USAGOLD Discussion - June 2000

All times are U.S. Mountain Time

tg
(06/01/2000; 01:01:04 MDT - Msg ID: 31615)
hyperinflation--- solomon weaver & TG
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.

ORO
(06/01/2000; 01:17:49 MDT - Msg ID: 31616)
The Stranger - the Ms - Volcker - and debt colonialism
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.


DaveC
(06/01/2000; 01:25:20 MDT - Msg ID: 31617)
Solomon Weaver (05/31/00; 22:43:59MT - usagold.com msg#: 31614)
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.

totalamateur
(06/01/2000; 03:25:27 MDT - Msg ID: 31618)
Questions
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!
Aragorn III
(06/01/2000; 04:43:31 MDT - Msg ID: 31619)
Where do we stand?
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?
Black Blade
(06/01/2000; 05:59:15 MDT - Msg ID: 31620)
Morning Wakeup Call!
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).


Hill Billy Mitchell
(06/01/2000; 06:04:25 MDT - Msg ID: 31621)
Official release
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%)
NORTH OF 49
(06/01/2000; 07:48:03 MDT - Msg ID: 31622)
totalamateur
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
JCTex
(06/01/2000; 08:07:24 MDT - Msg ID: 31623)
total amateur
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.
JCTex
(06/01/2000; 08:18:21 MDT - Msg ID: 31624)
ORO [or anyone else]
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
ORO
(06/01/2000; 09:13:31 MDT - Msg ID: 31625)
Aragorn III - a comment
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.
ORO
(06/01/2000; 09:43:36 MDT - Msg ID: 31626)
Aragorn III - Threshold interest rates.
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.
Henri
(06/01/2000; 10:16:08 MDT - Msg ID: 31627)
Meanwhile, Back at the "Desert Rose"
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!"

Farfel
(06/01/2000; 10:36:36 MDT - Msg ID: 31628)
Well there go the bubble profits...
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*
Henri
(06/01/2000; 10:46:31 MDT - Msg ID: 31629)
ORO Msg #31625
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?
ORO
(06/01/2000; 11:18:17 MDT - Msg ID: 31630)
Henri - Speed
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.
Leland
(06/01/2000; 11:32:24 MDT - Msg ID: 31631)
Michael, Enjoy Your Long Weekend...But, We'll Miss Your "Cool Daily Market Reports"
"USAGold: gold and silver spots, plus gold lease rate,
Comex stocks, and a cool daily market report"
Hipplebeck
(06/01/2000; 12:15:23 MDT - Msg ID: 31632)
bond prices and stock prices
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?
ORO
(06/01/2000; 13:40:46 MDT - Msg ID: 31633)
Hipplebeck - suspicions
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.

BTD
(06/01/2000; 13:41:34 MDT - Msg ID: 31634)
(No Subject)
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.
TownCrier
(06/01/2000; 14:17:34 MDT - Msg ID: 31635)
German 20 Marks: They are gone, folks! Thanks for your interest!
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!
Usul
(06/01/2000; 14:43:29 MDT - Msg ID: 31636)
Stocks up.... gold limbo dancing
Ho hum... there's nothing for it... I think I'll have to go
and read The Crash of '79 by Paul E. Erdman.
Hill Billy Mitchell
(06/01/2000; 15:17:31 MDT - Msg ID: 31637)
Official release
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%)
ORO
(06/01/2000; 15:21:22 MDT - Msg ID: 31638)
BTD - wonderful find

The post is just grand.

Love it.
TownCrier
(06/01/2000; 15:30:24 MDT - Msg ID: 31639)
News from COMEX
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.
TownCrier
(06/01/2000; 15:40:58 MDT - Msg ID: 31640)
"Black Gold" News from NYMEX
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.
Golden Truth
(06/01/2000; 15:44:36 MDT - Msg ID: 31641)
WHEN IS THE BOTTOM LINE GOING TO COUNT FOR ALL OUR GOLD TALKS?
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!!!!!!!!
Tom
(06/01/2000; 15:56:38 MDT - Msg ID: 31642)
Golden Truth
Thanks for the STRONGEST BUY signal I have seen in a while.
Tom
(06/01/2000; 16:02:12 MDT - Msg ID: 31643)
Hey farfel - stayin too long is exactly rite. Got a many friends doin just that.
They gona lose it all!

Thanks again for your insite!
Tom
HI - HAT
(06/01/2000; 16:02:15 MDT - Msg ID: 31644)
Golden Truth ..msg. 31641.......FEVER
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.
TownCrier
(06/01/2000; 16:16:56 MDT - Msg ID: 31645)
For Golden Truth
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.
Hill Billy Mitchell
(06/01/2000; 16:22:37 MDT - Msg ID: 31646)
Year 2000 spreads (30 yr bond vs fed funds rate)
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)
Goldfly
(06/01/2000; 16:32:59 MDT - Msg ID: 31647)
Golden Truth.....

GT!!!

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

gf
Hill Billy Mitchell
(06/01/2000; 16:33:21 MDT - Msg ID: 31648)
Year 2000 Spread (FF vs 30 yr bond)
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)
ss of nep
(06/01/2000; 16:34:59 MDT - Msg ID: 31649)
To Rugen (5/28/2000; 4:19:00MT - usagold.com msg#: 31436)
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.


ss of nep
(06/01/2000; 16:44:27 MDT - Msg ID: 31650)
@ Golden Truth (06/01/00; 15:44:36MT - usagold.com msg#: 31641)

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.








Hill Billy Mitchell
(06/01/2000; 16:48:14 MDT - Msg ID: 31651)
Selling physical gold to buy real estate
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
R Powell
(06/01/2000; 17:23:53 MDT - Msg ID: 31652)
Thoughts from today's reading
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
YGM
(06/01/2000; 17:36:04 MDT - Msg ID: 31653)
Golden Truth....
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)
YGM
(06/01/2000; 18:14:51 MDT - Msg ID: 31654)
Gata News....
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

TheStranger
(06/01/2000; 18:35:13 MDT - Msg ID: 31655)
Golden Truth and YGM
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!
aunuggets
(06/01/2000; 18:56:31 MDT - Msg ID: 31656)
Golden Truth....
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)
Golden Hook
(06/01/2000; 20:27:28 MDT - Msg ID: 31657)
POG AND SILVER WILL RISE BEGINNING IN NOV. TO ABOUT 550. OZ
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.

Hill Billy Mitchell
(06/01/2000; 20:37:06 MDT - Msg ID: 31658)
The present temperature inversion
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
Journeyman
(06/01/2000; 21:14:00 MDT - Msg ID: 31659)
Price discovery after COMEX @ORO & Trail Guide

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
jinx44
(06/01/2000; 21:14:36 MDT - Msg ID: 31660)
ss of nep
post to alprice@worldnet.att.net explaining your interest, por favor, and I will respond .
Hill Billy Mitchell
(06/02/2000; 01:14:17 MDT - Msg ID: 31661)
Test
TestView Yesterday's Discussion.

Usul
(06/02/2000; 01:22:32 MDT - Msg ID: 31662)
Absinthe
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?
ORO
(06/02/2000; 02:21:21 MDT - Msg ID: 31663)
Journeyman - price discovery with and without Futures
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.


HI - HAT
(06/02/2000; 02:51:18 MDT - Msg ID: 31664)
Hill Billy Mitchell............Temple Of Doom
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.
totalamateur
(06/02/2000; 02:52:53 MDT - Msg ID: 31665)
Questions yet unanswered!
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!
Black Blade
(06/02/2000; 04:57:22 MDT - Msg ID: 31666)
Global Warming Myth debunked!
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.
Henri
(06/02/2000; 05:18:09 MDT - Msg ID: 31667)
ORO msg #31630
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?

tedw
(06/02/2000; 05:35:59 MDT - Msg ID: 31668)
The appraisal of Gold
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.



Black Blade
(06/02/2000; 06:05:53 MDT - Msg ID: 31669)
Morning Wakeup Call! (and side note to Leigh)
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?
Aragorn III
(06/02/2000; 06:29:39 MDT - Msg ID: 31670)
Building a foundation for thought...to be done in two parts
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?
Black Blade
(06/02/2000; 06:36:36 MDT - Msg ID: 31671)
Silver Supply and Demand- A bullish case for Silver
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.

Usul
(06/02/2000; 06:46:26 MDT - Msg ID: 31672)
Questions by totalamateur
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?
Black Blade
(06/02/2000; 07:02:46 MDT - Msg ID: 31673)
A VERY WILD RIDE AT THE OPEN ON WALL STREET!
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!
Hill Billy Mitchell
(06/02/2000; 07:13:32 MDT - Msg ID: 31674)
The lunatic wacko fringe on the internet
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
Buena Fe
(06/02/2000; 07:45:22 MDT - Msg ID: 31675)
no winners but GOLD!
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!
SteveH
(06/02/2000; 08:07:31 MDT - Msg ID: 31676)
Gold futures up $6.80
Duck up
Dow up
Gold up
Platinum up
Silver up
Euro up
Oil up
Nat.Gas up
Dollar down
goldhunter
(06/02/2000; 08:08:50 MDT - Msg ID: 31677)
Happy Days...
http://www.usagold.comHappy Friday every one...HAPPY DAYS are here again, gold up very nicely.
Leland
(06/02/2000; 08:38:27 MDT - Msg ID: 31678)
A Quick to Load, Handy GIF File to Use on a Day Like Today
http://www.usatoday.com/money/gold.gifBe sure to hit reload to update.
Usul
(06/02/2000; 08:45:28 MDT - Msg ID: 31679)
Grey Men Tape
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
Black Blade
(06/02/2000; 08:55:21 MDT - Msg ID: 31680)
TC about MK's possible new gold offer
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.
YGM
(06/02/2000; 09:31:43 MDT - Msg ID: 31681)
Peruvian Deep-Throat & June Gold...
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>>>>>>>
Trail Guide
(06/02/2000; 09:31:57 MDT - Msg ID: 31682)
Gold,,,, OIL,,,,, and EUROs,,,, All up!


(Big Smile!)
Golden Hook
(06/02/2000; 09:38:41 MDT - Msg ID: 31683)
Gold will be 550. and silver 17. by january.`
A gambler always try to get another dollar before he quits.
You only buy money with paper. The fuse will burn slowly.
Golden Truth
(06/02/2000; 09:50:36 MDT - Msg ID: 31684)
I,AM A SUPER FREAK, SUPER FREAK, SUPER FREAKY, BLOW BABY BLOW!!
I,AM A SUPER FREAK GOLD OWNER AND PROUD OF IT.
100% PHYSICAL GOLD, GO BABY GOOOOOOOOOOOOOOOOOO!
Goldfly
(06/02/2000; 09:53:24 MDT - Msg ID: 31685)
See GT?

And weren't those tolas delicious?

gf
ss of nep
(06/02/2000; 10:01:33 MDT - Msg ID: 31686)
Golden Truth (6/2/2000; 9:50:36MT - usagold.com msg#: 31684)
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 ?




Golden Truth
(06/02/2000; 10:03:24 MDT - Msg ID: 31687)
To Goldfly
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!!!
YGM
(06/02/2000; 10:03:39 MDT - Msg ID: 31688)
Watching the trades..
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.
lamprey_65
(06/02/2000; 10:05:03 MDT - Msg ID: 31689)
Buena Fe
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.
ss of nep
(06/02/2000; 10:05:12 MDT - Msg ID: 31690)
To All

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

other than BUY YOU TIME



HOW ?


and under what circumstances ?


YGM
(06/02/2000; 10:12:13 MDT - Msg ID: 31691)
Bullion Desk
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
ORO
(06/02/2000; 10:16:13 MDT - Msg ID: 31692)
Stagflation - how does the market display this expectation, what it means for gold
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.
beesting
(06/02/2000; 10:24:38 MDT - Msg ID: 31693)
@ Sir ORO # 31663. Price Discovery with and Without Futures.

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.



beesting
(06/02/2000; 10:56:04 MDT - Msg ID: 31694)
Aug.Gold hit $286.40, From CBS Market Watch.
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.
ORO
(06/02/2000; 11:09:24 MDT - Msg ID: 31695)
Bonds gold and other currencies today
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.


flierdude
(06/02/2000; 11:10:36 MDT - Msg ID: 31696)
(No Subject)
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.
ss of nep
(06/02/2000; 11:16:31 MDT - Msg ID: 31697)
Buena Fe (6/2/2000; 7:45:22MT - usagold.com msg#: 31675)

You stated: "no winners but GOLD!"

I would say: "no winners but TRUTH"

IMPOV

TRUTH is the ONLY thing that will PREVAIL




Leland
(06/02/2000; 11:18:55 MDT - Msg ID: 31698)
Need Help! What is Going on Here...

Mexico
IPC
^MXX
12:54PM
6534.310
+356.250
+5.77%
ss of nep
(06/02/2000; 11:20:07 MDT - Msg ID: 31699)
Price discovery

It is simpler than 20 thousand pages of discussion.

Answer: It is not definable in FIAT !





Al Fulchino
(06/02/2000; 11:38:11 MDT - Msg ID: 31700)
Oro and TedW
Oro, Thank you for all your postings.

Ted, nice post.
Al Fulchino
(06/02/2000; 11:42:41 MDT - Msg ID: 31701)
Oro
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?
Gandalf the White
(06/02/2000; 11:44:42 MDT - Msg ID: 31702)
Spot the Dog Chart ! (Tick by tick)
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 !
<;-)
Gandalf the White
(06/02/2000; 11:51:26 MDT - Msg ID: 31703)
OOPS !
http://www.forextrading.com/forexartists/page1.htm<;-(
MarkeTalk
(06/02/2000; 12:03:46 MDT - Msg ID: 31704)
Dollar Down, Metals and Currencies Up
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.
ss of nep
(06/02/2000; 12:41:28 MDT - Msg ID: 31705)
outside ao the box

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 ?









ORO
(06/02/2000; 13:06:50 MDT - Msg ID: 31706)
Al Fulchino - Temporary
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.



ss of nep
(06/02/2000; 13:09:32 MDT - Msg ID: 31707)
Sooooooooooooo,

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.





Strad Master
(06/02/2000; 13:31:17 MDT - Msg ID: 31708)
ss of nep
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.)
goldhunter
(06/02/2000; 13:38:02 MDT - Msg ID: 31709)
Gold will buy a lot...
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...
ss of nep
(06/02/2000; 14:24:05 MDT - Msg ID: 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 !


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





Beowulf
(06/02/2000; 14:29:39 MDT - Msg ID: 31711)
Possible reason for metals jumping?
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.]**


Hill Billy Mitchell
(06/02/2000; 14:44:58 MDT - Msg ID: 31712)
Official release
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%)
ORO
(06/02/2000; 14:47:47 MDT - Msg ID: 31713)
TED spread and stocks
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.
Leland
(06/02/2000; 14:47:53 MDT - Msg ID: 31714)
Beowulf...This Confirms
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.)
Buena Fe
(06/02/2000; 15:16:02 MDT - Msg ID: 31715)
ss of nep (6/2/2000; 11:16:31MT - usagold.com msg#: 31697)
"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!






ORO
(06/02/2000; 15:29:39 MDT - Msg ID: 31716)
Beowulf - putting gold on the bank counter
**[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.
Leland
(06/02/2000; 16:06:51 MDT - Msg ID: 31717)
Implications of a Rising U.S. Stock Market and a Falling U.S. Dollar..
"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."
Leland
(06/02/2000; 16:31:23 MDT - Msg ID: 31718)
I Have a Lot of Respect For This Guy...
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.)
Leland
(06/02/2000; 17:01:24 MDT - Msg ID: 31719)
The Seven Worst Bear Markets Since 1928
http://www.bearguardfund.com/charts.htmlClick on each chart to enlarge.
Leland
(06/02/2000; 17:16:10 MDT - Msg ID: 31720)
"Selling of Dollar" Story..
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.)
Leland
(06/02/2000; 17:47:22 MDT - Msg ID: 31721)
More on the "Summer Rally"..This From Bill "Fleck"
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."
TownCrier
(06/02/2000; 18:04:09 MDT - Msg ID: 31722)
Benchmark COMEX figures
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.
Al Fulchino
(06/02/2000; 18:41:11 MDT - Msg ID: 31723)
Oro
Thanks
lamprey_65
(06/02/2000; 18:57:06 MDT - Msg ID: 31724)
TownCrier
Thank You for responding to my email query...you've made things much clearer. :)

Lamprey
canamami
(06/02/2000; 19:23:28 MDT - Msg ID: 31725)
Don Coxe on the Euro
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.
Solomon Weaver
(06/02/2000; 21:32:07 MDT - Msg ID: 31726)
A good article with a small plea for help in analyzing gold
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!



Black Blade
(06/02/2000; 22:25:39 MDT - Msg ID: 31727)
Clinton is in Europe and........................
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 ;-)
Chris Powell
(06/02/2000; 22:33:26 MDT - Msg ID: 31728)
GATA busts the shorts and gold rallies
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:

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TheStranger
(06/02/2000; 23:43:11 MDT - Msg ID: 31729)
Where Have All The Flowers Gone?
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?
Leland
(06/03/2000; 02:42:21 MDT - Msg ID: 31730)
The Credit Bubble Bulletin by Doug Noland, June 2, 2000
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.

Leland
(06/03/2000; 03:54:50 MDT - Msg ID: 31731)
Intellect...From GOLD-EAGLE
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. . .
Hipplebeck
(06/03/2000; 05:57:19 MDT - Msg ID: 31732)
Solution to the mystery rise in everything
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?
SteveH
(06/03/2000; 06:11:17 MDT - Msg ID: 31733)
Protecting food (might as well have been gold!)
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.
Aragorn III
(06/03/2000; 06:35:45 MDT - Msg ID: 31734)
Foundation: a workshop for beginners only (Day Two)
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?
SteveH
(06/03/2000; 07:02:03 MDT - Msg ID: 31735)
Is he good or what?
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
Trail Guide
(06/03/2000; 07:32:26 MDT - Msg ID: 31736)
Comment

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


Journeyman
(06/03/2000; 08:58:06 MDT - Msg ID: 31737)
Thanx ORO!

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
Journeyman
(06/03/2000; 09:05:19 MDT - Msg ID: 31738)
Aragorn III: Foundation: Good series!!

Sir Aragorn III,

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

Regards,
Journeyman
ss of nep
(06/03/2000; 09:14:47 MDT - Msg ID: 31739)
Rugen(5/28/2000;4:19:00MT MsgId # 31436 )
http://www.richardhoskins.com/bkwolf.htm

Rugen,

Did you take yor post from the indicated site ?


Chris Powell
(06/03/2000; 09:41:32 MDT - Msg ID: 31740)
Let's get physical, as Trail Guide says
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.
Leland
(06/03/2000; 09:49:21 MDT - Msg ID: 31741)
Picked-off GOLD-EAGLE..Don't Believe Him About the Gold
"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."
Hill Billy Mitchell
(06/03/2000; 10:10:37 MDT - Msg ID: 31742)
Propter hoc post ergo post hoc

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
Journeyman
(06/03/2000; 10:25:07 MDT - Msg ID: 31743)
Where "too big to fail" comes from -- and what to do about it @Aragorn III, ALL

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
YGM
(06/03/2000; 10:31:32 MDT - Msg ID: 31744)
GATA News
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



Journeyman
(06/03/2000; 11:41:23 MDT - Msg ID: 31745)
Nice one @TheStranger 6/2/2000 #31729 "Where Have All The Flowers Gone?"
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.

ss of nep
(06/03/2000; 12:03:34 MDT - Msg ID: 31746)
THE EMPIRE WAR AGAINST MAN
http://www.richardhoskins.com/hrempir.htm
several good articles here

stuff most history books do not contain.





Leland
(06/03/2000; 12:32:05 MDT - Msg ID: 31747)
From an Arkansas Newspaper..
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.)
pdeep
(06/03/2000; 16:53:23 MDT - Msg ID: 31748)
Gold Committments of Traders
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.

RossL
(06/03/2000; 17:04:07 MDT - Msg ID: 31749)
Sir HBM

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.
RossL
(06/03/2000; 17:04:38 MDT - Msg ID: 31750)
Sir HBM

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.
Leland
(06/03/2000; 17:25:03 MDT - Msg ID: 31751)
Amen....
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 ) .
Turnaround
(06/03/2000; 18:18:12 MDT - Msg ID: 31752)
TEST
HI
Turnaround
(06/03/2000; 18:23:00 MDT - Msg ID: 31753)
hello

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?
HI - HAT
(06/03/2000; 18:46:44 MDT - Msg ID: 31754)
Turnaround
Welcome to the Procession.
Leland
(06/03/2000; 20:36:14 MDT - Msg ID: 31755)
No Problems With Gold Mining in China...
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.)
Leland
(06/03/2000; 21:40:44 MDT - Msg ID: 31756)
SteveH, I Applaud You For Your Gun Rights Postings...
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.
Hill Billy Mitchell
(06/03/2000; 22:02:10 MDT - Msg ID: 31757)
Natural fear, greed, ignorance and laziness
@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
Leland
(06/03/2000; 22:07:27 MDT - Msg ID: 31758)
It's the "Triffin Dilemma"
Read-up.
Hill Billy Mitchell
(06/03/2000; 22:10:25 MDT - Msg ID: 31759)
Golden Hook's prognosis
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
Hill Billy Mitchell
(06/03/2000; 22:21:58 MDT - Msg ID: 31760)
(No Subject)
@ 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
Hill Billy Mitchell
(06/03/2000; 22:41:21 MDT - Msg ID: 31761)
Ted spread reversal and euro "unsqueeze"
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
Leland
(06/03/2000; 22:46:35 MDT - Msg ID: 31762)
Amazing Things are Happening..
http://www.sunday-times.co.uk/news/pages/sti/2000/06/04/stifgnusa01007.htmlLet us hope it will be used for PRODUCTIVE purpose.
Hill Billy Mitchell
(06/03/2000; 22:57:10 MDT - Msg ID: 31763)
Interest rates
@ 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
Gandalf the White
(06/03/2000; 23:08:56 MDT - Msg ID: 31764)
Leland's comment on the "Taell"
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).
<;-)
Gandalf the White
(06/03/2000; 23:11:42 MDT - Msg ID: 31765)
Leland's comment on the "Tael" (SECOND Try)
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).
<;-)
Hill Billy Mitchell
(06/03/2000; 23:16:40 MDT - Msg ID: 31766)
Sir TC's repo agreement and coupon pass reports?
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
Journeyman
(06/03/2000; 23:26:04 MDT - Msg ID: 31767)
Leveraged gold in the 1920's @Hill Billy Mitchell #31760

"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
Hill Billy Mitchell
(06/03/2000; 23:49:15 MDT - Msg ID: 31768)
Journeyman (6/3/2000; 23:26:04MT - usagold.com msg#: 31767)
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
Hill Billy Mitchell
(06/04/2000; 00:13:35 MDT - Msg ID: 31769)
Test
TestView Yesterday's Discussion.

