fashion or another.

I stopped another nice lady and showed her my clippings. "Goodness gracious," she exclaimed,
"Bentonville's starting to sound like Washington D.C."

"Well, yes ma'am," I replied, "But at least Mr. Clinton managed to shuffle his intern away to another
job."

The nice lady, named Grizelda Foonbark, then allowed as how if they ever had a problem like that in

Ashley county, "Why the men folk would know how to handle it." I pressed for details and like Mrs.
Peaburper she blushed badly and excused herself.

I approached a crusty looking old fellow who eyed me carefully when I explained my purpose for
approaching him on the street. He had sort of a slack-jawed, walnut-eyed, near-drooling expression
but
perked right up when I told him I wanted to know how "the men folk" of his community would deal
with
a problem like the one in Benton county.

"First off, we don't allow none of that big-city stuff down here," said Joe Bob Beefis. "And if'n we
ever
did have fellers get out of line like that we'd just call 'em out in a manly manner and counsel with
'em."

When he said "counsel" I knew immediately that he meant more than warm and fuzzy exchanges of
feelings and I accused him of just that.

"Oh, I don't know about that City Feller," said Joe Bob, "just where do you suppose that expression
came from?"

The way he asked, I knew at once he was going to explain a deep mystery of life to me. I bit.

"You see, we'd just wait till dark, go by the offender's house and toss him in the back of a pickup.
We'd drive on out to the tracks and wait till all the counselors got there then we'd have us one of
them
warm and fuzzy counseling sessions."

Joe Bob described the process in such rich detail I immediately knew he had prior experience in
these
matters.

You see folks the term "warm, fuzzy feelings" comes from this: stripping a scoundrel naked, painting

him with warm tar and they applying a large quantity of feathers. When the train comes by you
merely
wait for a open boxcar and pitch the offender into the northbound moving darkness and voila! your
political problems are solved. No fuss, no muss and the total expense, by Joe Bob's reckoning, is
about $10.

Anyone in Bentonville for tar and feathers? There's four trains every day along Highway 59. For
$20 it
appears you can solve a lot of political problems. By the way, Joe Bob now says he's considering a
new career: political consultant. Oh, the implications and possibilities!

(Fair Use Protections Apply.)

http://www.thomsoninvest.net/iwatch/cgi-bin/iw_page?group=0&1=Go&temp=homeThoguth I'd post this for those interested. On Wednesday, I came upon this site that has info on committments of traders. From what I understand from a friend of mine who used to work for this outfit, Thomson runs the database system which captures traders buy and sells queries, and they are now making them available for free (for a time I bet!).

Go to the gold sector (it's a pain, since you have to scroll through a bunch of sectors and you can miss it the first time).

Anyway, on Wednesday, there was this amazing buy:sell ratio of anywehre from 10:1 to 30:1 for gold equities. I didn't make much of it, since I neither have the technical expertise to make out what this means, nor have I been following the data long enough to make out any patterns.

Imagine my surprise on Friday when gold went up 7%.

I was wondering if there was any relationship here, and I wonder if the traders knew something was afoot. BTW, on last report, it still looks pretty good!

Enjoy.

Nice essay. I sometimes have doubts as to my judgement about when will be the best time to sell the precious physical. I assume it will be in 3 to 15 years.

I suppose it will be time when cabbies, grocery-store employee kids, and the chatter at the gym begins to talk about the Roosters and Helveticas.

Nice essay. I sometimes have doubts as to my judgement about when will be the best time to sell the precious physical. I assume it will be in 3 to 15 years.

I suppose it will be time when cabbies, grocery-store employee kids, and the chatter at the gym begins to talk about the Roosters and Helveticas.

Date: Sat Jun 03 2000 19:19
PortlandJohn (Petronius@Linux) ID#42126:
Copyright � 2000 PortlandJohn/Kitco Inc. All rights reserved
Petronius, Linux is an old phenomenon not a strange one. Quality wins in the long run.
People are willing to contribute because they wish to be associated with higher quality
work and because the acceptance of Linux creates money making opportunities all
over the place for their expertise. The only new wrinkle is the enabling power of
internet communications which makes possible global cooperation on complex
projects. The underlying assumption in the Linux world is that an operating system is
too complex in design and too fundamental in use to be successfully developed by a
single company. This assumption is based in reality; the Linux development model is
better than the usual let's put a bunch of geeks in a building, pay them as little as we can
get away with, and make a bunch of money with the proprietary product that they
develop. Applications based on Linux and modifications of Linux, adaptations of Linux
for specific uses, are suited to the proprietary development model. It is a more
intelligent split of the software turf. It ( the split: operating system developed on the
Linux model, specific applications developed on the proprietary model ) leads to higher
quality software and hence wins in the long run, an old phenomenon ( to repeat ) .

For analogous reasons, gold will rise in value relative to purely fiat currencies ( higher
quality wins in the long run ) .

HI

Hello,

I have been reading this forum for quite awhile, it is amazing!
May I offer my utmost appreciation for the hospitality of the host.

I've directed a few people CPM's way, don't know if it has
exacted the quid pro quo.

There are thoughts expressed here that future generations would
do well to emboss into a sheet of gold. It is also quite interesting to
find an electronic place where decorum is still appreciated- it is
hard (especially for myself) to convey accurate impressions with
text only. I've learned a lot here just in that regard.
*****

Various thoughts:

Whatever happened to TC's repo agreement and coupon pass report?
It's funny the things you miss when they're gone.

Has anyone, Elwood in particular, attempted to chart the US and global
flow of gold (ex/im) from say, 1913 to present?

TG:
Why should 1 gm/bbl be an equilibrium price for oil? I agree the
historical data supports this, but one is a depleting resource.
Oh, and thanks for the guidance!

In nearly all mainstream commentary, the viewpoint appears to be that
the Fed has all the best motives for its actions, and is therefore either
doing wonderful things (SM bulls) or is somehow misguided (SM
contrarians).
If one looks at their actions from the POV of the majority Class A
shareholders, one obtains a quite different interpretation of the
bubble creation and management. It may be interpreted as a brilliantly
managed (external and FRN currency collapses and all) net transfer
of assets, to the ultimate (interlocking) holding companies of ORO's Hyena and Vulture, LP (very picturesque!).

Question: When a bank goes under, do its assets (loan portfolio in particular) move up (or sideways) the ownership chain, or go into something like receivership? The recent investment bank loan expansion is interesting in this regard:

The Credit Bubble Bulletin by Doug Noland, June 2, 2000
http://www.prudentbear.com/credit.htm

Speaking of ORO, it is a joy to which his/her (I dunno) rapid evolution.
It's a real chore trying to keep up (I'm not cutting it), let alone
contribute anything meaningful, sorry.

I don't know what to call this period- The Greatest Financial Faceplant
Ever Ever, Happy Paper Trails, Fabianism/Socialism's Day in the Sun, what?
*****

I am somewhat concerned about what may go on over the next few years,
as an example (I wasn't paying that much attention, so am paraphrasing):

May 31, 2000
Matthews interviewing W. Bush-

Q: "[What kind of leadership would you bring to the table in the event
of a major crisis, for instance] if the economy goes into a free-fall?"

A:[Blah, blah, great deeds done in Texas, blah, and if for instance North
Korea were to invade the South or if China threatened to invade Taiwan
we'd get in there and show them what's what...]"

No mention of free-falls. Interview turned to something else.

I am of course not claiming that 'W.' does any thinking for himself,
rather, that the pre-programmed association that he made is of concern.
*****

Hill Billy Mitchell (06/03/00; 10:10:37MT - usagold.com msg#: 31742)
Propter hoc post ergo post hoc

"The should be no interest in the future of markets for accumulators of PM's unless
that accumulator plans to convert.... you think paper is always liquid
refer to the "Weimar (sp) German experience. When paper vaporizes it becomes a gas and
loses its liquidity and wheelbarrows become liquid."

So start a wheelbarrow factory. (smile)

"Fed actions will cause the collapse therefore the collapse will occur after the Fed takes the
necessary actions or else commits the inadvertent blunders to effect the collapse. It is my
strong opinion that recessions are never accidents but intentional. I am not as certain when
it comes to depressions but I suspect that depressions are the result of intended consequences
of Fed actions getting out of control which cause the "out of control" Fed to commit the
inadvertent blunders."

Maybe they don't like the money-printing competition from the GSE's either. I don't
think you can blame everything on the Fed- if it weren't for the natural greed, fear and
ignorance behind a great deal of human action this situation would not even exist.

As for Fed actions, does it appear the debt trap is being closed now on Ma and Pa Kettle?

Welcome to the Procession.

A tael is a Chinese unit of weight. One tael is equivalent
to 1.2 oz.

CHINA ECONOMIC INFORMATION CENTRE (XINHUA): Resources: Mines with Gold
Output Exceeding 10,000 Taels (1)
China Economic Information Centre (Xinhua), May 8, 2000, 186 words

BEIJING (CEIS) -- Following is a list of mines whose gold output exceeded 10,000
taels in 1999.

(Unit: tael)

No. Mine Output in 1999

1 Shandong Gold Group Co. 283,276

2 Shandong Jincang Gold Group Co. 136,726

3 Fujian Zijinshan Gold Mine 96,320

4 Gansu Ge'erhe Gold Mine 73,600

5 Shaanxi Dongtongyu Gold Mine 72,719

6 Shandong Zhaoyuan Gold Co., Ltd 71,580

7 Henan Jinqiu Gold Mine 65,866

8 Heilongjiang Uraga Gold Mine 60,744

9 Shandong Heilangou Gold Mine 57,665

10 Liaoning Paishanlou Gold Mine 55,066

11 Xinjiang Axi Gold Mine 44,502

12 Shaanxi Jianchaling Gold Mine 41,783

13 Xinjiang Hami Gold Mine 40,015

14 Jilin Jiapigou Gold Mine 39,043

15 Guangdong Hetai Gold Mine 38,498

16 Shandong Daliuxing Gold Mine 37,101

17 Shaanxi Chen'er Gold Mine 36,049

18 Shandong Rushan Gold Mine 33,943

19 Inner Mongolia Jintao Co., Ltd 33,376

20 Henan Tonggou Gold Mine 32,867

21 Guangxi Gaolong Mining Co. 32,762

22 Henan Tantou Gold Mine 32,388

23 Henan Qiangma Gold Mine 32,118

24 Henan Andi Gold Mine 32,001

25 Hunan Xiangxi Gold Mine 31,056

26 Hebei Yu'erya Gold Mine 20,500

27 Hebei Zhangjiakou Gold Mine 30,468

28 Henan Qinling Gold Mine 30,003

29 Hebei Jinchangyu Gold Mine 29,300

30 Shaanxi Taibai Gold Mine 28,720

31 Shandong Guilaizhuang Gold Mine 28,296

32 Shandong Hexi Gold Mine 27,099

33 Shandong Hedong Gold Mine 27,048

34 Shandong Lazigou Gold Mine 27,000

35 Hebei Dongping Gold Mine 26,484

36 Henan Wenyu Gold Mine 26,026

37 Hubei Xianshi Gold-Copper Co., Ltd. 25,625

38 Liaoning Wulong Gold Mine 25,070

39 Shaanxi Sifang Gold Mine 24,341

40 Hebei Hougou Gold Mine 24,176

41 Anhui Shilao Gold Mine 21,800

42 Heilongjiang Laozhashan Mine 21,221

43 Henan Jinniu Co. 20,618

44 Xinjiang Hatu Gold Mine 20,333

(Thanks to ASIA INTELLIGENCE WIRE, And Fair Use For Educational/Research Only.)

And to UNCLE, I'm sooo glad you gave us those 3.5" rocket
launchers for Korea. Muccch better than those 2.8"
bazookas in WWII.

@Turnaround (6/3/2000; 18:23:00MT - usagold.com msg#: 31753)

hello

Sir Turnaround:

Welcome! Your comments are valuable.

You say to me:

. ..I don't think you can blame everything on the Fed- if it weren't for the natural greed, fear and
ignorance behind a great deal of human action this situation would not even exist.

My response - You are quite right. I gave the wrong impression. Central banks are not to be blamed for everything. Sometimes one overstates his case in order to press his point. At least 51% of the blame falls on the sheeple who have relinquished their authority to Central banks all over the world. We are to blame. The Fed simply deserves the credit for its willingness to flex its muscle now that it has such a vast control over the economy. I blame myself and you and my parents and grandparents for selling our children and grand children into slavery. You have hit the nail on the head. The Fed has us by the short hairs because of our "natural greed, fear and especially ignorance", to which I might add one other thing - laziness which is the root cause of ignorance.

HBM

Read-up.

Sir Golden Hook, you say:

(06/02/00; 09:38:41MT - usagold.com msg#: 31683)

Gold will be 550. and silver 17. by january.

On what do you base this. Most interesting that gold will double while silver triples. Please explain.

HBM

@ ORO (6/2/2000; 10:16:13MT - usagold.com msg#: 31692)

Sir:

I was not aware that our gold banking system had leveraged physical gold in the late 1920's. If you can spare the time would you elaborate on that please and compare the situation in the 20's with the situation today.

HBM

ORO (6/2/2000; 14:47:47MT - usagold.com msg#: 31713)

Sir, your comment:

This was probably due to dollar selling because of the "expectation" that the Fed would not raise rates significantly going forward.

My comment:

I find it interesting and quite agree that expectations as to what the Fed will do, "going forward" seem to be the cause of many market gyrations. I keep thinking that gyrations caused by expectations often prove to be false indicators because we cannot know or even guess what the next move will be by Sir Alahad. All we can depend on is what the future holds from his recent past and present actions. Not trying to be a smart-alec(sp). Just trying to stimulate some thoughts as to why one shouldn't be cautious in guessing what the Fed will do or not do in the future, but rather pay very close attention to what is happening now and in the recent past and projecting those actions into the future. It sure seems to me that taking actions based on expectations as to what the Fed will do would be a downright form of speculation (gambling).

Kind regards

HBM

http://www.sunday-times.co.uk/news/pages/sti/2000/06/04/stifgnusa01007.htmlLet us hope it will be used for PRODUCTIVE purpose.

@ HI - HAT (6/2/2000; 2:51:18MT - usagold.com msg#: 31664)

Sir, you say:

"Interest rates are not the most important thing, They are Everything".

I would not say, "everything", however, the "rates" seem to be the only tool Sir Alahad is willing to use with the possible exception of the short-term repo's, a tool which he seems to use more as a throttling mechanism while applying the brakes via interest rate mandates. My uncle used to wear his brakes out quickly by keeping his foot on the brake and the excellerator simultaneously.

Respectfully

HBM

http://www.gold.org.cn/indexe.htmHowever the Official Quote for the Gold Price of the People's Bank of China is shown in Grams�iRMB/Gram), and in HK uses they use the "Liang".
Hongkong�FHK$ per liang (37.4269 grams)
London and New York :US$ per troy ounce (31.1035grams).
<;-)

http://www.gold.org.cn/indexe.htmHowever the Official Quote for the Gold Price of the People's Bank of China is shown in Grams (RMB/Gram), and in HK they use the "Liang".
Hongkong -- HK$ per liang (37.4269 grams)
London and New York -- US$ per troy ounce (31.1035grams).
<;-)

I concur with Sir Turnaround

"Whatever happened to TC's repo agreement and coupon pass reports? It's funny the things you miss when they're gone."

We need that info. I understand if you cannot find the time Sir TC. Perhaps you could delegate that job to Sir Turnaround and provide him with your source of information. We might eventually be able to correlate the information with the current interest rate squeeze or "expected lack thereof". I am beginning to disagree with Yogi. "It is 'not' difficult to forcast, espeicially about the future". When one is in the dark and the flow of information ceases, it becomes "impossible".

George Allen said it best, "The future is now."

Thanks for putting up with us.

HBM

"I was not aware that our gold banking system had leveraged physical gold in the late 1920's. If you
can spare the time would you elaborate on that please and compare the situation in the 20's with the
situation today." -Hill Billy Mitchell #31760

Sir Mitchell, not to butt in, but I believe what ORO is referring to is that under the auspices of the Federal Reserve System, significantly more "REDEEMABLE IN GOLD ON DEMAND" Federal Reserve Notes were printed and circulated in the 1920's than there was gold with which to redeem them. Therefore this amounted to fractional reserve (leveraged) gold banking of the most dishonest kind. The ultimate -- and what should have been unthinkable -- solution was to steal America's gold in 1933 and make it illegal for the freest people in the world to own it.

ORO, correct me if I'm wrong here. I believe the situation today is that the bullion banks have equivalently leveraged their gold using derivatives other than the redeemable in gold Federal Reserve Notes that were the derivative of choice in the 1920s. There are probably some figures somewhere to compare the degree of leverage then and now, but I don't know where you could find them. ORO's probably your best bet here.

Regards,
Journeyman

Sir Journeyman:

I should have paid more attention to ORO's phrase, "banking system". I read it to mean individual banks leveraging physical gold which I suspect might possibly have occurred and should the physical have been held by "individual" banks as reserves I suppose that would be a form of leveraging gold through fractional reserve lending. I am not as clear headed as I should be when it comes to the banking system. I think I understand the theory well enough but my grasp of all the mechanics of the system leave much to be desired. A comparison of the degree of leverage would be quite interesting although I suspect we may have apples and oranges to contend with.

Thanks for your response.

HBM

TestView Yesterday's Discussion.

I have been thinking. Some would call the process dangerous. There are those who would prefer common folk like me not to do it. Not only will I think but I will think out loud via this forum. Let us call it a form of rebellion, this thinking for ourselves. As I think out loud I would ask that those of you who read feel free to offer some good old fashion criticism.

During the 1992 presidential campaign I believe a sign bearing the words, "it's the economy stupid" was placed in the democratic presidential campaign headquarters. I may have the wrong headquarters and I may have the wrong campaign in mind; however the point was that one must not miss the prize by concentrating on the wrong cause and effect.The single most important issue to the electorate in any society is the economy and failure to recognize this brings on certain defeat politically.

Now if one is saving (accumulating assets) over the long term it seems that one would be more interested in the direction of the economy than any other thing, for by having a good sense of the direction one can have an understanding as to what assets would be best to accumulate. Now I know that are those of you out there in forum land who take the position that the storing of wealth need not depend upon the direction of the economy. Well I would disagree with that position. To every thing there is a season, and a time to every purpose under the heaven.. There is a time to accumulate precious metals. There is a time to hold and there is a time to convert a portion of that which has been held into other assets. Now is the time to accumulate. During the 1980-1981 period conversion was in order and accumulation became the obvious thing to do beginning in the mid 1990's and continuing up to the present.

Why would one watch the direction of the economy in order to determine timing as to accumulation and conversion of accumulated assets? The answer is quite simple. The direction of the economy tells one what is hot and what is not, or should I say what will be hot and what will not be hot.

The maxim of buying low and selling high will never fail because it is a simple "derivative" of the immutable law of mathematics. It is not difficult to discover what is high (hot) and what is low (not) in the present. One simply accumulates that which is not hot and converts that that which is hot into that which is not hot. Of course one cannot convert that which he has not accumulated, therefore accumulation of that which is not hot is a prerequisite to future conversion of that which is hot to that which is not hot. We cannot know the future thus we must accumulate and convert in the present. The problem for others and myself, I think, is the temptation to accumulate and convert in the future (high stakes gambling).

Let us define what is hot and what is not hot. Hot is that which is in relatively high demand and relatively short supply. The tendency for that which is hot is to become overpriced. When something is overpriced then something else must be under priced due to the immutable laws of mathematics and economics. What we have here described is a market in disequilibrium. The market is always in disequilibrium and is always pursuing equilibrium. Therefore one who accumulates assets always has something to accumulate and one who has already accumulated will eventually have something to convert from that which is hot to that which is not hot.

The problem is not what to accumulate or what to convert. The problem is that of knowledge and information and having the guts to do what the herd is not doing, or should I say, not do what the herd is doing. This takes guts and tenacity and sometimes a very tough outer layer of epidermal tissue. I have described Warren Buffett, the consummate contrarian. If one stays with it long enough his success will eventually eliminate all criticism and he will no longer be recognized for what he is, a contrarian. I hope for that situation some day, perhaps soon, when I will no longer be considered a contrarian. Hopefully I will continue to be a contrarian as Buffet has and always will be. I also hope this for GT.

There are three broad categories of assets available for accumulation - commodities, paper, and real estate. Two of these, commodities and real estate, have such enduring worth that they need never be converted. The purpose of conversion, a form of turbo-charged accumulation, I will discuss later. It is my opinion that only the commodities store wealth indefinitely and that of the available commodities only gold and silver can be depended upon to do the job. Real estate will not do for obvious reasons. (lack of liquidity, portability, and intrinsic value ie. indestructibility). The last great category, paper has liquidity and portability. Problem is, it is not only destructible but also can self-destruct. (Actually it is not true that paper can self-destruct. It just appears to do so when the irresistible law of mathematics destroys it.)
One has to be very careful with the paper due to its lack of durability. Its lack of durability is reflected in its volatility and volatility is anathema to accumulators. Just watch the bondholders. No, I did not say bond traders, I said bondholders. Bond traders get mad. Bondholders get even. Sir Alahad does not fear the bond traders, he fears the bondholders. I must quit rambling and get back to the subject. Let's accumulate.

The should be no interest in the future of markets for accumulators of PM's unless that accumulator plans to convert. Why, because his accumulation or cessation of accumulation is always based on present conditions. One who plans to convert any portion of PM's at some point in the future should be very interested in the markets. The reason for this is liquidity and volatility. Land is seldom volatile and never liquid. Gold and silver are always liquid and seldom volatile. Paper is not always liquid and most always volatile. If you think paper is always liquid refer to the "Weimar (sp) German experience. When paper vaporizes it becomes a gas and loses its liquidity and wheelbarrows become liquid.

Now if you plan to convert a portion of your accumulated PM's to, let's say, Standing Timber I would say that you would be very interested in knowing the direction of the markets, for in recessions and depressions new housing dies wooden pallets are not needed and standing timber becomes to say the least, not hot. The problem of liquidity, and volatility make it so that there is normally of very small window of opportunity for conversion from PM's to standing timber. Of course the land and standing timber will and may go down in value very quickly and stay down for a very long time, but the price of PM's will be volatile and be up for a comparatively short period of time and the paper will be so volatile that conversion must be executed post haste, else the window of opportunity will close and although land will still be under priced PM's will no longer be overpriced. If the paper were to vaporize before execution there might exist a longer than normal opportunity for conversion..

What is the point. If there are those of us who plan conversion it would be very helpful to get a glimpse of what the future holds. When will PM's rise? When will paper fall? When will real estate, ie standing timber fall? What are the chances of these three occurring simultaneously? Has it ever happened before? When will it happen again? Is there anything, which we can watch which will with any degree of reliability indicate future economic conditions?

I keep telling myself, "It's the economy, stupid". I truly believe that we have a tool, which will work. We have U.S. Treasury Dept. releases which give us exact information as to what the Fed is doing. Not what the Fed is planning to do, not what the Fed says it is doing, but what the Fed is doing. Information is power. We have access to this information and we have access to the historical information and we have access to the history of the economy. We can correlate the past actions of the Fed with the historical economic consequences of those actions and with a great degree of reliability we can project the future economic consequences of the current Fed actions. Listen to Sir Alahad if you must. He speaks in code for reasons of deception. Watch what Sir Alahad does if you will. He cannot act in code. He cannot deceive with his actions.

I will do my best to truthfully and accurately provide as much historical and current information as I can on this wonderful forum. I ask that those of you who are like minded please pay close attention and offer your thoughts and comments. At the risk of exposing our ignorance we may gain some knowledge and wisdom.

I would suggest that we be careful to avoid fallacious arguments ie. "Post hoc ergo propter hoc - after that therefore caused by that" and stick to logical arguments ie. "Propter hoc ergo post hoc - caused by that therefore after that. It would help clear up much misinformation bandied about.

The economy does not collapse because the stock market crashes as some suppose happened in 1929. The stock market crashed in anticipation of a failed economy, a market place that no longer will function properly. The bursting of the "bubble" will not cause economic collapse; however a bubble will burst in anticipation of economic collapse. Just because the economic collapse appears after the bubble bursts does not mean that the bubble caused the collapse.

Economic engines stall and die when they have no fuel. Economic booms are caused at least in part by the availability of high-octane fuel. The engine is fueled and maintained by the Fed. Watch the Fed. Economic collapse will be caused by the Fed's actions. "Propter hoc ergo post hoc" - caused by that therefore after that. I state my case: "Fed actions will cause the collapse therefore the collapse will occur after the Fed takes the necessary actions or else commits the inadvertent blunders to effect the collapse. It is my strong opinion that recessions are never accidents but intentional. I am not as certain when it comes to depressions but I suspect that depressions are the result of intended consequences of Fed actions getting out of control which cause the "out of control" Fed to commit the inadvertent blunders.

I am thinking, "Propter hoc ergo post hoc", caused by that therefore after that. I am thinking, "It's the economy stupid." The law of supply and demand is controlled by God. The economy should be controlled by these laws and they are. However these laws are being circumvented by a usurper, The Federal Reserve Chairman and his secret bosses. Sir Alahad is doing as he is told. We must watch what he is doing as he is at the controls. The ultimate authority, God, who made the immutable laws will not allow His laws to be broken with impunity. Each time the Fed acts the results are determined by these immutable laws. That is why the Fed cannot engineer an inverted curve without a recession. That is why we can rely on the information. It tells us what will happen when certain actions are taken because the laws of supply and demand are immutable.

I repeat the lesson in paragraph two above. Let us not miss the prize by concentrating on the wrong cause and effect. The single most important issue to the economy is, "the actions of the Fed and the results of those actions which are dictated by the immutable laws of supply and demand. Failure to recognize this brings on certain defeat to the prognosticator.

Please forgive the length of this post. I must warn you that there is more to come; however I will try not to be so wordy.

HBM

"I am not as clear headed as I should
be when it comes to the banking system. I think I understand the theory well enough but my
grasp of all the mechanics of the system leave much to be desired. " -Hill Billy Mitchell #31768

That makes two of us!!