Hill Billy Mitchell
(06/04/2000; 00:18:14 MDT - Msg ID: 31770)
Repost (msg#: 31742) Propter hoc ergo post hoc

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

Journeyman
(06/04/2000; 00:21:55 MDT - Msg ID: 31771)
That makes two of us! @Hill Billy Mitchell

"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


Strad Master
(06/04/2000; 00:36:04 MDT - Msg ID: 31772)
ss of nep
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???
ORO
(06/04/2000; 01:53:05 MDT - Msg ID: 31773)
Aragorn - where the problem is, Hill Billy Mitchell - on gold leverage
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.

Leland
(06/04/2000; 02:18:32 MDT - Msg ID: 31774)
More on Central Banks...
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.)

Topaz
(06/04/2000; 02:20:09 MDT - Msg ID: 31775)
Leland (6/3/2000; 22:46:35MT - usagold.com msg#: 31762)
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!
Turnaround
(06/04/2000; 02:58:36 MDT - Msg ID: 31776)
rheumy eyes
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.
HI - HAT
(06/04/2000; 03:20:43 MDT - Msg ID: 31777)
Hill Billy Mitchell msg.31763.......Interest Rates
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.
Topaz
(06/04/2000; 03:36:49 MDT - Msg ID: 31778)
HI-HAT: 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??
HI - HAT
(06/04/2000; 04:18:01 MDT - Msg ID: 31779)
Perpetual Motion........Not
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.
Topaz
(06/04/2000; 04:21:53 MDT - Msg ID: 31780)
.....and in the Monumental Snub Dept.
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".
Topaz
(06/04/2000; 04:30:03 MDT - Msg ID: 31781)
OOPS....
www.news.com.auPrevious post courtesy of The Sunday Telegraph..at ^ link... a most auspicious publication, t'be sure, t'be sure...
HI - HAT
(06/04/2000; 04:32:39 MDT - Msg ID: 31782)
Topaz..msg 31778.........OR........WHAT....
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.
ss of nep
(06/04/2000; 06:02:06 MDT - Msg ID: 31783)
Strad Master (6/4/2000; 0:36:04MT - usagold.com msg#: 31772)
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.



Jack
(06/04/2000; 07:16:20 MDT - Msg ID: 31784)
"Promissory Scams Leave Many Broke" - WASHINGTON POST, 6/4/2000
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.
Leland
(06/04/2000; 09:04:48 MDT - Msg ID: 31785)
Some Nonsense on a Sunday Morning (Taken From an Arkansas Newspaper)
"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."
Leland
(06/04/2000; 09:52:41 MDT - Msg ID: 31786)
Another Fine Editorial Cartoon...This From Canada
http://www.thestar.com/thestar/editorial/opinion/20000604NEW01x_ED-CARTOON.html.
Leland
(06/04/2000; 10:23:43 MDT - Msg ID: 31787)
From the Hightly Respected DONALD at Kitco...This One is on the Serious Side
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.
JavaMan
(06/04/2000; 10:56:33 MDT - Msg ID: 31788)
ss of nep...
Would you care to share what your point is regarding Strad Master?
Leland
(06/04/2000; 11:23:58 MDT - Msg ID: 31789)
Java
For those of us who know Strad Master (Endre), what a
WONDERFUL experience to hear his Tchaikovsky D Major,
Op. 24!
Leland
(06/04/2000; 12:03:33 MDT - Msg ID: 31790)
(No Subject)
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."
pdeep
(06/04/2000; 12:16:24 MDT - Msg ID: 31791)
There is nothing new under the sun.
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.
Hill Billy Mitchell
(06/04/2000; 12:47:20 MDT - Msg ID: 31792)
Fiat is fiat
@ 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
Leland
(06/04/2000; 12:54:18 MDT - Msg ID: 31793)
Sir Hill Billy Mitchell
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.
Jason Happy
(06/04/2000; 13:43:01 MDT - Msg ID: 31794)
The Protocols of the Learned Elders of Zion
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?
Turnaround
(06/04/2000; 13:58:32 MDT - Msg ID: 31795)
group fantasies

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.


JavaMan
(06/04/2000; 14:41:22 MDT - Msg ID: 31796)
Jason Happy...
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.
elevator guy
(06/04/2000; 15:22:36 MDT - Msg ID: 31797)
What is the paper price of gold going to do on Monday?
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.
Gandalf the White
(06/04/2000; 15:38:34 MDT - Msg ID: 31798)
Elevator Guy's Question
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 !!!
<:-)
Leland
(06/04/2000; 15:43:18 MDT - Msg ID: 31799)
elevator guy
http://www.thebulliondesk.com/News.aspIf you don't have the above link, it may help.
Leland
(06/04/2000; 15:57:22 MDT - Msg ID: 31800)
After All, It's Sunday, Time For a Little Fun
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"
JavaMan
(06/04/2000; 16:12:26 MDT - Msg ID: 31801)
Leland, re: Tchaikovsky...
Actually, I prefer Mozart's concertos for piano and violin.
Golden Truth
(06/04/2000; 16:57:33 MDT - Msg ID: 31802)
GOLD Down $1.90 Already
WHAT A SLAP IN THE FACE!!!!!!!!!
Journeyman
(06/04/2000; 17:28:37 MDT - Msg ID: 31803)
Re: Group fantasies @Turnaround (06/04/00; 13:58:32MT - usagold.com msg#: 31795)

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.
elevator guy
(06/04/2000; 17:47:01 MDT - Msg ID: 31804)
@Leland
Thanks for the link.
Hill Billy Mitchell
(06/04/2000; 17:47:27 MDT - Msg ID: 31805)
@ Journeyman (06/04/00; 17:28:37MT - usagold.com msg#: 31803)
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
Golden Truth
(06/04/2000; 17:51:25 MDT - Msg ID: 31806)
GOLD Down only .85cents or up$1.05
Gold is trying to hold it's gains, can it do it?
I think yes!
Hill Billy Mitchell
(06/04/2000; 17:58:28 MDT - Msg ID: 31807)
No subsidies
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
HI - HAT
(06/04/2000; 18:40:30 MDT - Msg ID: 31808)
Hill Billy Mitchell..msg. 31792.........Fiat
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".
elevator guy
(06/04/2000; 19:15:38 MDT - Msg ID: 31809)
For paper players only, please
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.
YGM
(06/04/2000; 19:57:43 MDT - Msg ID: 31810)
Elevator Guy
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
YGM
(06/04/2000; 20:09:30 MDT - Msg ID: 31811)
DumbMiner Belief...
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.
elevator guy
(06/04/2000; 20:30:10 MDT - Msg ID: 31812)
@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")
elevator guy
(06/04/2000; 20:32:24 MDT - Msg ID: 31813)
@Gandalf
Wow, haven't heard from you in a while!

Thanks to you and the Hobbits for your good advise. I should be so smart.

:^)
Hill Billy Mitchell
(06/04/2000; 20:38:57 MDT - Msg ID: 31814)
Legal tender fiats
@ 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




SHIFTY
(06/04/2000; 20:53:58 MDT - Msg ID: 31815)
Last weeks PONZI
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

YGM
(06/04/2000; 21:05:26 MDT - Msg ID: 31816)
El Guy
Family, Friends, Guns & Gold......."Semper Fi"Never Quit, Never Say Die!.....My Old Dad!....Ken.
SHIFTY
(06/04/2000; 21:16:14 MDT - Msg ID: 31817)
YGM
Are you a miner?

Didn"t you have a web site?
Journeyman
(06/04/2000; 21:16:26 MDT - Msg ID: 31818)
Subsidies @Hill Billy Mitchell

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
Gold Trail Update
(06/04/2000; 21:26:35 MDT - Msg ID: 31819)
The Gold Trail Discussion has been Updated
The Gold Trail Discussion has been updated. Click on the link to read the latest updates.
Black Blade
(06/04/2000; 22:14:11 MDT - Msg ID: 31820)
Slow Nite
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?


beesting
(06/04/2000; 22:57:32 MDT - Msg ID: 31821)
FOA msg#25 A little better understanding for me,thank you!
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.

goldnbones
(06/04/2000; 23:03:09 MDT - Msg ID: 31822)
money, money, money
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.
Gandalf the White
(06/04/2000; 23:07:38 MDT - Msg ID: 31823)
Beesting's confusion!
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?
<;-)
Strad Master
(06/05/2000; 00:30:20 MDT - Msg ID: 31824)
ss of nep
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.

Strad Master
(06/05/2000; 00:44:34 MDT - Msg ID: 31825)
Java Man
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.
YGM
(06/05/2000; 00:46:17 MDT - Msg ID: 31826)
SHIFTY
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
Strad Master
(06/05/2000; 00:47:40 MDT - Msg ID: 31827)
Leland
SurpriseI had no idea you've heard my recording of the Tchaikovsky concerto! How sweet of you to mention it.
Topaz
(06/05/2000; 01:45:24 MDT - Msg ID: 31828)
All
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!
Hill Billy Mitchell
(06/05/2000; 04:21:29 MDT - Msg ID: 31829)
Journeyman (6/4/2000; 21:16:26MT - usagold.com msg#: 31818)

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
Canuck
(06/05/2000; 05:00:42 MDT - Msg ID: 31830)
Trade Deficit
@ All,

I haven't seen the April trade number, anyone?

TIA.
Leland
(06/05/2000; 05:21:32 MDT - Msg ID: 31831)
It's Getting Better...

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.)
Aragorn III
(06/05/2000; 05:27:02 MDT - Msg ID: 31832)
Extending the Foundation built Friday and Saturday as prompted by ORO and Journeyman
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?
Aragorn III
(06/05/2000; 05:33:44 MDT - Msg ID: 31833)
Canuck, for that you must wait yet two more weeks
got patience?
Black Blade
(06/05/2000; 05:53:12 MDT - Msg ID: 31834)
Morning Wakeup Call!
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.
Gandalf the White
(06/05/2000; 07:38:56 MDT - Msg ID: 31835)
Jump Spot , JUMP !!
http://www.forextrading.com/forexartists/page1.htmWatch Spot JUMP !
<;-)
Mr Gresham
(06/05/2000; 07:51:22 MDT - Msg ID: 31836)
Derivatives
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.)



SHIFTY
(06/05/2000; 08:00:06 MDT - Msg ID: 31837)
YGM
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 !!
YGM
(06/05/2000; 08:29:50 MDT - Msg ID: 31838)
I'm Not Alone In My Optimisim....
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



YGM
(06/05/2000; 08:40:45 MDT - Msg ID: 31839)
SHIFTY.......FOA.
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.
beesting
(06/05/2000; 09:36:36 MDT - Msg ID: 31840)
Sir Gandalf the White #31823

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.
ORO
(06/05/2000; 09:39:54 MDT - Msg ID: 31841)
FOA - losing by winning, a note to Aragorn, comments
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.


USAGOLD
(06/05/2000; 09:46:26 MDT - Msg ID: 31842)
Today's Gold Report: D-Day (Derivatives' Day) Looms
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.
Canuck
(06/05/2000; 10:20:00 MDT - Msg ID: 31843)
@ Aragon III
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

TownCrier
(06/05/2000; 10:30:46 MDT - Msg ID: 31844)
Four, count them, F-O-U-R new additions to the Gilded Opinion
http://www.usagold.com/THEGILDEDOPINION.html...added over the course of Saturday and this morning. You've got some reading to do, folks.
YGM
(06/05/2000; 11:16:06 MDT - Msg ID: 31845)
This Gentleman Should Be.......
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.

Leland
(06/05/2000; 11:49:47 MDT - Msg ID: 31846)
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.)
Leland
(06/05/2000; 12:18:57 MDT - Msg ID: 31847)
Impressive Gains Today!


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.)
Christopher
(06/05/2000; 12:39:58 MDT - Msg ID: 31848)
YGM
Hello YGM,
Are you doing any hiring for your operation?
RS
(06/05/2000; 12:52:48 MDT - Msg ID: 31849)
YGM re: Congressman Ron Paul for President ........... sign me up!
YGM sir, what a concept!
CONGRESSMAN RON PAUL FOR PRESIDENT !!!!

I'll go door-to-door, stuff envelopes, whatever it takes.

goldhunter
(06/05/2000; 13:15:31 MDT - Msg ID: 31850)
Who wants to be a bullionaire?
http://www.usagold.comGold (both kinds) finished with a rally again today...looks good on the chart.
schippi
(06/05/2000; 14:06:12 MDT - Msg ID: 31851)
Select Gold Hourly Chart
http://www.SelectSectors.com/agpmp70.gifSelect Gold ( FSAGX ) moving Up!
Leland
(06/05/2000; 14:56:59 MDT - Msg ID: 31852)
This on from "NJ" at Kitco -- Too Bad The Article Does Not Mention The Safety of Bullion

"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.)
R Powell
(06/05/2000; 15:21:32 MDT - Msg ID: 31853)
Volume and open interest totals
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!!
YGM
(06/05/2000; 15:23:47 MDT - Msg ID: 31854)
Some Replies.....
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"....
Leland
(06/05/2000; 15:38:06 MDT - Msg ID: 31855)
I Am Completely Confused ... BIS Suggested the Japanese LOWER Their Interest Rates
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".
Leland
(06/05/2000; 15:45:23 MDT - Msg ID: 31856)
YGM, I Don't Know, BUT, I Intend to Get More Familiar With Him
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.)
Leland
(06/05/2000; 16:42:54 MDT - Msg ID: 31857)
"I Am Completely Confused ..."
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!
ORO
(06/05/2000; 16:49:26 MDT - Msg ID: 31858)
Leland - computing the BIS
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!

Leland
(06/05/2000; 16:58:39 MDT - Msg ID: 31859)
But (ahemm), Oro, Are They Not Trying to Destroy the U.S. Dollar?
.
Leland
(06/05/2000; 18:01:19 MDT - Msg ID: 31860)
I Have Seen the Banks Close...1934...I Guess I'll Live to see This Again
.
aurelius
(06/05/2000; 18:12:38 MDT - Msg ID: 31861)
question about gold coin storage
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?
Leland
(06/05/2000; 18:21:14 MDT - Msg ID: 31862)
Aurelius, Who's to Know...But Just Remember, You Become a "Shareholder" if the Bank Fails
I post too much.
aurelius
(06/05/2000; 18:29:17 MDT - Msg ID: 31863)
can I legally store bullion coins currently being issued by USA in safety depositi box?
www.usagold.comcan current bullion coins issued by the US mint be legally stored in a bank safety deposit box?
ORO
(06/05/2000; 18:40:41 MDT - Msg ID: 31864)
Leland - not exactly
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.
PH in LA
(06/05/2000; 19:18:13 MDT - Msg ID: 31865)
Questions for ORO
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.
Canuck
(06/05/2000; 19:29:22 MDT - Msg ID: 31866)
@ ORO
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
Canuck
(06/05/2000; 19:33:23 MDT - Msg ID: 31867)
@ PH
You dog, you asked ORO the 'punchline' question moments before me.

Kudos to you!
ORO
(06/05/2000; 19:42:20 MDT - Msg ID: 31868)
Canuck - not as hard
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"...



JCTex
(06/05/2000; 19:59:00 MDT - Msg ID: 31869)
aurelius (06/05/00; 18:12:38MT - usagold.com msg#: 31861)
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.
Canuck
(06/05/2000; 20:02:24 MDT - Msg ID: 31870)
From another site......our friend Richard
(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?

SHIFTY
(06/05/2000; 20:05:33 MDT - Msg ID: 31871)
NY Ponzi
Nasdaq 3,821.76 + Dow 10,815.3 = 14,637.06 divide by 2 = 7,318.53 Ponzi

UP 14.46 ponzi points
Canuck
(06/05/2000; 20:29:38 MDT - Msg ID: 31872)
@ ORO
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.
ORO
(06/05/2000; 20:37:33 MDT - Msg ID: 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.

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.


Leland
(06/05/2000; 20:46:28 MDT - Msg ID: 31874)
Who Else But Oro Could Express it Like This??!!
"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.!
elevator guy
(06/05/2000; 21:24:52 MDT - Msg ID: 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

Thanks
ET
(06/05/2000; 21:55:11 MDT - Msg ID: 31876)
PH

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.
Leland
(06/05/2000; 22:05:05 MDT - Msg ID: 31877)
Unless There is an Error, Comex "Received", "Withdrawn", Shows That it's All a Paper Game
http://www.futuresource.com/cgi-bin/art?000605/144906.
pdeep
(06/05/2000; 22:12:15 MDT - Msg ID: 31878)
Austrian Economics
http://www.newaus.com.au/econ155us.htmlA short but sweet article on inflation/deflation by a modern thinker of the Austrian school.
pdeep
(06/05/2000; 22:22:01 MDT - Msg ID: 31879)
Message Volume om Gold Equities
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.
Black Blade
(06/05/2000; 22:22:51 MDT - Msg ID: 31880)
ORO and Canuck Re; Credit Cards
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 ;-)
Leland
(06/05/2000; 22:53:56 MDT - Msg ID: 31881)
A Message From the REAL WORld...This was Picked-off Kitco
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.)
schippi
(06/05/2000; 23:13:57 MDT - Msg ID: 31882)
Gold Index Chart
http://www.SelectSectors.com/gldindx.gif Major Gold Indexes moving Up!
Jason Happy
(06/05/2000; 23:20:13 MDT - Msg ID: 31883)
THE PROTOCOLS of the LEARNED ELDERS of ZION
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.
sourdough
(06/05/2000; 23:39:18 MDT - Msg ID: 31884)
Canadians, GATA Needs help (what did you do in the war daddy?)
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.
YGM
(06/05/2000; 23:42:37 MDT - Msg ID: 31885)
Good to see Gold Trade Sideways......
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
THX-1138
(06/05/2000; 23:47:32 MDT - Msg ID: 31886)
Regarding Credit Cards
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.
YGM
(06/05/2000; 23:55:44 MDT - Msg ID: 31887)
sourdough..
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.
Turnaround
(06/06/2000; 00:07:11 MDT - Msg ID: 31888)
baton twirling
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.

YGM
(06/06/2000; 00:30:58 MDT - Msg ID: 31889)
Sourdough....
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
YGM
(06/06/2000; 01:56:30 MDT - Msg ID: 31890)
Stuff LikeThis Can Cost Sleep.....
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
Black Blade
(06/06/2000; 05:22:47 MDT - Msg ID: 31891)
Barbarous relics on tour in USA
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!
Black Blade
(06/06/2000; 06:34:13 MDT - Msg ID: 31892)
Morning Wakeup Call!
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!




Rugen
(06/06/2000; 07:09:58 MDT - Msg ID: 31893)
YGM 31890
I sent one to the SNB
Gandalf the White
(06/06/2000; 07:24:46 MDT - Msg ID: 31894)
WOWSERS ! See Spot JUMP !!
WE HAVE BLASTOFF !
a $5 up move already.
<;-)
wolavka
(06/06/2000; 08:06:04 MDT - Msg ID: 31895)
gold
will continue up
JCTex
(06/06/2000; 08:29:00 MDT - Msg ID: 31896)
BIS warning
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.
sourdough
(06/06/2000; 08:38:21 MDT - Msg ID: 31897)
YGM LETTER
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.
ORO
(06/06/2000; 09:12:33 MDT - Msg ID: 31898)
Smoke = liquidity dries up
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.

YGM
(06/06/2000; 09:17:46 MDT - Msg ID: 31899)
sourdough....
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......
USAGOLD
(06/06/2000; 09:28:43 MDT - Msg ID: 31900)
Today's Gold Report: Gold Sharply Higher on Short Covering
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.
YGM
(06/06/2000; 09:37:39 MDT - Msg ID: 31901)
WILLIAM HAGUE
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

The Invisible Hand
(06/06/2000; 10:06:34 MDT - Msg ID: 31902)
present gold rise in (euro-) perspective
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?
lamprey_65
(06/06/2000; 10:29:29 MDT - Msg ID: 31903)
Reasons for the current move in POG
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.
sourdough
(06/06/2000; 10:36:23 MDT - Msg ID: 31904)
GOLD DERIVATIVE BANKING CRISIS
http://business-times.asia1.com.sg/2/views.htmllET`S TAKE IT TO ASIA.
LINK TO SINGAPORE BUSINESS TIMES.
Hudson
(06/06/2000; 10:56:01 MDT - Msg ID: 31905)
Accounting Changes
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
Mr Gresham
(06/06/2000; 11:19:42 MDT - Msg ID: 31906)
Old Books vs. Current Rulers
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?


goldhunter
(06/06/2000; 11:35:10 MDT - Msg ID: 31907)
@Hudson...hedging
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.
beesting
(06/06/2000; 11:54:33 MDT - Msg ID: 31908)
@ Sir Turnaround # 31888---Who owns all the Stock Shares?

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.
wolavka
(06/06/2000; 12:05:02 MDT - Msg ID: 31909)
ecb rate hike
getting interesting; could start seeing overnite moves in overseas mkts for gold.

forerunner for comex spikes.
Hudson
(06/06/2000; 12:25:25 MDT - Msg ID: 31910)
Thank you goldhunter
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
Henri
(06/06/2000; 13:46:03 MDT - Msg ID: 31911)
A new Bretton Woods????
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?
YGM
(06/06/2000; 14:20:44 MDT - Msg ID: 31912)
WILL THERE BE RESPONSES or IS THIS AN OFFFENSIVE POST......
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


TownCrier
(06/06/2000; 16:06:23 MDT - Msg ID: 31913)
Goings on across the pond...on the OTHER continent
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.
R Powell
(06/06/2000; 16:24:20 MDT - Msg ID: 31914)
Options liability
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.
R Powell
(06/06/2000; 16:31:55 MDT - Msg ID: 31915)
More short covering on Monday?
COMEX numbers for Monday 6/5/00 Volume= 36,079
Open Interest= 144,148
Change in Open Interest= down 6,029
YGM
(06/06/2000; 16:45:20 MDT - Msg ID: 31916)
Clarification...
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.
pdeep
(06/06/2000; 17:55:09 MDT - Msg ID: 31917)
Gold Equities Message Volume
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.
HI - HAT
(06/06/2000; 18:35:16 MDT - Msg ID: 31918)
Anti - Fabian Fascist - Trust
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.
SHIFTY
(06/06/2000; 19:31:39 MDT - Msg ID: 31919)
NY Ponzi
Nasdaq 3,756.37 + Dow 10,735.57 = 14,491.94 divide by 2 = 7,245.97 Ponzi

Down 72.56 ponzi points
Canuck
(06/06/2000; 19:51:02 MDT - Msg ID: 31920)
B.I.S. and central banks warn of US dollar
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.



Canuck
(06/06/2000; 20:08:30 MDT - Msg ID: 31921)
Last post
"...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.
longj
(06/06/2000; 20:09:48 MDT - Msg ID: 31922)
HI-HAT anti-trust action against the FRB
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.
Hill Billy Mitchell
(06/06/2000; 20:12:37 MDT - Msg ID: 31923)
Official release
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
(06/06/2000; 20:13:22 MDT - Msg ID: 31924)
re-post, also for Jason Happy
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

Hill Billy Mitchell
(06/06/2000; 20:22:55 MDT - Msg ID: 31925)
Official release
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%)
Hill Billy Mitchell
(06/06/2000; 20:35:39 MDT - Msg ID: 31926)
Temperature inversion comparison

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
law
(06/06/2000; 20:47:31 MDT - Msg ID: 31927)
Bullion Banking Explained
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!
Ray Patten
(06/06/2000; 20:48:40 MDT - Msg ID: 31928)
Dear Wolavka:
You seem to have something valuable to say to us. Please give us more details of your thinking.
law
(06/06/2000; 21:03:38 MDT - Msg ID: 31929)
Bullion Banking Explained
MK Just realized something after posting this...this was not meant to be a form of advertising or soliciting...sorry!
law
(06/06/2000; 21:22:02 MDT - Msg ID: 31930)
To HBM....rate inversion of '89
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
Journeyman
(06/06/2000; 21:34:11 MDT - Msg ID: 31931)
Green cheese stinks @Leland (6/4/2000; 2:18:32MT msg#: 31774)

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.
ORO
(06/06/2000; 21:35:45 MDT - Msg ID: 31932)
Fed running out of stuff to sell abroad
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.

Hill Billy Mitchell
(06/06/2000; 21:51:40 MDT - Msg ID: 31933)
@ law (06/06/00; 21:22:02MT - usagold.com msg#: 31930)
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
Farfel
(06/06/2000; 22:03:34 MDT - Msg ID: 31934)
Merrill Lynch Vs. the Bullion Banks?
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*
law
(06/06/2000; 22:07:54 MDT - Msg ID: 31935)
HBM...recession of '90/91
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
ORO
(06/06/2000; 22:34:13 MDT - Msg ID: 31936)
Farfel, thanks for sp
Thanks for sp on Merrill.

Do you think the Fed additions to reserves were related to the NASDAQ rebound of the same time?

law
(06/06/2000; 22:45:29 MDT - Msg ID: 31937)
Debt
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

ORO
(06/06/2000; 22:47:48 MDT - Msg ID: 31938)
Farfel - selling enough
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.

Leland
(06/06/2000; 22:55:09 MDT - Msg ID: 31939)
Journeyman, Your Msg.#31931
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.
ORO
(06/06/2000; 23:08:29 MDT - Msg ID: 31940)
law - Fed reserves
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.
law
(06/06/2000; 23:50:04 MDT - Msg ID: 31941)
ORO...Weiss report
http://www.martinweiss.comORO...this is by subscription...password changes monthly.
If still interested contact me via email...law@fullnet.com.
ORO
(06/06/2000; 23:50:51 MDT - Msg ID: 31942)
law - Forcing the Fed's hand
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....
Jason Happy
(06/06/2000; 23:57:02 MDT - Msg ID: 31943)
Conspiracy Theories
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

Jason Happy
(06/07/2000; 00:19:40 MDT - Msg ID: 31944)
Gold Derrivative Banking Crisis in the Protocols?
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.

law
(06/07/2000; 00:52:14 MDT - Msg ID: 31945)
ORO...inflation vs destruction of the system
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
Elwood
(06/07/2000; 02:11:08 MDT - Msg ID: 31946)
law (06/06/00; 22:45:29MT - usagold.com msg#: 31937)
----"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.
TEX
(06/07/2000; 02:16:12 MDT - Msg ID: 31947)
Jason Happy
Un-huh........All I want to know is why the Kitco chart always takes a little dip early in the London market?
Topaz
(06/07/2000; 03:58:59 MDT - Msg ID: 31948)
wolavka (06/06/00; 12:05:02MT - usagold.com msg#: 31909)
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!!!
schippi
(06/07/2000; 03:59:39 MDT - Msg ID: 31949)
Useful Gold Indexes
http://www.SelectSectors.com/gldindx.gif XAU, HUI, GOX, FSAGX Chart
Each Index is in a strong Uptrend
wolavka
(06/07/2000; 04:36:14 MDT - Msg ID: 31950)
coming soon: increase in margin at comex
watch for massive increase in margin requirements at comex.
wolavka
(06/07/2000; 05:58:44 MDT - Msg ID: 31951)
new rules
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.
Black Blade
(06/07/2000; 06:32:27 MDT - Msg ID: 31952)
Morning Wakeup Call!
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.

Leland
(06/07/2000; 06:36:14 MDT - Msg ID: 31953)
Congratulations to Michael!
http://www.thebulliondesk.com/News.aspClick on "USAGOLD".
Leland
(06/07/2000; 06:59:27 MDT - Msg ID: 31954)
Stolen From GOLD-EAGLE
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!
Richard640
(06/07/2000; 08:08:13 MDT - Msg ID: 31955)
PROTOCOLS OF THE ELDERS OF ZION ???
Who's the braintrust that posted this great literary work? he's got a lot of class....all low---
Cavan Man
(06/07/2000; 08:35:49 MDT - Msg ID: 31956)
Richard 640
Ditto for me--nitwittery!
USAGOLD
(06/07/2000; 08:44:05 MDT - Msg ID: 31957)
Today's Gold Report: Corrective Medicine but Overall Bullish Tone
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.
USAGOLD
(06/07/2000; 08:51:08 MDT - Msg ID: 31958)
Here's that link to the Central Banking page. . .
http://www.usagold.com/centralbank/current.htmlHave a look. . .
Goldilocks
(06/07/2000; 09:14:53 MDT - Msg ID: 31959)
Test
Test
Leland
(06/07/2000; 09:24:07 MDT - Msg ID: 31960)
From Colin J. Seymour (London)
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.)
Leland
(06/07/2000; 09:50:09 MDT - Msg ID: 31961)
(No Subject)
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)
YGM
(06/07/2000; 09:59:09 MDT - Msg ID: 31962)
GATA...GDBC Report
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.
Journeyman
(06/07/2000; 10:06:03 MDT - Msg ID: 31963)
Synergy @ALL
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
wolavka
(06/07/2000; 10:06:06 MDT - Msg ID: 31964)
crb just getting started
natural gas in short supply...


grains need storage and need to be dried...

opportunity knocking...

watch china and taiwan gold buyers
YGM
(06/07/2000; 10:07:10 MDT - Msg ID: 31965)
Richard 640
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
(06/07/2000; 10:42:33 MDT - Msg ID: 31966)
Hedges Ore Edges
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"
YGM
(06/07/2000; 11:34:10 MDT - Msg ID: 31967)
Gold Inching Back
EURO holding @ $0.96The playing field is leveling, still 23 days in June... and lots can and is happening in our favor...Ken
TownCrier
(06/07/2000; 11:51:27 MDT - Msg ID: 31968)
Nice timing on this gold price rally for the Europeans
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.
YGM
(06/07/2000; 12:09:42 MDT - Msg ID: 31969)
As I take my Leave.......
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.


TownCrier
(06/07/2000; 12:10:58 MDT - Msg ID: 31970)
Update to The Week in Gold--Commentary by the World Gold Council
http://www.usagold.com/wgc.htmlOf note in this week's report regarding factors affecting last week's gold market:

"The strength of the dollar, which had contributed to the recent weakness in gold, was the main focus of attention...[BUT] The market's perception of the dollar, which has been such a negative factor for gold in recent weeks, appears to have changed to gold's benefit."

Also:

"The latest statistics published by the Commodity Futures Trading Commission illustrate the heavy levels of speculative short-selling that occurred over the second half of May. Consequently, during the two weeks ended May 30 the net short position of the large speculators on Comex rose sharply from 29,530 contracts (equivalent to 91.8 tonnes) to 40,624 contracts (126.4 tonnes), at which point open interest stood at 159,156 contracts. The more recent short covering that was triggered towards the end of the week saw open interest drop back to 150,177 contracts in response."

Click the link provided to review the whole commentary. It won't take long, and is completely painless.
Peter Asher
(06/07/2000; 12:17:01 MDT - Msg ID: 31971)
Holtzman (6/7/2000; 10:42:33MT - usagold.com msg#: 31966)
This is a superb, comprehensive, easily understandable depiction of the Gold hedging world.

To the Hall of Fame with it!!!

Addendum:

My sense of the Ashanti debacle was that they got themselves into a contract that required additional cash collateral in the form of a margin call to secure against the risk they might not be able to deliver ore in the situation of Gold being more costly to the contract writers than the price Ashanti was commited to.
Peter Asher
(06/07/2000; 12:23:05 MDT - Msg ID: 31972)
Breakout confirmed!
YGM (6/7/2000; 12:09:42MT - usagold.com msg#: 31969)
The long awaited turn around in the Gold market was technically confirmed today by the news that USA Gold's "Yukon Gold Miner" was returning to the field to resume production.
RS
(06/07/2000; 12:33:07 MDT - Msg ID: 31973)
YGM........ we look forward to your safe return.
Best wishes...
Take good care of yourself and keep your powder dry.



Cage Rattler
(06/07/2000; 13:22:19 MDT - Msg ID: 31974)
Dollar/SDR
Currently $/SDR is at around 1.3380. For two and a half months this year this rate was tightly locked between 1.34 and 1.35. It bottomed out at virtually the same level as that of ten years ago and has now recovered to virtually the same range. Will the "powers-that-be" decide to try to lock it once again? It would certainly suit Europe - not sure how strong growth will be, the US - not sure how strong the slowdown will be, and Japan who are always looking for stability.
Usul
(06/07/2000; 13:50:00 MDT - Msg ID: 31975)
Benny Hill
Sir Holtzmann... Now that you mention it, I vaguely
recall the saying!!!

A toast... to Absinthe friends! (Including YGM)
Usul
(06/07/2000; 13:52:19 MDT - Msg ID: 31976)
Um... Sir Holtzman (sorry about the superfluous 'n')
Usul
(06/07/2000; 14:03:40 MDT - Msg ID: 31977)
The Protocols & Free Speech
http://www.adl.org/frames/front_Online_Booksellers.html"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." - Jason Happy (06/06/00; 23:57:02)

Freedom of speech is something I think most people here
hold dear- to talk about gold, that which statists fear.

Many people however consider the Protocols reprehensible
and recall that many books were burned by the Nazis in
the 1930s.

ADL (link above) believes that "in a free, democratic
society, books should not be banned, no matter how
reprehensible they are."

"on-line booksellers... have agreed to place prominently on
their web sites ADL's statement that The Protocols is an
anti-Semitic forgery circulated by Czarist secret police at
the turn of the last century. This statement points out that
"The Protocols has been a major weapon in the arsenal of
anti-Semites around the world, republished and circulated
to convince the gullible as well as the bigoted that Jews
have schemed and plotted to take over the world." "
Usul
(06/07/2000; 14:20:35 MDT - Msg ID: 31978)
Protocols & Gold Derivatives
http://motlc.wiesenthal.com/pages/t062/t06262.htmlThe Simon Wiesenthal Center says it is "A forged document
that reveals the supposed Jewish plan to take over the
world, under the rule of a Jewish conspiracy. It first
appeared in the US and Britain in the 1920s, and was used as
a Nazi "warrant" for exterminating Jews. The "Protocols"
continues to be published today to foster hatred of Jews"

One does not need this sort of thing to examine the
potential for a gold derivatives explosion. The gold
short overhang, deficit of demand over mine supply,
etcetera has been thoroughly looked into by GATA,
Frank Veneroso and others, see for example:

http://www.gata.org/Essays/Scandal_Gold/scandal_gold.html

See also on USAGOLD:
http://www.usagold.com/ANOTHER_PAGE.html
"6/24/98 ANOTHER (THOUGHTS!)
Mr. Murphy, I read at USAGold the "Frank Veneroso's Gold
Commentary & Central Bank Watch" with much interest. It is
good to see this market thru the eyes of others...
What cannot be seen is the "currency of gold" in the form of
"derivative positions "market. The "supply and demand" in
this trade, it is much different, yes? Many of these
"positions" find not a beginning in the mine industry, but
they do make the physical dollar price of the metal "much
different"... "
Usul
(06/07/2000; 14:32:04 MDT - Msg ID: 31979)
Protocols are a hoax, detailed article, Nazi Gold Hunt....
http://www.adl.org/frames/front_protocols.html"The Protocols of the Learned Elders of Zion:
A Hoax of Hate
1 - Introduction
Origins of the Protocols
2 - The Hoax Spreads
3 - Contemporary Re-Emergence
4 - Widespread Condemnation
5 - Conclusion
It is a classic in paranoid, racist literature. Taken by the
gullible as the confidential minutes of a Jewish conclave
convened in the last years of the nineteenth century, it has
been heralded by anti-Semites as proof that Jews are
plotting to take over the world."

Remember all that Nazi gold that allegedly got mixed up with
central bank stockpiles...

Could stories about Nazi gold and other related subjects be
part of a campaign to discredit gold as an alternative
investment? You know how touchy some investors can be...

Funny how searches on "Nazi gold" seem to come up with dates
of 1997 and after... could be a statistical fluke, or could
it be related to stock market weakness since 1997 (when the
Asian financial crisis started).

OK, the WWW hasn't been around since 1949, but isn't 50
years after the event a bit odd for a sudden burst of Nazi
Gold investigation fever? Is the delay in declassification
of documents a credible explanation?

http://www.expressindia.com/ie/daily/19970514/13450683.html
Wednesday, May 14 1997
"The Swiss are in a dilemma over the damaging 200-page
report released this week by the US government which
documents the fate of Nazi German gold stolen from occupied
countries..."
Christopher
(06/07/2000; 14:38:05 MDT - Msg ID: 31980)
YGM
Good Luck Yukon, Wherever you are....
Wish I was goin' with ya.
Usul
(06/07/2000; 14:41:02 MDT - Msg ID: 31981)
Gold is honest money
http://www.letsfindout.com/subjects/events/dachau.htmlGold is no-one's debt. Hold physical gold, and its value
depends not on the confidence in a bank number game. It
has served many in extremis through history. Do bad guys
want to get their hands on gold? You bet- Let us hope that
the message at USAGOLD reaches the good guys.

"Then they were crammed into gas chambers and killed by pumping truck
exhaust into the rooms. But that was found to be too inefficient, and
later they were killed with cyanide gas.

The Nazi guards then went to work with pliers, pulling gold fillings out
of the mouths of the dead..."
R Powell
(06/07/2000; 15:08:46 MDT - Msg ID: 31982)
Volume and open interest for 6/6/00
Volume= 41,209

Open interest= 140,841

Change in open interest= down 3,307

Probably short covering. It would be encouraging to find open interest increasing on days when POG rises indicating new long positions. This may happen if POG continues upward and may tell us when the "shorts" have covered and decide to go "long"

YGM, I wish for you both the pleasure of the quest and a overflowing poke. Suggestion- keep a journal!
Usul
(06/07/2000; 15:08:53 MDT - Msg ID: 31983)
How did Nazis get their hands on gold?
http://www.ess.uwe.ac.uk/genocide/appropriation.htmHow did Nazis get their hands on gold?
Looting... theft... robbing the dead at Dachau. I have been to Dachau, and the Yad Vashem memorial at Jerusalem.
http://home.vicnet.net.au/~aragorn/holocaus.htm
Anyone who has the opportunity should
go to such a place to learn the lessons of the past.

It is important to differentiate between gold, which is
neutral as a repository of wealth, and the character of
its owner, which may be anything in human nature. The
idea that gold as an investment class is in any way
wrong just because some bad guys acquired some of it
in an immoral way is preposterous. The number of good
owners of gold through history far outweighs the number
of bad. As a matter of fact, the money-making mania
in the stock markets has attracted a criminal element
and corruption amongst the companies that deal with stocks.
See "Boiler Room" and other antics.
Beware the propaganda war against gold. They are trying
to manipulate your perception.
Usul
(06/07/2000; 15:14:09 MDT - Msg ID: 31984)
Modern Anti-Semitism & Gold Grabbers
http://remember.org/History.root.modern.htmlI hope that the appropriation of gold by means as used by
the Nazis in WWII will never again be attempted. Yet
there are movements today whos behaviour mimics the
early years of Nazism. Taken to its logical conclusion,
they will have your gold, unless you are one of their
cookie-cutter aryan footsoldiers.

"The Protocols of the Elders of Zion and anti-Semitic
theorists promoted increased hatred of the Jews which served
as the prelude to the Nazi views about them...

It was not until 1921 that a London Times newspaper reporter
uncovered that the story described in The Protocols was a
direct plagiarism of two obscure fictional works,
one a satire on Napoleon by a French writer, Maurice Joly,
and the other a story by Herman Goedsche. The damage,
however, could not be erased. The Nazis relied on The
Protocols to justify persecution of the Jews, and the
worldwide publication of the document persisted in fanning
the flames of anti-Semitism years after the hoax of
this forgery was proven. It is still possible to find copies
of The Protocols today, as it remains one of the most
popular tracts for distribution by individuals and groups
which hate Jews."
Cavan Man
(06/07/2000; 15:14:11 MDT - Msg ID: 31985)
Usul
Thank you for the running commentary. I am enjoying it immensely. Also, I stand with the Jews.
ORO
(06/07/2000; 15:27:09 MDT - Msg ID: 31986)
law, Bullion banking - CPM article by JM Christian on the resource investor - comments
http://www.thebullandbear.com/resource/RI-archive/0300-bullion.htmlThe article is correct but does not address the real issue. It makes the following points:

1. Gold loans do not necessarilly involve physical gold. Actually, they don't involve any gold at all until the mine delivers. As a currency, it is a unit of account and a denominator of debt. Just as dollars are created as a result of loans, so does fiduciary/paper gold form as a result of such lending.

2. The system is a fractional reserve gold banking with most participants having a "loading" of 5-10 and some having up to 40. Loading is the reverse of reserves (nice letter play there):
Loading__Reserve
5________20%
10_______10%
40_______2.5%

3. No physical gold need change hands in order for these banks to trade it in fiduciary form. All traders within the system know this but don't realize the consequences.

4. The core asset used for trading purposes is the gold reserve in unallocated gold accounts. - These are demand accounts payable in gold. Since for ages more gold has been put into these accounts than has been taken out, the whole of the gold trading system is viable only because of this phenomenon. This is what is missing from the article and from trader's perspectives; that the system is built on confidence in what has to be only a temporarilly liquid fractional reserve system very much susceptible to a bank run.

5. As demonstrated with the silver strategy in the article, the bank can use the physical silver so many times over in trade, that it preffers having to buy silver at $6 and roll over a derivative worth $1 because at a reserve ratio of 10%, it can write $60 worth of silver contracts which translate into at an interest rate of 5% or 8%, to $3 or $4.8 in interest revenue (not necessarilly income, because they also pay interest), and $1.2 minimum in fees and commissions. So putting a $1 profit on a derivative at risk is much better than losing out on anything from $2 to $6 in revenue and possibly over $2 in income.

There are a few things missing in the analysis in that in a precise description of a highly leveraged gold banking system it does not consider that ALL such systems in history have broken down due to either (or all) of the following: (a) New production being insufficient to supply interest and principal payments due. (b) Deliberate or accidental large withdrawals bring the bank to illiquidity that can not be ameliorated by borrowing from other banks. (c) Each bank thinks the other has ample reserves and sells its own reserves assuming the availability of borrowed reserves, thus resulting in a situation where no substantial reserves can be had in the whole of the system. (d) Same as c, but with a central bank gold reserve being considered available, while history has shown that central banks will immediately cease lending gold at the first sign of market illiquidity - which is exactly when the bullion banks need the central bankers to provide permanent or temporarty reserves. The central banker's solution has allways been to change the rules so that banks can pay off contracts in fiat currency rather than in the contracted precious metal. Often, they took for themselves what remaining reserves were available, and to boot, took whatever other precious metal was known to them and within their reach. Central banks are created in the interest of and at the sufferage of government and it can take away the charter or nationalize the central bank much more easilly than it was to create the central bank.

As to proportions, banks hedge currency accounts with net outstanding derivatives at a 1:1 ratio in the international currency/debt markets, but for the dollar which is double hedged at 2 derivatives to one Eurodollar on account. The reason being that each Eurodollar in an account must be guaranteed by a derivative issued by a Federal Reserve System member because this is the official reserve currency.

At a factor of 1, net gold derivatives notional value of 26000 tonnes implies a 26000 tonne gold liability in unallocated gold accounts at banks. The 26000 tonnes would join another 70-75% (derived from a correlation which I will not detail here) of the 26000 tonnes in these derivatives being bank's short positions of 20000 tonnes, and long positions of 6000 tonnes, giving a net liability of 14000 tonnes stemming from derivatives, and a total net liability of 40000 tonnes.

The gross liability is unknown, but a rough estimate can be made using other currency data showing that banks have interbank commitments of roughly 40% additional units of currency on deposit. The trade volumes of currency to outstanding currency accounts and to economic (rather than financial) trading are also telling in that they show turnover of about 50:1 relative to accounts outstanding, and that economic trade sits at a ratio of 1.25 to outstanding accounts in dollars, and 0.8 on total currency (of which about 80% is double counted) providing a net of 1.4 as the ratio. Using this ratio, the outstanding gross gold commitments in the banking system would be about 56000 tonnes.

I believe that the reserve is on the order of 6000 tonnes (equivalent to the net long position estimated), though it probably fluctuates wildly according to withdrawals and deposits of large players.

The main point that the gold watchers are making from outside the trade, is that there is a constant supply of gold to fill a physical supply/demand deficit, which has accumulated, according to Frank Veneroso's estimates, to something over 10000 tonnes. Going back further (though with only a finger to the wind estimate) and projecting to the end of this year, 16000 tonnes in cumulative supply should have come out of gold reserves backing the unallocated gold accounts and the derivatives. This is the only possible source but for central bank lending. Why? because central bank books in total do not show any net reduction in holdings over the past 20 years. The only major official report showing a drawdown is the NY Fed's earmarked gold account, which only saw draws of substantial quantities in 1995-1997 (1000 tonnes) and after the WA (estimated at 800 tonnes to date) during 1995-2000.

See
http://www.bog.frb.fed.us/releases/Bulletin/1299pg51.pdf

This is all an attempt at estimating the actual ammouts of outstanding gold liabilities in the banking sector. I have many questions left unanswered from this and previous estimate attempts.