Regards,
Journeyman

Guess I'm not exposed, after all. In response to your post:
"ss of nep (6/2/2000; 14:24:05MT - usagold.com msg#: 31710)
strad master
who are you ??????????
before you respond to this post examine the correlation between 'maurice joly' and 'moses joel'
or () are you already aware of the correlation
in which case YOU will not post !
If you do not post then you are exposed !"

That has got to be the WEIRDEST response I've ever gotten to a question in all the years I've been posting here or at Kitco! Lest you begin to imagine that the delay in my posting is some bizarre coded message and that, therefore, you've exposed something nefarious about me, let me assure you that I have ABSOLUTELY NO IDEA what you are referring to!!! WHO ARE the two people you name? WHAT are you talking about? I don't want to take up too much bandwith with this rubbish (and I wouldn't, were it not almost midnight on a slow weekend) but let me assure you, Sir ss, that many on this forum know me personally and can attest to the fact that I am definitely not either or both of those personages.

Now that that is out of the way, maybe you could respond to the questions I posed to you???

The problems of debt money do not come from debt, they come from the government. Governments charter the central banks , providing them with a monopoly on the production of currency within the government's jurisdiction. But more importantly, central banking makes the many separate banks into one big whole - a single bank.

The Federal reserve publishes bank data in terms of banking liabilities. There is a circle around the Fed and the banks and outside this circle are the other central banks and us, the real economy. The Fed holds constant measurements on the economy and on the flow of liabilities of us to the banks, and of the banks to us. The circle encompasing the banks and the Fed acts like a single bank with many branches.

The distinction is very important, perhaps the most important issue in money and banking.

How so?

Looking at one bank, it has depositors and borrowers. The loan made to a borrower is spent and becomes the liability of the bank to the various vendors to the borrower, who have nowhere to put their funds (checks etc.) but at the one bank, whereby they are now the depositors. Since there is only one bank, the only draw on it is for quantities of funds held as physical cash. Obviously, such a bank needs to maintain cash on hand only to satisfy the withdrawals of people seeking physical cash. This cash on hand is the bank's reserve.

Let us now put in more banks. Borrowers from a very aggressive bank "A" spend MA funds leant to him during a period where other banks are careful and are holding back on lending. The receivers of these funds are either clients of "A", which deposit x% of MA back with this bank, the rest put their checks for the total of (100%-x%) * MA on deposit at other banks. The banks send the checks to bank "A" for redemption and bank A must provide this sum to the other banks immediately. If it has not the funds available, it must sell some of its assets to the other banks or declare itself insolvent (chapter 11 bankruptcy reorganization). If the aggressive bank "A" has sold so many assets that it has more liabilities than assets it must go under (chapter 13 bankruptcy for liquidation).

The reserve ratio that keeps a bank solvent is that at which the other banks hold their reserves. If this bank lends more relative to reserves than other banks, it must generate a higher return on these loans and do so with less risk. This proportion is chosen by each bank seperately. If the banks could join together in choosing the level of reserves so that all banks maintain the same reserve ratio, the "problem" of market restraint would be solved. The only way this could be achieved is by having a bank regulator set up by the government that tells the banks exactly how much they need to hold in reserves.

So we see that a single bank can lend much more than the multiple bank system, because the most aggressive banks, holding the least reserves will go under. Thus for each unit of reserves, the one bank can lend more than the total lending of the multiple banks. Since interest is earned only on funds on loan, all bankers would believe they could be more profitable if they could share their reserves so that they become one bank.

The only reserves the unified banks now need are those required to satisfy the proportion people like to hold in hand rather than at the bank. This is the reason for central banks' existence.

What remained of reserve ratio competition among banks was just the relative level within the US system and the central bank systems outside the US. (This is called "the problem of the currencies" around which grew the Currency School)

True to form, banks reduced their reserves from the 40-60% level to less than 5% within a few years from the creation of the Fed. This is a 10 fold increase in money supply.

Not content with this ratio, banks clamored for more - to keep people from holding cash and to eliminate their own liability. At the time this happened, the bankers had prevented people from keeping cash (gold at the time) on hand rather than in the bank by doing two things: making gold holding illegal, and making price inflation that reduces the value of funds people have in cash, forcing them to move their low risk cash hoard from the strong box to a savings account.

Today, the reserve ratio is less than 1%.


Aragorn, the problem is not banking with gold or with anything else, the problem is the existence of a central bank in each nation. Closing the central banks is the solution.

To Hill Billy Mitchell,
Journeyman has it right.
Leverage at the time was to 3.75% reserves, meaning a 26-27 fold leverage relative to gold on hand.
It is interesting to note that when the deed was done, the Fed (and later Treasury had taken the gold away from the bankers who owned the Fed) had enough gold to cover 60% of its remaining gold liabilities: those to foreign central banks.

From 1933 to 1971, the US liabilities in gold - dollars abroad, became leveraged to well beyond 10 when the system was disolved by Nixon.

Today, the banking system may well be holding a 5% reserve, having thought it had 25% because they thought the EU central banks were going to continue to put up their gold for use in reserves, something the WA put away.

June 4, 2000


Green Cheese Rules

RECKONINGS / By PAUL KRUGMAN

Argentina is a faraway country about
which most people in the United
States know only what they learned
from Andrew Lloyd Webber. And while the
government of Fernando de la R�a is facing
serious economic problems -- a weak
recovery from last year's nasty slump,
growing labor unrest -- "crisis" would be far
too strong a word.

Yet Argentina has special symbolic importance in the battle among
economic ideologies. The Latin nation has been a sort of poster child for
the anti-Keynesian counterrevolution, for those who want to banish
discretion and human fallibility from monetary policy. The nation's current
difficulties won't cause the true believers to lose faith. But the contrast
between the bad economic news in Argentina and good news elsewhere in
Latin America is a reminder that green cheese has its virtues after all.

Puzzled? Let me explain. Until the 1930's, recessions were generally
regarded as inevitable, and perhaps even desirable -- a sort of purging
process that cleansed the economy after the excesses of the preceding
boom. The government's job was to provide sound money and balance its
own budget; a depressed economy would heal itself.

But in the face of mass unemployment some economists -- most notably
the British theorist John Maynard Keynes -- concluded that recessions
were neither healthy nor inevitable. They were, instead, an economic
pathology that resulted when too many people tried to hoard cash instead
of buying real goods and services. In a famous passage Keynes declared
that "Unemployment develops . . . because people want the moon: men
cannot be employed when the object of desire (i.e. money) is something
which cannot be produced and the demand for which cannot readily be
choked off." And he offered an answer: "There is no remedy but to
persuade the public that green cheese is practically the same thing and to
have a green cheese factory (i.e. central bank) under public control." In
other words, the government could and should print money to stimulate a
depressed economy.

For hard-money types this was and remains anathema. The dream of going
back to an objective monetary standard -- preferably gold, but anyway
something untouched by human hands -- has been kept alive by a small but
well-financed group of enthusiasts. And in 1991 they got their wish:
Argentina, desperate to regain credibility after decades of irresponsible
policy, not only pegged its peso to the dollar but backed each peso with a
dollar in reserves. In effect, the national green cheese factory was shut
down.

In the years that followed, Argentina -- helped not only by the end of
hyperinflation but also by the removal of many controls that had strangled
business -- experienced an economic surge, and the hard-money
enthusiasts took full credit. Only last year, as the currency of neighboring
Brazil tumbled, an op-ed writer at The Wall Street Journal held up
Argentina as a model: "No stimulating of the economy through inflation, no
improving the 'competitiveness' of exports through currency devaluation.
Just money that works." And she went on to express her ultimate wish:
"Now if only America could make the dollar as good as gold."

But while Argentina's money may work, many Argentines don't, because
they can't find jobs. The devaluation in Brazil was followed by a flight of
manufacturing to Argentina's suddenly lower-cost neighbor. Although
Argentina's government has insisted that slashing spending and raising
taxes to balance the budget will promote recovery by restoring confidence,
the actual effect -- as Keynes could have told you -- has been the opposite:
with lower incomes, consumers are spending less, and recovery has been
delayed.

And meanwhile Brazil has bounced back: that devaluation has turned out to
be just what the doctor ordered. Chile and Mexico, with their floating
exchange rates, are doing well. Right now Argentina has the worst, not the
best, of Latin America's major economies.

I'm not saying that Mr. de la R�a should devalue the peso. Too many
loans, even from one Argentine to another, are in dollars -- and anyway the
political cost would be catastrophic. At least for the time being, I fear that
Argentina is stuck. But its travails are a lesson for the rest of us, especially
those who are nostalgic for the certainties of the gold standard: Keynes
was right. Taken in moderation, green cheese can be good for your health.

(From THE NEW YORK TIMES, Fair Use For Educational/Research Purposes Only.)

Souped-up Photons:

This two places at once thing is old-hat to the Bullion Banks eh? They've been doing it fer years with Gold. Be good to send one of these little critters, armed with a bit of info gathering gear into (say) Tuesday and return with the AM pog fix.
Just as a bit of an aside, while you-all are enjoying Sunday dinner tonight, I'll be trawling my local Coin shops (Monday Morn) mopping up my last (probably) purchase of Aust $0.50 1966 Ag coins @A$2.25...
An "INTERESTING" week lays ahead........ good luck ALL!

ORO (6/4/2000; 1:53:05MT - usagold.com msg#: 31773)

"True to form, banks reduced their reserves from the 40-60% level
to less than 5% within a few years from the creation of the Fed.
This is a 10 fold increase in money supply.

Not content with this ratio, banks clamored for more - to keep people
from holding cash and to eliminate their own liability. At the time
this happened, the bankers had prevented people from keeping cash
(gold at the time) on hand rather than in the bank by doing two
things: making gold holding illegal, and making price inflation
that reduces the value of funds people have in cash, forcing them
to move their low risk cash hoard from the strong box to a savings account."

Incidently, there was a type of note issued in 1929 (!) called "National Currency"
(words placed where FRN now is) with the subtitle (roughly, I can look it up
if need be) "Backed by US Bonds Held on Deposit in the US Treasury" and
"Redeemable in Lawful Money at Any FR Bank" - with no definition of "Lawful Money".
I submit this was an experiment- to see if the public would accept such trash
(they did), and therefore pave the way for the confiscation.

"Aragorn, the problem is not banking with gold or with anything else,
the problem is the existence of a central bank in each nation. Closing
the central banks is the solution."

And how might one go about accomplishing this? Could, say, a global currency
collapse (perhaps a result of currency devaluation wars) be of assistance here?
I am rather concerned about what might replace the FRN- the "cashless society"
has beem a gleam in the rheumy eye of the PTB for some time. I'm sure they would
promise to never, ever slide in a few extra keystokes.

Intersest Rates Are Not The Most Important Thing. They Are EverythingEverything is indeed a big word. As we were and are talking about Federal Reserve actions, I probably broadened out to much in that post.

The real context I meant in "they are everything", is that interest rates are at the heart of "most every" investment strategy, goods cost, service, World currency ratios, all carry trades, gold leasing, all debts, cost of government, etc..

I am saying that interest rates ratios are a part of every nook and crany of modern life. Even anything that would lead up to a pure barter exchange.

Also as ORO has reminded, ALA, Volcher, whole regions of the World can be devastated and harnessed with nothing but interest rates.

Mr Hat:
The scene is set for a re-play of the mid/late 1920's where Britain (I think) ramped it's rates only 1% causing a mass exodus of funds from America - resulting in the Great Depression.
Today the Euro is similarly poised.
Will they now raise their rate in seeming response to the perceived weakness of said Euro?? (thus confirming the Currency War scenario)
OR.....WHAT??

New Age economics can be summorized as a perpetual motion machine that is powered by pure debt.

Goods and services production=create demand=purchasing power venue schemes.

All and especially the latter using ,DEBT, to sustain the "virtuous", circle.

The Achilles Heel is of course the threat of DEFAULT.
Bailouts have papered over mis-steps up til now, but the system careens ever closer to the brick wall of Liquidity Crises, (on large scale).

Only higher and higher inflation can keep the wheel turning.

BERLIN:
Bill Clinton was apparently not amused when German Chancellor Gerhard Schroeder offered him a box of Cuban cigars during an otherwise jovial dinner yesterday.
Witnesses in a restaurant in east Berlin said the US President stopped laughing when Schroeder offered him cigars that Development Minister Heidemarie Wieczorek-Zeul had bought back from Cuba last week.
Washington, unlike Germany, still maintains an embargo on trade with communist Cuba.
Other diners said Clinton,perhaps remembering both protocol and the reports of cigars put to curious uses in the Monica affair, "looked irritated" and then "smiled politely".

www.news.com.auPrevious post courtesy of The Sunday Telegraph..at ^ link... a most auspicious publication, t'be sure, t'be sure...

The scale of the Monetary Function, derivatives, arbitrage,etc., is at a point where I have no clue on how big a crack-up or how the mess is going to be straightened out.

The holding of some wealth gold, which has no DEBT claims on it, seems the only prudent posture.

http://www.posse-comitatus.org/BeWise/newlight.html
you said "I have ABSOLUTELY NO IDEA what you are referring
to!!! WHO ARE the two people you name? WHAT are you talking about?"

Well I will help your investigation.

http://www.washingtonpost.com/wp-dyn/articles/A58537-2000Jun3.htmlHmmmm, yes, this article reminds me of the "evolution" of our dollar from being redeemable for gold/silver to it's current worthless status as promissory Federal Reserve Note.

"Last week, we took our two dogs, Holly and Earless Joe
(E.J.), on their first trip to the lake. Holly and E.J. are
mostly lab, partly mutt each weighing in at about 40 pounds.
When we put them in the truck, they weren't entirely sure they wanted to
go, since the truck has been known to take them to the veterinarian. But
once we passed the vet's office, they assumed they were in for a grand
adventure. And boy, were they right.

Once in the boat, we cruised out slowly into the main channel of the
lake.

We cruised for a while and then pulled up to the shore of an island
and got out. The dogs romped around the trees, through the tall grass and
along the shoreline. Holly is a Frisbee fanatic, so we threw her Frisbee
into the shallow water and she enthusiastically splashed out to retrieve it.

Meanwhile, E.J. was busy exploring the island, nose to the ground, tail
in the air, leg hiking up to mark all the new territory. He was in doggie
paradise. So many trees, so little time.

After plenty of play, we loaded the dogs back into the boat and took
off. E.J., in particular, was right at home on the water. With his one good
ear flapping in the wind, he sat up proudly on a seat in the boat's bow
smiling a toothy smile, his nose sniffing and twitching in the air.

As the sun eased closer to the horizon, we stopped about 50 yards
from shore to float for a while and enjoy what was left of the warm spring
evening. We started talking about how successful our little excursion had
turned out, how we had worried for no reason. It was obvious that our
dogs loved the water and were well behaved in the boat.

At that moment, E.J. stood up on his seat and peered over the boat's
edge. One paw went up over the railing, and before I could say "Tom, I
think he's gonna ju�," he had already done it.

He went in with a big splash and went all the way under before he
surfaced. For that first instant, we were both paralyzed with shock. And
apparently, so was E.J. He had enjoyed wading in the shallow water on
shore but was alarmed to learn that the entire lake wasn't so shallow.

As he surfaced, he looked back at us wide-eyed, as if to say "Oh no,
there's no bottom! And its cold!" He started to doggy paddle furiously.

I panicked. I didn't know if my "child" was a strong swimmer or not.
So, without hesitation, I did what any responsible mother would do in this
situation. I ordered my husband to jump in the lake and save the dog.

So he whipped off his T-shirt and bailed in with a splash, just like the
dog had done moments earlier.

By this time, E.J. was already heading toward shore. But when he
heard the splash and saw Tom in the water, he had a decision to make
�swim for shore or swim for master. Unable to decide on which
direction, he paddled around in circles until Tom caught up with him. He
was so thrilled to have company in the water that he doggy paddled on
his master's back all the way to shore, resulting in some nasty scratches.

Back in the boat, I had my hands full keeping Holly from going
overboard, too. She had watched first her roommate and then her master
bail out, and she had a strong urge to follow them in.

But we had enough problems without having three of the four of us
flailing around in the lake. So I caught hold of her collar, snapped on the
leash and held onto it as I drove the boat to shore to rescue my
marooned husband and dog.

The moral of the story? It's two-fold: 1) Dogs should wear lifejackets.

?) Sometimes looking before your leap is not sufficient, as appearances
can be deceiving. So before you let enthusiasm and ambition convince
you to dive right in, perhaps you should stick a toe in and test the water,
lest you end up over your head and paddling in circles."

http://www.thestar.com/thestar/editorial/opinion/20000604NEW01x_ED-CARTOON.html.

Date: Sun Jun 04 2000 12:17
Donald (@Goldfish) ID#26793:
Copyright � 2000 Donald/Kitco Inc. All rights reserved
No...No...No...A gold standard does not prevent deflation. We were on a gold
standard until 1933 and had four years of deflation from 1929 to 1933 and beyond.
Let me repeat it again. That period of deflation, and the next one, will be caused by a
reduction of credit dollars. You must take the time to understand the difference
between a cash dollar and a credit dollar. They are not the same. They are not always
automatically interchangeable at your option. It doesn't matter to deflation whether your
cash dollar is a gold cash dollar or a fiat cash dollar; either one is more valuable than a
credit dollar. Even with the horrible inflation we have had since 1933 there are "only"
$589 billion cash dollars in existance against well over $100 trillion credit dollars.

Would you care to share what your point is regarding Strad Master?

For those of us who know Strad Master (Endre), what a
WONDERFUL experience to hear his Tchaikovsky D Major,
Op. 24!

http://www.gold-eagle.com/gold_digest_00/taylor060600.html"Bill Murphy at GATA has done everything within his power to bring his
gold conspiracy theory to the attention of the public. But for the most
part, the establishment media has shut him out."

ss, I appreciate that we are all entitled to our opinions. But I would like to put you on notice, sir or madam, that I find your posting of links to sites which foment hatred of particular racial/ethnic groups as being off-topic, as well as morally and ethically repugnant to an extreme degree.

@ Leland (6/4/2000; 10:23:43MT - usagold.com msg#: 31787)
From the Hightly Respected DONALD at Kitco...This One is on the Serious Side


"...You must take the time to understand the difference
between a cash dollar and a credit dollar. They are not the same. They are not always automatically interchangeable at your option. It doesn't matter to deflation Leland Even with the horrible inflation we have had since 1933 there are "only" $589 billion cash dollars in existance against well over $100 trillion credit dollars.

My comments:

This does not compute for me. Am I missing something? To my thinking It matters greatly. Certainly an electronic quantity of debt would look different from a physical quantity of debt. A gold coin is not a dollar let alone a debt dollar. Any form of physical money with intrinsic value would not be a debt dollar unless it collateralizes a debt denominated in dollars.

Surely I would rather have Paper fiats than electronic fiats but if one vaporizes the other will quickly follow.

Talking of the difference between a cash dollar, a credit dollar, a paper dollar, a gold dollar, a fiat dollar, an electronic dollar, or any other kind of dollar is jibberish to me unless all are given a clear definition of each in advance.

My personal belief is that gold, silver, copper, platinum, nickel, corn, wheat, tobacco, bullets etc. can be used as a store of value. My understanding is they are in no way tied to the dollar. The dollar as we know it (paper or electronic) certainly would not be a store of value. One is hot and the other is not hot. I gladly and quickly exchange the hot for the not hot when I have the opportunity.

HBM

Certainly, Donald did over-simplify...but, to his credit,
he's answered many questions that resulted. A quick scan
of today's posings at Kitco, by Donald, would be of interest.

http://www.posse-comitatus.org/BeWise/newlight.htmlpdeep,

The Protocols of the Elders of Zion is not racist, nor does it promote racism or ethnic hatred of the Jewish people.

ss of nep,

Thank you for posting that information on the origins of the
Protocols. I learned about the Protocols about 3 years ago,
and finally read them about two years ago. Very enlightening document.

pdeep,

perhaps you did not read as far down his page as I did, where it says:

"Unfortunately the tone can get a bit harsh in revealing these Truths. BeWISE would like to re-emphasise (sic) that we are in no way blaming every single individual Jew for this NWO push. That would be ridiculous and wrong since we actively work with many precious Jews all across the
world. We are clearly pointing out that this push for global control as laid out in the Protocols comes mainly from the Jewish LEADERS and their cronies - their politically correct "yes men" . . . However, it is a FACT that many Jews are used willingly by these diabolical
leaders and their agendas as are many other people . . . and that is sad . . . "

In my own words...

The Protocols are the alleged details of a plan by about 300 Jewish families to control the world through the use of gold, propaganda, and more. Surprisingly, although this document was written over 100 years ago, the plan laid out has come to pass in a remarkably accurate and almost prophetic way. On a gold forum where participants frequently speak of a world conspiracy in gold, I find a discussion of the Protocols of the Elders of Zion about on-topic as you can get.

Further, the forum guidelines specifically prohibit "ethnic, religious and racial slurs."

The Protocols neither disparage the Jewish religion, nor the Jewish race. Neither the religion nor the race is responsible for the ambitions and goals of 300 Jewish families who have turned their backs on the tenets of their own religion and ignored the commands of their own Bible; choosing instead to focus on a few verses and ideas that justify their evil acts and ambitions.

On a personal note, and for the record, I am not racist in any way. The Bible says God will bless those who bless the Jews.

[Gen 12:3.4] And I will bless them that bless thee, and curse him that curseth thee: and in thee shall all families of the earth be blessed.

[Mat 5:44.5] But I say unto you, Love your enemies, bless them that curse you, do good to them that hate you, and pray for them which despitefully use you, and persecute you;

And, I believe that the United States has received a measure of such blessing for its support for the state of Isreal. However, as we pressure Isreal to give up land for peace, I believe God's blessing on our Nation's prosperity will surely wane. Yes, the dollar began a decline on
Friday, while a few days earlier, Isreal abandoned territory.

pdeep, if you are concerned that people may harbor racist ideas, then you should oppose the doctrines of evolution, which Hitler used to justify the promotion of his "master race" to the exclusion of all others.

pdeep, the Lord Jesus Christ had scathing words for
the Jewish Leaders, yet called all non-Jews "dogs", because he came for salvation of the Jews, not the Gentiles. Are you able to make the distinction that Jesus did? And realize that a discussion of the plans of a few Jewish Leaders is not even remotely in the same topic as
a discussion of racial hatred of the Jewish people?

On a final note, I will say that racism is bad because people PRE-JUDGE a person or a group based on irrational
and wrong beliefs. pdeep, are you guilty of prejudging
ss of nep's message, without examing the truths it contains?

Hill Billy Mitchell (6/3/2000; 22:02:10MT - usagold.com msg#: 31757)
Natural fear, greed, ignorance and laziness
@Turnaround (6/3/2000; 18:23:00MT - usagold.com msg#: 31753)

hello

> Sir Turnaround:

Ha! now that has a certain Medieval flair ;-)

> Welcome! Your comments are valuable.

Thank you, I hope to shed more light than heat. I should tell you though,
I'm nobody's expert on any of this.

>You say to me:

>>. ..I don't think you can blame everything on the Fed- if it weren't for the natural greed, fear and
>> ignorance behind a great deal of human action this situation would not even exist.

>My response - You are quite right. � We are to blame. The Fed simply deserves the
> credit for its willingness to flex its muscle now that it has such a vast control over the
> economy. I blame myself and you

I plead nolo contendere. (smile)

> and my parents and grandparents for selling our children and grand children into
>slavery. You have hit the nail on the head. The Fed has us by the short hairs because of
>our "natural greed, fear and especially ignorance", to which I might add one other thing -
>laziness which is the root cause of ignorance.

Well, I left laziness out for a reason, and shorthanded the rest. There are many (billions)
very hard-working people that simply don't pay much attention to macroeconomics,
finance, etc.

Consider:
A culture is in part a set of shared beliefs about how the world works. That set, or
belief system, or worldview can only endure by rejecting or ignoring facts that do
not fit the picture. This is the underlying basis of the current 'Culture Wars' (term
comes from "The Fourth Turning", by Struass and Howe) in the US,
and the reason, for example, for the French repugnance of things American.

The maintenance of culture requires of its members a certain 'complicity', or
agreeability, if you will. This is created and maintained by the mechanisms of
the network of social interaction, both by acceptance and by the aformentioned
rejections. Certain subjects are not discussed at cocktail parties, for example, while
the dress receives a compliment. This model is not unlike the excitory and inhibitory
signals in a neural network. It is how rumors are spread, how team sprit works,
how armies are raised.
The mechanisms also include non-verbal means, such as vocal tone, dress, body
language, etc., as well as hierarchical networks such as mass media and academia.
Most people require a leader- they do not want to be free.

Some things are just not open for any kind of discussion, such as the number and
kind of dictatorships "we've" sponsored over the past century. These are cultural
"blindspots" that have to be maintained in the Land of the Free. Any broach of this
cultural agreement is greeted with derision and bemusement. Would you think
this is impossible to do in a country that can forget that it is 30 minutes from
MAD, 24/7?

In the current context (cash is trash, interest rates are everything) there have been
several highly reinforcing factors for American 'complicity' with the Fed. Here I
have to speak only about the US, as I'm not well-traveled. The two most important
factors are, in my view,
1) The rise of American influence in the world, the American Century
or American Empire.
2) The general prosperity in the US. (I think patriotism comes in a distant third.)

I hear tell that the difference in per-capita income between the richest and the poorest
countries was something like 3:1 200+ years ago. That ratio is now something like 70:1.
We've had a great ride, albeit on the backs of a lot of brown people. (Puh-lease do not
mis-interpret this as racism on my part.)

So sure, we (the so-called sheeple) are slaves of the Empire, our taxes exceed the most
despotic feudal lord's rates, but we are a most refined kind of slave-
one that agrees and complies.

Jason Happy: "...are you guilty of prejudging ss of nep's message, without examining the truths it contains?

JavaMan: Here is part of ss of nep's "message"..."Adolph Hitler realized this. A howl of rage from all corners of the world was the answer to his quick action - but he tore the burning fuse from the bomb set to explode in the summer of 1933. And but for this quick action, Germany today would be suffering the tragic lot of Russia."

JavaMan: No, Sir Happy, the truth is that this is racist material and I believe anyone who advocates Hitler and/or his message is a racist.

Jason Happy: "if you are concerned that people may harbor racist ideas, then you should oppose the doctrines of evolution, which Hitler used to justify the promotion of his "master race" to the exclusion of all others."

JavaMan: You make it sound as though one who opposes the atrocities of Nazi Germany are obligated to oppose the theory of evolution which is somehow irrefutable. Many people today oppose the doctrines of evolution, as do I. There is absolutely no evidence to support the theory of macro-evolution, and the "wisdom" of micro-evolution is waning with each passing day.

Lastly, pdeep can respond to your post for himself if he chooses to, but I inquired of ss of nep as to where he was going with his dialog with Strad Master as I saw it to be inappropriate and await his response. Perhaps he will shed some light on the purpose and relevance of the link he posted.

Some dont care. Thats fine, you need not reply. Read no farther. Enjoy your peace of mind as you contemplate your gold holdings.

Now for anyone who is interested-

It would seem that GATAs' document on manipulation is making some waves. The dollar got hit. There was a kind of a fight in the pits on Friday, by one account. These factors point to volatility.

Volatility is our friend.

Has gold been naughty, and now must be driven low again? (If so, buy puts, right?)

Or is it going to continue to rise on Monday morning? (Shall I go long?)

Ah, the volitility is great. Exhilarating.

EG -- The Hobbits suggest that you try to restrain yourself from buying ANY COMEX paper, (either a Put or a Call), and buy the real thing ! -- Physical GOLD that is. -- Then you will not care if the Shorts trash the COMEX on Monday as the sun will be shining on the real thing soon !!!
<:-)

http://www.thebulliondesk.com/News.aspIf you don't have the above link, it may help.

Date: Sun Jun 04 2000 17:49
Stone-Gold (History of the World, Part XIV) ID#277190:
Copyright � 2000 Stone-Gold/Kitco Inc. All rights reserved
( croaky old voice ) "So, on the 1st June 2000, when GATA released it's report, that's
what did it, Grandchildren. The banks got it, the comittees got it, everyone got it.
Sheesh, even the Senators were forced to accept it. And in New York, guilty faces
looked up at one another, as the realization dawned..the game was coming to an end
very shortly....and as one looked at the others, the thinking behind those guilty faces
were the same..
'gotta get out before they do'
and thus it was, Grandchildren, that the New York Gold Crisis took the United States
to it's knees as the gold price soared out of the grasp of the guilty banksters and like a
pack of savage dogs, turned on one another, slaughtering each other one by one until
the last one, having killed, fell and died. ( Cough ) . The US stock market crashed,
taking the whole economy with it. The rest of the world was only marginally affected.
Countries like China, India and of course the wily Russians benefited fantastically, as
you see, because they actually had the gold.
So they waded in, buying the US firms , and when the US finally noticed the economic
stranglehold it was being put under and tried to outlaw things to protect itself, they
waded in militarily. We were in no condition to respond, our forces collapsed in days
through lack of logistics, shortages wasted them away, they received not even electrical
power. So, that's why we are where we are today, kids."
"Grandpa, shut up and keep scrubbing"
( footsteps )
( silence )
*shrill voice* "Yankee!"
"Yes, Massa?"
"Have you finished creaning, yet, Srave? Bling me a dlink of whisky when you are
done."
"Yes, Massa"

Actually, I prefer Mozart's concertos for piano and violin.

WHAT A SLAP IN THE FACE!!!!!!!!!

Nice post! I still have a tendancy to blame the "sheeple" now
and again, but I'm tending to the notion that outlook isn't
productive, nor, actually, very accurate. I think only a very
small proportion of Americans are actually "complicit" in the
fiat looting of the rest of the world in the sense they are
knowing accomplices anymore than most Germans were complicit in
the Third Reich. Likewise, only about 12% of the population was
involved in the First American Revolution - - - and that includes
those on BOTH sides.

Not only were a large percentage of Germans neutral or even
hostile to the Nazis, there was a relatively large and active
resistence. There were several attempts to exterminate Hitler,
one frustrated only by a misguided but stout oak table leg. The
existence of this German resistance was, naturally, surpressed
and, typically, knowledge of its existence covered up. The
average German had little to do with the power games played by
their hierarchist power elites - - - except to contribute their
male children as cannon fodder, and the destruction of their
cities in the end game.

To be an accomplice, you have to understand what's going on and
actively support it. Most people simply don't understand or get
drawn into the hierarchist games that come so naturally to a
small percentage of male humans. Most Americans haven't profited
that much from these games either. Since the evolution of the
modern world and it's "total warfare" and fiat currencies, they
are much more often the victims than the accomplices. We
American non-participants may unfortunately discover the down
side of this status soon enough for ourselves.

Thus "if you're not part of the solution, you're part of the
problem," isn't quite correct. It's more like, "I know it's not
fair, but if you don't find a solution, you'll likely be a victim
of the problem."

Regards,
Journeyman

If you're interested in finding out more about the "free riders,"
either beggars, but more likely "leaders," with hierarchist
tendancies (as opposed to people with cooperative
predispositions) and the genetically based tension, even
conflict, between them, check out "Hierarchy In The Forest" by
Christopher Boehm. I have no financal connection to this book
what-so-ever. It's available from amazon.com or barns and noble.

Thanks for the link.

Thus "if you're not part of the solution, you're part of the
problem," isn't quite correct.

I have no subsidies from any branch of any government. If one has a single subsidy they he is part of the problem.

HMB

Gold is trying to hold it's gains, can it do it?
I think yes!

I should have mentioned that my wife and I are the only people that I know who have no subsidies. I am sure that there are others out there, I just have not known personally a soul who is in this category. I do not mean to indicate that we are special in any way. It just happens to have been a choice of ours.

I could explain however I not ever seen an interest in the subject of removing one's self from any and all soup lines.

Is there any one out there who does not have a single subsidy. I'm feeling very lonely.

HBM

HBM."Surely I would rather have Paper fiats than electronic fiats but if one vaporizes the other will quickly follow".

I think you are right insofar as vaporization of purchasing power if all systems remain on-line.

However in a systemic bank interuption currency law proscribes that only cash fiat notes are "legal Tender".

I suspect the dollar enamored Public will recognize said notes as such, no matter what the inflation rate.

What I am saying is that like the saying, "money is tight", we could see "cash money is scarce".

I think the current little rally is "allowed" by GS, and TPTB. All they have to do is stop selling paper as viciously, and the price will just naturally sort of rise like bread when the yeast is taking over. I mean, there is enough upward pressure on gold already, and they really dont have to do much, or step out of character to let it go up. They actually are just holding the string on the helium ballon. All they have to do to create a little interest in the paper market is to just let the ballons' string slip through their fingers al little bit. Look back over the last few days before Friday, it is clear that there was not much paper trading going on. It would be a smart move for the cabal to create a bit of interest, before everyone just swears off paper altogether, like a whole town gettin religion, and then the bar closes for good. Cant have that, we must keep the people playing the paper lottery, so we can continue to fleece them. Keep the illusion strong.

Those who sell paper into the market to depress the price- can do so indefinitely-IF- they can sell enough paper to depress the price, and then, before those options expire in the money, IF they can have a press release bashing gold, OR- do something with the news or the US dollar to push the stock market back up, drawing funds away from gold,
pushing the price lower just before expiration, then they don't have to make good on the calls they sold. The calls expire worthless.

Then they can buy the gold at cheap prices, and accumulate more physical, all the while encouraging BOE to dump the peoples gold at a loss.

Then they can stage a little rally, to excite paper players, and draw in fresh cash flow, and the cycle repeats. I beleive that our current rally is an "allowed" rally, to create some paper trading action. Draw in the romantic longs, then shake them upside down, and scoop up the quarters. They want to "gouge out the eyes" of those who beleive in gold. (Which makes them a very vicious and un-holy lot, dont you think?)

I beleive they use techniques of opinion formation much like the record and film industry plays the spuin to lauch a new movie. Its mass psychology at work in the media. This is the age of deception.

Its kind of like surfing the wave of popular perception and opinion, and I can see no end in sight as long as we have a strong dollar, bond market, and stock market.Until then, any rallies will be crushed.

If the bond market, stock markets, and the US dollar tank simultaneously, then we have strong impetus to see money flow into gold.(Thanks for this insight, Farfel.) I may repeat it for a while until someone thinks I thought of it. :^)

Of course it is fool hardy to make predictions, but it seems very likely that the paper POG will be squashed early tomorrow.

I don't mean to rain on anyones parade, but this is the dominant paradigm, and it will take something bigger than the Washington Agreement to make any change in the way things are. The whole Western world is controlled by these snakes, and just what makes anyone think they are going to lose control in a blink of an eye? There is no end to evil, and no end to the b.s. that they can come up with. Dont look for any big changes in the next few years, thats my take on it.

This shouldn't disappoint any physical gold holders, because after all, they are not in it for a profit, and it is not profit that motivates them, but only truth, purity, righteousness, etc. And of course maybe someday, when the world turns on its side, their gold will be worth $30,000, but those will be little dollars, whose value is equivalent to about $300 today.

And so for those future days, some sit and wait, and talk in romantically shrouded and hushed tones of the doom to come, and hold the torch of truth near (which now flickers in the bad air in this night of deception,) to read the sacred words of gold written on this forums' hallowed walls.

Your last comments...Your perception is shared by me, good post.....But maybe just maybe, Monday in NY may show us a change of PLAYERS which means a change of tactics, and the shorts will have to pile on after the yellow shows new strength....we need some institutional might and there is just a possibility that indeed GATA and it's spokespersons armed w/ 119 pages of revelations (to the masses, not most Goldbugs) that we may get a few (offshore especially) funds trying to be earlybirds?......It's a complex monster Derivatives created and who knows what new twists are around the corner. Anybody's guess, but we at least already have our Gold...Compare the interest and press in the Goldwold 12 months ago....to now!
AWESOME CHANGE as I see it....GO Physical & GO GATA>>>>>>>
Regards...YGM

All Gold Needs....is a few new players w/ deep pockets and perception....and we have the shorts buying or jumping out windows.....The latter wouldn't bother me anymore...I'm becoming uncivilized I guess.....YGM.

I wish you the best of all possible results in your business endeavors.

Unlike you, my fortune or poverty does not lie directly tied to the price of gold.

However, if the economy tanks, there will be less elevator construction, and my fortunes will fail.

Whereas, if the economy tanks, your fortunes will soar.

So it seems that we are set at odds, each praying for opposite results, but we are not really different, because deep in my heart I know that gold is good.

Semper Fidelis, Ken

(Latin, and Marine Corps motto, meaning "Always Faithful")

Wow, haven't heard from you in a while!

Thanks to you and the Hobbits for your good advise. I should be so smart.

:^)

@ HI - HAT (06/04/00; 18:40:30MT - usagold.com msg#: 31808)

I said:

"Surely I would rather have Paper fiats than electronic fiats but if one vaporizes the other will quickly follow".

You say:

I think you are right insofar as vaporization of purchasing power if all systems remain on-line. However in a systemic bank interuption currency law proscribes that only cash fiat notes are "legal Tender". I suspect the dollar enamored Public will recognize said notes as such, no matter what the inflation rate. What I am saying is that like the saying, "money is tight", we could see "cash money is scarce".

My response:

You are right by your definition of vaporization (an undefined but extremely high rate of inflation coupled with a systematic interruption in the banking system). What I invision when I use the term vaporization is a rate of inflation so hyper that my wheelbarrow will be much more valuable than the amount of paper it will contain. I keep such a small amount of cash and or electric money that it would not buy a loaf of bread should this vaporization occur. I have only about a month's supply of fiat on hand at any time. Anything above that I convert to PM's bullion type coins. Under a hyper-inflationary scenario my 30 day supply of fiat would quickly become a one day or less supply; however my 2 year supply of pre-64 legal tender would become a 30 year supply for about a year(smile). In vaporization conditions nothing will be legal but gold and silver coins will be tender. I am talking teotwawki as in Weimar Germany and you are talking 1980-1981 in the U.S.coupled with a break-down in the banking system.

If we are talking 1980-81 I believe my one month's supply of fiat will be plenty. I will have 30 days to earn another month's supply and or convert some silver to fiat.

HBM

Last weeks Ponzi numbers:

Tue. Nasdaq 3,459.58 + Dow 10,527.13 = 13,986.71 divided by 2 = 6993.35 Ponzi up 241.18

Wed. Nasdaq 3,400.91 + Dow 10,522.33 = 13,923.24 divided by 2 = 6961.62 Ponzi down 31.73

Thur. Nasdaq 3,582.50 + Dow 10,652.20 = 14,234.70 divided by 2 = 7117.35 Ponzi up 155.73

Fri. Nasdaq 3,813.38 + Dow 10,794.76 = 14,608.14 divide by 2 = 7,304.07 Ponzi up 186.72

Family, Friends, Guns & Gold......."Semper Fi"Never Quit, Never Say Die!.....My Old Dad!....Ken.

Are you a miner?

Didn"t you have a web site?

Well, it's not quite so lonely. As you may have guessed, I have no subsidies either - - - haven't for over 25 years. I've also greatly reduced the subsidies I pay to grabbits. Only the indirect variety that are nearly impossible to avoid.

Regards,
Journeyman

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

While waiting for the Au market to really get under way. Here is a little amusing thought.

Customer: Waiter! Waiter! What is that fly doing in my soup?

Waiter: Why sir, I believe he's doing the backstroke!

Or, this:

Customer: Waiter! Is that a cockroach in my roll?

Waiter: I don't know sir.

Customer: I want to see the manager right now!

The manager comes over, and after spying the offending article in the roll, he grabs it and pops it into his mouth.

Manager: No sir, it's a raisin!

OK, I know. But it's really slow tonight. I am actually surprised that the Aussies didn't sell into the rally and scuttle any upward momentum. Maybe we will see a continuing Au rally on Monday. Who knows?

From FOA's msg # 25, subject Euro dollar:

<real local economic growth. Even today, after a huge, economic supporting decline in their currency,
price inflation is still less that in the US! Confounding the currency trader bugs that present
themselves as knowing just how a currency should act.>>

My comment:
I think I understand!
In the past'since the U.S. dollar served as the barometer for all the paper currencies in the world, when the U.S. dollar "gained" strength all other paper currencies worldwide lost purchasing power.Some not too much, but many especially developing countries,that owed money in U.S. dollars, a lot!In those countries it was called inflation of the local currency.

Now, since the Euro dollar is the only currency NOT tied to the dollar, whatever happens to the U.S. dollar(inflation, deflation, whatever) it doesn't effect the purchasing power of the Euro. Hence, if the real or unreal rate of inflation in the U.S. rises faster than the real or unreal rate of inflation in the Euro-zone, the Euro dollar gains strength faster than the U.S. dollar in all the currencies of the world, eventually causing a possible stampede of foriegn money out of U.S. dollars and into Euro dollars that have a 15% stated Gold backing.

Once the public understands(if they ever will) what is happening, many may decide, worldwide, to invest in Euro backed assets and hard assets instead of U.S. dollar assets.(Gold & PM's)
Does this make sense?
Thanks for Reading, and good-night.....beesting.

http://exn.ca/onair/index.cfmI saw an excellent show on the Discovery Channel in Canada, about ancient and modern counterfeiting. The show examined a Roman treasure hoard unearthed in England in 1992. Amazingly beautiful objects of silver and gold, as well as a whole lot of Roman coins. The show will air again on June 24, at 7PM ET, for anyone interested. Here is an excerpt I pulled off the web site:.....note that the exerpt is nowhere near as good as the program was.

In November, 1992, a retired gardener named Eric Lawes was puttering around with his metal detector in a field near the small village of Hoxne, England. He stumbled upon one of the richest treasure hoards ever found in Great Britain, a collection of jewelry, household objects and gold and silver coins worth millions of dollars. Soon after the discovery, the British Museum purchased the Hoxne Hoard, as it came to be called, and began restoring and examining the treasure. Today experts there are just beginning to understand who buried the treasure, and what it can tell us about the last days of Roman Britain.
After visiting Hoxne field and meeting the archaeologist who oversaw the hurried, clandestine excavation of the treasure, we'll travel to London and the British Museum. There we'll meet Simon Dove, the conservator who cleaned and conserved the 15,000-odd coins that were found in the hoard. We also talk to Jonathan Williams and Mike Cowell, who are taking a closer look at the coins to see what they can tell us. Many of the coins in the hoard were 'clipped' -- someone had trimmed bits off of the outside edge presumably to make counterfeits.

Sorry Beesting, but you are confusing three items!! -- You know what the US$ is, and also the Euro --- but you seem to have confused the Eurodollar amoungst them. -- The Eurodollar is only an "outside the USA Borders" USDollar! -- Hard game this is to figure out without them throwing curves. Ay?
<;-)

My, my, my!What a hornet's nest of controversy I have managed to stir up by my mere existence, eh? While I, like Java Man, breathlessly await an elucidation of what that "Protocols of the Elders of Zion" web site has to do with me (or gold, for that matter), I do thank you for unearthing it and posting it for the collective edification of us all. Since you obviously use the web as a primary source of intellectual stimulation, I thought I might share some equally authoritative, well-researched and documented sources of information. Although not in the same genre, you will undoubetedly find that they comport nicely with your thirst for truth. Enjoy!

http://www.alaska.net/~clund/e_djublonskopf/Flatearthsociety.htm

http://www.aniware.se/AghPagee/Legacy.html

http://theshadowlands.net/alien.htm

http://www.nessie.co.uk/

http://www.mit.edu:8001/activities/41West/Elvis.html

View Yesterday's Discussion.

Kudos!Thanks for your well spoken reply to Jason Happy's post in defense of the web site ss posted. You kindly saved me much time and effort. Much appreciated.

Well I have been one ....for a number of years, but I doubt if I can afford to persue it past this season if things stay the same...The website will be in another format and site, not up again til Gold is worth selling for living money. Now it's only worth hoarding. You have a good memory....Ken

SurpriseI had no idea you've heard my recording of the Tchaikovsky concerto! How sweet of you to mention it.

Extract from TG's latest:....... If the political risk is now on the dollar side,,,, and your gold inflation
hedge is discovery priced with contracts created with unlimited dollar supply,,,,, how will paper gold rise in a dollar hyper
inflation? In addition, how will any gold
supplier that must sell into these markets, profit during an inflation? We have hiked this path before, no?......(end quote)
All:
Don't ya just hate it when TG yanks the rug out from under you with a dose of logic as above!
That's the hard part-- trying to mentally prepare for the coming price spike in Au, all-the-while aware that said spike will, (in TG's hypothesis) be perhaps not representative and in worst case, markedly down.
Several here appear to support the TG position one minute and then offer thoughts consistent with the Market being a true and fair Barometer,"POG to the Moon" etc..etc.

We must be CONCIOUSLY ready for anything.

Get mentally ready!

Sir

You are a man after my own heart. You are so right! I should have guessed from your previous postings.

There is a possibility that any of us may indulge in some subsidies of which we are not aware.

Over time maybe a dialog on this subject could expose some of the hidden subsidies so that those including myself who wish to totally free from them may be well armed with the information to do so.

You da' ma'an

Very respectfully,

HBM

@ All,

I haven't seen the April trade number, anyone?

TIA.

Gold firm in Europe, fix at highest since April 18



Updated 5:42 AM ET June 5, 2000

LONDON, June 5 (Reuters) - Gold bullion prices were firm
in Europe on Monday, with the metal fixed at $281.70 an
ounce, up 10 cents from Friday afternoon's fix and the highest
setting since April 18.

Traders said the market was retaining the $10 gains seen on
Friday afternoon, with current strength reflecting a weaker
dollar. Hedge funds were said to be switching out of the dollar
into gold.

The market is now running into an area of technical resistance
around $282.00, with the next upside target at $285.00.

(Fair Use for Educational/Research Purposes Only.)

You two are not beginners...why were you reading those posts? You need not waste your time on me! But with the points you raised, I can see perhaps yet another day of construction may prove helpful for those others seeking a firmer foundation.

ORO, you said well enough in yesterday's #31773:
<<<<"The problems of debt money do not come from debt, they come from the government. Governments charter the central banks , providing them with a monopoly on the production of currency within the government's jurisdiction. But more importantly, central banking makes the many separate banks into one big whole - a single bank.">>>>

Yes, and the implications of this as you have described are well known to myself and dear TownCrier, but precious few others have demonstrated openly a solid grasp of those fundamentals. Who among our wide circle of gold readers can hope to understand gold's present, future, and past if they elect not to see this banking for what it truly is? As you have clearly established more credibility at this roundtable than I, with confidence I shall entrust that point of education unto your capable hands. To conclude your post, you said to me:
<<<<"Aragorn, the problem is not banking with gold or with anything else, the problem is the existence of a central bank in each nation. Closing the central banks is the solution.">>>>
Let us look into that in time. But first, we must look into reasonable expectations, cause and effect. I offer the following "examination" requiring hard and honest contemplation. (I trust that all have read ORO's post and my two-day "Foundation" before continuing here further).

Is it not the nature of of a people and their government to interfere for the perceived common good? We must back up a bit to make this clearer. How long might we expect a general public to endure the good medicine of "free banking" when the bitter pill of occasional or rolling bank failures must be swallowed? How long before free banks, which provide near identical services, engage in mergers to benefit from economies of scale? How long before the appearance of a "Bancrosoft" controlling a vast franchise of "McBanks" is *innocently* created to pool and centralize resources against any modest threat of a bank run? How long before the people act through their government to break the monopoly, and ward off other "banking misdeeds" with a federal agency for banking supervision? How long before the federal agency for supervision is altered to also serve as a lender of last resort for political expediency?

The good news for you, ORO, is that events have transpired, which you well know, such that you may indeed see your "free banking" wish granted one day to come. We will get to that by addressing the Saturday #31743 post of Sir Journeyman. Though our good Journeyman did us good service with a brief review of important bank run statistics, he did not provide the most telling portion of the tale. I shall. From his post we are told:

<<<"With truly redeemable gold-backed currency loaned by independent banks without a central bank cartel using government T-men to enforce their monopoly, the boom-bust swings would be much much smaller. They were in the past. For example, in the worst pre-Federal Reserve panic, the panic of 1873, only 2.8% of banks failed (and that was due, largely I believe, to the loss of a huge gold shipment off the East Coast), while after only 20 years of Federal Reserve operations (1913-1933), about 50%, that is fully HALF, the nations banks were unsound. This is what turns "small scale (single bank failure)" into "large (national speculative investment bubble, hyperinflation, or recession/depression)." This is where "too big to fail" comes from.>>>

Such a picture certainly incriminates the Central banking system when weighed against the Free banking system, does it not? Such suffering...those monsters at the Fed! But it is the untold story that brings the picture into clearer focus. With these small pre-Fed troubles and these larger post-Fed troubles prior to 1933 kept in mind, for the rest of the story please review these old comments I once offered in 8/11/99 - Msg ID:10880:

<<"When the stock market bubble popped in 1929, the financial system, and much necessary confidence began to unravel, and the bank run became a probationary event for the Olympics. In 1929, 659 banks failed. In 1930, 1352 banks failed. In 1931, 2294 banks failed. Late 1932 and early 1933 witnessed this trend swell to envelop not small or isolated banks alone anymore, but entire communities and statewide banking institutions. (I will tell you that by 1933's end, nearly half of U.S. banks had disappeared...such is the "privilege" of issuing excessive claims on money that cannot be backed through this fractional reserve system!)

"You can see why the Roosevelt Executive Order of a bank holiday effective March 6, 1933 was something other than a trip to the beach. In this year, 4004 banks failed, or else were found to be unfit to reopen at the end of the "holiday". In the following year, only 62 failed. Why? Because as you already know, it was at this point that President Roosevelt took the money (gold) out of the domestic dollar...">>

And so we see the development that has become the relevant part of the tale for today's world. We see that after 1933 the Central Bank suddenly established a greatly improved (some may say "impressive") track record to this day, no? We all know the reason for this new and perennial success. To be sure, there is little purpose in a bank run when the currency has become only a ledger entry that is not redeemable at the banks for any THING which, in the old (gold) days, may or may not be in the vault. The evidence speaks for itself. With this 67-year-old debt-based (paper) currency now firmly established, perhaps the needful days of the "Lender of Last Resort" may nearly be brought to a close, returning the role of Central Bank to that of Central Supervisor only.

First "Free gold", then "Free banking" in due time...a world you could live in?
The Foundation is in place.

got gold?

got patience?

Souces: Bridge News and MiningwebAsia Precious Metals Review: Gold steady after Friday's rally
By Hiroyuki Fujiwara, BridgeNews

Tokyo--June 5--Spot gold was steady above U.S. $281 per ounce Monday in Asia after Friday's rally in the U.S. market, dealers said. Short-covering continued to support gold despite some selling on rally capped prices early in the morning, they said. Platinum extended Friday's gains on speculative buying, the dealers said. Short-covering from investment funds and buying from Japanese supported gold Monday, while some physical dealers in Singapore took profits, the dealers said. Prices are likely to be steady in the near-term as many players expected gold's short-covering rally over the past few days, they said. Some dealers said that market sentiment has turned neutral from bearish in the past few months, while others said players are still
hesitant to buy gold on a lack of fresh follow-through fundamentals. If investment funds reverse positions into long-buying, gold could surge further, but selling from producers is likely to hamper prices without aggressive buying, they said. Tokyo Commodity Exchange (TOCOM) platinum futures hit the daily maximum price limit-up broadly following the stronger Friday's NYMEX, the dealers said. Speculative buying and short-covering lifted the yen-denominated futures despite the weaker U.S. dollar/yen on Monday, which supported spot platinum during Asian trading hours, they said. Some players who had expected price declines for bargain hunting rushed to buy platinum today following the sudden price rebound, the dealers said. Meanwhile, massive profit-taking inflated the trading volume of TOCOM platinum contracts but did little to cap prices on Monday, they said.

Black Blade: Surprising news is that producers in Oz did not sell forward on the POG increase. The dollar continues to weaken and this alone should be good for gold today. Also rumor has it that hedge funds are bailing out of dollars and are transferring into other asset classes such as GOLD. We could expect a real Tug-O-War today as longs (Investors and Funds) fight shorts (Big Investment Banks). A possible continuation of Fridays short squeeze. Also the Euro interest rates are expected to be increased this Thursday - Hey Bonus! And Platinum continues to rise as the auto manufacturers shift out of Palladium. The short-fall from Russia is likely to become critical as they can't deliver sufficient PGMs and industrial users begin to wake up and smell the coffee!