Final comment on the article is that the article ignores both the obvious historical standing of precious metals as money and that it is the only significant holding of central banks that they have NOT sold under any but the most dire circumstances; war, economic collapse, government default. Obviously the role of gold in inter-governmental settlements and large scale global commerce is much greater than the traders of the day to day gold market comprehend.

They will soon have a crash course.

These liabilities are the fiduciary gold assets of many large investors and many more small ones. The bulk of the gold market effect of gold banking is in the illusory assurance these fiduciary gold assets provide to investors who preferred them to the physical metal holding. As they will find out soon enough, the main reason to hold physical gold and to invest in gold is to avoid the default of the banking system.

During inflation it defaults on the value of the fiduciary gold. Once inflation of paper gold ceases, the bank will also stop payments of gold according to contract. Even if the bank wanted to actually pay out (which is much in doubt), it could not.

The investor in bank's fiduciary gold obligations will find that he has gained no long term benefit that could be had with physical gold, and has lost the whole of the protection against default that physical gold provides.
Usul
(06/07/2000; 15:41:00 MDT - Msg ID: 31987)
Gold has intrinsic value
http://www.warwick-castle.co.uk/information/events.htmlWhat is the difference between gold, and paper dollars,
pounds, yen, francs etc., or gold and "golden dollars"
made of base metals and costing a few cents? The big
one is intrinsic value. If you exchange gold for goods,
the trade is the goods' intrinsic value against gold's
intrinsic value, arrived at by mutual agreement. It's not
what is written on the coin. In the long run, the rate
of production of gold is pretty low and at current
population growth, surely the ratio of gold to people is
decreasing? Paper money and base metal however can be
produced in as large a quantity as is required, and it
requires a massive overbearing government organisation
to prevent it running away... sometimes failing due to
socio-political events (inevitably, in the long run).
Why should the people of a country have their means of
exchange and storage of value inflated away because their
political leadership finds itself at odds with the rest
of the world? Those that have gold insulate themselves
from these events.

Recently, fellow Knights, I attended Warwick Castle, where
I saw jousting knights in combat, and my children tried
their hand at the Mediaeval Festival games on the
River Island encampment.
http://www.warwick-castle.co.uk/information/events.html
To play the games, a player must change modern money (fiat)
for "groats", which are then offered to the game masters in
order to partake in the game.
The thought occurred to me as to how transient is the value
in the "groat", not precious as may have been in the real
past, but of some cheap alloy. Take it outside the castle
grounds, and its "value" disappears in an instant. But
how little difference there really is between this token
and "normal money". The coins in your pockets are tokens,
whose transient value depends not on the coin's tiny
metal value, but on an inflated value that depends on
being able to perpetuate its flow through the economy in
which it is a part. Fine- it works well in the short term.
But set aside a sum of money for many years and its value
will leak away, unless invested wisely. Hold those tokens
through economic or political disruption, and its value
will disappear like that of an alloy groat taken outside
the castle grounds. Fortunately such events are few and
far between, but as they say, it's the 2 percent that
kills you. As we stand at the end of a phenomenal bull
market in stocks, with massive debt creation, no savings,
a huge US trade deficit, an oil price that has risen 200%
in a year, an inverted yield curve, and impending slowdown
in economies and, to follow, falls in corporate profits,
the increasing risks of holding only transient-value money
should be clear. And- if, at the same time, gold's price
in dollars has bottomed?
Usul
(06/07/2000; 16:01:45 MDT - Msg ID: 31988)
The 30s
http://home1.gte.net/rroberg/30s.htmlThe 30s gave us the Great Depression, FDR, gold confiscation, the growth of Hitler, profound changes in
entertainment and fashion styles, the beginning of
television broadcasting, and many other significant changes
of which a substantial amount was positive. The crash
and depression and a World War hurt many, but was also, like
the great forest fires of nature, the opportunity for a new
beginning and a re-evaluation.

From the above URL:
"One of the most popular books was The Protocols of the
Elders of Zion. It was here that Hitler formulated his
belief that part of his mission was to rid the world of Jews"

Some escaped Nazi Germany with the aid of gold, that they
had held through the Depression years. It served them
well.

http://www.alphalink.com.au/~tzeriah/audreytest.htm
Audrey's Testimony - "gold pieces hidden in the heels of their shoes"
Usul
(06/07/2000; 16:41:57 MDT - Msg ID: 31989)
Gold & Propaganda
http://www.cjnews.com/pastissues/sept3-98/front2.htmFrench anti-Semitic Web site shut down by ISP
http://www.cjnews.com/pastissues/sept3-98/front2.htm

Directed anti-semitism is one thing, but as noted earlier,
a learned discussion of the questions raised by a document
such as the Protocols is more properly a matter for the
consideration of the value of free speech. Shutting down
a web site (perhaps as the result of complaints) should
be not so much a result of the presence of notorious
material, but the use to which it is put. Are there, in
fact, topics in that document that are relevant? The
best propaganda includes at least some material that is
true. There may well be groups that seek power and gain
using techniques such as those described. Personally,
I would rather look elsewhere for insight into what might
be happening in today's world that could influence the
distribution of gold- from weak hands to strong-
and there are many fine articles here that shed light
on things that would prefer to stay hidden. No source,
however, should be taken for granted, without careful
scrutiny and independent research.

Gold is the ultimate safe haven, and a rise in the price of
gold threatens the paper money system with its intimation
of inflation and suggestion that gold's stance has
changed from bear to bull. Common sense should indicate
that whenever means are available to hold the price of
gold down, whether propagandist or market operations,
they will be used:

http://www.bog.frb.fed.us/BOARDDOCS/TESTIMONY/19980730.htm
http://www.house.gov/banking/72498fed.htm
"Nor can private counterparties restrict supplies of gold,
another commodity whose derivatives are often traded
over-the-counter, where central banks stand ready to lease
gold in increasing quantities should the price rise."
- Alan Greenspan

http://www.fame.org/HTM/Why2_FOR%20HTM%20CONVERSION.htm
"Why the Gold Industry is Being Destroyed and What to Do About It"

However, history has shown us, for example, in currencies in
the Asian financial crisis, and in the exit of the British
Pound from European Monetary Union, that even governments
can not hold market pressures for ever.

Propaganda is just one of the tools that can be used against
gold. Looking at that another way, propaganda (jawboning)
can be used to support paper currencies- and has been,
frequently, by the Japanese on the Yen rate, by the US
Treasury ("a strong dollar is in the national interest")
and others. Its influence depends on the existence of
underlying supporting forces (for example, the success of
Nazi rhetoric depended on the underlying dissatisfaction
of the people with economic conditions). If the market
does not genuinely support the jawboning that is being
attempted, it will achieve only a temporary delay before
the market has its own way. To the wise, the appearance
of propaganda reveals the fears and intentions of those
who generate it.

http://vrml.ced.tcu.edu/docw/hitler.htm
"Hitler succeeded in linking these fears with anti-Semitism
and the traditional German fear of Bolshevism by calling on
a 1905 Russian forgery, "The Protocols of the Elders of Zion..."

http://pnews.org/art/3art/propcons.htm
"The Propaganda of Communications
David Icke... seems oblivious to the fact that it [The
Protocols] helped the Nazis justify the Holocaust: "Just
because Hitler used knowledge for negative reasons doesn't
reflect on the knowledge," he says. He dismisses the
overwhelming evidence that the Protocols are a concocted
forgery..."
Usul
(06/07/2000; 16:44:11 MDT - Msg ID: 31990)
Cavan Man
Thank you for your kind words!
John Doe
(06/07/2000; 16:59:45 MDT - Msg ID: 31991)
Money, Commerce, & Fraud

All true, productive commerce is essentially barter.

Money was invented to facilitate the transfer from one barter good or service to a "barter proxy" in lieu of another "immediately desirable" barter good or service. Beyond this function, money serves no useful (or honest) purpose whatsoever. Originally, money itself was essentially a barter good � a good that the vast majority of parties to a transaction accepted as a reasonable substitute for an "immediately desirable" item in barter exchange, e.g., gold, silver, or even yap stones. Money in this form is the "glue" that holds commerce together, sanctioning all phases of transaction in honesty and fairness. In this way, no one at any point in the barter loop was left holding the bag simply by elongating an exchange and exercising the relative convenience of holding money in place of additional goods.

Commerce is now held together with spit. All money held or in account is subject to unannounced, violent collapses in purchasing power at worst, or a slow erosion over time at best, trivializing the practice of savings for the purpose of self-sufficiency or capital formation. The essential barter characteristic of all commerce, apart from direct barter, has been disrupted by the substitution of a form of money that lacks any intrinsic value whatsoever, and the "accepted" value of that money is predicated upon an false assurance, a real threat, or both. Commerce in this form is simply legalized, coercive fraud conducted on a grand scale.

Fortunately, every fraud comes to light. Unfortunately, the bitter fruit of every fraud invariably accrues to the innocent. Governments were formed to prevent fraud, protect the innocent, and punish the fraudulent. From these basic actions, all governments derive their legitimacy. Without these, then, the threat of violence may be freely substituted as an alternative.
Cavan Man
(06/07/2000; 17:03:57 MDT - Msg ID: 31992)
Usul
An interesting book you might want on your bookshelf is "Legends, Lies and Cherished Myths of World History" by Richard Shenkman.

Page 232:

"In 1940 Hitler personally endorsed a proposal to deport all remaining Jews in Germany to the French island of Madagascar, off the coast of Africa, but the plan proved impractical. Because the British controlled the sea lanes, it couldn't be carried out".
jinx44
(06/07/2000; 17:41:18 MDT - Msg ID: 31993)
Usul and the rest....
Will you stop your whining about the jews and whether the POZ is this or that? This board stinks like kitco now with a bunch of peckerheads arguing about puerile crap. Take the protocals and change the word zion or jew and insert liberal socialist if that makes you feel better. It still reads the same way and shows without any doubt that there are people that want to rule the world through communism. I don't care what gene pool they slithered out of--I don't buy the communist socialist dogma. That was the point of the original posting anyway. You people read a few words and make up your mind too quickly. Your prejudice is irritating and pathetic. Go back to kitco or talk about gold.
Hill Billy Mitchell
(06/07/2000; 18:29:48 MDT - Msg ID: 31994)
Official release
http://www.bog.frb.fed.us/releases/H15/update/
Official: Federal Reserve Statistical Release

Release Date: June 7, 2000

Rates for Tuesday, June 6, 2000

Federal funds 6.47

Treasury constant maturities:
3-month 5.99
10-year 6.14
20-year 6.28
30-year 5.91

upside-down spread FF vs long bond = (.56%)
HI - HAT
(06/07/2000; 18:54:17 MDT - Msg ID: 31995)
1099
Revolting Tax RevoltSeveral months back Cherokee over at Kitco posted a news article detailing how "authorities", were examining how drug dealers were laundering currency by buying gold.

Aside from the obvious that law enforcement and IRS does not like this arrangement, why is this important ?

Further, a couple of months ago there was discussion about a law up in Congress being proposed that would make the buying and selling of gold a more "fair" endeavor, by treating it's participants just like other investment mediums, with taking of social security numbers etc..

These items are important because I think Uncle Sugar is going to put laws into effect that will result in 1099's being issued around gold transactions.

Gold is not a mainstream investment as of now. However, the Washington CRONY power loop is every bit as informed as any of us that inflation is going to soon be front page.

The Public is already tuned into the, "that could be worth alot of money someday", mindset. It's just not gold, YET.

When inflation is all the RAGE, the Beanie Baby Morons will panic into gold. When mainstream picks up the gold ball and runs with it, count on laws being quickly put in place to trace these transactions, this time around.

Many of us got in under the wire when we bought. Nobody knows we have it. We will probably not be so lucky when or if we sell in the future.
totalamateur
(06/07/2000; 18:57:00 MDT - Msg ID: 31996)
Gold, Jews and The Coming Crash!
THE MONEY CRISIS!

LOOK AT THE WORLD ECONOMY TODAY! IT'S IN SUCH A MESS, IT'S ALMOST UNBELIEVEABLE! You don't need to be a financial wizard or an educated economist to see the serious dangers caused by skyrocketing prices & money that is worth less every day! With worldwide inflation soaring to record levels & the cost of living always rising faster than wages, people all over the World are beginning to wake up to the fact that something is terribly wrong!
AND NOW AS COUNTRY AFTER COUNTRY FINDS ITSELF OWING BILLIONS TO THE IMF & THE WORLD BANK with no real hope of ever being able to pay back their loans, even the World's most respected economists are viewing the future with alarm, warning that we face the most dangerous economic collapse in World history!
VIRTUALLY EVERY WESTERN GOVERNMENT IS BILLIONS OF DOLLARS IN DEBT & ALREADY BANKRUPT. The total debt of the U.S. alone is three trillion dollars! It's hard to even conceive of how much money that really is, but if you spent one million dollars every day it would take over 8000 years to spend three trillion dollars! The U.S. has gotten to such a totally hopeless, bankrupt state that they know they will never be able to pay off that debt! And yet they continue spending far more than they earn in taxes, getting more in debt every year! To continue their false prosperity they have borrowed heavily from the U.S. Federal Bank!--And where does the Federal Bank get this money? Well, they just print it!...Billions upon billions of paper dollars worth nothing more than the paper they're printed on, & no more valuable than the counterfeit dollars printed by criminals! It's like trying to pull wealth out of an empty hat! But wealth must be made from something of actual value! Only nothing can be made out of nothing!
THE YEARLY BUDGET OF THE U.S. GOVERNMENT IS NOW ALMOST ONE TRILLION DOLLARS!--Over $900 billion to be exact--of which $300 billion is spent on the defense budget alone! The entire Latin American debt altogether is $320 billion, so what the U.S. wastes on military spending in one year could pay off almost all of that entire debt! But, of course, the U.S. isn't even paying its own colossal debts!
DID YOU KNOW THAT BANKS ARE FAILING IN THE U.S. RIGHT NOW AT THE RATE OF ONE A WEEK?--And that several major corporations in the U.S. are hundreds of millions of dollars in debt & going bankrupt right & left? It's on the financial page of the newspaper every day & in the business news! These are the biggest failures the World has ever known, but they get no big publicity because it's becoming so common.--"Just another great multinational corporation gone bankrupt, so what? It happens every day now!"
THE ONLY NEWS YOU SEE IN THE HEADLINES IS: "SLIGHT GAIN IN THIS! Not diving quite as fast in that!" Any time the economy stops going down so fast, they say, "Oh, Recovery!"--That's Recovery?! Some little tiny grain of encouraging news makes the headlines, but the huge monumental losses taken by the banks & businesses are hidden in a little two-inch notice in a column on the financial page. They're trying to keep it out of the headlines because they don't want to scare the public into a panic!
THE GOVERNMENT SAYS: "DON'T WORRY IF THE BANKS FAIL, the big corporations fail, business fails, everything fails, the Government will pay!" But the trouble is, the Government itself is broke & borrowing the money to pay! And do you know where the U.S. gets this money from?
BESIDES BORROWING FROM THE FEDERAL BANK, THEY'VE BEEN BORROWING BILLIONS FROM OTHER NATIONS. It's the loans from rich international investors which have been paying the bill for America's extravagance & its military budget. Both Europe & the Arabs know that the U.S. is now bankrupt, but they've got so much money invested in dollars & in U.S. businesses, etc., that they can't demand payment of their loans now, or it would cause a run on the banks. This would cause the entire fragile American economy to crash which in turn would literally blow the whole World banking & financial system to bits! Why?
BECAUSE WHEN THE WORLD WENT OFF THE GOLD STANDARD some years ago, it yielded to U.S pressure to make the dollar the worldwide standard of value & of monetary exchange!--And it has been ever since! Nearly every government in the World today which uses paper money uses American dollars as the foundation of their currency!
HAVE YOU EVER SEEN A TOY HOUSE BUILT OF CARDS, each one stacked precariously atop the others? Well, that is precisely how fragile & shaky the present dollar-based capitalistic system is: Like a house of cards! It is so delicate & artificial that almost anything could cause it to come tumbling down. It is ready to crash right now! It can happen any time!--Suddenly! It's gone too far & it's in such a mess that there's no solution but a total Crash!--The real Crash in which nobody will accept worthless paper money any more! As soon as the people finally wake up to the fact that their leaders & rulers & economic experts don't know the solution & the World is in trouble, they'll all lose faith in the System & boom, the bottom will fall out!--And the banking system will crash & the money will become worthless!
MOST PEOPLE ARE AWARE THAT THE WORLD MONETARY SITUATION IS IN TROUBLE, but they don't know what to do about it. They don't even dare think about it or they'd go crazy! So the general public is just going on "business as usual". Even though they know the whole System is already bankrupt, they just have to keep on having faith in it! They don't dare stop or everything would collapse!
APART FROM THE DANGEROUS INFLATION, ONE OF THE BIGGEST PROBLEMS FACING MANY NATIONS TODAY IS THE DEBT CRISIS. They have borrowed billions of dollars from the World Bank & the IMF--the International Monetary Fund. The World Bank generously loaned them the money, in fact, almost forced it on them, deliberately tempting them to borrow billions of dollars! The big money boys & bankers (guess who they are!) knew that they would never be able to pay them back, but they did it purposely, insisting on loaning all this money to the poor countries! Why?
BY FORCING EVERYBODY INTO DEBT & BANKRUPTCY THEY HAVE GOTTEN CONTROL OF THE MONEY, control of the finances, control of the World economy, & have enslaved nearly every nation on Earth! As the Bible says, "The borrower is slave to the lender." (Prov.22:7), & that's the real reason the rich loaned them the money! The World Bank & IMF are now dictating the economic policies & the internal national policies of these nations & telling them exactly what to do about their government, their industry, their banks--dictating virtually everything! They are running these governments by money pressure!
SEVERAL NATIONS ARE TRYING TO GET OUT OF THE CONTROL OF THE IMF, & the Latin American countries in particular have united in a Debtor's Cartel to try & renegotiate their debts. The IMF is aware that if these debtor countries refused entirely to repay their loans it'd destroy the World banking system now! But, by giving them a little more time to pay, they are keeping their slaves alive & still able to continue carrying the colossal weight of their debts.
THESE NATIONS ALSO KNOW THAT IF THEY REFUSED TO PAY, IT WOULD BRING THE DOWNFALL OF THEIR OWN ECONOMIES. Therefore, to survive, they have to do everything just the way the World Bank tells them to. Otherwise, they wouldn't be able to borrow more money to keep from going into financial chaos & total bankruptcy! So the Debt Crisis was created by the big money manipulators. They control it & are using it to their own advantage just like they always have.
ECONOMIC PROBLEMS DON'T JUST HAPPEN BY ACCIDENT & there aren't just some "natural" laws of economics that control all these things. The big money boys make the laws of economics & know what's going on because they are the ones manipulating the money. Through their control of the newspapers & the media, they persuade the public to keep on believing in the economic system, but they themselves are the first to leave, like rats deserting a sinking ship. They try to sneak quietly out the back door unnoticed with their money & their bank accounts before anyone else finds out what's going on.--That's what they did in 1929!
DO YOU REMEMBER THE U.S.'S GREAT STOCK MARKET CRASH OF BLACK MONDAY, OCTOBER 29, 1929? When the international bankers removed all their investments from the stock market in one sudden move, it caused a public panic & a run on the banks! The banks immediately crashed, resulting in the Great Depression of the '30's. The little fellows all went bankrupt & the big money boys just came in & bought everything dirt cheap! And it's happening again, but now on a worldwide level!
THEY'RE WITHDRAWING THEIR MONEY SECRETLY, selling their dollars, & stocks & bonds little by little while they can still get something for them. If they tried to dump their investments too fast, prices would go down & they'd lose money, & they don't plan on losing.--So they don't want to let the little guys learn what's happening!--Yet!
BUT ONCE THESE INTERNATIONAL BANKERS HAVE THEIR BILLIONS SAFELY OUT, THAT'S WHEN THEY WILL LET THE NEWS BREAK TO THE PUBLIC & this will cause the greatest economic crash, depression & social & political disaster in all of World history! Then the little guys, the businesses, industries, banks & entire nations will all be in debt to the international bankers who will then wind up owning everything!
YOU SAY, "THAT SOUNDS LIKE A PRETTY DISMAL, BLACK PICTURE!" Yes, but you've got to know about it! You can't let those big money boys outsmart you! You'd better be one jump ahead of them, by the help of God, knowing what they're planning to do!
IT IS URGENT THAT YOU MAKE SURE THAT YOU HAVE SOME KIND OF PLACE IN THE COUNTRY FOR YOURSELF & YOUR FAMILY, because when the Crash happens the modern big cities will be in chaos, with riots & starvation! So the time to buy some land is now--before the Crash makes your life's savings worthless! A bank is the worst place to have your money when a Crash happens, so invest in land & things of real value today! A farm is the best place to buy. You'll also need to buy a substantial number of seeds, as well as to stock your place well with dried & canned foods such as grains, rice, beans, flour & other basic necessities, tools & equipment! And make sure you have your own safe water supply, not dependent on electricity to pump it up.
PERHAPS YOU CAN BUY IT TOGETHER WITH ANOTHER FAMILY OR TWO or, if you can't afford it, you could at least be sure that your own house is stocked full of non-perishable foods & firewood as well as an adequate water supply for one or two months. It is far better to be ready months too soon than to be one day too late! Prepare now!
SO BY ALL MEANS, PREPARE ALL YOU CAN, BUT MOST OF ALL TRUST THE LORD & DON'T WORRY! After all, the Lord & prayer are your best protection & your greatest security! With Jesus you're ready for anything!--Are you trusting Him? Do you personally know Him? You can! He loves you & will come into your life right now if you'll sincerely pray this simple prayer: "Lord Jesus, please forgive me for all my sins. I believe that You are the Son of God & that You died for me. I now open the door of my heart & I ask You, Jesus, to please come in & give me Your free Gift of Eternal Life! Help me to love You & to love others by telling them about You & Your Love. In Jesus' name I pray. Amen."

Written by a man of God in 1985; still to be fulfilled, but getting closer all the time! He was a lone voice in the wilderness back then. Many honest analysts and truth lovers are anow saying the same thing!
Leland
(06/07/2000; 19:04:13 MDT - Msg ID: 31997)
Kudos to AP...For Publishing Some of the Truth

Inflation in the state up 8.1 percent over
1999

STORRS, Conn. (AP) - Inflation in Connecticut jumped 8.1
percent in the first quarter compared to the same period a
year ago, according to a survey by Connecticut Economy, a
University of Connecticut publication that monitors the
state's economy.

Price hikes were recorded in food, transportation and medical
care. But housing costs jumped the most, 12.3 percent,
accounting for nearly half the overall increase, according to the
survey.