Excerpt from analyst Clive Roffey : (http://196.36.119.130/MGGold.nsf/Current/422567D9004530DF422568F5002E1567?OpenDocument)

Gold begins charge to $385 by year-end - Roffey

My oft-stated analyses on gold have continuously defined the bullion price movement as a major base formation in total contrast to the huge top patterns evident on the world's equity market indices. I have frequently stated that when the lift upwards from this base occurred it would be vicious and take the form of a catapult, or almost vertical move. Last Friday evening the gold price suddenly jumped $10 in the space of a few minutes as US futures players covered their short positions on the back of a falling dollar.

For any market to have an unexpected vertical move out of a negative psyche it needs to have a sudden jolt that turns the prevailing fundamentals on their head. In the case of bullion there can be no doubt that the US bullion houses have been keeping the lid on the gold price to protect their short sales at the $310 level. But the combined forces of a falling dollar, rising commodity prices and weakening stock markets are starting to take effect. My analysis continues to look for the vertical catapult with a target of around $385 by the end of the year. In this context the shares have formed major buy signals as their oscillators refused to mirror the new lows made in the early part of last week.

Black Blade: I sure hope he's nailed this one! Meanwhile - Au is up $2.70 at $283.90 prior to the open, S&P Futures are down -2.50, fair value -6.66. Smell the blood in the water? I think that the sharks are circling and getting ready for the kill. Should be an interesting day on Wall Street.

http://www.forextrading.com/forexartists/page1.htmWatch Spot JUMP !
<;-)

http://www.washingtonpost.com/wp-dyn/articles/A47365-2000Jun1.html"Imagine shaking hands on a financial contract without knowing whether it was enforceable in court. Now imagine entering into tens of thousands of such contracts, worth several trillions of dollars. "

And these are the "adults" supposedly ruling our financial world -- of course, none of us are "seasoned enough" professionals to carry on such important work.

(Haven't posted in awhile, but I've been almost keeping up reading -- I had to hunt down my password in my old computer, unplugged almost 3 weeks ago -- Oro & Aragorn have been prolific indeed. Requires some 2nd and 3rd readings for me, hopefully soon.)

A Spike Is A Spike Dept. : It seems to me one test of TG's thesis on paper markets unraveling is that each time there's a spike in POG, they have to beat it down with more paper "hedging", and so they lock the identical risk levels in at a new, lower price. Kind of winding the crossbow a notch tighter...

A spike to, say, $300, this time should accomplish similar mayhem to last year's spike to (what was it? $339?). But then, was there any reported blood spilled over this year's early one?

FOA's latest, on currency movements and their effects, I can really feel the effect of living inside the "American Box" all my life -- thinking only in dollars. (Fish living in water? No perspective.) At least Europeans have had to think multi-currency more often, but still the dollar's domination has held the world in a spell for over a generation. Almost none can be mentally prepared for the ground to shift as FOA predicts.

I'm finding I don't have the mental tools at hand to absorb FOA's #25 as easily as he makes the picture sound. The usual "hydraulics" of "This goes up, making that go down" that I learned in Economics fails me for now. Gotta try harder...

ORO and FOA put on a Mental Olympics here. I feel lucky I "made the cut" just to attend, but the events are the most challenging thing I've happened on in years!

(I have a close friend who computer-modeled Rubik's Cube when it came out, so he could formula-ize it and solve it in the fewest moves possible. He was so good, the manufacturer -- Ideal Toys, I think -- paid him to write a manual for it. This reminds me of hanging around in his office while he explained how he was moving the pieces to solve it.)

Ken: I check your site often. I too do a bit of mining,( placer gold) and I know what you mean about selling at these prices. I hope to get north one day to do some mining. Was looking forward to seeing some big nuggets on your site this season. Hopefully the tide is changing and we will !!

Goldfinger @ GE Forum.... ....I think you're RIGHT ON THE MONEY Mr. Goldfinger...YGM.



Financial Times Gold Conference in Paris
(GOLDFINGER) Jun 05, 09:36

Goldbugs,

It would not surprise me if we saw the start of a Gold Rush at the end of June. Why? GATA is going to have a significant presence at the upcoming Gold Conference in Paris on June 26th and 27th. What is more important is the World Press is going to be there and historically France has always been Pro-Gold (in addition, it's Central Bank has one of the largest Gold holdings in the world). Stories of GATA "Gold Derivative Banking Crisis" document surely will have made it's way back to Europe by now. In spite of the Media's lack of coverage of GATA and it's document in the U.S. (for obvious reasons), I suspect the media in Europe is more inclined to listen. In addition, GATA's planned trip to South Africa immediately following the Conference can only help the case for gold. This could also perhaps explain the little run up in gold that we have seen since Friday. It's getting more and more difficult to keep the lid on what is going on the the gold market. In addition, no one seems to be refuting GATA claims...this is very significant (in my opinion). Let's face it, if you don't refute an argument it's probably because it's true. If anyone were to refute the claims of GATA they (Cabal) could run the risk of getting more coverage then they bargined, or eventually get caught in a lie they may have to explain later. I also find it interesting that Greenspan has responded by stating the New York Fed nor the US Treasury Department have not been involved in the gold markets in any form, but when questioned about the ESF he has declined to answer.

This has all the potential of being bigger than the Watergate Scandal

Goldfinger

IF ONLY.......Shifty....
I had a Laptop and a Sat. Dish on my Excavator or Cat I could watch the action from work....And work starts this week-end. You "will" make it North and I'll be proud to show you the Golden sights of the Yukon....Kenny

PS: Travel and a whole lot more will be in the picture for Bugs who hoard physical now....GO GATA.

**TRAIL GUIDE....You come here & you get to be Guided thru 100 years of Gold on the Creeks....Tit for Tat....YGM.

Hi Gandy,you are right, I did completely forget the Euro and Euro dollar are two completely different forms of money.
If anyones interested, please DELETE dollar after the word Euro twice in my 31821 message.
Need to hire a proof reader....Thanks....beesting.

In your last post, you state that the Dollar faction won the war with gold by putting Western gold investors into paper gold.

That is not a win, that is preparation of the conditions needed to lose. Here is why:

If one had a paper money system which was managed to maintain a parity with gold, then that management would cause a gold standard to operate de-facto. The system I see is that of bond parity - the interest rate is maintained so as to keep investors from converting dollar bonds that mature into gold from being converted, instead rolling them over.

However, had the monetary system been managed in this way only to provide an appearance of a gold parity, allowing monetary expansion at great multiples of actual physical gold, but expanding the paper gold - or fiduciary gold - to keep the same ratio of monetary units to gold, then the system is exactly as the old gold standard of the Federal Reserve.

Throughout the 20s gold was leaving the public and flowing into Bank and Fed vaults, and the public held the gold debt derivative they knew as the Federal Reserve Gold Certificate and "dollar". Some were taking the gold and stashing it - not only within the US, also salting it away in other places.

Anyone who took the trouble to check the bank reports and the Fed's reports of its financial condition could see the buildup of leverage upon the same old reserves. These people would realize that the game would explode. If it exploded as it did before the Fed, there was no reason to believe that the centralization of failed bank policies and their repetition by the same financial leadership now calling itself a "Federal system", would not explode as well. Particulalrly if the system had reached much higher levels of risk than it had ever done before.

The success of the monetary system in getting the public to trade its gold for IOUs in the 20s worked well for those accumulating gold, but destroyed the system once realization set in with the public that the gold was not there and the IOUs could not be repaid.

Thus the game ended with total loss of the bank's credibility and dollar parity had to be maintained in international trade and banking even after the world went to war and the losers had no choice but to take what system was given. The system kept the same official and defacto parity and exchangeability with gold as long as it could. When it no longer could, the system broke down and the market share of dollars in reserve holdings fell from 100% to less than 60% and slowly drifted down to below 50% now. The main reason it had not fallen to 0 is that the partners to the original agreements gave political support to the system, forcing their own people to export at a loss for 20 years in order to keep the dollar reserve system working. If it was so important to maintain the dollar system, why would the Europeans not support an equivalent gold system that replaced gold with paper gold that could absorb any number of dollars and supply them with gold?

The win in investor psychology is still not a win on the plane of reality. The plane which forces the hands of both the deludors and the deluded. Illusions will feed themselves in the gold credit world, until the debt created is so huge that there is no hope of solvency and all must fail.

FOA - a note on the "free gold" concept

The presentation of this concept as assuring elimination of future leverage of gold by eliminating the possibility of enforcement of gold debt contracts is misleading. Though attractive to the Arabian gold holder because of religious bias, it ignores the realities of economics and the fact that it is in the interest of current gold bankers.

The main point of "free gold" is not that it would eliminate the future leverage of gold, but that it would clear the current bankers of their current leverage. It would allow bankers to get away with outright fraud once more, without putting their system out of business. This is 1933 all over again.

I say, let the bankers fry. Banking is the easiest large scale service to start from scratch. The loss of the 5-6 major US institutions that are heavilly involved in bullion bnking would eliminate only 15% of banking. There is a system in place to protect the "innocent" depositors through the Fed's printing press. The Fed even went as far as doing detailed simulations of the banking system to determine the level of danger to the rest of the banking industry if a certain number of the megabanks went under. They discovered that the inflation of the currency needed to bail out depositors was not so bad as to be unacceptable. Hence the warning by Greenspan that "too big to fail" is no longer an issue.

Again, "free gold" is not a system to protect the future from dilution of gold with fiduciary substitutes, it is a mehod of eliminating the current gold obligations that threaten to destroy a small number of large banking institutions that have taken "moral hazard" to the utmost extreme.

As the tarring, feathering and burning of Republic's leader shows, there are easy mechanisms to enforce contracts without government. These are much more effective and tend to target the actual malfeasors, rather than the stooges set up by them to "take the fall".



Aragorn III

The problem of bank mergers for banks in a free banking system is that any attempt to gain advantage through actions that are not justified by the market will cause them to lose market share almost instantaneously to upstarts that today are much easier to establish than in any time in the past. The market forces that control free banking eliminate the danger of "megabank" monsters.

The advent of large "trusts" - or "megacorporations" - is completely attributable to the advantages of government favor to a few large banks. The Japanese and Korean forms of Kairetsu and Chaebol were copies of US and UK business models that existed long before these Asian countries industrialized. These structures were of a large bank with a national charter to print money sitting at the center of a group of industrial companies. The banks supplied their group members with below market interest rates that allowed them to win any price war and buy up any resisting competitor. A central bank or other regulatory arrangement was used to keep other banks from competing in this manner, and to move the risk of loss making endeavors onto the public at large.

There is no reason for government to regulate banking. The only role for government in finance is to enforce contracts entered into honestly, and to prosecute the purveyors of fraudulent contracts (a.k.a. Banks, and I don't mean prosecuting loan officers but chairmen and executives).



The practicalities of the question of return to free banking.

The main issue is the absence of pure cash in the currency system of today, all cash is but a derivative of someone's debt. There is only one choice, eliminate the exclusivity of currency for paying debt contracts. This means changeing legal tender laws to allow payment of debt in gold, silver, platinum, palladium, and a number of additional items that are used by the public as a cash substitute, among them bonds and stocks in standardized form: shares in a "total market index" bond or stock fund. Using market exchange rates for determination of quantity needed to settle any denomination of debt in dollars.

Later, the system would develop its own preferences as to whether dollars, gold, silver, or stocks (or any combination of them in some basket) would denominate further debt. The most common usage will most probably fall to gold, but there is no assurance of this.

The key is to eliminate the situation which allows the banking sector to have a monopoly on the creation of the denominator of debt. The next day, the Fed can be closed forever.

The dollar market values of the allowed legal tender would rise to match or exceed the levels of debt.

The gold standard, it should be noted, was created because of the pressure by bankers to eliminate alternatives to their favored denominator of debt. The main reason for this was the Anglo and US bank's success in gaining control of a large portion of gold production in the two most productive regions in the Western US and in South Africa. They had good control of the supply of the debt denominator if it were gold. They could not do this with silver, so had it eliminated as an instrument for payment of debt. The next phase was the elimination of gold for the payment of debt and its use as denominator of debt in favor of debt dollars which were under the exclusive control of bankers. No one could find a bonanza dollar mine.

Remember, the banks have used government in order to eliminate competition; competition to their inflation of debt, and competition to their issue of the means of paying it back. The only way to eliminate their destructive power (no, there is no positive effect to their activity of debt creation, only to their secondary activity of allocation of those real resources put in their trust by WILLING depositors) is to take away their monopoly over the issue of the means for paying debt - that monopoly which they have toiled for 300 years to gain.

Banking is not evil, the monopolies granted by government to some banks are.

6/5/00 Indications
�Current
�Change
Gold August Comex
286.30
+2.10
Silver July Comex
5.09
+0.05
30 Yr TBond Sept CBOT
96~20
0~00
Dollar Index June NYBOT
107.75
-0.29


Market Report 6/5/00): Gold carried a strong uptrend through the weekend to add another $2 to
the price in today's early going.

When most analysts are asked, they respond to gold's surprising breakout Friday with comments
about the weaker dollar and prospects that the Fed might be tempted to cool its heals this summer
with respect to interest rates, but the real reason for gold's lustrous showing late last week might
have to do with a little known change in accounting rules for public corporations scheduled to go
into effect June 15, 2000. Called by Salomon Smith Barney's resident gold expert, Leanne Baker,
an "Accounting Nightmare", SFAS 133 will force derivative players to mark their derivative
positions to market. That could lead in some cases to the posting of huge losses by some mining
companies.

Currently, derivatives' positions are shown as footnotes to financial statements because the profit
or loss has technically not been claimed in most cases. The "book" losses do not flow to the profit
and loss statement or balance sheet. Obviously, if you have a losing position and you don't want it
to cloud the financial picture for your employer, the tendency would be to roll it and hope for the
best. It is a much less complicated world for traders if they do not have to recognize their losses,
but instead continually build a short position leading to the critical mass potentiality we have talked
about here so many times before.

Ms. Baker says that the negative mark to market losses for some mining concerns are
"spectacular." With the implementation of SFAS 133 on the fifteenth, all books will become open
books and stockholders of the mining companies will be able to see exactly where they stand, and
what might happen should the gold price rise and jeopardies these positions. I might add that this
new "Derivatives' Effect" will apply to all markets across the boards. Its implementation could
change the way Wall Street does business when investors, regulators, accountants, and
stockholders have been clued in on what's been going on in the shadow of the previous standards.

Says Baker:

"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."

The bottom line here is that mining companies are not going to want to be exposed as the primary
enemy of the very product on which they depend for a profit and the implications that
eat-your-young strategy might have on future stock values-- not if most gold stockholders have
their way. Secondly, no management team will have wanted to show that the company balance
sheet has suffered a serious hit because they gambled against gold, instead of acting to bolster its
value. They could very well be attempting to clean up their positions before the SFAS 133
standards are imposed apparently for the second quarter reporting period, which could mean more
big jumps in the gold price between now and D-Day (Derivatives' Day). Keep in mind that many
mine company presidents went out of their way to assure their stockholders after the first quarter
reporting period that they were not among those with huge hedge books geared in terms of net
effect to driving the gold price lower. Most made the case that there hedge books were prudently
run, etc. The time has come to turn over that hole card for the whole table to see, and it could get
interesting. At the very least, we are going to see some deeper analysis of these hedge book
positions. Questions will be asked;answers made part of the public record.

I would refer you to Ms. Baker's longer (and prescient) treatment of the issue in our Gilded
Opinion section and leave you with this final quote from the study she wrote titled: "A New
Millennium Gold Rush" published in October, 1999:

"We have long argued that derivatives positions in gold were lopsidedly short and
disproportionately large for the underlying market. At its core,our positive view on gold in 1999
has been based on a belief that gold market liquidity was less than participants blithely
assumed--and that when speculator and producer shorts were inevitably forced to cover, the
results could be spectacular....

The carnage in the gold derivatives market resulting from a 25% jump in prices is astounding to
us, especially against a backdrop of double- and triple-digit percentage gains in oil, copper,
aluminum, and nickel; resurgent inflation signals; dollar weakening; and looming Y2K
concerns. Stress testing of portfolios and "Value at Risk" (VAR) measurements captured only
normal market and trading variability and failed to provide a meaningful assessment of
comprehensive risk in the event of an "exogenous" shock--such as the European central banks'
announcement.

Particularly nettlesome were complex structured derivatives-- forward contracts with embedded
contingent options--and leveraged option strategies that could not be unwound quickly. The
practice of selling out-of-the-money call options to finance put purchases backfired as well.
Even basic spot deferred contracts were tarnished as gold breached reference prices and climbing
lease rates eroded forward premiums. We question whether managements understood their
exposures and conclude that any positions put on this summer in a $250- per-ounce gold price
environment were misguided at best, and disastrous at worst."

Food for thought.

That's it for today, fellow goldmeisters.

Patience....no problemWaiting 2 weeks for April trade deficit will be fun, should put us in perfect timing.

a) Allows time for Gata's GDBC report to 'brew'.
b) June 15 "D-Day" as mentioned by our honourable host.
c) FOMC June 27/28 meeting may be clearer.
d) May CPI/PPI freshly released.
e) OPEC June announcements may be clearer.
f) CRB at 226/227/228/229/230?
g) USD lower?
h) April trade deficit still above $30 billion?

Last half of June should be a barn-burner. Aristotle taught me patience.

got gold ... get more

CAnuck

http://www.usagold.com/THEGILDEDOPINION.html...added over the course of Saturday and this morning. You've got some reading to do, folks.

PRESIDENT!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.


***Like they say if you dream, do it in technicolor....
GO GATA & Congressman Ron Paul, my kind of guy....YGM.

I fear for patriots, like Congressman Paul. The latest
episode was with Jim Inhofe. His story is worth a re-read:

Okla. Sen. Inhofe Makes Emergency Landing

FBI Investigating - "Props don't usually just 'fall of'"

Saturday, May 8, 1999

CLAREMORE, Okla. (AP) -- Sen. Jim Inhofe, a pilot for 41 years, made an
emergency landing early Saturday after the propeller fell off his airplane.

Inhofe, R-Okla., was not injured, but his single-engine airplane was slightly
damaged, said press secretary Danny Finnerty. Inhofe was alone in the aircraft.

Inhofe said he glided for about eight miles before landing the plane at
Claremore Airport. He said he took off from Ketchum, where he keeps his
1979 Grumman Tiger, and had been in the air about 10 minutes when trouble
began.

``I noticed a vibration,'' he said, then heard a pop as the propeller dropped off.

The plane became tail heavy and he knew it would be difficult landing, he said.
``I wasn't sure I could make it,'' he said.

Inhofe, an experienced, commercially rated pilot, was en route from
northeastern Oklahoma to Oklahoma City, where he was to meet President,
who was touring tornado-ravaged parts of central Oklahoma.

Finnerty said the FBI has been asked to investigate because ``propellers don't
just fly off airplanes every day.''

The propeller was found on a county road about four miles from the airport by
G.W. Curtis, who graduated from Central High School in Tulsa with Inhofe.
Curtis returned the propeller to Inhofe at the airport.

(Fair Use For Educational/Research Purposes Only.)

Gold continues to rally

By Lisa Sanders, CBS MarketWatch
Last Update: 1:33 PM ET Jun 5, 2000
NewsWatch
Latest headlines


NEW YORK (CBS.MW) -- Gold futures jumped $2.60 to $286.80 Monday
as the market's technical recovery continued.

"It's been a real big washout on the gold market for
the last couple of years," said Phil Flynn. senior
market analyst at Alaron Trading. "Gold was out of
favor as an inflation hedge, and it's been on a
downward trend since it's spike last February."

"The market appears to be at a level where it's at a
bottom. It's a little bit technical, and some short
covering, and it's partly because some of the change
in the outlook on currency."

The U.S. dollar's weakness against most foreign
currencies is contributing to gold's strength,
according to Bridge News, which boosts the buying
of the dollar-denominated precious metal. See major
currencies.

Comex gold warehouse stocks, as of late Thursday,
were down 7,991 ounces to 1,892,615 ounces. Silver
stocks fell 232,311 ounces to 99,055,768 ounces.

July silver added 0.25 cent to $5.075 an ounce on
Comex Monday.

In the equities market, the Philadelphia Gold and
Silver Index added 0.2 percent to 59.41 and the CBOE Gold Index rose 0.7
percent to 37.27. Ashanti Goldfields(ASL: news, msgs), which gained 7.1
percent to 1 7/8, and Coeur d'Alene Mines(CDE: news, msgs), which
advanced 5.1 percent to 2 9/16, led in the indices.

In other metals highlights, July copper gained 0.9 cent to 80.20 cents a
pound.The London Metals Exchange said copper supplies, as of early
Friday, were down 925 metric tons to 604,600 metric tons. Comex stocks
were up 23 to 75,048 short tons.

Also Monday, September palladium rose $6.65 to $603, while July platinum
rose $2.70 to $555 an ounce.

(Fair Use For Educational/Research Purposes Only.)

Hello YGM,
Are you doing any hiring for your operation?

YGM sir, what a concept!
CONGRESSMAN RON PAUL FOR PRESIDENT !!!!

I'll go door-to-door, stuff envelopes, whatever it takes.

http://www.usagold.comGold (both kinds) finished with a rally again today...looks good on the chart.

http://www.SelectSectors.com/agpmp70.gifSelect Gold ( FSAGX ) moving Up!

"Central Bankers warn of US risk to global economy
By Alan Beattie in Basle
Published: June 5 2000 17:22GMT | Last Updated: June 5 2000 17:48GMT

The global economy faces the risk of a hard landing with US
stock markets and the dollar dropping sharply in tandem, the
Bank for International Settlements, the international organisation
of central banks, warned on Monday.

Recent volatility in currencies and equities, and the lack of
liquidity in some financial markets, meant the market reaction to
such a downturn posed a further risk, the BIS said in its annual
report.

Emphasising the uncertainties of the current global situation, the BIS said the imbalance
between rapid growth in the US and slower growth elsewhere would have to be corrected,
and that large movements in exchange rates were likely to follow.

"The rate of expansion of domestic demand in the United States is unsustainable and
potentially inflationary, and a similar if less extreme state of affairs prevails in some of the
other English-speaking countries," the BIS said.

In a pointed warning of the risks of complacency, the BIS compared the US to Japan in the
late 1980s, with a combination of high productivity growth, low inflation and soaring asset
markets, which ended in a collapse in asset markets and a prolonged recession. Present
stock market valuations were unlikely to be sustainable in the long term, it said.

"The Federal Reserve's rate cuts in late 1998, needed to stabilise fixed income markets, may
have encouraged the stock market to rally at the same time," the BIS said. It warned that, if
the inflationary threat in the US remained, the Federal Reserve should keep raising interest
rates even if stock markets slumped - avoiding any suspicion that it was bailing out investors
who had been caught out.

"Were monetary policy to back off at the first signs of declining equity prices, the risks of
moral hazard would be great," the BIS said. "Misguided investors should be allowed to pay
the price, and quickly, so that capacity can be reduced and longer-term profitability rapidly
restored."

Andrew Crockett, the general manager of the BIS, said that although banks were better
prepared for financial market turmoil than in earlier years, the recent high volatility in the
equity and currency markets was likely to continue. "The market-making activities of some
institutions and the liquidity of many markets are not as good as before," he said. "The ability
to absorb changes in supply and demand in the markets is not there."

The drying-up of government borrowing was also creating difficulties for bond investors,
with liquidity problems fragmenting government bond markets, the BIS said.

The BIS also criticised emerging market countries who had failed to push ahead with reform
in their economies and banking systems, and which were loosening monetary policy by
intervening to stop their currencies rising. "There is a risk of re-establishing the fixed
exchange rate mentality which contributed to the Asian financial crisis," said William White,
the BIS's economic adviser.

The annual report said the Japanese government should maintain its fiscal stimulus to the
economy. But it suggested switching the expenditure from public investment to the country's
"underdeveloped" social safety net."

(From THE FINANCIAL TIMES (UK), And Fair Use For Educational/Research Purposes Only.)

http://www.crbindex.com/reviews/story4000.html Note that this is dated June 5th but then this
"-Fiqures of previous business day-"
So I think these numbers pertain to Fridays upside move.
volume open interest change


COMEX gold 15,549 150,177 dn 5,883 If I had to quess, I'd say that the price move was caused by short covering which lowered the remaining number of contracts (open interest). The big speculators held ( I believe) close to 60,000 shorts (contracts sold). If so, their Friday short covering offset less than 10% of their position. Usually these guys go "long" or "short" according to whether the charts are moving up or down. They simply look at a chart, repeat their mantra, "the trend is my friend" and buy or sell. If the move upward continues, they will continue to buy (offset their short position) and eventually go long if the "trend" tells them to do so. We'll know if this is happening as offseting will lower open interest. This is my quess on this-- ?? Hope it continues big time!!

USA GOLD Report Today........What a Message!Leland...doesn't Mr. Paul have some sort of Gold related biz in a blind trust?

Christopher...The way things have been going my 10 yr old daughter will be running my Hoe w/o sitting in my lap by the time she's 12....hopefully that will soon change. I did in 95 have six employees...that dwindled over the course...Call me at $450.00 (grin)...

RS...Get it going & if you need two more votes, Hell I'll immigrate to Alaska "GLADLY"....

http://www.gold-eagle.com/editorials_98/birch030498.htmlAn old article, and I understand it, but the new tactic by
the BIS is "not computing".

And he has a web page. I don't think Michael would want me
to post it. (This is getting to be a "sticky" subject.)

That was a lie. I'm simply trying to have some of the
intellectuals "get going"...I enjoy (as a passive) all
the benefits of the great minds (not mine) on this forum!

Remember some of the background of the time. Japanese had invested heavilly in East Asia over the early-mid 90s and had financed much of the "miracle" by lending to local corporations. In seeking a more balanced budget, the Japanese government raised sales taxes at the first signs of economic recovery. Immediately, the recovery disappeared. Much of the Japanese lending was in dollars accumulated from the trade surplus with the US.

The early 90s were characterized by the US having the lowest interest rates in the world for the first time in "forever". As a result, many carry trades were built with the dollar as source currency and much investment was financed by borrowings in US dollars. The lending was not dominated by US banks even in Latin America, but by Japanese, British, Swiss and German banks. US banks seem to shun lending for industrial investment, seeking instead to lend for financial purposes only.

After the mid-80s financial disaster in Asia, the US had eradicated much of its "real" foreign debt base (that which provides the bulk of demand for US dollars abroad). The US dollar was crumbling and heavy pressures and G7 meetings were conducted to get the US out of trouble. Japan lowered rates for this reason and allowed a destructive financial bubble to get out of hand and had to stop it before it gained such size that the whole world could be destroyed by its popping.

The financial arrangements that saved our bacon at the time, included major central bank purchases of dollar debt up to 1997. Even with major dollar mopping operations by the various central banks, the dollar was still in a precarious position and at the first sign of US recovery the Fed hiked rates to head off "price inflation". The reason for the price fears was the fact that the US was about to join Latin America and Asia in economic growth, which would have raised demand for basic goods and capital well above the capacity of the world to provide. FOA and ANOTHER added that the US dollar was supported by a gold parity arrangement via OPEC oil trades that my research indicates was the second such arrangement since 1982, and was followed by a third arrangement shortly after the signing of the EMU papers in 1992.

The rise in dollar rates after such a steep rise in indebtedness of Emerging Market economies led to the cascade of events that reached a temporary high in the 97-99 "Asian contagion". After Japan committed Hara-Kiri in 1989-1992, Fed rate policy led to the elimination of Mexican demand by the crashing of that heavilly dollar indebted economy. Many other Latin countries followed. The rate pressures eventually caught up with the Asian Economies when oil prices started rising due to the demand from both a growing US and a resurgent South America. When rates were raised by the Fed 1/4 point in 1997, the BIS joined in with new bank rules that effectively stopped the lending to these Asian countries. With heavy debts pressing, the 3 hits of oil, rates and bank lending drying up started a chain of destruction in these markets.

Though dollar rates were an important culprit, Japan's lending was a more urgent matter, as the Japanese trade surplus made it impossible for Asian debtors to repay Yen loans. My analysis of the currency statistics indicates that the intensity of the credit crunch of 1997-8 was most intense in Yen, rather than dollars.

The BIS, in the reports you mention, had been pressing Japan to lower rates to a point where anyone could borrow in Yen profitably, thus supplying enough Yen to stop the unwinding of the Yen/dollar carry trade before it destroyed the dollar along with the Asian debtors. The Japanese responded just as that carry trade reached self destruction. The BIS knew what it was saying.

If their fear of US equity and currency collapse has intensified, so should yours!

.

.

http://www.usagold.comI was recently advised by a clerk in my local bank that it ws illegal to store currency in safety deposit boxes.Does that imply that storage of bullion coins that are currently being issued by the US or other sovereign states also violates US law?

I post too much.

www.usagold.comcan current bullion coins issued by the US mint be legally stored in a bank safety deposit box?

What the BIS has in mind is a functional economic system with the dollar's position being in proportion to its actual economic role alone rather than in its financial role(a 5 to one ratio). The US and the IMF/World Bank/Development Bank faction who operate the dollar colonial system have resisted all attempts to converge with the rest of the world and flatten the playing field. In a series of compromises, the BIS/EU faction have played along for the purpose of maintaining world trade. The US, being the debtor that can destroy his creditor, managed to get great concessions, among which is the WTO.

The WTO is intended to provide the US with a chance to export itself back to health. The expected flood of US exports is going to meet stiff resistance from the local interests in each country that have built themselves on export to the US. In order to undo this resistance through a formal system, the US negotiated the WTO. The most attractive export market is China, with its rapid industrialization and transition from Iron Age Communism to the loose Electronic Age Democratic Fascism practiced around the world. Thus the urgency to pass both WTO and China PNTR this year and last. Time was just running out as the Euro was building and the global dollar debt system was falling apart.

The runup in the dollar which ANOTHER expected to precede the turnaround towards hyperinflation had not quite made it because the Japanese carry trade broke early and no longer contributed to the Euro carry trade when that trade was at its peak through 1999-2000. The dollar shortage he expected was not as severe because of this and because of the following:
1. Technology exports for building the internet helped.
2. The US managed to absorb an inordinate amount of imports, well beyond anyone's imagination.
3. As a result of 2, the US provided a much greater supply of dollars than ANOTHER expected at this stage, and did so more rapidly.
4. The IMF managed to do much better than expected with its stop gap measures to shore up dollar debt that was about to be erased through default.
5. OPEC strategy was way too sluggish to really squeeze the dollar up when the time came.

Because of all of these factors, the Yen and Euro carry trades did not have the opportunity to compound each other, the EM debt did not instantaneously evaporate, and paper smoldered rather than burned, and continues to do so. Thus the intensity of the upcoming collapse has been reduced substantially and the process delayed and extended in time.

This whole thing brought the world to consider a slower unwinding which will cause us somewhat less intense pain - though a more prolonged one.

It is sort of like medication for reducing flu sysmptoms; you are not suffering as intensely, but the symptoms are our body's tools at fighting the flu. Supressing the symptoms prolongs the disease.

ORO:

Your recent post (msg#: 31864) included the comment "...and paper smoldered rather than burned, and continues to do so. Thus the intensity of the upcoming collapse has been reduced substantially and the process delayed and extended in time." And suggests a few questions:

What "paper" do you see "smoldering, rather than burning"?

How intense do you see "upcoming collapse" as being? Do you presently see much chance that the process will be sufficiently "delayed and extended in time" so that the price of gold will remain low and an air of "normality" can be preserved?

Have you consulted with FOA/Another regarding all or any of this other than by reading their writings here (and elsewhere)?

Your own writings have almost seemed to take on some of Another's mysterious incomprehensibility lately. I guess too much of all this is really far from clear to those of us with simple-minded understanding. But please don't let that deter you from your good and fascinating work. Would like very much to see FOA comment on some (or all) of this, too.

From your last message,

"Thus the intensity of the upcoming collapse has been reduced substantially and the process delayed and extended in time."
--------------------------------------------------------

A short time ago the greatest worry was a hard landing.
Is it possible a soft landing can be engineered?

May I ask a straight forward question? On a scale of one to ten, one is soft landing, 10 is severe hard landing,
where are we now?

Or do I interpret incorrectly? Is hard landing imminent but instead of x time it's x+y time?

Going back to the horserace I feel you imply it's only a longer race with the same results?

TIA.

Canuck

You dog, you asked ORO the 'punchline' question moments before me.

Kudos to you!

The issue is not whether you get a hard landing, you will, just not as hard as it could have been had the BOJ lowered rates earlier, like .... when they were asked.

Falling from Euro 0.88 and Yen 1/110 is not like falling from Euro 0.80 and Yen 1/180.

By the way, do not take this the wrong way, it is not a net positive performance on the part of the US that has reduced the problem a little, it is 80% bad behavior: mainly a result of our propensity to borrow and spend at all opportunities - and a very loose credit policy by our bankers. I have to scream at credit card telemarketers "NO I DON'T WANT YOUR CARD AND pleeeeze DON'T CALL BACK"...

That is a new one on me. Sounds like a clerk who risen a bit too far. However, they may have changed a law that I don't know about. Ask your bank officer.

(richard640) Jun 05, 17:57

"Flambeur discovered Who Dunnit!! All Hail to you for scouring the 4 corners of the globe to uncover the reason for golds rise--that is the most plausible explanation yet. This marking to market will bring to focus all the other efforts like those of GATA & others who have worked to uncover the machinations of the derivative players--I think this development guarantees the end of the bear mkt. for gold and effectively puts a floor under the price."
---------------------------------------------------

Thoughts?

Nasdaq 3,821.76 + Dow 10,815.3 = 14,637.06 divide by 2 = 7,318.53 Ponzi

UP 14.46 ponzi points

I hear you about the credit cards; I tear up the applications before the wife gets home. I would hate to build another closet for her shoes, dresses, etc. Not being sexist, she simply has too many shoes. The mathematical possibility of wearing out that many pairs and/or experiencing that many fashion trends in a lifetime is the same as me flapping my wings and flying to the moon.

Unfortunately, as you imply, the 'free' debt offered to every man, woman and child has entrapped our society into a debt-ridden monster. I believe debt servicing to be the final straw in all of this. I feel shame and sorrow for the poor dolt, debt ridden and out of opportunity to escape, this probably applies to the neighbour right on through to the nation.

Ok, so a matter of scale is at hand, what is it.

Let's take South Korea's disaster as a standard and call it 100.

We were in danger of falling as follows:
South Korea peak Current accounts deficit: 18% of trade
US current accounts at peak, current est. for 2000: 20% of trade (15% last year).

Gross foreign owned debt and currency relative to GDP:
South Korea: 10% before devaluation, 18% after, some estimates put the peak at 23-25%
USA: 106%

Gross foreign owned debt and currency - Relative to industrial production:
South Korea: 13%, 20% after devaluation
USA: about 400%

PPP currency distortion:
South Korea: 125% before devaluation, 60% after devaluation
USA: 200% average last year, 220% current

The factor of depreciation potential to mean (without overshoot):
South Korea: 1.2*1.25=1.5, -33%, actual was -45% at the worst.
USA: 4*2=8, -87.5% depreciation potential without overshoot

So if Korea was 100 of 100, we are at 500 of 100.

"It is sort of like medication for reducing flu sysmptoms; you are not suffering as intensely, but the
symptoms are our body's tools at fighting the flu. Supressing the symptoms prolongs the disease.!

Howdy, SS. If you would like to exchange some ideas about Christianity I would like to hear from you. You can e-mail me at xcelsior@home.net

Thanks

Hey PH - how've you been? You wrote in part;

"I guess too much of all this is really far from clear to those of us with
simple-minded understanding".

Take it from another 'simple-minded' soul, it is easy to get lost in the minutia. I have a more simple-minded approach to the entire thing in which I attempt to place into context all I read here.

Foremost, it's all debt. So all we are talking about here is whether they can create debt faster than debt is destroyed through repayment or default. If they cannot, the monetary system will deflate at some rate. This does occur at the micro level (individual currencies), as well as the macro level (all currencies combined).

If they can produce debt faster than it is destroyed, as they have been able to do to this point, it then becomes a question as to whether the inflation can be sustained and further; will they lose control of the debt creation resulting in a hyperinflation? The same micro and macro aspects apply. The effect of any outcome depends on where you sit.

The goal has always appeared to be a very controlled inflation lest the average Joe realize he is actually being taxed in this fashion. For quite some time, this bunch has been very successful in attaining their goal and the system has neither deflated nor hyperinflated to the point where the public as a whole tosses them out.

I like to picture the situation like this; we are always floating on this continuum between deflation and hyperinflation. The paper system can continue to function as long as we don't fall too far in either direction past the point of no return. It appears to me that this subset of all outcomes, a liquid and orderly market, is becoming smaller and smaller on a macro level as forces are pushing from both directions. I believe there is the null subset where the system will no longer function and will be abandoned.

Just my take. I hope it's right.

I would like to thank all the fine thinkers here for sharing their thoughts about how it all works and how it might work out. There is nothing more fascinating than trying to understand and predict human action.

I've very much enjoyed the ongoing debate over 'free gold' and 'free banking'. I've always fallen on the side of free banking as I also believe one bank is the source of much of our discontent. One bank is a monopoly and results in monopolistic behavior. I think free gold wouldn't be the issue if free banking were the norm. In any event, having some gold in hand would seem to be the thing to do at this time.

http://www.futuresource.com/cgi-bin/art?000605/144906.

http://www.newaus.com.au/econ155us.htmlA short but sweet article on inflation/deflation by a modern thinker of the Austrian school.

http://www.thomsoninvest.net/iwatch/cgi-bin/iw_pageLooked back at the message volumes for gold equities, and they are running on crude averge about 3:1 buys:sells. It would appear that someone is accumulating at a furious pace.

I hear ya! What I do is take the applications (as I do with all junk mail) and write a big "NO THANKS" on it. Then I stuff everything including the envelope into the postage paid return envelope and send it back. They have to pay for the postage and hopefully after a few times they get the message. If enough people were to do the same, we could be well on our way to cutting down on junk mail. Hey, even a dead rat in a box with the junk mail might do the trick, and as slow as the mail is, well, it could be somewhat "very ripe" on arrival ;-)

Romanian private bank ceases
payments to its clients

By Mihaela Armaselu, Associated Press, 6/5/2000 23:08

BUCHAREST, Romania (AP) Increasing the turmoil on
financial markets, a private bank said Monday it would not
allow clients to withdraw their savings for the next six months.

The Romanian Popular Bank, with more than 50 branches and
500,000 clients nationwide, blamed its decision on the
uncertainty generated by the collapse of a large investment
fund and fears of bank closures.

In a statement, the Romanian Popular Bank urged calm.

''Our business is correct and honest,'' the statement said.

Dozens of clients lined up Monday at its buildings in Baia
Mare, Brasov, Craiova, Galati and Timisoara asking for their
deposits, national radio reported.

Two weeks ago, legal authorities ordered the National Fund for
Investment to stop operations. Thousands of investors took to
the streets and demanded their money. The fund has over
300,000 investors and reported assets of more than $150
million.

The fund's collapse generated fears that the country's biggest
bank, the Romanian Commercial Bank, was close to
bankruptcy. A government guarantee dissipated such fears,
but added to the general climate of mistrust.

Five banks have collapsed in recent years. Pyramid schemes,
sometimes dressed up as investment funds, have also wiped
out the savings of thousands of Romanians, who make about
$93 a month on average.

(Remember, $93/month, and Fair Use For Educational/Research Purposes.)

http://www.SelectSectors.com/gldindx.gif Major Gold Indexes moving Up!

http://www.ptialaska.net/~swampy/illuminati/zion.htmlMany people are asking "how will it all end" today.

I believe the Bible is the ultimate authority on that subject...
but since people are asking about Gold, and Strad Master asked about the Protocols...

From a document that predates the creation of the Fed...
From a document whose threats and descriptions of future action read like the history of the last 100 years...

THE PROTOCOLS of the LEARNED ELDERS of ZION

http://www.ptialaska.net/~swampy/illuminati/zion.html

Quotes on Gold:

How will it end?
Read No. 3: 11 & 12

No. 1:
7. In our day the power which has replaced that of the rulers who were liberal is the power of Gold. Time was when Faith ruled. The idea of freedom is impossible of realization because no one knows how to use it with moderation. It is enough to hand over a people to self-government for a certain length of time for that people to be turned into a disorganized mob. From that moment on we get internecine strife which soon develops into battles between classes, in the midst of which States burn down and their importance is reduced to that of a heap of ashes.

8. Whether a State exhausts itself in its own convulsions, whether its internal discord brings it under the power of external foes - in any case it can be accounted irretrievable lost: IT IS IN OUR POWER. The despotism of Capital, which is entirely in our hands, reaches out to it a straw that the State, willy-nilly, must take hold of: if not - it goes to the bottom.

No. 2:
5. In the hands of the States of to-day there is a great force that creates the movement of thought in the people, and that is the Press. The part played by the Press is to keep pointing our requirements supposed to be indispensable, to give voice to the complaints of the people, to express and to create discontent. It is in the Press that the triumph of freedom of speech finds its incarnation. But the GOYIM States have not known how to make use of this force; and it has fallen into our hands. Through the Press we have gained the power to influence while remaining ourselves in the shade; thanks to the Press we have got the GOLD in our hands, notwithstanding that we have had to gather it out of the oceans of blood and tears. But it has paid us, though we have sacrificed many of our people. Each victim on our side is worth in the sight of God a thousand GOYIM.

No. 3:
11. THIS HATRED WILL BE STILL FURTHER MAGNIFIED BY THE EFFECTS of an ECONOMIC CRISES, which will stop dealing on the exchanges and bring industry to a standstill. We shall create by all the secret subterranean methods open to us and with the aid of gold, which is all in our hands, A UNIVERSAL ECONOMIC CRISES WHEREBY WE SHALL THROW UPON THE STREETS WHOLE MOBS OF WORKERS SIMULTANEOUSLY IN ALL THE COUNTRIES OF EUROPE. These mobs will rush delightedly to shed the blood of those whom, in the simplicity of their ignorance, they have envied from their cradles, and whose property they will then be able to loot.

12 "OURS" THEY WILL NOT TOUCH, BECAUSE THE MOMENT OF ATTACK WILL BE KNOWN TO US AND WE SHALL TAKE MEASURES TO PROTECT OUR OWN.

No. 4:
5. The intensified struggle for superiority and shocks delivered to economic life will create, nay, have already created, disenchanted, cold and heartless communities. Such communities will foster a strong aversion towards the higher political and towards religion. Their only guide is gain, that is Gold, which they will erect into a veritable cult, for the sake of those material delights which it can give. Then will the hour strike when, not for the sake of attaining the good, not even to win wealth, but solely out of hatred towards the privileged, the lower classes of the GOYIM will follow our lead against our rivals for power, the intellectuals of the GOYIM.

No. 20:
22. YOU ARE AWARE THAT THE GOLD STANDARD HAS BEEN THE RUIN OF THE STATES WHICH ADOPTED IT, FOR IT HAS NOT BEEN ABLE TO SATISFY THE DEMANDS FOR MONEY, THE MORE SO THAT WE HAVE REMOVED GOLD FROM CIRCULATION AS FAR AS POSSIBLE.

No. 22:
2. 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.

http://tv.cbc.ca/fifth/Fellow Canucks, Midas suggested we may be of some help getting GATA attention in the Canadian Press.
The above link, is for the "5th estate website.
Anybody who has watched them know what they can do.
They have a link set up on their web-site to e-mail them with a story suggestion. lets fill their mail box tomorrow with the GOLD DERIVITAVE BANKING CRISIS AND A SUGGESTION THEY LOOK INTO IT.
http://www.GATA.ORG IS WHERE IT CAN BE FOUND.
IF someone can set this all up to make it easier please,do.

Overnight...Then if the buyers outpower the shorts tomorrow possibly the pace will pick-up on the other 3 exchanges....There has to be a fear of the Wall St Cabal hammering & media bashing these early gains, hence the smart traders are sitting back and accumulating slowly and CHEAPLY while all eyes watch which way the pendelum swings....Just my thoughts anyways.
....YGM

Everytime now that I get a credit card application I write on it "Not Interested, Remove me from your mailing list", and then I sign and date it. Now though, I wish I would get an application, as I would tell the bank I would be interested in the card but only if the bank provided to me any information on their exposure to gold derivatives. I would also tell them that if they did have gold derivative exposure then I would not even open an account with them as they possibly be bankrupt in the next 2 years if the gold derivatives go belly up.

http://www.gata.org/test.htmlHello to you...The above link will take them right to the report and they can cruise the rest of the site from this page also...I always provide links to USA Gold (Guilded Opinion & Trail Guide) as well as Gold-Eagle Editorials and lemetropolecafe and Golden Sextant for additional material.
Slowly but surely with many like yourself and all the folks putting in long hrs searching out email addresses and sending the report it will hit some of the right buttons. I believe GATA has some new PR in the works but not sure what it will be...Good luck to you...Regards Ken.

ET (06/05/00; 21:55:11MT - usagold.com msg#: 31876)

"Foremost, it's all debt. So all we are talking about here is whether
they can create debt faster than debt is destroyed through repayment
or default. If they cannot, the monetary system will deflate at some
rate. This does occur at the micro level (individual currencies), as
well as the macro level (all currencies combined)."

"If they can produce debt faster than it is destroyed, as they have
been able to do to this point, it then becomes a question as to whether
the inflation can be sustained and further; will they lose control of the
debt creation resulting in a hyperinflation? The same micro and macro
aspects apply. The effect of any outcome depends on where you sit."

Seems to me you can have deflation in some areas (e.g. bonds, stocks, real
estate) side-by-side with (hyper) inflation in other assets (e.g. food, energy)
The "German Nightmare" article at 'The Guilded Opinion' speaks of this.
It isn't necessary to have an expanding or contracting money supply in order
to ignite hyperinflation, only an increase in money velocity. Maybe it's a
question of timing, or of what gets monetized when.

For example, if the Fed were to step in and simply purchase the entire US
stock market (which is apparently being done, in effect, on a small scale now),
then stock prices would hold steady, while the currency that was created would
run to the grocery store.

At some point we will also be treated to "Big Float's Homecoming Parade",
which may balloon M1 by a few hundred percent.


*****
ORO (06/05/00; 20:37:33MT - usagold.com msg#: 31873)
Ph in LA and Canuck - scales, and what's that smoke smell?
"Ok, so a matter of scale is at hand, what is it.

Let's take South Korea's disaster as a standard and call it 100."

Sir,

Would you be so kind as to define 'PPP currency distortion'?

"PPP currency distortion:
South Korea: 125% before devaluation, 60% after devaluation
USA: 200% average last year, 220% current"


"The factor of depreciation potential to mean (without overshoot):
South Korea: 1.2*1.25=1.5, -33%, actual was -45% at the worst.
USA: 4*2=8, -87.5% depreciation potential without overshoot"

Also, not sure the derivation of the 1.2 figure in S. Korea and 4 figure
in US calculation.

So if Korea was 100 of 100, we are at 500 of 100.
*****

I wonder what they'll use for confetti?

View Yesterday's Discussion.

Here is a sample sent to Fifth Estate......(Make them "Imagine Competition For The Story") :-)

G.A.T.A...Gold Anti Trust Action.

"GOLD DERIVATIVE BANKING CRISIS REPORT"

Firth Estate:

To Whom It May Concern:
Please read this for the sake of Canadians being the first to break what WILL BE one hell of a story....I have been involved as a supporter of GATA since Jan./99 and our intent is coming to fruition. At the supplied link below you will be taken to a web page @ GATA Site where a 119 page document has been posted. This document called the "Gold Derivative Banking Crisis Report" has been asked for and given to US Congressmen & Senators....It is very EXPLOSIVE information. Such that seemingly no mainstream media want to touch it yet although the US show 60 Minutes may have an interest, that is as yet unknown. This report just may be one of the Fifth Estates more prominent peices and I'm just giving you a 'heads up'.... Thank you for your time in this matter...YGM..(a Yukon Gold Miner & GATA/Gold Advocate)...

PS: Mr Rafe Mair did a talk show w/ GATA Chairman, Bill Murphy last spring/99 and GATA was also featured in it's inception days on CNBC, but was given only
polite silence and about 3 min to tell all.....Times are Changin...you better believe it!
Report at.... http://www.gata.org/test.html

http://www.bis.org/cbanks.htmAt this B.I.S. page you will find all the major CB's of the world from A-Z....Each is linked and each has an email address link for you to send the GATA site for Report viewing and downloading....Read it or not it's their choice, but it's now on Crocketts desk and I just sent one to the E.C.B.... Short comments are best IMHO....YGM

Print your own comments and copy so it's fast to insert on email page.....GET BUSY ALL!

G.A.T.A...Gold Anti Trust Action.
"Gold Derivative Banking Crisis Report"

Dear Sirs: At the link provided please read a report prepared by GATA on "Gold Banking Derivative Crisis" and requested by members of the U.S. Senate and Congress....This is an explosive report of worth to all of an interest in the Gold Markets....Sincerely: ............
..Gold & GATA Advocate
http://www.gata.org/test.html

Russian Gold on Display in U.S.

By C. BRYSON HULL, Associated Press Writer

HOUSTON (AP) - Russian treasures of gold and jewels, which survived centuries of upheaval and even the Bolshevik Revolution, will make their home in the United States for the next 11 months.` `Imagine, if in 700 years, the Smithsonian Institution packed up 140 of America's finest treasures and sent them to Russia for the Russian people to enjoy, then you'd see you what they have done for us,'' says Jim Weaver, president of the board of directors of the Houston Museum of Natural Science where ``Kremlin Gold: 1,000 Years of Russian Gems and Jewels'' is on show. The pieces will be shown only here and, starting in October, at Chicago's Field Museum. They return to Moscow at the end of March 2001 and will not travel again, according to Kremlin Museum director Irina Rodimtseva. Seven years in the making, ``Kremlin Gold'' sprung from Houston museum president Truett Latimer and gem and jewel curator Joel Bartsch's idea to exhibit a single collection that spanned 1,000 years. ``The Kremlin is one of the only museums with extensive enough holdings to bring 1,000 years to us,'' Bartsch says. Most Americans recognize the Kremlin as Russia's political seat, the 633-year-old Moscow complex is also the cultural and historical center of the country. The State Historical-Culture Museum there has some 65,000 pieces in its collection and historical records.

The Houston exhibition is split into two galleries which cover far more than 1,000 years. The first focuses on pre-18th century, while the second represents Russian art from the 18th century to the present. Common to most of the pieces is the signature metalwork, inlaid gemstones and religious icons, the last a result of a strong Byzantine influence on Russian art. In 1557, Ivan the Terrible commissioned a gold frame, or oklad, to cover a painted wooden icon of the Madonna and Child. Considered the best example of 16th-century Russian goldsmithing, the bejeweled and filigreed frame now has only black velvet where the icons once sat. It took three years to complete. More impressive in size is the golden sarcophagus cover of Prince Dmitry, Ivan's youngest son, who died at age 8 in 1591. The boy was canonized in 1603, and Czar Mikhail Feodorovich ordered a life-size image of him crafted in gold in 1630. Kremlin artisans embellished the 65-pound cover with filigree, various jewels and small portraits of the family's patron saints, a common feature of religious Russian art. Only three such covers are known to exist. ``During Napoleon's invasion in 1812, the actual sarcophagus was lost, but a group of jewelers carried the cover outside of the city and hid it,'' says Kremlin curator Marina Martinova. The silver shrine holding the boy saint's body has never been found, Martinova said. Russians took great care to hide the country's prized artwork in times of war or invasion, ``and would lay down their lives to protect them,'' she says.

Several of the pieces on display were recovered centuries after they were hidden or disappeared. A braided gold bracelet and a gold necklace accented with cut glass, both dated from the 4th century and the oldest pieces on display here, were discovered by boys playing near their Black Sea homes in 1927. The works were believed hidden when the Huns invaded. When their father turned the treasures in to the government, he was rewarded with a horse - a prized possession in the harsh years of starvation that followed the October Revolution. A 12th-century headdress adorned with silver kolts, or engraved medallions, was discovered in 1988 by workers installing cables underneath the Kremlin museum itself. Archaeologists believe the fur and silver headdress was stashed during the Tatar invasion in the 13th century. Even though the gold and jewelry held at the Kremlin was symbolic of the excesses of the very aristocracy the Bolsheviks fought to overthrow, Russia's new rulers preserved them when they seized power in 1917.