''This is the largest price increase in any quarter since we
began tracking prices in 1993,'' Steven P. Lanza, managing
editor of Connecticut Economy, told The Wall Street Journal.

Because of the way the university calculates housing costs,
the school's inflation index is not comparable to the nation's
consumer price index, he said. The Connecticut Economy
calculation is much more sensitive to changes in housing
prices, Lanza said, while the national index uses a formula
based on rent costs, which are less volatile.

Surging energy prices and a tight labor contributed to the
sharp rise in inflation, he said. The survey put the price of
gasoline at an average of $1.55 a gallon, up 39 percent from
$1.11 a year earlier.

Fast food prices were affected by wage hikes, Lanza said. The
price of a KFC fried-chicken dinner rose 31 percent and a
large Papa Gino's cheese pizza 20 percent, he said.

''Even in these low- skilled, low-paying jobs, the labor market
is so tight, wages are going up,'' he said.

The study was not viewed as bad news by economists.

It shows the depth of Connecticut's economic turnaround,
said Michael P. Meotti, president of the Connecticut Policy
and Economic Council, a Hartford think tank that helps
municipal and community groups by providing data on local
government issues.

''Now there's a lot of evidence the economy of Central
Connecticut-Greater Hartford is buzzing,'' he said.

(Fair Use Protections Apply, But! More Importantly, a Thanks
Needs to be Extended to AP for Publishing.)
SHIFTY
(06/07/2000; 19:26:45 MDT - Msg ID: 31998)
NY Ponzi
Nasdaq 3,839.26 + Dow 10,812.86 = 14,652.12 divide by 2 = 7326.06 Ponzi

up 80.09
wolavka
(06/07/2000; 20:37:05 MDT - Msg ID: 31999)
good move up in gold tomorrow
$20.00 + move tomorrow in gold
TownCrier
(06/07/2000; 20:38:23 MDT - Msg ID: 32000)
I hope you guys will tolerate this post...despite its relevance to the gold market
COMEX action throughout this recent 5+ percent gold price rally played out like this...

Prior to Friday's initial run-up, in Thursday's trade the open interest in August gold climbed by 2,321 to 90,740 contracts...in which total volume was a lackluster 15,300 contracts traded on the day. With the settlement of 1,364 June contracts, the open interest for that futures contract was nearly cut in half.

Delivery notices for the June gold futures Friday morning called for another 560 contracts from the 1,646 remaining June positions in open interest after Thursday's trade.

During Friday's brisk trade and price rise, COMEX trading volume more than quadrupled from Thursday, totaling 70,354 contracts (995 for June, 65,870 for August contracts.)

The result of all of that trading left COMEX gold futures open interest to end the day (and week) at 1,030 June contracts (down 616) and 84,657 August contracts (down 6,083).

On Monday morning, delivery notices for the expiring June contract increased by 580, bringing the total for the month sor far to 5,734 contracts.

The trading levels that followed during Monday's market action was only half of Friday's brisk trade, totaling 34,899 contracts. This included movement of 387 June positions and 32,199 August contracts.

When the trading came to a close and the paper dust settled, open interest for June declined by 760 to leave only 270 contracts. August contracts declined by 4,792 to leave 79,865 contracts in open interest.

On Tuesday morning another 53 delivery notices we announced on the remaining June contracts, and subsequent trade that day saw turnover in 82 June contracts and 39,242 contracts traded among the August positions.

Open interest at the end of that trading volume on Tuesday (which was comparable to Monday) left 210 June contracts (down 60) and 76,540 contracts for August (down 3,325).

Today's trading (Wednesday) was kicked off with 20 delivery notices for a June total of 5,807 contracts so far. The final stats won't be in until tomorrow, but estimated trading volume for COMEX paper today was 25,000 gold contracts.
Chris Powell
(06/07/2000; 21:29:14 MDT - Msg ID: 32001)
GATA report zips around world as we terrorize NY Fed
http://www.egroups.com/message/gata/479?The word is getting out and the shorts are
in trouble.


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
Marius
(06/07/2000; 22:03:23 MDT - Msg ID: 32002)
Touche (accent the e) Townie!
Townie,

The header to your last message was the best line of the day! I loved it!

MK,

Time to fumigate, perhaps?

M
Chris Powell
(06/07/2000; 22:19:32 MDT - Msg ID: 32003)
Another analyst acknowledges manipulation
http://www.egroups.com/message/gata/480?Another analyst acknowledges
manipulation of the gold price:

http://www.egroups.com/message/gata/480?


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
Black Blade
(06/07/2000; 22:52:21 MDT - Msg ID: 32004)
Townie, Right On!
Some of these posts lately are truly bizarre. I tend to get off topic occasionally, but really! "Yea, I the lord of the Great Kimba shall rise and smite you or something, if thou don't stopeth posting heresy. Now gimme your gold tithes and get thou back to the mines and bring forth the sacred metal, thus sayeth me!" There, I should think that would just about cover the religous, bizarre and racist drivel for awhile. BTW, Townie, what's the word on any more online offerings from the castle? I seem to recall that you mentioned something about some possible S. American treasures.
MarkeTalk
(06/07/2000; 23:02:52 MDT - Msg ID: 32005)
Weather changes linked to market changes?
Earlier this year NOAA (National Oceanic Atmospheric Administration) located in Boulder, Colorado issued a drought alert for the U.S. Midwest, stating that subsoil moisture levels were the lowest since the Great Depression. Prices of commodities began to rise and have continued so albeit with some minor setbacks. These rising prices are reflected in the CRB Index.

Now just today NOAA has issued a warning that the greatest solar storm in recorded history is about to hit earth late tonight and through tomorrow. Approximately one billion tons (that's a bunch) of electrically charged particles will hit the earth's atmosphere and will affect everything from cell phones, GPS to electric utilities. The last time such a cloud of charged particles hit earth was in 1989 with the result that a utility plant in Quebec was shut down in 90 seconds and remained down for about a week.

If such a cloud of charged particles inflicts such damage this time, it could shut down power to financial markets in New York and Chicago. Just imagine what gridlock that would be! (This would be a good time to use those extra flashlights you bought for Y2K.) Some scientists are saying that the earth's electromagnetic field would be compromised and thus cause the poles to flip--north becomes south and south becomes north. This could lead to a host of earth changes (vulcanism, tsunamis, earthquakes) which are not pretty to contemplate.

The point behind all of this is to emphasize the necessity for gold and not paper in these unsettled times. With the recent slide in the U.S. Dollar and subsequent rally in gold (a stronger rally than either silver or platinum), the prudent investor is taking stock of the situation by buying gold. Lots of clients here at Centennial have called me in the last few days to add to their existing portfolios. Let the ignorant investor beware!
YGM
(06/07/2000; 23:06:35 MDT - Msg ID: 32006)
Parting Shot...
I have no doubt at all the Devil grins,

As seas of ink I spatter.

Ye gods, forgive my "literary" sins --

The other kind don't matter.
Black Blade
(06/07/2000; 23:11:08 MDT - Msg ID: 32007)
YGM
Good luck and good hunting! Fire up the equipment, start up the grizzly and shake out a few nuggets. Any you don't want, just send to me. I'll even pay the postage :-)
Chris Powell
(06/07/2000; 23:25:08 MDT - Msg ID: 32008)
A salute to the man who makes it happen
Dear YGM, many thanks for your contributions
at this forum, for your tireless support of
GATA, for quoting Robert Service on my behalf,
and, most of all, for being one of the people
who help make honest money possible for all
the world. What we've tried to do at GATA has
always kept the work of such folks at heart.
I can't quote anything as glorious as Service
tonight but in light of your return to the
wild, maybe another favorite, William Jennings
Bryan, will do:

"....The miners who go down a thousand
feet into the earth, or climb 2,000 feet
upon the cliffs, and bring forth from
their hiding places the precious metals
to be poured into the channels of trade
are as much business men as the few
financial magnates who, in a back room,
corner the money of the world. We come
to speak of this broader class of
business men."

All success to you, Ken.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

YGM
(06/07/2000; 23:27:21 MDT - Msg ID: 32009)
Black Blade.....
Sounds good....The Doc told cause my back is bad from Cats, not to lift anything heavier than a half full mason jar or my 'you know what'..so if I get a heavy one I'll call you....YGM.
YGM
(06/07/2000; 23:33:20 MDT - Msg ID: 32010)
Thanks Chris....
We here and elsewhere are going to owe YOU. Much more than we can ever repay. GATA has made Gold a byword again and soon a word on many new fronts....Kenny

GO PHYSICAL (right here @ USA Gold) & Go GATA
TEX
(06/07/2000; 23:41:06 MDT - Msg ID: 32011)
Un-huh
All I really care about is that little black line on the Kitco graph going up
TEX
(06/07/2000; 23:47:55 MDT - Msg ID: 32012)
Oops....
Oops....bad timing....previous post meant no disrespect to YGM and others.......just those "UFO" posts that have been appearing lately
SHIFTY
(06/07/2000; 23:50:49 MDT - Msg ID: 32013)
Java Man
http://www.mcremo.com/door8.htmSaw this and thought you would like to see it. Old bones named Java Man!dug up in 1892
SHIFTY
(06/08/2000; 00:05:52 MDT - Msg ID: 32014)
YGM
You never get cold with a fever for gold!
Good luck!View Yesterday's Discussion.

YGM
(06/08/2000; 01:09:51 MDT - Msg ID: 32015)
TEX....
That Kitco Lines.....gonna go up like those 500 ft mesa walls in the badlands, and then stay in the high country for good......Land of the Apache Warriors........Ken
Aragorn III
(06/08/2000; 03:26:44 MDT - Msg ID: 32016)
A look back
This old post was brought to my attention. In light of the topic of some recent discussion and along with my recent "Foundation" posts, it seemed appropriate to revisit this commentary I offered March of one year ago. I believe it was of some assistance for comprehension at that time, and with many new faces here (a very good thing!) it may yet again be of service. As you read, consider that oil was selling for nearly one third of today's price, the euro was newborn, U.S. bond prices had recently peaked and were looking to continue a long slide in my view, and the international world seemed to have reached beyond its saturation point of borrowing new dollars, or more precisely, Euro-dollars...U.S. dollars in foreign accounts. It seems that to this day Americans themselves have been willing to carry on with the grand borrowing tradition...and for cheap foreign imports, who could blame them? U.S. monthly trade deficits since that time have grown most impressively...not a good thing, but telling.

Before I proceed, allow me to call attention to the post--ORO (06/06/00; 23:50:51MT - usagold.com msg#: 31942). It is very well done and must be read by all. Continuing...
-----begin-----
Aragorn III
Oil, Gold, & the Dollar
[Regarding] the Fed "orchestrating and colluding"...So it would seem. Perhaps. Perhaps instead, "They work hard so you don't have to!" Banks pre-date central banks. Ancestor banks in the U.S. set new standards of wayward practice, visiting much ruin on unsuspecting or ill-informed customers. Fractional reserve lending has always been the downfall, even as the dollar was defined in gold! The primary evil perpetrated by Congress with the Federal Reserve Act in 1913 was not so much the creation of the Federal Reserve System of Banks--the immediate purpose of which was to bring order to the chaotic free-for-all of fly-by-night banks across the land. No, the primary evil was escalation of the degree to which fractional reserve lending could occur--even on a gold standard--for now the Government itself had a lender from which it could borrow money that was not there. You see where this has led. Do not cry overmuch for Nixon's action in 1971 to end the last vestige of the Gold Standard. Such a Standard was, and ever will be, meaningless if concurrent with fractional lending.

The finger must point in all directions to find the blame. Any bank alone or united is powerless. It takes a borrower to complete the fraud. Why do they not insist on hard money? Why does the Government allow fractional reserve lending? The Fed need not create a dime. Your Main Street banks create more than enough to ensure our eventual ruin.

There are many that do not favor Fed Chairman Greenspan. Surely this view is held by those that see the future and know that the dollar is not in it. You are the brilliant minority, my friends. The Fed does not serve at the pleasure of the brilliant, for the brilliant can surely look to their own affairs. No, the Fed serves the least common denominator...the unsuspecting, the ill-informed customer of the dollar institutions. Ask yourself, would the U.S. population be better served by a currency that traveled the path of the Ruble, the Sucre, the Real, the Peso, the Lira?

Savings in the bank can do no BETTER than suffer the ravages of fractional lending, but your brilliance must allow you the recognition that it could also suffer much, much worse! That day will come. Your frustration is that your brilliance was early to recognize the end of game, and preparations left you out of the easy money on Wall Street. Don't be suddenly stupid. Gold right now IS the EASY MONEY!!

Chairman Greenspan, appointed during the Reagan administration is exactly the man a gold heart would want at the helm. Do not blame him for the inflationary effects of fractional lending. Credit him instead for using his gold heart ideals to attain a perspective and understanding that has maintained a semblance of value to an instrument [of paper] that is being propelled headlong into oblivion through forces quite beyond the Chairman's control. Remember, the finger points in all directions in the assignation of blame. Yet in the face of the many agents of the dollar's demise, Mr. Greenspan stands perhaps in effort as temporarily a one man substitute for a gold standard. And remember, even a gold standard itself does not hold up in the face of fractional lending and exuberant markets. Witness 1929. I have nothing to gain in an attempt to defend the Chairman, except to prevent the unnecessary delays of my fellow knights tilting at windmills, or slaying the ally on the field of battle. I say again, your brilliance has indeed served you well, for gold is the easy money. Look nowhere else.

What is OPEC up to? What is the euro for?

Surely you are not so inclined to think your brilliance is not distributed around the world? You have an exit strategy--gold. Or rather, a Survival strategy. You are not alone. But recognize that national concerns are not the same as individuals' concerns. You have options not available to nations, and nations have options not available to you. The euro. In the past I have explored the many sides of the euro, some as pure exercise. "This is not the gold standard of your fathers" I have said before. This remains true. It shall be a contractual currency, unencumbered as is the dollar with levels of debt that cannot be serviced. Yet in its euro price gold will display its true value.

What folly is it to suggest that a body [as OPEC] is impoverished which commands a position atop a commodity needed the world over? Impoverished, no. In dire need of contract renegotiation to undo past mismanagement? Yes. Much like the United States "renegotiated" its debts in 1971 by saying "no more gold shall be paid to settle accumulated dollar-denominated debts". Dollars at that point became very cheap and easy to come by. OPEC is in the position to do likewise, though they will say "no more oil will be paid to settle accumulated dollar-denominated debts". By [one day] pricing oil in euros, the U.S. will find that euros are not easy to obtain as the U.S. is a net importing nation. And what more need will any net exporting nation have for U.S. Dollars as balance of trade when oil requires euros? Suddenly, the outside world is not eager to accept any few dollars for its real products as they do now. In that time to come, exchange rate of the dollar falls, and countries may use these newly cheap dollars to settle all accumulated dollar-denominated debts. That is the exit strategy of nations.

The U.S. will be at a disadvantage until it achieves meaningful balance of trade. It cannot continue to print its primary export value. This will not kill the future demand for oil. The world is a much larger place than 50 united States, and any group of nations would be equally happy to rise to the occasion to be the fat consumer of of last resort.

These are the few remaining days of easy money. I suggest you use them wisely. Here is a hint...gold is the universal currency. Here is another hint...
got gold?
-----end--------
A year has now passed. In that time we see that patience and orderly markets can be used to your advantage. How have you spent the past year of your productive capacity? Or perhaps I should say, "saved"?
got need for wheelbarrow?

got firmer Foundation?
Aragorn III
(06/08/2000; 03:33:18 MDT - Msg ID: 32017)
Sir Holtzman, well met again, I say.
To your post # 31966 yesterday <<<"the events described in the following article...may possibly explain Aragorn's absence over the past few months ...[the individual] 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.">>>

Brought down by only six men? You must surely know right there it was a frail imposter. But, thank you. Yes, I am feeling much better now. As for our friends Legolas and Gimli, you surely know that Gimli had only the fair lady Galadriel in his heart...and the love of gold thereby slightly displaced. And the mane of our sturdy son of Thranduil...we can recall the dark hair and keen light eyes of that skillful archer quite well. As seen (and later described) by Frodo while upon the Great River under threat of Nazgul from above and orcs upon the further shore. "Legolas laid down his paddle and took up the bow that he had brought from Lorien. Then he sprang ashore and climbed a few paces up the bank. Stringing the bow and fitting an arrow he turned, peering back over the River into the darkness. Across the water there were shrill cries, but nothing could be seen. Frodo looked up at the Elf standing tall above him, as he gazed into the night, seeking a mark to shoot at. His head was dark, crowned with sharp white stars that glittered in the black pools of the sky behind."

But, to turn this delightful diversion into something perhaps more applicable to the wider forum, we shall turn some pages ahead to a portion of conversation between Eomer, Third Marshal of Riddermark, and the Dunadan, heir of Isildur, that could almost [analogously] be overheard in a pub this very day:

Said Eomer, "It is hard to be sure of anything among so many marvels. The world is all grown strange. Elf and Dwarf in company walk in our daily fields; ...and the Sword [let Anduril be symbolic of gold for our purposes here] comes back to war that was broken [through banking] long ages ere the fathers of our fathers rode into the Mark! How shall a man judge what to do in such times?"

"As he ever has judged," said Aragorn. "Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men [differing races or religions]. It is a man's part to discern them, as much in the Golden Wood as in his own house."

"True indeed," said Eomer.

got fellowship?
Aragorn III
(06/08/2000; 03:45:20 MDT - Msg ID: 32018)
Our most noble miner, YGM
May your pans be plagued with such copious quantities of yellow metal that you return to us with arms that ache and with forgotten concept of tailings. "What are tailings?" I hope to hear you say.

got best wishes!
HI - HAT
(06/08/2000; 04:12:55 MDT - Msg ID: 32019)
Market Talk msg. 32005
Bad Hair DayHistorically the World climate has been very benign for hundreds of years.

That there is over 6 Billion people is testament of the prolific cycle.

The gold is an Eternal insurance policey against an ageless Murphy's Law.
JavaMan
(06/08/2000; 05:57:07 MDT - Msg ID: 32020)
Shifty, & YGM...
Shifty...Thank you for the link. How in the world did you stumble across it? JavaMan seemed a better name than Austrailio Pithicus Man or Neanderthal Man (smile), yet I believe we are descendents of none of these creatures from another era. When time permits, and if the forum would overlook my OT post, I would like to share my explanation that reconciles the fossil record with the Biblical account.

YGM, Your enthusiasm shows me you live life to the full. I'm sure I speak for many when I say I will miss your presence at the table. Sir Aragorn has just posted a previous message of ORO's from about a year ago that served well as a "marker" to consider what has transpired since that time. Likewise, it will be interesting to see where things are upon your return.
TownCrier
(06/08/2000; 06:01:46 MDT - Msg ID: 32021)
An update to our newest central banking news feature
http://www.usagold.com/centralbank/current.htmlCourtesy of Central Banking Publications Ltd.(some excerpts follow)

Central Bank of Norway announces portfolio results
...The Petroleum Fund is where the Norwegian state sets aside some of the runaway wealth being generated by the country's offshore oil and gas assets, for the future sustenance of an aging population when the wells have run dry. The transfers into the fund also have a relatively unknown facet. Thanks to its oil wealth, Norway is the only OECD nation currently having a negative national debt - ie assets exceeding liabilities.

Bank for International Settlements
...A sudden reversal in the US dollar could pose the greatest single upset to the world economy, the Bank for International Settlements (BIS) said. In its annual report released on Monday, it also warned that the boom in the economy tied to new technologies also has a negative side.

Predatory Lending
...For its part, the Fed is trying to curb "predatory lending" by some mortgage and credit providers who target low income groups, according to Alan Greenspan, the chairman. Their high interest rates and aggressive debt collection methods constitute 'abusive' treatment of vulnerable parts of the population and he said that the central bank was trying to address the matter in various ways.

Opposition to capital asset cover
...A new rule proposed by the Fed to make banks set aside more capital to cover their investments in start-up companies was strongly opposed by the Office of the Comptroller of the Currency (OCC). The Fed's plan would mean that bank holding companies had to set aside capital equivalent to 50% of venture capital investment; they are currently required to hold 8 % capital against such assets.

Click the link to see more.
wolavka
(06/08/2000; 06:07:14 MDT - Msg ID: 32022)
good support for gold
short dip then much stronger.
Black Blade
(06/08/2000; 06:22:56 MDT - Msg ID: 32023)
Morning Wakeup Call! Au could get a bit frisky today.....read on!
Sources: VariousAsia Precious Metals Review: Spot gold extends losses
By Polly Yam, BridgeNews

Hong Kong--June 8--Spot gold extended its losses in Asia on Thursday after falling in U.S. trading overnight, as Australian producers aggressively sold the metal early in the trading day, dealers said.Activity in the gold market was relatively strong, though trading of other precious metals remained sluggish, they said. Dealers noted that buying interest continued to focus on small lots of gold on Thursday in Asia, driving down prices amid aggressive selling from Australia. Trading was choppy early on, but quieted down in the afternoon, they added. Some players expected gold to rebound during European trading, as funds' buying has not finished yet, dealers said. Gold's nearby resistance has adjusted down to U.S.$288 per ounce from Wednesday's $290, while its nearby support remains at $284, they noted. "It's hard to determine gold's next move, as it depends on funds' interest," one dealer commented.

Black Blade: The Aussie producers simply can't afford to let the POG rise. Many are forward sold for several years production. The exchange rate between the USD and Aussie peso is quite favorable for gold sales right now. However, this won't last forever. Can you say Ashanti? I knew you could. Also, today the EU CB is likely to raise rates. Any little surprise could wake up Au for another spurt to the upside. I would then look for the Bankers and Investment houses to work very hard to keep Au below $290, at least until expiry on options passes.

Gold bulls have been thwarted again.

An extensive $20 short covering rally by commodity funds and market participants failed to drive the price decisively through a critical resistance of $295 an ounce. Physical demand which was buoyant when bullion traded between $270 and $280 faltered and yet again gold appears to be stuck in a narrow trading band. Unexpected dollar weakness contributed to the rally. But the Gold Anti-trust Action Committee (GATA), a gold bug pressure group, is also claiming credit for the spurt. A week ago, it presented a document to John Silvia, Chief Economist of the Senate Banking Committee, Congressman Spencer Bachus, Chairman of the Subcommittee on Domestic and International Monetary Policy and other Washington politicians. The document, "Gold Derivative Banking Crisis" published on the web at the time, claims that a "cabal of bullion banks, with the probable assistance of the New York Fed" and other official bodies are "repressing the true equilibrium price of gold by hundreds of dollars".