But the Romanov family's collection of 54 Faberge eggs - perhaps the most famous pieces of Russian art - were considered extravagances and sold in the 1930s. Modern Russian art historians consider that a mistake. Only 10 are now in the country, the rest held by private collectors. ``When I first started as a tour guide 36 years ago, I was taught that the Faberge exhibit was nothing,'' says Irina Polianina, a Kremlin curator. ``Step by step, we changed our understanding of it.'' Two of the eggs are in the exhibit, one built to commemorate the completion of the Trans-Siberian Railroad in 1900 and the other a 1909 tribute to the Romanovs' royal yacht, The Standart. Both were commissioned by Czar Nicholas II as gifts for his wife. The fine detail on the eggs is almost too precise for the naked eye to see behind the glass cases. The railroad egg contains a working miniature model of the very first train to ride the route, cut in gold and platinum and made to be folded to the size of a matchbook. The train's windows - smaller than an infant's fingernail - are made of quartz crystal, clear for most cars and dark for the smoking sections. The Standart egg has 1,786 diamonds of varying size adorning a platform of gold, platinum and lapis lazuli. A precise finger-sized model of the 350-foot yacht rides on an ocean of quartz carved with waves breaking off the tiny vessel's bow.

Black Blade: Barbarous relics indeed!

Source: Bridge NewsAsia Precious Metals Review: Gold capped after overnight rally
By Hiroyuki Fujiwara, BridgeNews

Tokyo--June 6--Spot gold was capped at about U.S. $285 per ounce Tuesday in Asia after an overnight rally, dealers said. The absence of follow-through buying prevented prices from further gains on Hong Kong's holiday, they said. Platinum was also capped at the key psychological resistance of $570, the dealers said. Japanese speculators showed buying interest in early morning but profit-taking and some fresh selling on rally capped gold prices in the afternoon, the dealers said. Spot gold surged by more than $10 in the past few days due to short-covering by investment funds. Expectations of further short-covering underpinned prices in the sluggish market, while players were hesitant to buy gold aggressively, they said.

Black Blade: Yawn, Ho Hum. Typical drivel.

Europe Precious Metals Review: Gold stalls at $285.50, easing

Europe Precious Metals Review: Gold stalls at $285.50, easing
By Gavin Maguire, BridgeNews

London--June 6--Spot gold kept to within a light U.S. $284-286 per ounce range Tuesday morning as trickles of short-covering continued to prop trade up at nine-week highs. Dealers said the upside momentum that carried prices higher Friday and Monday was showing signs of waning, however, and added that players wary of further sharp price movement were "moving toward the sidelines," said one. The rest of the complex stayed quiet at overnight levels. "We appear to have reached the upside for this run," a dealer said, noting the presence of the 200-day moving average around $285.75--a level which capped trade Monday and so far today. "The short-covering which drove things on has subsided notably, and sellers are now understandably taking the cream off the top," he added. Others argued that players were merely "taking stock" of the move, and maintained further gains were "always possible as long as there are short positions to be covered," said one. "As the $285 area is a key level, stops have been placed above there. OK, so they haven't been triggered yet, but they're there somewhere and if someone has a proper go at it we could easily see another sharp rally," he added. Silver remained perched above the $5.00 mark in very thin trade and is expected to hold above that level in the near term, dealers said. "The 4.89-5.20 range has easily confined trade over the past four months or so, so it's not too risky to predict that it will continue to do so," a source mused. Platinum and palladium traded intermittently at overnight levels and are expected to remain quiet in the short term.

Black Blade: Ditto for Europe. Calm before the storm?

Meanwhile S&P Futures +0.5, fair value +0.67, at this level a lackluster open on Wall Street. Au is down -$0.70 at $284.50 but rising. Look at Rhodium. Rhodium is up $50 at $2050. We saw intense Rh action a few months ago. Now that Auto manufacturers are switching to Pt catalysts, they will need to combine with Rhodium. It looks to be a slow start this morning, but that can change really fast!

I sent one to the SNB

WE HAVE BLASTOFF !
a $5 up move already.
<;-)

will continue up

Bankers warn of global hard landing
By Alan Beattie in Basle
Published: June 5 2000 17:22GMT | Last Updated: June 6 2000 11:35GMT



The global economy faces the risk of a hard landing with US stock markets and the dollar dropping sharply in tandem, the Bank for International Settlements, the international organisation of central banks, warned on Monday.

Recent volatility in currencies and equities, and the lack of liquidity in some financial markets, meant the market reaction to such a downturn posed a further risk, the BIS said in its annual report.

Emphasising the uncertainties of the current global situation, the BIS said the imbalance between rapid growth in the US and slower growth elsewhere would have to be corrected, and that large movements in exchange rates were likely to follow.

"The rate of expansion of domestic demand in the United States is unsustainable and potentially inflationary, and a similar if less extreme state of affairs prevails in some of the other English-speaking countries," the BIS said.

In a pointed warning of the risks of complacency, the BIS compared the US to Japan in the late 1980s, with a combination of high productivity growth, low inflation and soaring asset markets, which ended in a collapse in asset markets and a prolonged recession. Present stock market valuations were unlikely to be sustainable in the long term, it said.

"The Federal Reserve's rate cuts in late 1998, needed to stabilise fixed income markets, may have encouraged the stock market to rally at the same time," the BIS said. It warned that, if the inflationary threat in the US remained, the Federal Reserve should keep raising interest rates even if stock markets slumped - avoiding any suspicion that it was bailing out investors who had been caught out.

"Were monetary policy to back off at the first signs of declining equity prices, the risks of moral hazard would be great," the BIS said. "Misguided investors should be allowed to pay the price, and quickly, so that capacity can be reduced and longer-term profitability rapidly restored."

Andrew Crockett, the general manager of the BIS, said that although banks were better prepared for financial market turmoil than in earlier years, the recent high volatility in the equity and currency markets was likely to continue. "The market-making activities of some institutions and the liquidity of many markets are not as good as before," he said. "The ability to absorb changes in supply and demand in the markets is not there."

The drying-up of government borrowing was also creating difficulties for bond investors, with liquidity problems fragmenting government bond markets, the BIS said.

The BIS also criticised emerging market countries who had failed to push ahead with reform in their economies and banking systems, and which were loosening monetary policy by intervening to stop their currencies rising. "There is a risk of re-establishing the fixed exchange rate mentality which contributed to the Asian financial crisis," said William White, the BIS's economic adviser.

The annual report said the Japanese government should maintain its fiscal stimulus to the economy. But it suggested switching the expenditure from public investment to the country's "underdeveloped" social safety net.

http://www.canadianalliance.ca/contactus/index.cfmWell put, I`ll use it.
above is the link to CANADIAN ALLIANCE PARTY CONTACT PAGE
(P.S. where do you mine in Yukon or Alaska? I pick and shovelled (down 38 feet) on Hunker Creek back in 78.

So what is it that is burning?

Swap derivatives are burnt out. These play the difference of interest rates between two bonds/loans or between two classes of bonds.

The traditional buyers of these derivatives hold treasuries or other low risk securities in order to guarantee principal, and want to increase their income by purchasing a derivative that will provide the interest from a higher yielding security. In order to do this they sell the interest stream from their securities and buy the interest stream from another security that has much higher yield.

Often, the benchmark interest rate is the treasury rate, and the interest rate being bought is a corporate bond rate or a mortgage backed security rate, or an Emerging Market bond.

Many quant funds don't have the securities but buy and sell the contracts in order to profit from deviations from well established historical patterns. 2% differences between corporate and treasury bonds (spreads) are rather rare and tend to reverse quickly.

What has happened repeatedly since 1998 is that the historical historical values were reached, the "quants" went in, and the historical values were exceeded - sometimes greatly. Though many had followed conservative hedging strategies, like delta hedging, the markets "dried up" and hedging activity had a much greater effect on price levels than normal. This produced enormous losses that have shut down many funds and trading desks.

The main reason for this problem was that everyone in the market was using the same historical data to make the same decisions on the same securities, and this was equivalent to all people moving to the same side of the boat - causing it to keel over and get everyone wet. This is called a "crowded trade" and it is caused by misapplication of Black-Scholes equations under conditions which they don't take into account. Particularly illiquidity and price/liquidity relationships for crowded trades. Many are working on this, but usable models are not quite there yet. PhD disertations are still being written on these subjects.

Hunker Creek......Good morning sourdough....small world huh? I've worked Bear Creek but not Hunker. I'm in the Revenue Creek area west of Carmacks. Remember Klaus Djugenstein (sp) approx. 25,000 oz in 4000 ft of creek on Revenue? (79-84?) He hit it right on w/ Gold at $800. US in 80. Anyway go get em....I would hope that everyone WILL take a few min/hrs each day/nite to email GATA Report to any and all the CB's and Politicians, NewsMedia etc.....Send it to CEO's of PDG etc. I'm going to give Tony Blair one today! Stockwell Day tomorrow. (grin) They can send it to the recycle bin but I doubt it. Curiosity & the Cat?......Regards..Ken

Go GATA & the Midnite Cyber Infiltration Team......

http://www.usagold.com/Order_Form.html6/6/00 Indications
�Current
�Change
Gold August Comex
291.70
+3.50
Silver July Comex
5.14
+0.07
30 Yr TBond Sept CBOT
96~21
0~11
Dollar Index June NYBOT
106.48
-0.89


Market Report 6/6/00): Gold ratcheted sharply higher this morning against the backdrop of
looming changes in derivative accounting standards (See yesterday's report below) and a COMEX
report showing a massive gold short position of 40,264 contracts -- the largest position since last
September just before the announcement by European central banks that they had agreed to cap
gold sales and leases at then present levels. Reuters reports that a "squeeze is under way of a giant
speculative short position which dealers said was unsustainable." In September, gold shot through
the roof going from the $260 level to $340 in the course of less than a week. Unlike a long
position that can be closed out simply by selling the position, a short at some point must be bought
back. Therefore, a short position always implies a corresponding "buy" at some point along the
way, thus the potential for a squeeze. The markets were quiet for the most part in Hong Kong,
Tokyo and London overnight adding to the speculation that this is a short covering rally in the
paper gold market. Physical demand remains strong across the boards internationally with
international dealers reporting little physical selling. Adding to the bullish sentiments for gold are
reports attributed to an "official source" in Beijing that the Chinese central bank has been importing
gold to add to its national reserve. That's it for today, fellow goldmeisters. See you here
tomorrow.

NEW ACCOUNTING PROCEDURES COULD FORCE SHORT COVERING

(Report posted 6/5/00)

When most analysts are asked, they respond to gold's surprising breakout Friday with comments
about the weaker dollar and prospects that the Fed might be tempted to cool its heels this summer
with respect to interest rates, but the real reason for gold's lustrous showing late last week might
have to do with a little known change in accounting rules for public corporations scheduled to go
into effect June 15, 2000. Called by Salomon Smith Barney's resident gold expert, Leanne Baker,
an "Accounting Nightmare", SFAS 133 will force derivative players to mark their derivative
positions to market. That could lead in some cases to the posting of huge losses by some mining
companies.

Currently, derivatives' positions are shown as footnotes to financial statements because the profit
or loss has technically not been claimed in most cases. The "book" losses do not flow to the profit
and loss statement or balance sheet. Obviously, if you have a losing position and you don't want it
to cloud the financial picture for your employer, the tendency would be to roll it and hope for the
best. It is a much less complicated world for traders if they do not have to recognize their losses,
but instead continually build a short position leading to the critical mass potentiality we have talked
about here so many times before.

Ms. Baker says that the negative mark to market losses for some mining concerns are
"spectacular." With the implementation of SFAS 133 on the fifteenth, all books will become open
books and stockholders of the mining companies will be able to see exactly where they stand, and
what might happen should the gold price rise and jeopardize these positions. I might add that this
new "Derivatives' Effect" will apply to all markets across the boards. Its implementation could
change the way Wall Street does business when investors, regulators, accountants, and
stockholders have been clued-in on what's been going on in the shadow of the previous standards.

Says Baker:

"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."

The bottom line here is that mining companies are not going to want to be exposed as the primary
enemy of the very product on which they depend for a profit and the implications that this eat-your
-young strategy might have on future stock values-- not if most gold stockholders have their way.
Secondly, no management team will have wanted to show that the company balance sheet has
suffered a serious hit because they gambled against gold, instead of acting to bolster its value.
They could very well be attempting to clean up their positions before the SFAS 133 standards are
imposed apparently for the second quarter reporting period, which could mean more big jumps in
the gold price between now and D-Day (Derivatives' Day). Keep in mind that many mine company
presidents went out of their way to assure their stockholders after the first quarter reporting period
that they were not among those with huge hedge books geared in terms of net effect to driving the
gold price lower. Most made the case that there hedge books were prudently run, etc. The time has
come to turn over that hole card for the whole table to see, and it could get interesting. At the very
least, we are going to see some deeper analysis of these hedge book positions. Questions will be
asked;answers made part of the public record.

I would refer you to Ms. Baker's longer (and prescient) treatment of the issue in our Gilded
Opinion section and leave you with this final quote from the study she wrote titled: "A New
Millennium Gold Rush" published in October, 1999:

"We have long argued that derivatives positions in gold were lopsidedly short and
disproportionately large for the underlying market. At its core,our positive view on gold in 1999
has been based on a belief that gold market liquidity was less than participants blithely
assumed--and that when speculator and producer shorts were inevitably forced to cover, the
results could be spectacular....

The carnage in the gold derivatives market resulting from a 25% jump in prices is astounding to
us, especially against a backdrop of double- and triple-digit percentage gains in oil, copper,
aluminum, and nickel; resurgent inflation signals; dollar weakening; and looming Y2K
concerns. Stress testing of portfolios and "Value at Risk" (VAR) measurements captured only
normal market and trading variability and failed to provide a meaningful assessment of
comprehensive risk in the event of an "exogenous" shock--such as the European central banks'
announcement.

Particularly nettlesome were complex structured derivatives-- forward contracts with embedded
contingent options--and leveraged option strategies that could not be unwound quickly. The
practice of selling out-of-the-money call options to finance put purchases backfired as well.
Even basic spot deferred contracts were tarnished as gold breached reference prices and climbing
lease rates eroded forward premiums. We question whether managements understood their
exposures and conclude that any positions put on this summer in a $250- per-ounce gold price
environment were misguided at best, and disastrous at worst."

Food for thought.

That's it for today, fellow goldmeisters.

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

To receive our monthly newsletter News & Views, please go to the link above.

leader@conservative-party.org.ukNot sure if Hague is U.K. official opposition or not but he now has the link to Report.....YGM

G.A.T.A...Gold Anti Trust Action.
"Gold Derivative Banking Crisis Report"

Dear Sirs: At the link provided please read a report prepared by GATA on "Gold Banking Derivative Crisis" and requested by members of the U.S. Senate and Congress....This is an explosive report of worth to all of an interest in the Gold Markets....Sincerely: ............
..Gold & GATA Advocate
http://www.gata.org/test.html

It may be becauseI follow the discussion only sideways, but it seems to me that the dollar fall more than neutralises the gold rise. Yes, I know gold has risen more than 20 % in euro in the last 18 months, but now gold is falling in euro. Or is this the first step of, excuse me the expression, the dollar going through the toilet?

So, let's summarize what we have thus far:

1. The dollar is falling -- as of now it has only moved back to its up-trendline...will there be more downside?
2. The Chinese are buying.
3. The new derivitive reporting requirements look to be forcing public companies into the market to "clean up the books".
4. Today's reason de jour -- a short squeeze centered on the COMEX...it's all just paper don't you know.

Personally, I think all the above are playing a part, but I also have another possible reason to add to the mix...

Notice how gold moved higher just as this counter-trend rally in U.S. equities got under way? Could it be that the smart money is now selling into this equities move, knowing that it is mainly end-of-quarter/company buying related and destined to only last until mid-July at the very latest?...the proceeds being pumped into gold as we've all seen that gold is still the safehaven during a market collapse? This allows gold to be bought BEFORE the stampede of a market meltdown. The dollar MAY have topped and GATA's report is now out for all to see.

Worth thinking about.

http://business-times.asia1.com.sg/2/views.htmllET`S TAKE IT TO ASIA.
LINK TO SINGAPORE BUSINESS TIMES.

Excerpt from USA GOLD's repost re: New Accounting Standards.
As a student studying beginning and intermediate accounting, I do not understand part of this statement:

"Ms. Baker says that the negative mark to market losses for some mining concerns are
"spectacular." " ----OK that makes sense.

Here is where it does not make sense to me:

With the implementation of SFAS 133 on the fifteenth, all books will become open
books and stockholders of the mining companies will be able to see exactly where they stand, and
what might happen should the gold price rise and jeopardize these positions. "

----Why would these positions be jeopardized if the POG rose? The Mining Companies Positions, or who? It probably has to do with that short selling stuff, right? This is stuff I have less than a basic grasp of.

If anybody can give me an explanation, I would be greatful. ORO, anyone?
I do understand the mark to market concept, but just not how a higher/ lower POG will affect the company positions after the change takes place.
thanx.
Hudson

It always amazes me when I hear a "debate" over whether a certain anciently-written book is or is not a forgery, and therefore does or does not reveal a plan (already "in progress", point-by-point checked off) to control the world and our lives in it.

Paper (which we are not shown) is so easily back-dated, quotes manufactured, names and dates bandied about. It is really hard to imagine that the advocates of such a position expect their neighbors to accept such an incomplete proof of so major a conspiracy, except by appealing to their fears and prejudices. (WHADDYA THINK I AM, STUPID OR SUMTHIN'?)

I'm as paranoid as the next guy, however, but hopefully practical, and I'd say if you've got a hundred-year-old document outlining world domination, my first question to you would be: So the book (by whomever) exists -- Who's working the plan today? (Unless the original guys are about 150 years old and still coming in to work every day.)

Names. Where they live, work. What they had for breakfast this morning. Their motives. Prospects for success. Bumps in their plan. No competitors? Aren't there leaks somewhere in their lives and plots? There seem to be in just about everything else.

The rich are described in Forbes, they show up in Davos. If there are "Masters" even behind them, tell us more. (Names, addresses, shoe sizes, etc.)

There is enough foolishness, and evil, committed by the (corporate?) systems of institutions and players small and large that invite greed and mass deception, without needing to find a core of evildoers who happen to be of one particular religion. (No outsiders have managed to crack their game?)

Ever hear rumors of satanic rituals in your town, or a neighboring one? It is beyond my imagining that real people today would live at this level of Stephen King fiction, but I knew two respected friends who heard and believed personal accounts of such abuse in childhood. Second-hand, far from proof, but it has kept me from dismissing it, as strange as it has seemed to me. And I'm not really interested enough in it to pursue it further, so this is probably where I'll leave it. Same here for now, except without the respected friends telling me their info.

Some things concealed may of course be difficult for one outsider to prove to another, but we still have the right to state what items that MIGHT be obtainable would diminish our doubts.

Not all conspiracy theories are false, but most of them probably are. And they all share an odor of skankiness until the few that have some legs can outdistance the pack. You've got more work to do to convince the unusually open minds you'll find here on this forum.

OK, I'm really on my soapbox now, but I'm asking people to distinguish between superstition and science. The Faith that takes you into the positive results of a life in a religion does NOT mean using a parallel impulse of Faith to swallow negative assertions only peripherally related to religion. That is for scientific method to ferret out.

You know that gold advocates will be lumped in with loony conspiracy theorists until we show a better ability to distinguish superstition from fact. There is much emotion in the realm of money, finance, and thus, gold. Yes, so we can enjoy flights of romantic fancy quite often, and do.

There is also the hard math of money and gold. (Greatest thanks to Oro for keeping us going in that direction, and to those who try to bite into his big submarine sandwiches of data with interpretation.)

Hey -- at least O.J. (probably) left behind a bloody glove. (Not a note saying there had been one out back, but he must have taken it to Chicago and forgotten it there.) Can't you find one?

http://www.usagold.comA can of worms...all of this hedging stuff(short-selling)...

Alot of folks see the hedge as bad, poor judgement, immoral,un-American, or worse(?)...

I will try to help somewhat with your question...

A company can substitute sell (hedge) if they like the price in a variety of ways, at different locations, and with various "counter-parties"

If the company hedges "more" than a reasonable amount, and the price goes against them (rises) the company will now be suffering net loss...If they hedged a reasonable amount and the price rises, they are net-worth neutral as their physical product "offsets" the loss pretty much dollar for dollar as prices rise...Note the company is not "gaining" margin as some competition (un-hedged mines)may be...

A hedge "works" to protect AGAINST ADVERSE price movement...For the last years and months, prices have been coming down, and hedging was prudent risk management...

If we are at the bottom, hedges may be "bought back, and you might expect a little less hedging volume (until price rises?)

In short, The rising price will adversely affect the hedge that was put in place to protect the company from ADVERSE price movement...

It sounds a little tricky or strange, but it goes on and on. The company's goal is to transfer the price risk to others via their substitute sell hedge, therby locking in their margin that is necessary to remain competitive or even stay in business.

Tounaround, an excellent point was raised in your #31888 post # 31888:


<stock market (which is apparently being done, in effect, on a small scale now),
then stock prices would hold steady, while the currency that was created would
run to the grocery store.>>

If I may expand on that thought, here is what I see, any knowledgeable stockmarket players please correct any mistakes or ommissions in this post.

First, a definition of the word "stock".
From the A to Z of investing:
A share in the ownership of a corporation, which represents a claim on its earnings and assets.

Now since many major corporations are now multi-national(doing business in many different countries) and listed on many different stock exchanges, lets examine where the actual ownership share is held.(I only know about the U.S. system, so that's what I'm discussing here.)

First, actual foreign stock traded on U.S. stock exchanges is ALL held at The Bank of New York or a subsidiary bank(The Federal Reserve System).The Bank of New York or subsidiary then issues their own paper called American Depositary Receipts(ADR's) or American Depositary shares(ADS's),which are traded between buyers and sellers, on the stock exchanges.
The ACTUAL OWNERSHIP of the foreign corporations stock is in the custody of The Bank of New York(U.S.Central Bank) or it's subsidiary banks.
So to sum up one might say no, or very little, ACTUAL foreign stock is traded in the U.S.

Second,I don't know the actual figures, but I would estimate, more than 90% of ALL the stock traded in the U.S. is held in brokerage accounts, which in turn is held in large banks, which in turn is held or backed, by The Federal Reserve System.Large brokerage houses are now called,"Investment Banking Companies, as they are involved in the banking business,also.

So, to go back to Sir Turnarounds post:

<>

It is my contention that the FED and subsidiary banks already own most of the U.S. stockmarkets shares!Think about it! Shareholders(stockholders) own mostly ledger entries, unless of course they have received ownership of the stock certificate, issued by one of the above mentioned banks.

So, to sum up, banks in the U.S. are allowed fractional lending practice,"creating new money using assets as collateral",(See Sir Aristotles fine work in USAGOLD archives), if The Bank of New York and subsidiary banks use the dollar leverage of ownership of "Stocks on Hand", to trade(The Plunge Protection Team)on the equities markets, one can clearly see how "The Free Market System" could no longer be considered,FREE"!

Welcome to the land of "MYTH"(USA) where the illusion is created that Americans "OWN" more than others worldwide. The only thing Americans own outright anymore is food,clothes,paid in full household articles, and YES...""GOLD""!!!
Those in the Know......Buy Gold....beesting.

getting interesting; could start seeing overnite moves in overseas mkts for gold.

forerunner for comex spikes.

You response does help. However I will have to do alot of self study on "hedging". We touched briefly on it in class, but not close enough to gain a full understanding.
Thanks again
Hudson

Monday afternoon while traveling through south New Jersey,
I heard a radio spot for Lyndon LaRouche who fancies himself now a serious Democratic opponent to Al Gore. It talked of the great financial devastation that we are on the verge of and that lyndon is the "one" man with the knowledge and experience to see us through this.
The ad was sponsored by a group called "Democrats for a New Bretton-Woods"

Has anyone heard of this group or know anything about their "New" Bretton-Woods" plans?

http://www.number-10.gov.uk/forum/Forum.asp?F=18THIS was just posted at TONY BLAIR WEBSITE, 'Your Say' Section, Forum on "Economy"......Lets see if it gets replies or the boot......Imagine the nerve of those Gold Fools, "Posting Barbarous Relic Nonsense eh whot"......YGM.

PS: if it's removed we have it for posterity sake :-))))

Tonys Website @....http://www.number-10.gov.uk/





G.A.T.A...Gold Anti Trust Action....Gold/Derivatives/Bank Crisis Report
Reser, Ken - 6 Jun - 08:58:00
--------------------------------------------------------------------------------
G.A.T.A...Gold Anti Trust Action.
"Gold Derivative Banking Crisis Report"

Dear Ladies and Gentlemen:
At the link provided please read a report prepared by GATA on "Gold Banking Derivative Crisis" and requested by members of the U.S. Senate and Congress....This is an explosive report of worth to all of an interest in the Gold Markets....Sincerely:Ken Reser.
..Gold & GATA Advocate

http://www.gata.org/test.html


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



08/05/00 - 06/06/00
The Economy
G.A.T.A...Gold Anti Trust Action....Gold/Derivatives/Bank Crisis Report (Reser, Ken) Tue, 6 Jun - 08:58
DUNKIRK ANNIVERSARY (pegasus) Mon, 5 Jun - 10:36
THE EURO [1] (Sean) Fri, 2 Jun - 11:43
Does the government admit to being capitalist yet [1] (Ian Coley) Fri, 2 Jun - 10:43
Millennium dome. [1] (Christina Bass) Wed, 24 May - 10:30
Ms [5] (Diva) Tue, 23 May - 10:11
limited resources [2] (druiddude) Tue, 23 May - 06:36
Wonder what is happening with the � and the UK economy? (Stuart Widdowson) Tue, 23 May - 01:31
The Future (keith_wells) Sat, 20 May - 03:16
On the Brink of Enhanced Telecomuting? [1] (Howard Rogers) Fri, 19 May - 09:37
Sack Dawn Primarolo (anon) Thu, 18 May - 07:17
Sacj (anon) Thu, 18 May - 07:15
Can anyone explain ? [3] (read j) Wed, 17 May - 08:21

http://204.179.240.78/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=AOT0IXxXkRUNCJ3MgSpeaking of foundations...

In this Bloomberg article, Bank of France Governor Jean-Claude Trichet said in a Neuchatel, Switzerland speech that companies should give proper attention to "bottlenecks in all sectors reporting a significant shortage of skilled labor" to ensure 'price stability and allow unfettered growth.'

Mr. Trichet said, "The future of the euro is that of a strong currency, deeply anchored in price stability and on the intrinsic strength of European economies, and safeguarded with vigilance," saying that the credibility of the ECB's monetary policy was guaranteed by its independence. He added that governments of euro-land must take this independence into account and be guided by the goal of maintaining price stability.

As it now stands, annual inflation for the euro region was at a 1.9 percent pace through April, still below the ECB's 2 percent inflation target despite the the large drop in external exchange valuation of the currency against the dollar.

Meanwhile, French Finance Minister Laurent Fabius said yesterday, "We need a strong and stable euro, with low rates of interest, and the market is heading that way." Bloomberg also reports that the French 4-month deficit has fallen by 15%, while survey measures of both consumer and business confidence have climbed to and remain at a decade high within the 11-nation euro region.

Mr. Hudson,
I might be able to help with your question concerning SFAS 133 disclorure.
Many mining companies sold forward on the futures market, gold that was not yet mined (available for delivery. This was done as they believed that POG was going to be lower in the future and they could "lock in" a better price by selling forward. Worst case- POG rises and they recieve fewer dollars/ounce at some future date.
But, many companies also sold call options (the right to buy at a set price until a set time). These were sold for a one time payment (premium) collected by the mining co. If the option is never exercised, there is no liability. This was their expectation as they believed (were led to believe) that POG would not increase any great amount. What happened? The Washington Agreement sent POG flying and suddenly the option sellers were responsible for "in the money" call options they had sold. I had a few myself that I had bought for hundreds of dollars and cashed in for thousands. Someone had to pay what I gained. I hope it was G.S.
The new accounting will place a liability value on any such derivatives sold, this will be appearing in company reports after what Michael refers to as D-Day. I have, on occasion, sold such options but only when covered.
Example- you own a Dec. 300 call (right to purchase one Dec gold contract at $300/ ounce until a certain date)
You sell a Dec. 350 call to someone else for a one time fee. You collect the premium but are now liable for that option. However, any liability on the sold option can be covered as long as you own the 300 call. For every dollar POG goes over 350 you are accountable on the sold option but covered by the held option. This is an example of a covered call as opposed to a naked call. Hope this helps.
All this presented as a simple explanation and should not be considered in any way, shape or form as advice. Lord knows I not clever enough to give it.

COMEX numbers for Monday 6/5/00 Volume= 36,079
Open Interest= 144,148
Change in Open Interest= down 6,029

On previus post being offensive...I didn't mean here...But at the Speakers Forum where it was posted under the Crime, Government and Economics Forums....I'll see tomorrow when UK wakes up if any replies come in or it's pulled from all three. The Crime & Government Forums are very active....

***Gee I feel bad I never got a reply from Tony for his personal email...I know it must be my spelling, he'd never correspond with a goldbug let alone an illiterate one....

Everyone must be out burying fresh Gold today...YGM.

http://www.thomsoninvest.net/iwatch/cgi-bin/iw_pageWell, it looks like today the message volume has about a 1:3 buy:sell ratio, almost a mirror image of yesterday.

Microsoft -- Sanction Of The VictumsThe "Middle Way", proselytized by our "commander and chief",with Blair, Shroeder, et al leading the wagon train really formalizes the Big Banks, Big Corporation, BIG Governmentalists CRONY thrust as riders of the National horses of productive means.

The Governmentalists "class", like our commander in chief,have never really had a productive job that produced anything. This breed was born to control, direct, and re-distribute the fruits of productive means. They are LOOTERS.

Some how, some way Microsoft was not playing Ball. This prompted the Political mugging. The Looters were nudged into a temper tantrum and decided to show the power of the CRONY LORDS.

What we need is a anti-trust against the Federal Government looting machine. It is the biggest monopoly that takes a cut from every dollar from every exchange, every step of the way. From cradle to grave, they are everyones not so silent partner

As we stand on the eve of long nights of social distuption caused by government taxation, meddling and mis-management, I see little chance that de-centralization or Von Misesian truisms will prevail over the CRONY agenda power grip. Expect instead the upheavals as reason to call for more regimintation, sacrifice, and controls.

Nasdaq 3,756.37 + Dow 10,735.57 = 14,491.94 divide by 2 = 7,245.97 Ponzi

Down 72.56 ponzi points

http://www.nationalpost.com/financialpost.asp?s2=investing&f=000606/308940.htmlFrom Finacial Post:

Stocks still look overvalued, say the world's central bankers, warning that a risk of further sharp declines remains.

The Bank for International Settlements (BIS), the international organization of the world's central banks, told 49 central bank governors at its annual meeting in Basel, Switzerland, yesterday that high valuations, particularly in the technology sector, make stocks vulnerable to a meltdown.

Central bankers were told that a soft landing for the world's economy was by no means assured, with external trade imbalances and inflated asset prices remaining major threats to stability.

Any sudden reversal in the fortunes of the U.S. dollar, in tandem with rapidly declining stocks, increased the risk of a hard landing.

A sharp drop in the currency could imply a stronger yen and deliver a body blow to Japan's struggling economy. Similarly, a too sharp dollar drop against the euro would hurt countries that embraced the single European currency.

But inflated stock prices remain a prime risk to world economic stability, the BIS warned.

Central bankers have a mission to combat inflation and anything that could cause inflation, including unjustified stock price rises, said Andrew Crockett, managing director of the BIS.

Stock prices in many countries are high by historical standards, even after stripping out "new era" companies, the BIS said in its annual report.

The expected earnings rate of the U.S. technology sector at the end of March, implied by its price-to-earnings multiple, was 21% a year in real terms for the next decade -- five times the real growth of the underlying economy, the BIS said.

Mr. Crockett questioned last week's tech market gains sparked by data that showed signs of a cooling U.S. economy.

"It is a natural result of a slowing in the economy at the very least that the pace of increase in stock prices will have to come down," he said. "If every time the economy slows the stock market rises again, I think we are in a potentially unsustainable situation."

The BIS report also stressed that the U.S. balance of payments current account was "unsustainable in the long term," although in the short term it is being covered by an inflow of capital attracted by strong economic performance.

Urban Backstrong, BIS president and governor of Sweden's central bank, said for world current account balances to adjust smoothly, "growth in the U.S. needs to slow to a more sustainable rate and growth elsewhere needs to continue to strengthen."

The BIS described the recent trend toward monetary policy tightening in the U.S. as "most welcome," even if some asset prices look vulnerable. It warned that if the inflationary threat in the U.S. remained, the Fed should keep raising interest rates even if stocks slumped, so avoiding any suspicion that it was bailing out investors who had been caught out. "Were monetary policy to back off at the first signs of declining equity prices, the risks of moral hazard would be great," the report concluded.

"...the Fed should keep raising interest rates even if stocks slumped, so avoiding any suspicion that it was bailing out investors who had been caught out..."
----------------------------------------------------

How do you like that line, right from the B.I.S. !!!!

"... avoiding any suspicion that it was bailing out investors..." Yeah, there's suspicion all right.

When GATA's GDBC report coupled with D-day sinks into their lying, crooked, manipulative skulls we shall see ..... we shall see. Level out the playing field and play by the rules and we shall see ... now we have to live with 4-digit gold. Too bad for you cheating crooks, and us goldbugs, we knew the truth would come out.

Your abosolutely correct. However, I think the original legislation protected the private corporation (Federal Reserve) associated with the looting from anti-trust action. I wish it were as easy as going after the Federal Reserve Corporation on anti-trust grounds. As they clearly do have a monopoly on the enslavement of the american people with the political establishment as a willing accomplice.

http://www.bog.frb.us/releases/H15/update/
Release Date: June 5, 2000

Rates for Friday, June 2, 2000

Federal funds 6.53

Treasury constant maturities:
3-month 5.87
10-year 6.15
20-year 6.31
30-year 5.94

upside-down spread FF vs long bond = (.59%)

elevator guy (06/05/00; 21:24:52MT - usagold.com msg#: 31875)
@ss of nep
Howdy, SS. If you would like to exchange some ideas about Christianity I would like to hear from you. You can e-mail me at xcelsior@home.net

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

Release Date: June 6, 2000

Rates for Monday, June 5, 2000

Federal funds 6.51

Treasury constant maturities:
3-month 5.98
10-year 6.12
20-year 6.28
30-year 5.91

upside-down spread FF vs long bond = (.60%)

Average Rate spread (30yr T-Bond vs FF)

1989 = 80 basis points negative
1990 = 58 basis points positive
1991 = 260 basis points positive
1992 = 409 basis points positive
1993 = 340 basis points positive
1994 = 315 basis points positive
1995 = 102 basis points positive
1996 = 133 basis points positive
1997 = 108 basis points positive
1998 = 20 basis points positive
1999 = 86 basis points positive
2000 = 15 basis points negative *


* 03-22-00 thru 06-02-00

Question? Does anyone remember the length and severity of the economic contraction which followed the 1989 inversion
Comments please.

HBM

http://www.thebullandbear.com/resource/index1.htmlIs anyone interested in critiqueing this essay? For educational purposes only, of course!

Bullion Banking Explained

Jeffrey M. Christian, editor,
CPM Group's The Precious Metals Investor

Refer to the link above!

You seem to have something valuable to say to us. Please give us more details of your thinking.

MK Just realized something after posting this...this was not meant to be a form of advertising or soliciting...sorry!

http://www.investech.comGood Evening HBM! There is an interesting chart at Stack's website that shows previous recessions. We had a mild recession in "90/91. Hope this helps answer your question.

In addition...your tracking of this rate inversion is much appreciated, I believe this is one of a number of indicators that portend potential recessions or maybe even the "D" word.

Best Rgds, law

Leland, apologies in advance -- unless you've been posting
Krugman to pull someone's chain. I heard of Krugman, but never
read anything he wrote. Till the two posts of his columns from
you.

From these two columns, particulary the one on Argentina, it is
clear this guy is an irresponsible Keynsian apologist who knows
just enough history to get anyone who listens to him in trouble.

I don't have enough time to find my clips on Argentina, so you'll
have to accept the best I can do from memory -- or not.

Argentina in the 50's before they adopted Keynsian "green cheese"
was still on hard money, and so prosperous, it was referred to as
the U.S. of South America. The Argentinians of this period
laughed at the relatively depreciating dollar.

Then they too succumbed to the competitive devaluations and
adopted "green cheese" hook, line and sinker -- and deteriorated
so much as a result over the next three decades or so (chronic
hyperinflation, more and more government controls to supposedly
combat the results -- right on to quasi-government death squads)
that finally, when a left-winger president suggested hard money
again, much to his surprise, everyone agreed. In the last
Argentine election, one of the main issues was hard currency, and
the hard currency candidate won because people remembered the
consequences of green cheese only a decade or so before.

To suggest that "a weak recovery from last year's nasty slump"
and "growing labor unrest" is an excuse to return to the green
cheese that gave Argentinians, ultimately, death squads is
ludicrous, especially since Krugman himself admits "'crisis'
would be far too strong a word" to describe the situation.

Either Krugman doesn't know the economic history of Argentina --
and the social disintegration historically caused by Keynsianism
and other soft-money schemes -- in which case he disqualifies
himself from serious consideration, or else he does and is guilty
of casuistry.

Regards,
Journeyman

P.S. This post is not NEARLY harsh enough to do justice to such disgusting intellectual dishonesty -- or such incredible stupidity. The misery and death such as this -- person -- have heaped on the human race make the holocaust, Stalin's purges of 20 million, the killing fields, pale by contrast.

http://www.bog.frb.fed.us/releases/H41/Current/The Fed has lost another 3000 SDRs recently, leaving 5200 in the US account.

Another interesting note is the recent engorgement of the Repo holdings to double the previous levels just in the week of 5/25 to 5/31, adding 13 $B. It sold only 2 $B of US Treasury securities. There is probably an attempt to monetize debt, increase liquidity in the pained debt markets and reduce the spreads between treasuries and private securities.

All told, 16 $B were bought off the market and added to the monetary base. Was a rebound in the NASDAQ an expected or unexpected result? Could the noise from Crocket and company be related to just this effect? Are the "Psycopaths" of Wall Street having their way? Goldman Morgan-Stanley and Merryl (if memory serves me right) just got a syndicated loan package of some $ 43 Billion that week. Could this be related? The participants on the banking and investment side are all members of the risk assessment committee. Part of the PPT.

Definitely, the June 15th deadline for mark to market bookings is being interpreted as a need to move the markets to the point where the books straighten out. My Oh My, they probably have quite a few NDX and OEX puts coming right out of the money last week, boy does that make the book look better, how fortunate for them.

By the way word has it (and I don't know this to be true) that when "rogue trader" Nick Leeson took Barings bank under, he was responsible for only 1/3-1/2 of the losses. The rest of the bank was hiding more than double these losses, which were covered by borrowed funds, results of market moving operations in areas other than Nick Leeson's manipulation of the Nikkei. The funniest part about it was that the underwater positions were reported as profitable for years, till the bank was closed.

Sir Law

Thanks for the response. You said:

...There is an interesting chart at Stack's website that shows previous recessions. We had a mild recession in "90/91. Hope this helps answer your question.

I clicked on the link but was unable to discover where to locate the chart which shows previous recessions.

If you could give the specific link to the chart I would appreciate it.

Respectfully

HBM

I understand Merrill just downgraded JP Morgan. Interesting. It seems that Merrill is firing missles right and left at various bullion banks, having only recently downgraded Goldman Sachs.

Maybe Merrill knows something about their vulnerabilities in the gold market? Or maybe Merrill lined up somebody or some consortium of players to challenge the various bullion banks in the gold market by buying a huge gold position and taking delivery? Maybe Merrill is still seething over its recent bridge loan conflict with Goldman and now feels it has the firepower to take on GS and any of its bullion bank friends (JP, LEH, etc.)

Wouldn't it be funny if an institution like Merrill turns out to be the trigger for a huge gold short rally?

It seems that these types of financial house downgrades at a time when the markets are so precarious are very "ungentlemanly" of Merrill. After all, at a time when there is a heated dispute occurring as to whether we are in a bull or bear, you would think Merrill would rise to the occasion and upgrade any and all financials.

Something is occurring behind the scenes, it does not take a rocket scientist to figure that one out. After all, we are witnessing a gold short squeeze right now that has no self-evident explanation insofar as its exact cause.

At a time when England and Switzerland are selling tons of gold, logically the POG should be falling and quite badly.

Instead we are seeing a great price surge with every reason to believe it is not over.

Thanks

F*

http://www.investech.comSorry HBM, I didn't realize the weekly chart had changed...but toward the bottom of the page you'll notice "previous week's charts"...look under 5/30/00. The other charts are also very interesting...especially the one showing the NAZ in Niekki points.
Happy Hunting! law

Thanks for sp on Merrill.

Do you think the Fed additions to reserves were related to the NASDAQ rebound of the same time?

ORO QuestionThis info from Weiss!

"Household Debt has exploded from $348 billion in 1966...to $614 in 1973...to $2.7 TRILLION in 1987...to a startling $6.4 TRILLION at the end of 1999.

Corporate Debt in the U.S. is nearly DOUBLE what it was before the crash of 1987...over EIGHT TIMES KARGER than in 1973...and nearly 17 TIMES LARGER than in 1966, while the economy is just over 11 TIMES LARGER. There's $5.9 TRILLION in corporate debt outstanding today compared to "just" $351.1 billion in 1966---nearly two-thirds (64.7%) of our country's Gross Domestic Product (GDP). In 1966, for every dollar of net worth, us corporations had only 35.5 cents in debt. By 1987 44.7 cents...today 59 cents for every dollar of net worth.

Financial Sector Debt

If the debt problems were limited to households and businesses, then banks, savings & loans, and insurance companies could come to the rescue and dish out even more credit.

But that's not the case. Financial sector debt now stands at $7.6 trillion, up from only $72.9 billion in 1966 (see chart on page 5, lower right).

Compared to the country's GDP, financial sector debt has exploded � from 9% of GDP in 1966 to a whopping 80% at the end of 1999.

Make no mistake: These are the companies that are supposed to be safeguarding the meager cash assets of households and corporations.

What are they doing with that cash? Many are leveraging the heck out of it � trying to gamble their way to greater profits by way of debt, while trading in high-risk, extremely volatile securities."

ORO Question: The 16 billion buyback figure...is this the "surplus" raid on the Social Security General Fund? And if so...how many billions do you think they can raid?

ORO...Thanks in advance...enjoy reading your commentary immensely!

Best Rgds, law

The problem with the sales from the EU CBs is that they are finite, and the gold seems to be short circuited on the way to market.

It was much "better" for the shorts to imagine the whole pile coming to market.

My old whipping horse of the Fed study on achieving gold prices that simmulate sale of all CB gold has essentially borne out in price behavior but for two misconceptions that have come out - the high grading practice on falling prices - which brought the price down further and caused a rise in the future cost of gold mining - and the low grading which will replace it as the prices go up and cause these prices to reach much higher levels than the authors of the study imagined.

Add to this the fact that the ZAR and AD have been manipulated downwards so that their gold prices are at new highs, yet the new hedging that was expected and the extended exploration and expanded production that higher prices should have engendered never materialized. Quite the contrary to this, the SA and Aussi miners have started low grading, though only to the point of increasing cash costs by $5-10/oz.

Juan Peron, famous for making Argentina a "peronismo economy" in the 40's and 50's, is a fascinating subject.

I commend you for your objection to the Paul Krugman article.

The Fed PRINTED the electronic and paper money these $16 billion represent (a surprising amount was "physical" paper - pure cash).

As to the debt questions, it looks to be a cool document you are quoting from, if it is on the net, can you post the URL?

Yes, the ratio of Debt to unit GDP has increased dramatically. The ratio of financial debt to non-financial debt, i.e. leverage on leverage, has increased much more quickly.

We have been discussing the implications for quite a while now.

The main forces driving this level of leverage are partly justified, but mostly a result of "moral hazard" creeping up on us. Our crony capitalist system has created an ever growing constituency for monetary and price inflation. One of the best things to do, if you expect both price inflation and to be bailed out (or your job/business is not sensitive to recession), is to go into debt. Since the systemic risk grows so greatly with the rise in debt levels relative to income (private, business, and public) it is widely believed to be a given that reserves will be added to undo the systemic risk. Since the result of this action has allways been a steep price inflation, there is no reason to expect otherwise this time round - therefore we borrow.

http://www.martinweiss.comORO...this is by subscription...password changes monthly.
If still interested contact me via email...law@fullnet.com.

The driver for this is as follows:

Euro pushes away borrowers from dollar indebtedness by offering lower interest rates and by eliminating internal borrowing for the EMU members in dollars.

The result is a steep drop off in new borrowing in the Eurodollar market.

That, in turn, causes a shortage of dollars.

The dollar demand causes dollar prices to rise and dollar indebted economies fall into disarray, and reduce demand while increasing supply.

With a high dollar and less demand for real goods and services abroad, the US imports rise to elephantine proportions and the US external debt position grows at rates unheard of outside of the Third World.

The current accounts deficit grows and becomes structurally permanent in that foreigners now get a net income off of the US that is proportional to interest rates - increase rates and you increase that stream - and increase investment in more such positions. Reduce interest rates and the dollar drops like so many mafiosi with concrete shoes. - I.e. different action, same result.

Add to this the carry trades. Low Euro, Swissy, gold and Yen rates are low, and this encourages borrowing in these currencies. The borrowed currencies are thrown into the market, converted into foreign goods, go to "money heaven", or are "sanitized" by central banks selling bonds in order to absorb them. The end result is a very crowded trade that has currencies in structural short supply (because of trade surplusses) on the one side, and dollars - which are structurally plentiful - on the other side. The unraveling of these would hurt the dollar greatly.

Yet the Fed faces this situation where saving the dollar is nearly impossible (maybe there is a politically acceptable way to do so that I have overlooked, but I don't think there is). However, the squeeze on foreign dollar accounts is so fierce that people sell whole industries and inventory just to get the dollars in order to get out of debt. The Fed tries once again to restrain reserves, but the drain on domestic reserves by foreign banks drains the reserves that the Fed added just a wee bit before. To avoid risk of systemic failure, the Fed must provide more reserves, but the shortage of dollars is exacerbated by the high interest rates the Fed (and the markets) dictate.

So the Fed, reluctantly adds the reserves even as it sees that the results would be price inflation at any interest rate that does not destroy the financial system right along with industry and the consumer.

The Fed faces the choice of continuous inflation or destruction of the system.

As the Japanese CB and even some EU CBs (the latter have stopped doing so) absorb dollars from the currency markets, they force the international banks to seek reserves from the US, and forces dollar debtors to use dollars received in trade and investment to pay off their dollar debts
(thus destroying those dollars), and leaving them to either do cash financing or use Euro debt.

As I said, the destruction of either the dollar's value is a matter of mathematical certainty. The alternative is the death of the dollar debt system. The Fed, so far has increased reserves as it raised rates hoping to at least stop the growth of debt by reducing US economic activity. But the US consumer, faced with low import prices just can't let an obvious bargain go. Furthermore, the higher the dollar, the greater the volume of incoming goods - and the activity in the US continues to grow just along with foreign indebtedness....

http://www.time.com/time/magazine/1998/dom/980427/cover3.html
Conspiracy Theories

Mr. Gresham thanks for the perspective. Perhaps I am still too young, and not yet old and jaded enough, because I am continually fascinated by conspiracy theories that show the "point by point" fulfillment of plans for world domination. Perhaps you were referring to the other big conspiracy theory, the communist manifesto, whereby the U.S. has adopted just about all of its planks, such as free public education, among other points? And then there is the Catholic Church, the Jesuits, and Foxe's Book of Martyrs� Or the UN's stated goals for world peace/domination� And I'm sure there are more that I cannot think of at the moment.

The thing that annoys me is not the endless theories, or the speculation of their validity, as this is the natural result of the freedom which we cherish and enjoy. I am glad we have the opportunity to discuss, imagine, theorize, speculate, pontificate, ruminate, analyze, debate, discuss, and share such thoughts with one another.

The thing that annoys me is when a person takes the position that the reading or discussion of such theories should be banned, lest my brain, or others� be corrupted by the material.

After all, the Bible is the story of the greatest conspiracy theory of all. It's all about Satan vs. God. As I understand this one, Satan has been conspiring against God and trying to get man to join the fight. Apparently, in this war, God removes His people just before one of the last battles, catching away His people just before the 7 year tribulation which concludes with Armageddon, which is followed by the 1000 year reign of Christ, which is followed by one last final battle at the end.

And there is a lot prophesied about gold and money systems with regards to this time of the end, as well. As I see it, the four biggest scriptural descriptions to reconcile are as follows:

1. [Rev 3:18] I counsel thee to buy of me gold tried in the fire, that thou mayest be rich..."

2. [Ezek 7:19.8] They shall cast their silver in the streets, and their gold shall be removed: their silver and their gold shall not be able to deliver them in the day of the wrath of the LORD: they shall not satisfy their souls, neither fill their bowels: because it is the stumblingblock of their iniquity.

3. [Dan 11:43.10] But he [The Antichrist] shall have power over the treasures of gold and of silver, and over all the precious things of Egypt: and the Libyans and the Ethiopians shall be at his steps.

4. [Revelation 13:16] And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:
[Revelation 13:17] And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.
[Revelation 13:18] Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six.

All comments and conjecture as to how these verses will play out in the time of the end (soon now?) are welcome during this time of freedom that we have� while it lasts�

Here's mine: Since the Protocols say somewhat the same thing regarding gold� that gold will mostly all be concentrated in a few hands, or even, one, at the time of the end� perhaps the world bankers� plans for a one world currency and the biochip implant will be the fulfillment of both the Protocols and Revelation 13, all at the same time?

"Your daughter can store the money any way she wants--on her laptop, on a debit card, even (in the not too distant future) on a chip implanted under her skin." - TIME MAGAZINE - April 27, 1998 (page 51, 2/3 of the way down the page)

http://www.time.com/time/magazine/1998/dom/980427/cover3.html

--Jason Happy

http://www.ptialaska.net/~swampy/illuminati/zion.htmlI almost forgot... It seems almost as if... well, each one of you can/will judge for yourself. Also, of whether or not the numbering 6/6 is significant or not...

From the Protocols of the Learned Elders of Zion:

No. 6

6. At the same time we must intensively patronize trade and industry,
but, first and foremost, speculation, the part played by which is to
provide a counterpoise to industry: the absence of speculative industry
will multiply capital in private hands and will serve to restore
agriculture by freeing the land from indebtedness to the land banks.
What we want is that industry should drain off from the land both
labor and capital and by means of speculation transfer into our hands
all the money of the world, and thereby throw all the GOYIM into the
ranks of the proletariat. Then the GOYIM will bow down before us, if
for no other reason but to get the right to exist.View Yesterday's Discussion.

Your statement..."The Fed faces the choice of continuous inflation or destruction of the system."

Although the Fed recently "withdrew" reserves while attempting to drain some of the massive transfusion made in the last half of '99...and has yet again added reserves to maintain some liquidity and avoid complete collapse, do you believe they may be establishing a pattern of 2 steps back and then 1 step forward in reserve rotation while continuing to raise interest rates although the "street" is talking "no summer increase" (Oh my! a discernible pattern may be developing--no, couldn't be...somebody could take advantage of that!)