There's little point in wasting space on the allegation of central bank collusion. For a start it doesn't wash with last September's Washington central bank accord to cut gold loans and supplies. But is there any truth in the claim that bullion banks have a massive bear position which they will cover and drive the price into orbit? GATA has extracted March 2000 figures from the US Office of the Controller of Currency (OCC) and estimates that derivatives positions of US bullion banks amount to $91 billion, equivalent to 319 million ounces or several years production. Bank of International Settlements figures which are dated, estimate that total global over-the counter (OTC) gold derivatives positions were unchanged at $190 billion (667 million ounces) in the past three years.

Jessica Cross, head of Virtual Metals Research and Consulting received a doctorate for a thesis on the subject and wrote an excellent book* for the lay person. She confirms what bullion managers, analysts and World Gold Council executives report. Jessica's comment about the GATA thesis is: "one plus one equals twenty". Say a mining company sells 10 tons forward on the derivatives market. The counter-party (i.e. bank) takes on to its book a long position of 10 tons which it immediately offsets by selling forward 10 tons. The net position of the bank is zero, but the turnover is 20 tons and is reflected in the OCC numbers. A few weeks later the mining company elects to buy back 5 tons of its forward sale and the bank which now has a 5 ton short position, offsets it by purchasing 5 tons from another bullion bank. The commercial bank's derivatives exposure is zero, but the OCC position is 30 tons and so on. Options deals result in even more paper trading which clocks up OCC and BIS turnover.

Let's also put the bullion derivatives position in perspective. According to the BIS, gold bullion's $189 billion notional global outstanding derivatives position compares with foreign exchange contracts of $15 trillion, interest rate contracts $54 trillion and equity-linked contracts of $1.5 trillion. Examining "gross market values" which take into account bilateral netting agreements, the BIS estimates that global gold open positions doubled to $22 billion in June 1999 from $13 billion in June 1998. Gold, in the financial scheme of things, is a small market illustrating the paranoia of conspiracy theories. It is way down on the international agenda.

This doesn't mean that banks don't get over exposed from time to time. That's precisely what happened in the third quarter of last year. Although the World Gold Council and African producers are claiming credit for the Washington Accord, it is more likely that the Fed and other central banks shortened the lending book to control excess bear positions in the market, says an experienced derivatives trader. There was the inevitable market spike and several bullion banks and producers (like Ashanti) were badly burnt.

* The Derivatives Revolution By Jessica Cross (Rosendale Press)

By: Neil Behrmann

Black Blade: A good article on GATA efforts. Old news to many readers here on this forum, however, a nice little morale booster as Au pulls back on overnight trading. Article is from "theminingweb.com"

ECB raises rates to 4.25%, European Central Bank opts for half- point hike to curb inflation; euro rises
June 8, 2000: 7:57 a.m. ET

LONDON (CNNfn) - The European Central Bank (ECB) raised its key interest rate by a half percentage point to 4.25 percent on Thursday in a move that economists said would consolidate the euro's recent recovery and check inflationary pressures in the 11-nation euro-zone. Economists had been almost unanimous in forecasting a rate rise at the latest bimonthly meeting, though most expected a hike of a quarter percentage point. Alison Cottrell, chief international economist at PaineWebber in London, told CNNfn.com that the half-point rise was "a huge surprise" but indicated that it was what the market wanted to see. The single currency had gained more than 3 percent since the last ECB meeting on May 25, and economists said its recovery allowed the central bankers to tighten monetary policy in an inflation-fighting move, without appearing to be adopting panic measures to boost the euro. "The euro's rise has given them more scope to raise," said Cottrell. The euro rose to $0.9650 from around $0.96 just before the decision.

The bank last moved on Apr. 27, raising its key rate by a quarter point. Recent economic data has confirmed. The euro-zone's growth path, bringing down unemployment in Germany and France. And in a sign of the upward pressure on prices in the region, the 12 months ended Apr. 30 saw a 6.5 percent rise in M3 money supply, a key measure of inflation pressures. ECB president Wim Duisenberg was scheduled to hold a news conference to explain the rate decision following the central bank's announcement.

Black Blade: This could help Au at the NY open.

Meanwhile, S&P Futures are up +2.00, but fair value is only up +0.91 indicating a mostly flat open at these levels. Au is down -$1.70 at $285.40 already recovering from the overnight blues! And is still rising - Bonus! And Ag is down -$0.04 at $5.05.
Black Blade
(06/08/2000; 06:33:25 MDT - Msg ID: 32024)
Au opening up!
Au has just opened in NY and is rising nicely. I think she'll breach the surface soon. My oh my, I think this whale can fly! Tomorrow is the release of the PPI. Any upward move could hand the shorts their heads on a "Gold" platter.
TownCrier
(06/08/2000; 06:37:52 MDT - Msg ID: 32025)
Sir YGM, when you're not busy pulling money out of the riverbed...
if you find a contemplative moment or two, you'll have to try to give Robert Service a run for his money. But then, if you find yourself at a loss for words, no worries.

"In spite of all the romantic poets sing,
this gold my dearest is a useful thing." --Mary Leapor (1722-1746)

"The tongue hath no force when gold speaketh." --Guazzo

"Gold were as good as twenty orators." --Wm. Shakespeare (1564-1616)
JavaMan
(06/08/2000; 06:54:09 MDT - Msg ID: 32026)
Correction...
Sheesh...It looks like I have to either stop visiting USAGold before I wake up in the morning or start drinking coffee again.

I referenced Aragorn's post as quoting a message from ORO from a year ago, when in fact, the ORO post being mentioned as a must read is from Tuesday of this week. The
commentary from a year ago belongs to Aragorn.

Perhaps this illustrates well just how confused I can get when I read some of this truly brilliant material.

Apologies all.
Nightrider
(06/08/2000; 08:49:04 MDT - Msg ID: 32027)
Gold a Safe haven??
Has I had my morning coffee on my patio this morning for some reason, my mind back track some 25 year's. Back then, my yearly income was about $700.00 Big ones a month or a staggering $8,400 per year. As i recall my wife and I were not living in poverity and Gold was about twice want it is today.

Today, my income has grow by over 10 times want it was back then and outside of being a little bit less concerned about making our money last to the end of the week our, standard of living, hasnt changed alot.

I find this interesting because Inflation has been increasing over the last 25 years but Gold has lost half of it's Value. Could it be that Gold isnt the Safe Haven that we think it is?.

USAGOLD
(06/08/2000; 09:08:27 MDT - Msg ID: 32028)
Today's Gold Market Report: Quiet So Far This Morning
http://www.usagold.com/Order_Form.html FOR A FREE INFORMATION PACKET ON GOLD OWNERSHIP6/8/00 Indications
�Current
�Change
Gold August Comex
288.70
-1.30
Silver July Comex
5.12
nc
30 Yr TBond Sept CBOT
96~27
-0~13
Dollar Index June NYBOT
106.86
+0.53


Market Report 6/8/00): Gold traded quietly to the downside this morning on lack of fresh news
and the short covering apparently on hold for the time being. Weakness showed up in the stock
market in the wake of the Microsoft court decision calling for a break-up of the software company
and the dollar came out of the gate unexpectedly strong as the forex markets await the European
Central Bank's interest rate decision scheduled for later today. Forecasts run from a one-quarter to
one-half per cent increase, and it now appears that the markets are anticipating the lower number.
Gold's retracement of the past few days has been described by many gold traders as unsurprising
in light of the strong move to the upside which began last week and took the yellow metal to three
month highs. This consolidation period might be a short one given what's going on the stock
market, the building inflation rate, and the potential for a weaker dollar.

That's it for today, fellow goldmeisters. Not much news today. See you here tomorrow.
Henri
(06/08/2000; 09:59:12 MDT - Msg ID: 32029)
Al Fulchino
Am getting deeply into "Finding God in Physics" All I can say is ...Amazing! Have had to go back and forth to reread earlier sections as the author had suggested I might need to do. Holy Cow.
Journeyman
(06/08/2000; 10:31:41 MDT - Msg ID: 32030)
Re: Gold a Safe haven?? @Nightrider msg#: 32027

"Inflation has been increasing over the last 25 years but Gold has lost half of it's Value. Could it be that Gold
isnt the Safe Haven that we think it is?." -Nightrider msg#: 32027

Anything's possible; maybe this IS really, finally, the "new economy" after all those false "new economies" regularly declared under similar circumstances in the past. Could be.

But when was the last time you had a flat tire? Have you trashed your spare yet?

And a good thing too --- your tires have worn down to the cords over the last 25 years.

Regards,
Journeyman
John Doe
(06/08/2000; 12:25:37 MDT - Msg ID: 32031)
The Essence of Momentum Investing
As usual, The Onion nails it squarely

Blue Line Jumps 11 Percent

http://www.theonion.com/onion3621/blue_line_jumps.html
wolavka
(06/08/2000; 13:07:52 MDT - Msg ID: 32032)
sometimes too fast
PPI to be used as the excuse. gold trend still up.

tight range tonite till new york opens.

R Powell
(06/08/2000; 13:45:59 MDT - Msg ID: 32033)
COMEX numbers for Wed.,June 8th
http://www.crbindex.com/reviews/story4000.html Volume= 35,382

Open interest= 142,214

Open interest change= up 1,373

Gold was down slightly on Wed. and open interest was up which might indicate no short covering Wed. or new positions simply outnumbered those that were closed.
Nightrider
(06/08/2000; 13:46:40 MDT - Msg ID: 32034)
Journeyman your post made no sence at all
Journeyman thanks for the time you took to read and respond to my post "Has Gold lost it hedge" But i found no sence at all in your responce.
ORO
(06/08/2000; 13:54:40 MDT - Msg ID: 32035)
Nightrider - gold as safe haven
Gold in specie is a safe haven from default by the monetary/banking system. However, its day to day price is determined by that system itself in that it displaces specie with fiduciary gold - paper gold. The dilutive effects may become greater than the dilutive effect of the fiat money/credit printing in that system.

Actually, the growth of fiat money supply has been greatly overcome by the growth of the paper-gold supply. Considering the growth in gold derivatives outstanding notionals in the US from 81 mil ounces in the beginning of 95 to 160 at end 96 (double in 2 years) to 240 at mid 98 (triple in 3.5 years) to 337 at last count - that is a four fold increase since 1995, a double since 97. And this is for US banks alone. Including foreign banks, the amounts are much greater, at 26000 tonnes today, 19000 tonnes in 1998, and up from 9000 tonnes in 1995.

Had money supply been growing at that rate, we would have been in hyperinflation long ago. Hey, even the Brazillian Real does not inflate so quickly.

Q Bil $ POG $ mil oz
95Q1 31 382.12 81
95Q2 33.7 387.56 87
95Q3 40.3 383.05 105
95Q4 53.9 387.44 139
96Q1 57.6 396.25 145
96Q2 53.8 385.27 140
96Q3 64.1 383.14 167
96Q4 58.8 369 159
97Q1 59.5 351.81 169
97Q2 52.2 340.76 153
97Q3 60.8 322.8 188
97Q4 62.2 288.74 215
98Q1 62.3 295.94 211
98Q2 69.6 292.32 238
98Q3 74.1 288.98 256
98Q4 68.4 291.62 235
99Q1 65.2 285.96 228
99Q2 61.4 261.37 235
99Q3 83.4 266.6 313
99Q4 87.6 282.37 310
00Q1 95.5 283.2 337


So, the reason to use gold is to protect yourself against the chaos of the gold banking system collapsing in a massive bank run, and the economy tanking with it. At that point, many people that have been buying paper gold instead of physical will have to buy physical gold as they realize that promises are valuable only till the moment they are called upon fo fulfillment.
Leland
(06/08/2000; 14:27:44 MDT - Msg ID: 32036)
Oro, You Did it AGAIN!
And one of Michael's favorite quotations:

Dr. Moneywise says:
"Consider this: Those a Quarter richer
today can be a Dime poorer tomorrow and
Never know the reasons why. While those
who put Gold away have already saved
for that Rainy Day!"
SHIFTY
(06/08/2000; 14:44:06 MDT - Msg ID: 32037)
NY Ponzi
Nasdaq 3,825.56 + Dow 10,668.72 = 14,494.28 divide by 2 = 7247.14 Ponzi

Down 78.92 ponzi points
TheStranger
(06/08/2000; 14:52:21 MDT - Msg ID: 32038)
Nightrider
This is taken from comments I posted last December:

"Gold is often touted as being the superior alternative to paper. In the short run, that notion is only true or not depending upon whether its price is rising or falling. But, in the longer run, gold must compete with stocks, bonds, real estate, etc. And, of course, some of us like to believe that bullion is superior to these investments, particularly in times of fiat money, great currency inflation or military threat. But, in our own century, the 20th, the world has seen more of these phenomena than any other. Yet, over the past 100 years, gold has risen in price against the dollar at an annually compounded rate of about 2.5%, probably less than any other investment you can think of."

Nightrider - I repeat the above now to challenge the notion that gold should even be considered a safe haven. That notwithstanding, however, experience tells us that gold is still a very profitable investment....SOME OF THE TIME.

I would also challenge your suggestion that inflation has been increasing the last twenty-five years. My recollection is that inflation was higher in 1975 than it is today. I think it would be more accurate to say that, for the first time in a long time, inflation has been increasing in the past YEAR. And sure enough, gold's price has risen some 6% or so during this period, while stocks and bonds are mostly down.

Let's not forget one of the most basic rules of investing. It isn't what you own that matters. It is when you own it.
goldfan
(06/08/2000; 15:25:03 MDT - Msg ID: 32039)
Nightrider (06/08/00; 13:46:40MT - usagold.com msg#: 32034)
Sir Nightrider, I invite you to consider whether something's Value may be measured by its Price.

Something which is in ready supply, may have a very low price, but that does not mean it has a low value. Its value is a matter of perception. How that translates into price, depends on how badly it is wanted, and what people are willing to give up, to get it when it's supply becomes restricted. In fact something perceived to have high value, may come to have a high price, even when the supply is great. Witness Microsoft or Amazon.com stock, or the current trend in whatever "collectable" or child's toy, is in fashion.

I take it to be a measure of the spiritual shallowness, and the disrespect for history, of our time, that so many people measure value by price alone.

In my area recently, many people died suddenly from infected water. Suddenly, we perceive that pure water has a value beyond price. When I was a boy, a pair of skates cost $2.50. Today, my kids skates cost 100 times as much. It is not that the skates have changed in value!!

In fact, in the way of thinking of many excellent Knights, students of history and of value both, I guess that the dollar never had much real value, and this is now being made plain as it approaches its true value in "skate units". ie, in my youth it was overvalued at 40% of a skate unit. Today, it is apparent that it never was worth more than 0.4 of 1% of a skate unit. So it will go with gold or any other work of people or nature that we truly value.....

Goldfan
Hill Billy Mitchell
(06/08/2000; 15:32:01 MDT - Msg ID: 32040)
Official release
http://www.bog.frb.fed.us/releases/H15/update/
Official: Federal Reserve Statistical Release

Release Date: June 8, 2000

Rates for Wednesday, June 7, 2000

Federal funds 6.50

Treasury constant maturities:
3-month 5.92
10-year 6.13
20-year 6.26
30-year 5.89

upside-down spread FF vs long bond = (.61%)
Hill Billy Mitchell
(06/08/2000; 16:30:23 MDT - Msg ID: 32041)
Gold a Safe haven?
@ Nightrider (6/8/2000; 8:49:04MT - usagold.com msg#: 32027)

Your question:

Gold a safe haven?... Could it be that Gold isn't the Safe Haven that we think it is?

My response:

I take you to mean by the phrase, "we think it is." that you are asking an honest question while acknowledging that you still believe it to be a safe haven as many who post on this forum including myself do. You question is a fair one especially in the light of the real life story you shared with us. I can assure you that you were describing my life exactly. You must be 50-55 years of age. I do have some thoughts, which I hope will provide honest light to your honest question.

A safe haven: By this we mean that gold is the haven and that which is harbored there is wealth. The purpose of the haven is that of long-term protection from those forces which would destroy the wealth. Of course if the haven can be destroyed then that which is harbored, the wealth, would be destroyed simultaneously with the destruction of the haven.

Gold is, in this case, the safe haven. Its value as a haven is its indestructibility; ie the intrinsic value does not diminish one iota. One ounce of gold is one ounce of gold is one ounce of gold.

The value of the harbored wealth in terms of fiat prices is determined only twice--1st at the time the wealth moved from fiat to the physical haven, 2nd at the time when the wealth is moved out of the physical haven and back into fiat paper. All speculations as to changes in the value of the wealth stored, (between these two points in time) are meaningless. All that matters is the point in time when the wealth is relocated. To move my wealth from the physical haven at this time is anathema to me; however I can only speak for myself. I am pleased that I am the only one who can make the choice concerning the location of my wealth. For that reason I would certainly not disparage you for your choice, whatever that choice may be.

Let me guess. Most of the responses to your question missed the point that you were asking an honest question, did they not? That you have not made the decision to move your wealth yet, is my bet. Am I correct? Let the honest questions continue and let the attempts to discover the truth go forward. I welcome your question and hope that when I ask an honest question on this forum that the responses would more be in the nature of a helping hand rather than a raised eyebrow for asking the question.

I do hope that what I have said does not in any way appear to be an attack directed towards the previous respondents, all of whom are highly esteemed by me.(how's that for covering your own behind{grin})

Regards

HBM
USAGOLD
(06/08/2000; 16:38:06 MDT - Msg ID: 32042)
Gold Blesses. . .
http://www.gold-eagle.com/research/schultzndx.htmThe following was posted by my good friend, Vronsky, over at the Gold Eagle forum. I thought it a particularly appropriate characterization of the yellow from one of the most highly respected newsletter writers in the business -- Mr. Harry Schultz.

Begin quote:

Gold vs the price of gold: I've written several times over the last 36 yrs but tis time to restate
this principle with force. I am pro-gold regardless of the price!!! I don1t fight for gold in order
to make a profit on gold shares, bars or coins!! Gold is
important for far more important reasons & I would be embarrassed to promote gold only for
monetary gain. Gold is the essential linchpin for our individual (not group or nation) freedom.
Gold belongs in the monetary system as a governing factor. We belong back on the gold
standard. I used to compromise & say a quasi-gold standard will probably do, a modified
Bretton Woods version.

��And that may be what will evolve, but in my view we should fight for a pure gold standard,
the old fashioned form, because it worked! And not just for fiscal reasons! It forced nations to
limit their debt, spending, & socialist schemes, which meant sound
behaviourial habits were formed around those limitations, & those habits rubbed off on
everyone. People were more honest, moral, decent, kind, because the system was honest &
moral. Cause & effect. Today we have cause & effect of the opposite standard: no
limits on what govts can do, control, dictate; no limit on govt debt, welfare or socialist
schemes. There's no governor on the govt engine.

���This habit also rubbed off on the public, causing them to go into debt, lose respect for the
system & morality. The effect brings us more divorce, fraud, crime, illegitimate births, broken
homes. When the money of any country loses its base/backing there is no standard for any
behaviour. Money sets a standard that spreads into every area of human activity. No paper
money backing: no morality. That's why gold coin money
worked so well & why the US moved into paper money very slowly, carefully, keeping
paper-$1s backed 100% by gold. But slowly, like slicing a sausage, that backing was removed
in stages, til now there is none. The effect of this cause is all around us.

��Violent films reflect violent society reflect no respect throughout society. Layer by layer,
we're corrupted when money loses certainty. Today1s stock mkt bubble is part of the scene as
will be tomorrow1s mega-crash & mega-recession. Big Brother was made
possible through the absence of automatic controls & loss of individual freedom via
non-convertible currency. So, pass the word. Fight for gold. Not for profits, though they are
helpful & help us fight for individual freedom, but for a future that returns to sanity in various
standards. If we have a gold standard we get golden human standards!! The two are
intertwined. They are the ultimate cause&effect. Gold blesses.

Posted on behalf of
Harry Schultz
Editor, The International Harry Schultz Letter

End quote.

Please click link above
JCTex
(06/08/2000; 16:48:31 MDT - Msg ID: 32043)
Gold A Safe Haven
Nightrider (6/8/2000; 8:49:04MT - usagold.com msg#: 32027)I can only speak for me:
Would I prefer a safe haven that has been one for [literally] thousands of years or
a piece of paper that some T.V. talking head, or [shudder] one of Clinton's bureaucrats tell me is wonderful & safe?

Believe I'll go with the gold. Two reasons: [1] thousands of years of historical proof, and/versus [2] their lips are moving.

TownCrier
(06/08/2000; 17:34:47 MDT - Msg ID: 32044)
Highlights from today's ECB press conference following the 50 basis point rate hike
Willem F. Duisenberg, President of the European Central Bank:
Over recent months the risks to price stability in the medium term have clearly continued to increase. This assessment has been supported by the information from both the first pillar and the second pillar of the Eurosystem's monetary policy strategy. With regard to the first pillar, strong growth of money and credit throughout 1999 and the pronounced expansion of money and credit aggregates over the first four months of 2000 have strengthened the view that liquidity conditions are ample. As for the second pillar, in a phase of strong growth upward risks to price stability currently relate mainly to the spillover of rising import prices to consumer prices, owing both to the lagged effects of the exchange rate depreciation and to rising oil prices. In fact, most inflation forecasts have been revised upwards over recent months. This is a matter of concern. Today's increase in ECB interest rates is a decisive step to address these upside risks to price stability and it will contribute to the continuation of non-inflationary growth in the euro area.

...Let me start by addressing the latest monetary developments in the euro area. The three-month average of the annual growth rates of M3, covering the period from February to April 2000, was 6.3%, i.e. significantly above the reference value of 4�1/2%. Thus, the most recent M3 data confirm that the liquidity situation in the euro area continues to be very generous. M3 growth deviated from the reference value in 1999 and growth rates increased further in early 2000. This picture of very generous liquidity conditions in the euro area is complemented by the rapid expansion of credit to the private sector, which remained close to or above 10% throughout 1999 and exceeded 11% in April 2000. Taken together, such developments would clearly point to upside risks to price stability over the medium term, if not counteracted in time.

Looking at economic developments, the outlook for growth in the euro area has improved markedly over the past few months. Overall, indicators for economic activity released since the end of last year point to continued strong growth, following the upturn in real GDP growth in the second half of 1999. All the forecasts currently available from major international organisations and private institutions now project real GDP growth to be above 3% this year and next year, which is significantly higher than expected at the end of last year.
---
Question (translation): Mr. President, I would like to have your feeling on a few things. Do you think that the previous rises in rates have had a favourable effect on the euro exchange rate, which is now appreciating against the dollar? That is the first question. Second question: do you not think that we are going to accredit the idea that, for the ECB, a rate of growth of 3% is the maximum rate of growth that the euro area can support?

Duisenberg: The previous hikes in interest rates may have had an effect on the turn-around in the sentiment about the exchange rate. If that is so, then it is only welcome. But those interest rate moves and the one of today were in no way a reaction to the exchange rate developments, because we do not have, as you know, an exchange rate target. Yet, as a side effect, if they have helped to change the sentiment, then we are only grateful. The current forecasts for growth for both years, as I have said, by many institutions, and our own analysis, point to a rate of growth in excess of 3%, both in 2000 and in 2001. But there still is under-utilisation of capacity - the output gap may be closing, but I would not say that we would want to cap growth in any way at this stage and at this rate. On the contrary, we believe that the interest rate move of today creates the conditions for a sustained period of non-inflationary but high growth.

Question: There have been no questions about the weak euro this time, or where it stood three weeks ago. When do you expect the questions about a too strong euro?

Duisenberg: Not today.

Question: Mr. Milton Friedman, the Nobel prize-winning economist, has said that the euro is up to 25% undervalued against the dollar. Is that something you could adjust to?

Duisenberg: I know that the exchange rate of the euro, even after the recent appreciation, does not yet reflect the fundamentals, whatever they may be. But I am not in a position to declare a certain value to be the right value. That is what the markets decide. And when it does reflect the fundamentals, you will not hear me saying anything either.

Question: Mr. President, comparing today's moves with the last two interest rate hikes in February and March when you raised rates by 25 basis points, whereas - today - you have raised them by 50 basis points, something must have accelerated in the last six weeks. Can you be a little bit more precise on what exactly triggered today's 50 basis point move?

Duisenberg: Well, an assessment, as I gave it to you, of all recent indicators and comparing them with the assessment we had made towards the end of last year, they increasingly point to significantly higher future inflation than we thought only four months ago. And these are the monetary indicators: the forecasts made by others, the development of the exchange rates up until two weeks ago, the development of oil prices - there has been some decline, but an immediate rebound after that - all make us increasingly concerned that, over the medium term, inflation might - if we did not act decisively - exceed the 2% limit which we have set for ourselves. We believe that, with this move, combined with the moves we have made since November last year, we will avoid that danger.

Question: Mr. President, I would like to take you up on the question of oil prices. First of all, how do you see oil prices evolving and do you feel that the reversal in oil prices is something that will continue and is a worrying trend? You have obviously highlighted your concerns about inflation today, that is quite clear. Do you see that there is a longer-term average price for a barrel of crude that is acceptable in your eyes? And third, how do you see this evolving into price anticipation of consumers, given many of the commercial interests which mean that falling prices tend not to be passed on to the consumers as quickly as rising prices?

Duisenberg: When we look at the oil prices we of course also look at futures. And the futures indicate that the oil price may at some point fall, but they have already done that for a long time. The oil price is not falling and has not fallen. So we try to assess, to the best of our knowledge, what is not always an accurate guide. And I have actually asked the same question you have just asked me: I asked my colleague from Saudi Arabia that question last weekend, and I got an answer which was as vague as that which I am giving you. Will it work its way through? Will it push consumer prices up or down? I think the evidence indicates "yes", with a lag, but in both directions. When oil prices come down, you will - after a while - also see petrol prices coming down for the consumer, and you even saw that happening by a few cents this week and, when they go up, you see with a lag - which may be several months on average - that these prices work their way through to the consumer price level as well. Whether there is an optimum price - as was asked - I would not know. There probably is, but not for the central bank.

Material from the Press Division of the European Central Bank
http://www.ecb.int/
Leigh
(06/08/2000; 17:40:58 MDT - Msg ID: 32045)
Golds Revenge: Did He Get It Back?
Date: Thu Jun 08 2000 03:33
Golds Revenge (God's Revenge is Gold's Revenge)
Copyright@2000 Golds Revenge/Kitco Inc. All rights reserved

Gold's Revenge is God's Revenge

A phone call
Stretched
Across
The Largest Ocean
Two men
Holding the key to
ALL
That unfolds
Do you really believe that
Gold
Matters?
The angry banker barked into my
Ear
Do you really believe that you will
Win?
So I placed a phone call
And
Demanded the
Return of
ALL
My
Gold
Knowing
Full
Well
That a man who owns gold
May not always
Win
But
Knowing
Full
Well
He is
Far less
Likely to
Lose

666
666
666
666
666
666

Gold
Fun
Begins
Now
Journeyman
(06/08/2000; 17:46:07 MDT - Msg ID: 32046)
Re: Journeyman your post made no sence at all @Nightrider, ALL

Never did do too well with those smart-alec short answers!

OK. Let me try again. Promises of "new economies" abound in
history, all based on un-backed irredeemable paper currency. The
best warning about this I've run across is the following from
Andrew Dickson White's 1912 classic, Fiat Money Inflation in
France:

"Thus was the history of France [during the 1793 paper
currency debacle] logically developed in obedience to
natural laws; such has, to a greater or less degree,
always been the result of irredeemable paper, created
according to the whim or interest of legislative
assemblies rather than based upon standards of value
permanent in their nature [gold] and agreed upon
throughout the entire world. Such, we may fairly
expect, will always be the result of them until the
fiat of the Almighty shall evolve laws in the universe
radically different from those which at present
obtain." p. 109

According to White, fiat currencies ALWAYS massively devalue. You
don't need to believe in the Almighty for White to be correct
however. The trend has continued through-out history. You can
find at least one currency every year that goes down the tubes
taking the savings of everyone holding _anything_ denominated in
that currency with it. Anything. Currency, stocks, bonds,
options, derivatives of all kinds. ANYTHING. And some people
think the dollar is getting a little long-in-the-tooth, as they
say in the theatre.

There seem to have been a lot more fiat currencies than normal
going down the tubes lately. Some examples you may remember
having heard about quite recently: Mexico, South Korea,
Indonesia, Thailand, Philippeans, Russia, Turkey, Brazil (again),
Ecuador. I probably missed a few.

But it couldn't happen here. The dollar's immune, right?

As The Stranger suggests, you may be able to make money over the
long run in paper vehicles if you switch in and out of them at
the right times, or buy at what turns out to have been the
"bottom" in retrospect and hold them.

But if you don't switch into the right non-domestic currency or
non currency denominated "something" (such as gold) before the
currency you're playing in goes down the tubes, you may lose
everything you previously "won" -- and more -- due to the massive
depreciation in value that regularly occurs in fiat currency.

But it couldn't happen here.

The worst you can say about gold is that it's insurance against
just such a massive depreciation in fiat. Indonesians holding
gold DIDN'T lose their buying power when the rupiah melted down,
in fact some of them were able to buy-up neighboring farms with
their gold, for example.

That's what I was hoping to convey with the spare tire analogy.
A spare tire is your insurance if you get a flat. If you've been
driving for awhile on your current set of tires and haven't had a
flat, do you trash your spare?

If things have been going along fine in dollars for a long time
so you haven't needed your gold, do you trash it?

But the dollar's immune, right?

Regards,
Journeyman
HI - HAT
(06/08/2000; 17:46:15 MDT - Msg ID: 32047)
USAGOLD msg. 32042 GOLDEN INCHES = GOLDEN FEET
What Schultz has written concerning the bedrock wellspring for values standards and gold is the heart of the interaction rituals from which all standards enter into the human lexicon to be judged.

The Secular Humanists and Moral Relativist vermin are all in their element when grey areas and non-absolutes are the norm.

This causes mis-allocation and suffering.

If gold is not the apex of intrinsic absolute value, Man would have to re-invent something that was.

It won't be a Federal Reserve Note.
Peter Asher
(06/08/2000; 19:14:41 MDT - Msg ID: 32048)
The Simple Truth

Occasionally on this Forum an ongoing brilliant debate of great complexity is laid out crystal clear in a brilliantly written simplicity. Such is this excerpt from Hill Billy Mitchell (06/08/00; 16:30:23MT -#: 32041) below.

In regard to the role of Gold as a safe haven HBM's statement here is to me as Keats said about truth being beauty and beauty being truth. "This is all you need to know and all there is to know" (Quote approx.) IMO this excerpt belongs in the Hall of fame

>>>>A safe haven: By this we mean that gold is the haven and that which is harbored there is wealth.
The purpose of the haven is that of long-term protection from those forces which would destroy
the wealth. Of course if the haven can be destroyed then that which is harbored, the wealth,
would be destroyed simultaneously with the destruction of the haven.

Gold is, in this case, the safe haven. Its value as a haven is its indestructibility; ie the intrinsic
value does not diminish one iota. One ounce of gold is one ounce of gold is one ounce of gold.

The value of the harbored wealth in terms of fiat prices is determined only twice--1st at the time
the wealth moved from fiat to the physical haven, 2nd at the time when the wealth is moved out
of the physical haven and back into fiat paper. All speculations as to changes in the value of the
wealth stored, (between these two points in time) are meaningless. All that matters is the point
in time when the wealth is relocated. <<<

wolavka
(06/08/2000; 19:26:39 MDT - Msg ID: 32049)
315
315.00
R Powell
(06/08/2000; 19:45:08 MDT - Msg ID: 32050)
An opinion of Fed tightening from across the pond
http://www.smithers.co.uk/standard127.html As seen from London.
Solomon Weaver
(06/08/2000; 20:01:36 MDT - Msg ID: 32051)
Nightrider and the gold haven
Nightrider

It is interesting how often someone here expresses some doubt....and the voices come out of the woodworks in encouragement.

I heard a great line on public radio yesterday. The speaker mentioned that he had grown up on a farm in Wyoming and his uncle had a well drilling rig...and this uncle always refered to the water from a good well as "liquid gold".

The only "value" that gold has will always be measured against other things....the feeling of safety that gold gives is because we know that at all times and places it is ultimately convertable (and in the meantime immutable).

My advice to you is to consider that the POG, which you use to judge the "value" of your gold is based on a paper market which is not as immutable as gold. You must look beyond the POG. If your gold holding is of a size which you can hand in a pouch over to an heir while you sit on your death bed, will it be any less of a safe haven to that younger blood you leave behind...(not to speak of inheritance taxation).

Poor old Solomon
tg
(06/08/2000; 20:08:24 MDT - Msg ID: 32052)
(No Subject)
did anyone listen to Clintons speech,when he was paying homage to the late Japanese prime minister?
He said something along the lines that the late Prime minister was one of the few who could properly deal with the coming global financial crisis.(slip of the tongue???)
Cavan Man
(06/08/2000; 20:37:17 MDT - Msg ID: 32053)
Sir ORO
You have mail in the castle post.
pdeep
(06/08/2000; 20:53:00 MDT - Msg ID: 32054)
Gold Equities Message Volumes
http://www.thomsoninvest.net/iwatch/cgi-bin/iw_page?group=0&1=Go&temp=homeOn Wed evening, the buy:sell was 1:3. Today it has reversed 3:1. So far, for a grand total of 4 data points, a positive ratio has predicted a rise in bullion prices the next day. Since I'm in the yellow hand-held for the long term, I don't really care what the price does. This is purely for amusement!
Chris Powell
(06/08/2000; 21:01:42 MDT - Msg ID: 32055)
GATA keeps making trouble at the NY Fed...
http://www.egroups.com/message/gata/481?... over its accounting of gold being
shipped out of the country.


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
Al Fulchino
(06/08/2000; 21:06:50 MDT - Msg ID: 32056)
(No Subject)
Henri (6/8/2000; 9:59:12MT - usagold.com msg#: 32029)
Al Fulchino
Am getting deeply into "Finding God in Physics" All I can say is ...Amazing! Have had to go back and forth to reread earlier sections as the author had suggested I might need to do. Holy Cow

AF: I was wondering whether any of you fine folk, whom I sent the book to, had started reading it. Henri, that is so good to hear. I am glad you find it so interesting. It has been a year since I have read it and I am thinking of giving it another go. I have, however gone back to the very last two segments/chapters several times. These two are very beautiful and always bring a tear to my eye and soul. I am not sure you have gotten there yet, so I will not say another word. :)

Has anyone else read it? Just curious.



beesting
(06/08/2000; 21:54:48 MDT - Msg ID: 32057)
Nightrider # 32027 Gold a Safehaven.

Seeing as there were so many good responses to your post, may I view it from a different angle?
Part of your post:

<less concerned about making our money last to the end of the week our, standard of living, hasnt
changed alot.

I find this interesting because Inflation has been increasing over the last 25 years but Gold has lost
half of it's Value. Could it be that Gold isnt the Safe Haven that we think it is?.>>

My comments:
I think what you have touched on is the eternal question, how do we measure VALUE?

Very tough question,for instance;
I buy a house for say for $100,000, as the house gets progressively older(wood,cement,etc. ages and decays)yet the dollar amount value, in most cases, if I can find a willing buyer,goes up.And it will always go up in dollar amounts on my property tax statement.

So,lets go back to how do we measure value?
Well it seems the consensus is everything is measured in dollars or everything has a price.

Well, I don't agree, different things have ever changing values in relation to TIME.Most things go down in dollar value as soon as you buy them, including many sure thing investments.If you hang on to them long enough and take good care of them they(things)may go up in dollar price due to the value a collector may set. But mostly the everyday things one buys over a 25 year period become worthless with age.
Here is a rhetorical question. What is the dollar figure for 25 prime years of ones life?

However, there are a few things known the world over to be AGELESS, which means, they never age or wear out, even under harsh natural conditions(weather'salt water,etc.).In some cultures this type of object often has become priceless to the owner, as the owner wishes to be buried with it.Gold fits this catagory perfectly!

So how do we value GOLD in the 21st century? We the people allow the big Gold traders(100 ounce contracts{COMEX} and 400 ounce bars{LBMA}) to set a wholesale everchanging Gold price in the mostly paper traded Gold markets, many hoping for quick paper profits.

I submit, physical Gold in hand may be priced by YOU the owner, at the time of sale or any time in between!!! Think about that,unless a person is financially in a bind and has to sell,,,, YOU are setting a fair market value with the Gold YOU own outright!
USAGOLD is in the business of selling Gold at slightly above wholesale paper prices, and deals in high volume to offer buyers the best possible prices. But once the Gold is in your sweaty hands,you own it outright YOU set the price!!You may decide when to sell or who to sell to. Gold may be the only investment left to Americans where the physical owner has the right to set his/her own price.
Most here see gold as a long term storage of wealth, not found in most other buyable things,that has the potential for great profit.
Thanks for reading.....beesting.






Jason Happy
(06/08/2000; 22:26:37 MDT - Msg ID: 32058)
I am deeply sorry...
Dear Forum Readers,

I am deeply sorry for offending people by posting anything regarding the Protocols. I was not aware that they had the history of being used to stir up hatred towards the Jews. I had read that they had, but I did not believe it. I thought such claims were simply a tactic to discredit the Protocols.

From my reading of the Protocols, I, myself, was not inclined to feel any hatred toward either the Jewish people or the Jewish religion. And I did not understand how others could. My mistake was in thinking that hatred had to be logical. Thank you Usul, for educating me on this point.

If any feelings were engendered in me, they tended to fall along the lines of admiration for the few "supposed" wise rich Jews for being wise fellow gold holders. And secondly, that if the plans are real, whether instigated by Jews, Catholics, Muslims or Satanists, they must be very close to completion, which is just one more reason to buy and own gold ourselves.

I do not hate the Jews, nor do I hate their religion. My savior is a Jew; and He tells me to love everybody! Nor was I trying to present any reasons for anyone to hate anyone.

I thought I was just presenting some information from an old document that had something to say about a world plot and gold. To me, that this document claimed to have come from a few rich Jews who seem to hate all non-Jews, was the irrelevant part.

My reasoning went somewhat like this: Suppose there was an ancient KKK manual, espousing hatred towards non-whites, and it included plans for world domination and comments about gold that tended to mirror things seen in history. First of all, I thought that people would be able to differentiate between racist ideas and economic ideas. I was wrong.

Secondly, I also tended to think that such a hypothetical KKK-type document would be racist, but, if anything, only in an anti-Black sort of way. I couldn't imagine that such a document could ever be described as anti-white. Thus, I was having much trouble seeing how people could call the Protocols anti-Semetic. Once again, my fault was in thinking that hate had to be logical.

I'm deeply sorry for causing all the trouble, and causing an uproar at this wonderful forum that discusses GOLD. I really hope that this is the last post regarding the Protocols and racism. If people can't discuss the Protocols and what they have to say about Gold, specifically, then they probably shouldn't be mentioned at all. After all, this is a GOLD forum.

I almost feel sad to waste the forum's time with this waste-of-space of a post that has almost nothing to say about GOLD, but I felt an apology was in order.

Maybe tomorrow I will have time to answer YGM's question, and discuss my affinity for GOLD, and why I was drawn to it and this forum, which is usually filled with other logical thinkers.
Journeyman
(06/08/2000; 22:57:28 MDT - Msg ID: 32059)
Subsidies @Hill Billy Mitchell

Sir Hill Billy, I believe you had the last word in an exchange of
messages about subsidies.

I'm a bit disorganized lately it seems, and haven't had time to
do many great posts here justice.

At any rate, if I'm not mistaken, you suggested a periodic
exchange on how to avoid collecting subsidies, as we apparently
have both done.

It may or may not be "off topic" but a few messages at
appropriate times might be in order.

My problem is that I've nearly reached the conclusion that there
are two ways that involve subsidies that theoretically might
reform the system. One is if everyone refused subsidies, as we
have. The other is if everyone took every subsidy they could get
their hands on.

I've seen little progress from our chosen path. As you pointed
out, it seems a bit lonely here. It seems that while
_theoretically_ this approach might work, and of course is the
moral high road, perhaps the opposite is the ju-jutsu approach,
using the opponent's strength against him, and might work better.
If everyone sought out every subsidy he/she could get their hands
on - - -

Well, anyway, what do you think?

High regards,
Journeyman

Black Blade
(06/08/2000; 22:59:53 MDT - Msg ID: 32060)
CNBC's Seidman gets on air call about Au short positions at investment banks.
This morning I was watching CNBC and cooking at late breakfast. What did I hear? Senior CNBC editor Bill seidman was taking phone calls, and one caller had asked about whether JP Morgan and Goldman Sachs would likely become insolvent if their gold-short derivitive positions went against them. Seidman said that the banks were very well capitalized and that they should have no problem if there were such a situation. It seems as if GATA is making some people take notice. Actually, I was more surprised that the caller made it past the sceener.
TEX
(06/08/2000; 23:16:57 MDT - Msg ID: 32061)
Climb
Climb ....climb...... go up you sneaky little black Kitco Chart line......
Journeyman
(06/08/2000; 23:37:11 MDT - Msg ID: 32062)
Seidman, Gold & J.P. Morgan; Japan @BlackBlade, ALL
BlackBlade, for what it's worth, I took some notes on that Seidman interview. There was an interesting exchange on Japan (included) as well. (Seidman advises the Japanese government on what it should do.)

- CALLER: ~"I heard there was another major insurance company failure in Japan. Is this just the first? Will there be more failures?"
+
SEIDMAN" ~"Japan is in an unusual position. The interest rate the central bank is charging it's member banks is zero in hopes they will keep their interest rates low and people will borrow and get the economy going. So far it isn't working very well. The banks have been borrowing the money and investing it in U.S. securities, and making profits from that. It's the insurance companies that are having trouble, and this is the opportunity for them to recover. They don't dare raise interest rates. Japan has a recovery going, but so far it's very weak." -Chief Commentator Bill Seidman, CNBC, 08-Jun-00, 11:24 AM
+
CALLER: ~"Is it true J.P. Morgan is shorting gold in mass quantities and if something goes wrong, could it fall on U.S. taxpayers to bail them out?"
+
SEIDMAN: ~"I don't know if they're shorting gold, but they are well financed, they have the FDIC behind them. There is a possibility that the American taxpayers might have to bail them out, but that is very remote." -Chief Commentator Bill Seidman, CNBC, 08-Jun-00, 11:26 AM

Regards, J.
Leland
(06/09/2000; 00:37:34 MDT - Msg ID: 32063)
Journeyman, thanks
Bill Seidman, as always, gave honest answers. And, I
remember, 1995, during the Mexican currency crisis, he
did the same.

There was a comment that Ross Perot made at Congressional
hearings during the Mexico crisis that should be repeated:

"Nobody is going to bail us out. If we ever get this great
country in trouble, we are the bank, and there is no bank of last resort for us."

Thanks again
View Yesterday's Discussion.

Topaz
(06/09/2000; 01:07:59 MDT - Msg ID: 32064)
Fridays
Don't you just LOVE Fridays?
This ECB rate hike and the irrational forex action of the Euro in it's aftermath must have kept the PPT working overtime yesterday.
I'm thinking all hell could break loose today as Forex/PM's/bonds all begin a retreat from the Dollar.
Brave call? ..........We'll see!
If ever TS is going to hit TF it's going to be on a Friday, of that I'm sure. Which Friday- well that's another matter.
Topaz
(06/09/2000; 01:50:27 MDT - Msg ID: 32065)
No Au to speak of -"perhaps chaps"
http://www.dawn.com/2000/06/09/ebr11.htmImagine the amount of Au NOT getting to the physical market on account of this little stroke of Genius.
Leland
(06/09/2000; 02:01:32 MDT - Msg ID: 32066)
John Crudele...Latest Column
http://nypostonline.com/business/5697.htm.
Black Blade
(06/09/2000; 02:22:45 MDT - Msg ID: 32067)
Au chart looks interesting!
http://www.kitco.com/market/Gold up $1.40 on a very steep climb if KITCO chart is tyo be believed. Is Au getting a bit frisky in London town? Could this be the start of a recovery. Maybe not, but then again we have PPI numbers coming out and Petroleum prices have been higher lately. Just don't think about the core rate ;-) Hmmmnn...........
Black Blade
(06/09/2000; 02:31:02 MDT - Msg ID: 32068)
Another source of Au on hold. A bit less coming to market.
Source: Financial Times
Solomon Islands gold mine evacuated
9 Jun 2000 06:46GMT

The 125 foreign staff at the Australian-owned Gold Ridge gold mine in the Solomon Islands have been evacuated after the mine was threatened by local militants.

Terry Burgess, the managing director of Delta, Australia's fourth biggest gold miner who bought the 130,000 ounce mine last month, said the company had shut down the operation on Wednesday after members of the Isatabu Freedom Movement (IFM) surrounded the mine.

IFM members had broken into the armoury and stolen weapons, Mr Burgess said.

"Earlier in the week we minimised the number of people at the mine site whilst attempting to maintain mining operations," he said in a statement.

"With an escalation of political violence and lawlessness in the country and around the mine site in the last 24 hours, we have made the decision to suspend our Gold Ridge Operations," he said.

More than 125 people including Australians, New Zealanders, Papua New Guineans, British and Solomon Island nations have been transported to Honiara by helicopter.