Well ORO, it's almost 2:00 AM in my time zone...eyes are getting heavy...I'm going to say...have a goodnight
---law

----"ORO Question: The 16 billion buyback figure...is this the surplus" raid on the Social Security General Fund? And if so...how many billions do you think they can raid?"----

The debt buyback by the US Treasury is coordinated policy between the Fed and Treasury. While the Fed gradually raises rates and floods the system with liquidity the Treasury is helping by monetizing the nation's debt. It's all an effort to stave off a crisis in dollar liquidity. They're not really "raiding" anything since there are no real assets there to raid. It's bookkeeping smoke and mirrors. Do you know the difference between accrual and cash accounting? Well, they are treating the cash receipts as receipts, but excluding the benefits payable in the future from the deficit figures. It's called a "Unified Budget" (otherwise known as fraud).

Unfortunately, it will create more problems later on as this new hot money goes directly to price inflation. This is a hugely irresponsible policy that has lead from earlier over-expansion of the dollar. It's the only policy tool they have now.

It appears that the Euro float may have reached "critical mass" resulting in new trade-based demand for that currency vs the demand we've seen so far for dollar debt replacement. If the Fed fails to raise rates at its next meeting the capital flight from the dollar that has begun will accelerate.

ORO (06/06/00; 23:50:51MT - usagold.com msg#: 31942)
---"Yet the Fed faces this situation where saving the dollar is nearly impossible (maybe there is a politically acceptable way to do so that I have overlooked, but I don't think there is)."---

Oro, the only way I see out of this is for them to actually offer something real for all those dollars out there. This could be done by trading all that land and other stuff held by the Federal government such as NASA, Hoover Dam, TVA etc.

Un-huh........All I want to know is why the Kitco chart always takes a little dip early in the London market?

Hi Mr wolavka:
Can you expand on above svp?
All:
Permit me to report that I've just marked my vast(NOT) reserves of physical Au/Ag to market and....(drumroll).... I'm in the spread.......I'm in the spread........ I'M IN THE SPREAD ... Yyyeehaaaa!!!

http://www.SelectSectors.com/gldindx.gif XAU, HUI, GOX, FSAGX Chart
Each Index is in a strong Uptrend

watch for massive increase in margin requirements at comex.

Don't like the game?? change the rules...

T.A. still works, gotta have right info.

sto is too slow, also turns off.

paper is trash...

don't look for lines crossing ... look for lines that never cross.....................

watch volumne watch dollar

don't listen to news media or news events, after the fact..

"You have to choose between trusting to the natural stability of gold or the honesty and intelligence of the members of government, and with respect for these gentlemen, I advise you as long as the capitalist system works to vote for gold." Shaw.

Source: Bridge NewsAsia Precious Metals Review: Profit-taking drives gold lower
By Polly Yam, BridgeNews

Hong Kong--June 7--Profit-taking pushed down spot gold prices on Wednesday in Asia after prices surged in the U.S. market, dealers said, adding short-covering was likely to counter the fall and push up gold prices with nearby resistance at U.S. $290. The price of silver rose in Asia on minimal selling while the price of platinum and palladium increased due to buying from Japan, they noted. Spot gold started Asia trading at about $289, but selling from Australia quickly pushed down the price to about $288, dealers noted. Physical demand was minimal on Wednesday, they added. "There were all sellers in Asia," one of the dealers commented. But, gold prices could still rise later if funds continued to buy during the U.S. trading, he added. Another dealer said many players were bullish on gold at present on expectations of short-covering by funds, higher U.S. interest rates and weaker U.S. equities. He noted that recent rises in the price of gold was due to buying from U.S. funds. As large amounts of short positions remain in the market, a further rise in gold prices could force short position holders to rush to cover shorts, he added. Dealers see gold's nearby resistance at $290, then $292, and support at $285.

Black Blade: There it is! I knew the Aussies couldn't keep their hands outta the cookie jar. A nice short squeeze, a rise in POG, and these Aussie producers can experience the fun had by the likes of Ashanti, Cambior, and Emperor Mines.

NYMEX lists additional Dec 2000 gold options strike price

New York--June 6--The New York Mercantile Exchange said it listed an additional gold options strike price of 450 Tuesday on the Dec 2000 contract. The recommendation to list this strike price came from the Exchange's floor committee since it would not have been listed under the regular parameters of the Exchange gold options contract. (Story .22339)

Black Blade: The smell of fear in the air?

Turkey gold imports said recovering from 1999 slump

Istanbul--June 7--Turkey's gold imports are recovering from a slump in 1999, Serdar Citak, Chairman of the Istanbul Gold Exchange, told BridgeNews on Wednesday in an exclusive interview. He said 86 tonnes of gold were imported through the exchange in January-May, against only 107 tonnes during the whole of 1999. However, Citak said, better regulation was required for the exchange's futures market, where trading was not very active. (Story .12753)

Black Blade: Get yer gold while its hot!

Meanwhile, prior to the NY open, S&P Futures down -1.00, but fair value +1.76 - a slightly positive open on Wall Street. Au is down overnight -$2.50 at $286.20, other metals are flat-lined more or less.

http://www.thebulliondesk.com/News.aspClick on "USAGOLD".

The prison door opens after 20 years - but we're afraid to come out!
(shaver1)
Jun 07, 08:42

Just look at us after 20 years of hoping and dreaming of
legitimate money. We have been locked into a prison of
dollars so long that when the door opens and we can walk
out into the sunny world that we have believed so long
should exist - what do we do - but stand and look at
each other - wondering whether it's real. We have been
beaten and whipped so many times - we think it's normal.
Gold movement is to make dollars in we think - not the
reverse. We trust the security of prison and the prison
guards more than we trust freedom. It's a very common
psychology that develops among prisoners.

We're like Pavlov's dogs, reacting to 20 years of
programming. It's too bad that if fiat paper collapses
the salesmen of the paper being the former political
custodians that they are - won't be around to pay any
price.

"Fraud" by law, is defined is a crime punishable by jail
and triple damages. Yet if a government fraudulelently
promotes fiat currency for it's own ends, as
specifically opposed by the constitution - there are no
politicians that have to pay. That's the problem with
governments and armys - the innocent are always
sacrificed on that alter of power. The political
custodians should be held liable for their political
beliefs. After all government is just another businesss
pretending not to be.

If some well meaning economists in the 50's convinced
poliitican's that 1929 was an aberration of the Fed just
not supplying enough liquidity at that time and the
whole of our economic beliefs are that now built on that
fine thread of logic, and if that logic turns out to be
wrong the custodian-politicians around at the time
aren't there to pay.

Suppose it turns out that the crash of 1929 was caused
by a massive credit bubble (much smaller than exists
today), who will be around to pay - only the shepple.
The politicians will be long gone. Greenspan will take
his little control box that he was sure would work and
throw it in the dumpster and retire on some island -
while the shepple are squashed by the weight of the
credit monster eating the sheppple.

The dark dollar prison is opening - snap out of it -
don't be afraid of the sunlight!

Who's the braintrust that posted this great literary work? he's got a lot of class....all low---

Ditto for me--nitwittery!

http://www.usagold.com/Order_Form.html FOR AN INFOMATION PACKET ON GOLD OWNERSHIP6/7/00 Indications
�Current
�Change
Gold August Comex
288.80
-3.0
Silver July Comex
5.11
nc
30 Yr TBond Sept CBOT
96~26
-0~04
Dollar Index June NYBOT
106.51
-0.01


Market Report 6/7/00): Gold woke up this morning, shook the cobwebs and decided to take
some corrective medicine -- a clear case of altitude sickness after reaching three month highs
yesterday and experiencing what one analyst called a "mad scramble" with both funds and trade
houses "aggressive buyers" according to late press reports Tuesday.

The overseas gold markets were lackluster again overnight awaiting signals from New York that
the short covering would continue, halt or take pause. So far there hasn't been enough action upon
which one could form an opinion. One thing is certain: The unwinding that has occurred thus far
amounts only to a small portion of the short overhang, so we will see what happens. One London
dealer quoted by FWN had an opinion closely aligned to our own when he said that gold needed
"to settle back and take stock. . .Things need to consolidate a bit after the sharp climb and establish
a new base." He pegged that figure at $286. An Australian trader was quoted as saying that the
Asian market was relatively quiet and that "U.S. funds" were responsible for the recent rise in
gold prices. There have also been official statements out of Beijing that China has been purchasing
gold for its reserves.

In its report this morning Standard Bank of London offers this pleasant appraisal of the technical
picture: "The market has now moved into a bull phase (Ed. note: Our emphasis) with the 9 day
Moving Average ($278.25) moving up through the 18 day Ma ($276) and the 40 day MA ($277),
and the spot price ending well clear of the 100 day MA ($285) and the 200 day MA ($286.25).
Dips towards $286 will now be seen as buying opportunities. On the upside key resistance is
located at $294. We could be in for a period of consolidation with the market trading in a $286 -
$294 range."

Beyond the overall bullish tone, gold news was sparse this morning, fellow goldmeisters, so we'll
wrap this up for now and bid you good day. See you here tomorrow.

We'll leave up (Please see below), our recent report on the new derivative accounting procedures
and their potential effect on the gold price for a few days. Thanks for the many kind comments
both public and private over the past few days. They are always appreciated.

Our thanks to the Bullion Desk (London) for the new USAGOLD Daily Market Report link at their
very helpful page.

***PLEASE NOTE*** the addition of the weekly central banking news link at the top
of the page. For those seeking deeper insights into central bank opinion, policy and events
internationally, we highly recommend a regular visit. We are happy to have permission to provide
this important report. Our thanks to Central Banking magazine for sharing its pages with our
readers. We consider this an important addition to the USAGOLD website.

http://www.usagold.com/centralbank/current.htmlHave a look. . .

Test

http://www.netking.dircon.co.uk/finan.htm"Updated June 7, 2000
A developing essay examining the theory that a stock market crash of 1929 proportions is
approaching, to be followed by a bear market that will match the 1990s bull market for
strength and longevity in every respect

Why don't they stop the crash?

The answer is, that (based on readings of other crashes in history, and historical accounts such as
"The Madness of Crowds"), vested interests quite probably are attempting to prevent crashes. But in
the end, they are likely to fail, which means the taxpayer is called upon to subsidise the stock market
gamblers.

As a result, huge amounts of money go to support economic activities that ought not to receive it-
companies with bad business plans (Boo.com being a salutary example), companies that are a total
waste of human effort (you may decide for yourself), and of course, enterprises supported by
corruption and criminal activities. In the end, the propping up of markets weakens nations and by
delaying natural pull-backs in the business cycle, makes the pain much worse when it does eventually
arrive."
(Click for More.)

http://www.prudentbear.com/international.htm International Perspective - by Marshall Auerback

Printer Friendly Version

THE US CURRENT ACCOUNT: PAY ME
NOW, OR PAY ME MORE LATER

June 6, 2000



Masked behind last week's euphoric recovery in the US stock
market was notable weakness in the US dollar against virtually
all major currencies � the euro, the yen, the Swiss Franc, and
even the British pound. This striking divergence between bonds
the dollar on the one hand, and the stock market on the other
may seem puzzling, but this comes as no surprise to us. We
believe that the foreign exchange and bond markets more
accurately reflect the fundamentally fragile state of the US
economy today; stocks appear to be completely detached from
underlying realities. Primary amongst our concerns has been
the burgeoning US current account deficit. Over the last several
months, the US current account deficit has been on the order of
4 per cent of GDP. That exceeds the peak annual rates of the
mid-1980s. It is not only us who view this as a serious problem.
According to a report published yesterday by the Bank for
International Settlements, the global economy faces the risk of a
hard landing with the US stock markets and the dollar dropping
sharply in tandem should the Federal Reserve fail to rein in the
rate of expansion in domestic demand. The BIS views such
expansion as "unsustainable" and "potentially inflationary".
This is quite a gloves-off report from a leading public institution
which normally eschews such alarmist language.

(Click For More)

Getting a couple pos replies....One from "Venture" the Canadian Financial TV Show and another from "Letters to Editor" of Newsweek....Still no reply from Tony (grin)...Ken

Hey Jason..be..HAPPY....tell us about your affinity for Gold, we know you have one for truth..(as you see it)..Ken

GO PHYSICAL (right here at USA) and GO GATA.

Here are two previously appearing Greenspan quotes on gold which synergize each other well:

"If you are on a gold standard or other mechanism in which
the central banks do not have discretion, then the system
works automatically. . . . 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." -Alan Greenspan, to US
House, July 22, 1998
0f.htm> pg. 45 & 56


"In summary, then, although information technology by its
very nature has lowered risk, it has also engendered a far
more complex international financial system that will
doubtless bedevil central bankers and other financial
regulators for decades to come. I am sure that nostalgia for
the relative automaticity of the gold standard will rise
among those of us engaged to replace it." -Alan Greenspan,
to American Enterprise Institute, April 14, 2000


These also give a bit of perspective to Krugman's "Green Cheese" column posted in Leland (6/4/2000; 2:18:32MT msg#: 31774)

Regards,
Journeyman

natural gas in short supply...


grains need storage and need to be dried...

opportunity knocking...

watch china and taiwan gold buyers

You Are One Tireless Gold Crusader.....You have my great respect for your efforts for Gold and for sharing your knowledge and time with us and GE. You fit well into this austere group that tolerates YGM and his gata crusade..(very shallow financial wisdom have I)...
Regards...Kenny

Holtzman here,

--------------
Hedging one's bets
--------------

To Hudson, who asked in (06/06/00; 10:56:01MT - usagold.com msg#: 31905), "Why would these positions be jeopardised if the POG rose?"

The simple presence of a hedge book doesn't guarantee jeopardy in the event of a POG rise. As far as I understand it, Ashanti and Cambior managed to do themselves to death by selling more futures contracts than they could realistically ever deliver upon. In essence, their managements chose to step well beyond the role of a manufacturer locking in future prices and became additionally gamblers playing the futures markets just like ordinary speculators. They had bet the farm (or in this case the mine) on the belief that POG was forever destined to plummet and so why not get double the profit by shorting? They are both perfect examples of what happens when one sticks one's neck out too far.

However, those two did seem to represent the extreme rather than the typical hedged mining company. Though there may be other Ashantis or Cambiors out there waiting to be found out, there's something else of far greater importance to shareholders of moderately hedged companies. The jeopardy those companies face is that they'll miss out on future opportunities for windfall profits. In a sudden and sustained updraft of POG, most heavily hedged mining companies will continue to make ends meet, but only that, whilst their UNhedged competitors will thrive.

If you've been reading here at this Forum for any length of time, you've no doubt encountered comments along the lines of, "It'll be just my luck that POG will begin to soar the day AFTER I sell all of my gold."

Now picture a mining company saying that. Then picture yourself still owning the shares of such a company the day after.

Take Barrick, for example. They have control over a significant amount of gold tonnage in the ground, some fraction of which will be dug up this autumn, more in 2001, more in 2011. Barrick's managers can predict with some success what the future cost of digging will come to for each ounce retrieved. What Barrick's managers cannot predict (nor anyone else) is what the market price for that ounce will be once it's finally above ground and able to be delivered to a buyer.

Some companies are willing to bet that, over the long term, they'll be able to sell next year's ounces in the Spot (cash) market for more than it will cost them to retrieve those ounces from the ground. These companies operate in an UNhedged manner.

Barrick is the ultimate example of the precise opposite of this management approach. They want to nail down precisely what next year's sale price will be. How do they do that? They sell forward (which is to say, they sell their gold years before they even try to take it out of the ground) by selling futures contracts, on which they fully intend to deliver at various dates in the future for prices agreed upon today.

That's a wonderful arrangement in times when the Spot price of gold either holds steady or inexorably declines as the years pass. For most market analysts these days, that loosely equates to "within living memory." In any event, managers like Barrick's have concluded that they'll be better off locking in known sale prices years in advance so that they can then lock in known margins of profit for those same years. Then they can confidently tell their shareholders, "Regardless of how far the Spot price of gold falls from now 'til 2011, we shall still be making a profit."

The jeopardy for Barrick comes when, in the course of time, the Spot price of gold finally ends its cyclical downtrend and enters its cyclical uptrend. Might that be happening as we speak? Hopefully. But even if not, be sure it will happen someday, in the same way that you can be sure that winter ultimately gives way to springtime.

Here's the jeopardy: Barrick has completely detached itself from the price of gold. All Barrick represents anymore is a known and fixed future stream of corporate profits. Anyone looking to buy Barrick stock with any degree of study beforehand realises that Barrick is little more than a bond or a utility stock. The future earnings per share of its stock can be counted on to grow at perhaps a few per cent per year, but no more.

By contrast, a completely unhedged mining company is a loose cannon if there ever were one. Such a company takes each day's ore to market and gets each day's Spot price. In times such as summer 1999 when POG was $252, many mines were actually losing money.

On average across the planet as of last summer, the average mining company spent $199 to extract each of last summer's ounces of gold from the ground. That's Cash Cost. That same average mining company spent an additional $50 for each of those ounces to cover business overhead, financing expenses, etc. That's $249 average Total Cost.

Keep in mind these are Average figures. That means half the ounces dug up last summer cost the miners More than $249 each to extract from the ground.

As of last summer, those miners such as Barrick who had (probably back in 1998) forward sold their 1999 gold in the vicinity of $350 per ounce made a packet and looked like prescient superheroes to their shareholders.

But then came autumn 1999 and the Washington Agreement (see FOA's trail page). Suddenly the Spot price of gold leapt to $339. Now all of a sudden Barrick's glory was tarnished because they'd forward-sold even year 2000's gold at "only" $350 and had I believe been forward selling 2003's gold at barely $300. Oh, they'll still make a profit. After all, that's been locked in. But now it looks to be a paltry profit.

In contrast, a completely unhedged mining company which had perhaps even been losing money on each ounce mined in the summer of 1999 was suddenly earning nearly $90 on each ounce come autumn. It was now that company's turn to look heroic whilst Barrick looked rather like Jack who'd just sold next year's cash cow for a few measly beans.

Naturally as Americans know all too well, POG spent most of the months since last autumn trying its best to return to $252. But as the past half week has shown you, nothing carries on in the same direction forever, and it does seem that the bias is more to the upside now than to the downside. Higher lows rather than new 20-year lows in terms of the U.S. dollar, which finally seems to be bringing U.S. dollar POG into concert with the previously established uptrends in other fiat currencies' POGs.

Which, the long way round, comes down to saying that shareholders in a hedged mining company (whether they realise or no) are betting their investment on the hope that the Spot price of gold will Not rise in future. If it does rise, they'll get their paltry dividend and watch the rest of the world celebrate.

Meanwhile, shareholders in UNhedged mining companies are betting their investment on the hope that the Spot price of gold very much Will rise in future. If it does continue to fall, there's a small chance the company may reach the stage where it cannot justify digging even one more ounce out of the ground, at which point it'll likely declare bankruptcy.

It's that juxtaposition of risks that's what inspires most of us here at this Forum to regard mining stocks as speculative things, and to regard coins in hand themselves as far more reliable. Even if in the medium term they lose resale value, it remains the coin owner's option to choose Not to sell, to instead wait until the inevitable uptrend. But a minority shareholder has no such say over whether his company's manager will close up shop one day, or sell forward at precisely the wrong time.

--------------
Just what was the nature of Legolas' and Gimli's relationship?
--------------

TownCrier, I have attempted, so far unsuccessfully, to locate a reference in LotR to Legolas' hair colour. You're right in that few Elves apart from the Vanyar were blonde, whilst many Rohirrim Men were. But I can neither confirm nor deny it for Legolas.

On that same subject, however, there are times when one thinks of something which is at once both exquisite and awful, and the only thing worse than bringing it into existence would be failing to do so. I'm quite certain the people filming the Lord of the Rings movies haven't thought of this, but absolutely the perfect musical accompaniment to Gandalf's encounter with Durin's Bane would be Wagner's Ride of the Valkyries. Why perfect? In Sindarin, Durin's Bane was called a Balrog. The Quenya name for the same race is Valkaurar, Spirit of Flame. It's one of Tolkien's deeply buried in-jokes, and it would be simply marvellous were the filmmakers to be aware of it. Regrettably, I've yet to find a way to go about alerting them.

--------------
Anduril !!
--------------

Oh, and I would like to make perfectly plain that the events described in the following article had absolutely nothing to do with me, though it may possibly explain Aragorn's absence over the past few months ...

http://dailynews.yahoo.com/h/ap/20000602/wl/britain_sword_attack_1.html
Friday June 2 10:56 AM ET
London Sword Attacker Committed

LONDON (AP) - A man who ran naked into a south London church, slashing and stabbing congregation members with a sword, was declared mentally insane Friday and committed for an indefinite period to a high-security hospital.

Ten people in the 400-member congregation were injured, including three seriously, in the November attack at St. Andrew's Roman Catholic Church in Thornton Heath. One man was stabbed through the jaw into his neck.

A jury on Friday found the assailant, 26-year-old Eden Strang, guilty of attempted murder and assault. He was an unemployed computer expert who lived in the area, but was unknown to the churchgoers.

Strang, wearing a suit, showed no emotion after the verdict, only glancing toward his wife in the public gallery.

Doctors told the court that Strang had been suffering from schizophrenia for about seven years, but had not been treated. They said he was obsessed that demons were going to harm his family and thought God had told him through his computer to attack them.

Strang was subdued by a half-dozen men in the congregation, including an off-duty policeman, who wrestled him to the ground as he lashed out with the 3-foot gold and silver sword.

Yours,
I.V. Holtzman

PS to Usul: as Benny Hill used to say, "Absinthe makes the heart grow fonder"

EURO holding @ $0.96The playing field is leveling, still 23 days in June... and lots can and is happening in our favor...Ken

One of the events on our radar screen this month is that the European System of Central Banks (the ECB and its 11 member national CBs) will on June 30 engage in their quarterly "mark to market" exercise for their vast gold reserves. Consider briefly that the euro has recently enjoyed some strong gains against the dollar, and that (in my mind anyway) a well-balanced currency system (if not being gold itself) is one that should truely reflect gold's valuation; whereby gold would tend to make headway against any given paper currency. That is to say, if the euro has climbed at all, then gold should climb still further.

http://www.dv.sel~kfr/books/Service/menfitin.htmI'd like to thank each and every poster and our hosts TC & MK for putting up with me for 16 months. Duty calls.
I'd like to deicate one of my favourites to "CHRIS POWELL"
a true lover of Robert Service and a dedicated soul...
GO GATA!...I'll be back....YGM....Ken.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The Prospector


I strolled up old Bonanza, where I staked in ninety-eight,
A-purpose to revisit the old claim.
I kept thinking mighty sadly of the funny ways of Fate,
And the lads who once were with me in the game.
Poor boys, they're down-and-outers,
and there's scarcely one to-day
Can show a dozen colors in his poke;
And me, I'm still prospecting, old and battered, gaunt and gray,
And I'm looking for a grub-stake, and I'm broke.

I strolled up old Bonanza. The same old moon looked down;
The same old landmarks seemed to yearn to me;
But the cabins all were silent, and the flat, once like a town,
Was mighty still and lonesome-like to see.
There were piles and piles of tailings
where we toiled with pick and pan,
And turning round a bend I heard a roar,
And there a giant gold-ship of the very newest plan
Was tearing chunks of pay-dirt from the shore.

It wallowed in its water-bed; it burrowed, heaved and swung;
It gnawed its way ahead with grunts and sighs;
Its bill of fare was rock and sand; the tailings were its dung;
It glared around with fierce electric eyes.
Full fifty buckets crammed its maw; it bellowed out for more;
It looked like some great monster in the gloom.
With two to feed its sateless greed, it worked for seven score,
And I sighed: "Ah, old-time miner, here's your doom!"

The idle windlass turns to rust; the sagging sluice-box falls;
The holes you digged are water to the brim;
Your little sod-roofed cabins with the snugly moss-chinked walls
Are deathly now and mouldering and dim.
The battle-field is silent where of old you fought it out;
The claims you fiercely won are lost and sold;
But there's a little army that they'll never put to rout --
The men who simply live to seek the gold.

The men who can't remember when they learned to swing a pack,
Or in what lawless land the quest began;
The solitary seeker with his grub-stake on his back,
The restless buccaneer of pick and pan.
On the mesas of the Southland, on the tundras of the North,
You will find us, changed in face but still the same;
And it isn't need, it isn't greed that sends us faring forth --
It's the fever, it's the glory of the game.

For once you've panned the speckled and
and seen the bonny dust,
Its peerless brightness blinds you like a spell;
It's little else you care about; you go because you must,
And you feel that you could follow it to hell.
You'd follow it in hunger, and you'd follow it in cold;
You'd follow it in solitude and pain;
And when you're stiff and battened down let someone whisper
"Gold",
You're lief to rise and follow it again.

Yet look you, if I find the stuff it's just like so much dirt;
I fling it to the four winds like a child.
It's wine and painted women and the things that do me hurt,
Till I crawl back, beggared, broken, to the Wild.
Till I crawl back, sapped andsodden,
to my grub-stake and my tent --
There's a city, there's an army (hear them shout).
There's the gold in millions, millions, but I haven't got a cent;
And oh, it's me, it's me that found it out.

It was my dream that made it good, my dream that made me go
To lands of dread and death disprized of man;
But oh, I've known a glory that their hearts will never know,
When I picked the first big nugget from my pan.
It's still my dream, my dauntless dream,
that drives me forth once more
To seek and starve and suffer in the Vast;
That heaps my heart with eager hope, that glimmers on before--
My dream that will uplift me to the last.

Perhaps I am stark crazy, but there's none of you too sane;
It's just a little matter of degree.
My hobby is to hunt out gold; it's fortressed in my brain;
It's life and love and wife and home to me.
And I'll strike it, yes, I'll strike it; I've a hunch I cannot fail;
I've a vision, I've a prompting, I've a call;
I hear the hoarse stampeding of an army on my trail,
To the last, the greatest gold camp of them all.

Beyond the shark-tooth ranges sawing savage at the sky
There's a lowering land no white man ever struck;
There's gold, there's gold in millions, and I'll find it if I die,
And I'm going there once more to try my luck.
Maybe I'll fail -- what matter? It's a mandate, it's a vow;
And when in lands of dreariness and dread
You seek the last lone frontier, far beyond your frontiers now,
You will find the old prospector, silent, dead.

You will find a tattered tent-pole with a ragged robe below it;
You will find a rusted gold-pan on the sod;
You will find the claim I'm seeking,
with my bones as stakes to show it;
But I've sought the last Recorder, and He's -- God.