Mr Burgess said the company was now assessing the impact of suspending Gold Ridge on its current trading results.

Warring Solomon Islands ethnic militias on Friday agreed to a temporary ceasefire to allow a Commonwealth foreign ministers' visit this weekend aimed at restoring peace after an attempted coup on Monday.

"We confirm that the joint operations will cease hostilities to allow the safe landing and taking off of the Commonwealth ministerial action group which is coming to assist the political security and constitutional crisis in the Solomon Islands," said a statement signed by both militia groups.

"The joint operations also asks the general public to refrain from committing any acts which may jeopardise the security of this important visit," said the statement read by the Solomon Islands Broadcasting Corporation radio.

The Commonwealth delegation, which will include the Australian and New Zealand foreign ministers, is expected to arrive in the Solomons' capital Honiara on Saturday.


Solomon Islands Prime Minister Bartholomew Ulufa'alu has been held at gunpoint since Monday's coup bid by the Malaita Eagles Force. On Wednesday, fighting broke out between the Malaita militia and its rival Isatabu Freedom Movement.

The Isatabu from Guadalcanal are resentful of migration to their island by Malaitans, who have taken top jobs in Honiara.

Leland
(06/09/2000; 02:32:43 MDT - Msg ID: 32069)
This Site Has a Gold Message Board
http://www.superstarinvestor.com/frames_gold.htmlA good candidate for bookmarking.
HI - HAT
(06/09/2000; 04:00:27 MDT - Msg ID: 32070)
Shifting Time Sands
A pschology is a psychology is a psychologyGreat shifts in Human system functions can alter and change in what seems an instant.

But really great blows against an established order occur along the way, whose significance is not understood until after the fulness of time.

Ideas of ideals can have a thought form of such power that whole destinies are made manifest.

BEWARE the spark of a seemingly insignificant event that will burn the existing Paradigm.

Live by the sword ; Die by the sword.
totalamateur
(06/09/2000; 05:42:52 MDT - Msg ID: 32071)
Where find a buyer?!
I'd be glad if someone could help me. A friend has one metric ton of Au for sale; now where do I find a buyer?
Please contact me through forgold@hotmail.com
Black Blade
(06/09/2000; 06:49:45 MDT - Msg ID: 32072)
Morning Wakeup Call!
Sources: Bridge News and ReutersAsia Precious Metals Review: Gold falls on Australian selling
By Polly Yam, BridgeNews

Hong Kong--June 9--Selling from Australia drove spot gold down to below U.S. $284 per ounce late in Asian trade, after the price had fluctuated in a $284.30-284.80 band for most of the day, dealers said Friday. Gold's unclear price direction kept many Asia-based players from taking positions prior to the weekend, they said. The price of gold opened in Asian trade Friday at about $284.10-284.60 per ounce, and moved within a one-dollar range throughout the morning, dealers said. Selling from Australia amid a lack of buying from elsewhere, however, pushed the price down before trading started in Europe, they added. Trading was relatively sluggish in Asia as many players were unsure of gold's next move, dealers said. Some had expected funds' buying to continue to support gold in the near term, but gold fell further in the U.S. overnight. Disappointment at the fall in U.S. trade prompted some selling in Asia on, which also pressured the metal Friday, dealers said. Dealers have adjusted down gold's nearby support to $280 from $284 on Thursday and resistance to $285 from $288, in reflection of the increased bearishness in the market. The prices of spot silver, platinum and palladium hardly moved during the Asian session amid sluggish trading, dealers said. The relatively stable U.S. dollar/yen reduced dampened interest from Japanese traders who normally dominate platinum and palladium trading in Asia, they noted. In Japan, pre-weekend liquidations by Japanese trading houses pushed down most gold contracts on the Tokyo Commodity Exchange late in the afternoon session despite short-covering in the morning and early afternoon, TOCOM dealers noted. Profit-taking drove most TOCOM platinum contracts down, except the April contract which investors were reluctant to sell given uncertain supply from Russia amid strong global demand, they said. One dealer said he expects the TOCOM April platinum contract to rise to 1,650 yen per gram on Monday from Friday's close of 1,600 yen. TOCOM February and April palladium futures rose on increased bullishness in the market, dealers said, adding many players expect far forward TOCOM palladium futures to rise in the near future to catch up with recent rises in the NYMEX in the U.S. The relatively stable U.S. dollar/yen had little impact on the TOCOM precious metals futures on Friday, they noted.

Black Blade: The Aussie producers can't let POG rise. Some are forward sold as much as 12 years. If POG rises and is sustained for any real prolonged period. Then the Ashanti and Cambior fiascoes will be nothing in comparison.



Gold eases but outlook remains good

REUTERS

Gold eased in early European business yesterday and was bumping along the bottom of a range, sandwiched in by buying on dips and producer selling on the upside. The metal was likely to trade between US$285 and $290 an ounce, with the technical outlook still favourable but with Australian and South African producer selling hovering in the wings. Gold was fixed in London in the morning at $285.10, compared with Wednesday afternoon's $284.10 and New York's close of $287-$287.50. Despite the favourable technical outlook, dealers said many of the shorts that sent gold to an 11-week peak at $290.90 on Tuesday had now been flushed out of the market and producer and central bank selling were exerting pressure. "If we get a bit of a slide, there is good support at $280 and at $277," a London trader said.

Australian and possibly South African producers had taken advantage of favourable local currency gold rates to sell. One trader noted heavy selling on the afternoon fix as a possible sign of central bank sales.

Black Blade: This trader doesn't seem to know about the WA agreement. True Au is rising in "value" against the Aussie peso and SA rand.

Meanwhile, Au is up +$1.70 at $285.80, S&P Futures are bolting upward in anticipation of a 0.2 PPI and 0.1 core rate. S&P Futures up +10.40, fair value +16.12, indicating a very strong open on Wall Street at this level and provided there is no surprise in the PPI numbers.
wolavka
(06/09/2000; 06:51:22 MDT - Msg ID: 32073)
refco
what are you waiting for:::::::::::::::: Buy
TheStranger
(06/09/2000; 07:36:40 MDT - Msg ID: 32074)
Leland
Thanks for the Crudele link. I hope everybody takes a minute to read it.
Leland
(06/09/2000; 08:21:22 MDT - Msg ID: 32075)
Q & A With Jim Stack..
http://www.bearmarketcentral.com/stackqanda.htm
"Why can't the Federal Reserve simply cut interest rates to save the stock market?

For one reason, because Alan Greenspan is more worried about the economy than Wall Street. What
has been construed as a pro-bull monetary policy has actually been only an anti-recession policy.
The dilemma comes from the Fed being too willing to step in too soon at the first sign of trouble. To
unwind that perception, we believe Greenspan will not ease until he sees the "whites-of-the-eyes" of
a recession."

(Click For More)
wolavka
(06/09/2000; 08:54:32 MDT - Msg ID: 32076)
wheat
same color, now
USAGOLD
(06/09/2000; 08:56:07 MDT - Msg ID: 32077)
Producer Prices: Benign(?) or Not Benign (?) -- That Is the Question
http://www.usagold.com/Order_Form.html FOR AN INFORMATION PACKET ON GOLD OWNERHSIP6/9/00 Indications
�Current
�Change
Gold August Comex
287.80
+1.00
Silver July Comex
5.05
-0.05
30 Yr TBond Sept CBOT
97~09
-0~04
Dollar Index June NYBOT
107.28
+0.55


Market Report 6/9/00): Gold was up respectably in quiet trading this morning. The London
market found short covering support on a dip to the $283 level and closed at $285.15,and the
improving tone carried over to the New York open. Hong Kong reported Australian producer
selling in what is becoming an old song played nearly every morning in that part of the world. The
reports never mention who that Australian seller(s) might be.

FWN reports London dealers describing a "nervous air" in the gold market after the recent short
covering rally though they didn't expect any "large scale" moves ahead of the weekend. That view
could be sabotaged by competing views on this morning's inflation numbers. Core U.S. PPI
which includes energy and food prices climbed .2% for May while the narrower PPI which
ignores food and energy came in unchanged. Wall Street ignored the real number and concentrated
on the fantasy number as both the Dow and Nasdaq inched initially higher after report. We'll see
what happens when and if reality sets in on the inflation issue.

Gold seems to be reading the numbers as less than benign while stocks are reacting to the hope
that the Fed might table any further interest rate increases for the time being. One wonders if Alan
Greenspan and the Fed ignore food and energy prices in their ruminations. It would not be
considered radical theory to think the Fed's view is slightly different than Wall Street's on that
score. The dollar is having good day -- up against nearly currency on the board.

That's it for today, fellow goldmeisters. Have a good weekend. See you here Monday.
Journeyman
(06/09/2000; 09:17:15 MDT - Msg ID: 32078)
Summers announces . . . @TC, ORO, TheStranger, ALL interested in $$$ supply

Sec. of Treas. Lawrence Summers announced yesterday that the U.S. Treasury may step-up the bond buy-back program in response to strong revenue growth. -CNBC, ~11:13 AM

Regards, J.
Nightrider
(06/09/2000; 09:18:30 MDT - Msg ID: 32079)
Thank you
I would like to Thank everyone who responed to my post yesterday.
Leland
(06/09/2000; 09:32:52 MDT - Msg ID: 32080)
@Journeyman
http://dailynews.yahoo.com/h/nm/20000608/bs/economy_summers_dc_1.htmlMan, o' man, it's getting harder and harder to know what
to believe in the news media. I think your news source
is the CORRECT one.
ET
(06/09/2000; 09:57:46 MDT - Msg ID: 32081)
Microsoft
Featured on Mises.org today are several important pieces on the proposed
breakup of Microsoft: www.mises.org

Professor DiLorenzo's piece is so important, we thought you would like to
see it now. And don't forget about our complete archive on the subject:

http://www.mises.org/microsoft.asp

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

http://www.mises.org/fullstory.asp?control=442

MS-Nationalization
By Thomas J. DiLorenzo

[Posted on Mises.org June 8, 2000]

When Judge Thomas Penfield Jackson "ordered, adjudged, and decreed" the
breakup of Microsoft into two separate companies he effectively replaced
Bill Gates with government lawyer Joel Klein as the chief decision maker of
the Microsoft Corporation. The Judge accepted almost verbatim the Clinton
administration's breakup proposal, authored by Klein and his colleagues in
the corrupt Reno "Justice" Department (with the help and advice of
Microsoft's competitors), effectively nationalizing the company.

There is no more competitive industry than the computer industry, where the
dynamic market process has produced a company like Microsoft, which
produces both a computer operating system and applications. The Soviet
central-planning style breakup scheme ordered by Judge Jackson abolishes
what the competitive market process has produced and in its place puts a
Byzantine regulatory regime that is to be administered by federal and state
government lawyers. There could not possibly be anything more damaging to
competition, economic rationality, and consumer welfare.

The judge's order effectively destroys Microsoft's ability to compete in
the Web browser market, thereby making that market less competitive, and
also prohibits the company from employing routine competitive devices that
are used by thousands of other businesses, such as exclusive-dealing
contracts and tie-in sales.

Judge Jackson even goes so far as to order a kind of forced labor by
commanding Microsoft to "use all reasonable efforts to maintain and
increase the sales and revenues of both the products produced or sold"
prior to his order and to "support research and development" for such
products.

Never mind that some of these products might become obsolete in the
meantime, as they frequently do in the high-tech world; the government
commands the company to keep on producing them, thereby wasting resources
and causing higher costs and prices.

Most businesses that develop close relationships with vendors or suppliers
frequently give preferential treatment to those business partners from time
to time in order to maintain a good working relationship. Microsoft is
prohibited from doing so with the applications side of its business, for
Judge Jackson has forbade offering it "terms more favorable than those
available" to any other business.

In a fit of egalitarian extremism the judge further decreed that all
computer manufacturers doing business with Microsoft must be offered "equal
access to licensing terms; discounts; technical, market, and sales
support," etc., etc. Such discrimination, based on merit and performance,
is a necessity for any successful business, but Microsoft is banned from
it.

The judge's order imposes a huge paperwork burden which will cost the
company (and ultimately, consumers) untold millions of dollars and wasted
man-hours each year. Every single agreement made between the operating
system and applications businesses will have to be reported in detail to
the government every three months.

The company is ordered to divert valuable management talent away from
producing better computer products and appoint a "Chief Compliance Officer"
who will report/genuflect to the government on a regular basis.

A Gestapo-style monitoring system is established whereby the government is
given "access during office hours to inspect and copy...all books, ledgers,
accounts, correspondence, memoranda, source code, and other records and
documents." Fat chance that this proprietary information will not make it
into the hands of Microsoft's competitors, who urged on the lawsuit, were
government witnesses at the trial, and who helped write the breakup order
that the judge ultimately accepted, which included this very directive.

A particularly creepy and totalitarian aspect of Judge Jackson's order is
his encouragement of an internal spying network within the Microsoft
Corporation with his admonition to "establish and maintain a means by which
employees can report potential violations" of the government's regulations
"on a confidential basis."

The source code--perhaps the most valuable asset possessed by
Microsoft--will be stolen with the help of the government. Microsoft is
required to establish a "secure facility" where virtually all of its
business associates will be permitted to "study, interrogate and interact
with relevant and necessary portions of the source code..." This would be
like forcing Coca-Cola to allow other businesses to "study" the secret
formula for Coke, effectively ruining its business.

Microsoft is ordered to produce "written reports" about its practices
whenever the Justice Department lawyers or any of the state attorneys
general want one, opening up the door to endless political extortion ("Give
us campaign contributions and we won't ask for a report.")

No central planning scheme would be complete without price controls, and
the Jackson/Klein scheme is no exception.

The "order" demands "equal access" to discounts offered to computer
manufacturers and, after each new product release, it must "continue for
three years after said release to license on the same terms and conditions
the previous Windows Operating System Product to any [computer
manufacturer] that desires such a license."

The high-technology revolution, led by Bill Gates and Microsoft, has
occurred precisely because, up to now, the computer industry has been the
least-heavily regulated industry in the world. All that will change
dramatically if Judge Jackson's order stands and the higher courts allow
Bill Clinton, Janet Reno, and Joel Klein to effectively nationalize the Mic
rosoft Corporation.

The rest of the world, envious of America's economic success (thanks in no
little part to companies like Microsoft), must be marveling at such a
stupendous act of stupidity and arrogance.

-------

Thomas DiLorenzo, Professor of Economics at Loyola College in Maryland,
serves on the senior faculty of the Ludwig von Mises Institute.

c) copyright 2000, The Mises Institute.
TownCrier
(06/09/2000; 10:00:52 MDT - Msg ID: 32082)
Hear ye! Hear ye! Another "must read" has been added at The Gilded Opinion!
http://www.usagold.com/gildedopinion/taylorparksintvw.htmlCourtesy of Jay Taylor of Taylor Hard Money Advisors, Inc., we are able to offer you this exceptional interview with Dr. Larry Parks, Executive Directorfor FAME. Following is a sample...
------
Dr. Parks: As a practical matter, there is no longer any way to protect our civil liberties, our savings, or our promises of future payment, such as pensions.[...] The problem comes about because the banks should never have been allowed to issue bank notes that were redeemable on demand in gold, which were in law promissory notes, without having the gold on hand.

The reason they got away with that was because they misrepresented to their customers. From the earliest times, they told customers that they were making a "deposit" when they put "their" money in a bank. This was a misrepresentation. In fact and in law, when one puts money in a bank one is making an unsecured loan to the bank. Rather than being a "depositor," one becomes an unsecured creditor. If folks better understood that, then they would have been more mindful that they were taking counterparty risk, and there would have been more oversight as to how much leverage, i.e., fractional reserve lending, that banks did, and there would have been more oversight as to the risks that banks were taking.

Further, the promise that banks made to their note holders, that they could get "their" money back on demand was a further misrepresentation. What they should have said was that folks could redeem if the banks had enough gold on hand, and that, depending upon what banks did with "deposited" money, it might not be available when demanded and, in some cases, the gold might be lost by the banks due to bad investments or whatever.

The key concept that folks need to understand is that fiat money is not wealth. It is merely a potential claim on wealth. That's not the same thing. [...] Let me digress for a moment. Ordinary people have a common problem about how to provide for themselves in old age. It is best expressed in an old labor song: "Too old to work, too young to die, how am I going to get by?" The answer, of course, is that one saves, and, then, when one gets old and can no longer work, one draws down on those savings to provide for necessities in old age. But, with a fiat money monetary system, ordinary people are not saving wealth; they are saving merely potential claims on wealth. The real wealth that the claims represent is actually being consumed now. So, when later comes, it turns out that the claims are said to have lost purchasing power due to some unexplainable phenomenon called "inflation," and ordinary people are wiped out.
---
Grab your torch and wander down the hallway to the Gilded Opinion room, third door on your right. Or just click the link given above to be magically transported. Don't forget to find your way back here to share your thoughts and comments.
TownCrier
(06/09/2000; 11:13:38 MDT - Msg ID: 32083)
IMPORTANT: Zimbabwe foreign currency shortage threatens gold mining
http://biz.yahoo.com/rf/000608/l08190511.htmlCiting an acute foreign currency shortage, Reuters reports that the viability of Zimbabwe's gold mining sector is threatened from this impairment upon the order and imports of necessary mining equipment.

The problem stems from existing law which requires gold producers to sell their product to Zimbabwe's central Reserve Bank, for which they are paid in local currency.

As elaborated by Chamber of Mines President James Maposa at a news conference, "All other exporters have access to foreign currency, but gold producers are not permitted to receive and hold currency in FCAs (foreign currency accounts) and that starves them of that ability to expand and recapitalise. ... What we are asking as an immediate and urgent solution is to allow gold mines to have access to foreign currency for their survival. ... If the situation remains as it is, we see a serious reduction in production and retrenchments in the mining industry as well as gold mine closures." He indicated that lack of access to foreign exchange left the mining sector sitting idly on $8 million of orders for the import of necessary mining equipment.

TownCrier's note: What a shame. Here they are producing the universal money of the world, and yet they are being stifled by local policies and lack of acceptance/functionality of their local currency for purchase of imports on the world scene.

Reuters reports that the gold miners account for 30 percent of the foreign currency received by Zimbabwe. A gold mining company further said that soaring inflation and interest rates (above 50 percent) from the country's economic crisis " threatened the viability of the gold mining industry."

Again, what a shame. Here you can clearly see that even a company that produces gold cannot thrive when the local currency goes south. Despite the nature of their end product, they are, after all, businesses just like any other which can suffer under the same burden of a failing currency and various government capital control restrictions. Mining investors who think their mining shares are a superior, leveraged substitute for the end product (gold) had better think again. This article should make that quite clear.
Leland
(06/09/2000; 11:16:23 MDT - Msg ID: 32084)
An Observation by Jim Stack..
http://www.fiendbear.com/view0500.htm"An investor who put $500 in this [Investment Indicators] fund in 1971 would now be holding
about 39 shares of American Heritage Fund. While American Heritage was featured as THE
top-performing fund of 1997, that original $500 investment today would be worth - drumroll,
please! - $10.92 (or 28 cents/share)!" - Jim Stack

(Click For Full Story)
Gandalf the White
(06/09/2000; 12:14:38 MDT - Msg ID: 32085)
Question to SIR ORO
The Hobbits are asking me to request of you, confirmation of the arrival of the PPT two days ago into the fray, to assist the S&P Futures hold the line against a open market decline. WHAT DO THOU see ? Is this holding down gold ?
Thanks
<;-)
ORO
(06/09/2000; 12:49:37 MDT - Msg ID: 32086)
Wiz - PPT in the SnP
The SP futures did not see much interference so far as I remember. The data is gone now so I can't look at it again.

The late day rises are part and parcel of normal behavior during a bull move.

The lack of volume indicates that the move up is not quite over but it also belies the weakness of it. Leveraged pro players in the tech stocks are gone leaving behind day traders who play the noise in the markets as the only major leveraged players outside derivatives.

The recent action between the Wall Street houses indicates that they are breaking ranks. This is what happens when you see a shrinking pie before you. The traditional deference they have for each other's turf is going away. Watch this, as it is the best indicator of what is to come. As gold holders, we stand to benefit when the houses stop cooperating and each runs for his life. This solid front is what keeps the game going.

Leland
(06/09/2000; 13:24:14 MDT - Msg ID: 32087)
This is the BEST NEWS of the DAY!
By CURT ANDERSON, Associated Press

WASHINGTON (June 9, 2000 1:28 p.m. EDT http://www.nandotimes.com) - Moving closer to passing
a gradual repeal of the federal estate tax, the House on Friday defeated a less costly
Democratic alternative backed by President Clinton.

"We will erase it from the tax code forever, in hopes it will never return from the dead to haunt
family farms and businesses," said Rep. Bill Archer, R-Texas, chairman of the House Ways
and Means Committee.

Later on Friday, the House was expected to vote overwhelmingly to gradually repeal the
estate tax by 2010 using an estimated $105 billion from the projected budget surplus. Clinton
has threatened a veto over the cost - roughly $50 billion a year after full repeal takes effect -
but sponsors, including at least 46 Democrats, are hoping a big majority vote might persuade
the president otherwise.

"It's wrong for the government to steal a family's legacy," said House Majority Leader Dick
Armey, R-Texas. "It's not about money at all."

Arguing that the bill would mainly benefit the rich, Democratic opponents offered a version
costing $22 billion over 10 years that is geared directly toward small-business owners and
family farms, but it was defeated on a 222-196 vote. The Senate Democratic leader, Sen.
Tom Daschle of South Dakota, said that version is the only one that has a chance of
becoming law.

"If they want the accomplishment, they're going to have to compromise," Daschle said.

Supporters said they were moving to help people like Mark Sincavage, owner of a
Pennsylvania land excavation and development business, who says his family has paid more
than $600,000 in estate taxes and legal fees since his mother died in 1999. Much of his
business, he says, will be sold to make up the loss.

"My family worked hard, and we paid all our personal and business taxes for more than 35
years," Sincavage said. "We're going to have to sell a large chunk of our family property just
to pay this unfair tax."

Clinton, in a letter Thursday to House Speaker Dennis Hastert, R-Ill., said he could support
"targeted, fiscally responsible legislation to make the estate tax fairer, simpler, and more
efficient."

He said he favored a Democratic alternative, but was willing to work with the GOP leadership
to find an acceptable bill. But, he added, "If you send me a bill to completely repeal the estate
tax, I will veto it rather than risk the fiscal progress that has contributed to the longest
economic expansion in history."

Almost half of estate tax revenue is paid from a small number of estates worth $5 million and
up. Only a tiny fraction of farms and small businesses pay the tax because of generous
exemptions - $675,000 this year for individuals, $1.3 million for farms and small businesses -
but the stories of people like Sincavage has made the issue irresistible in an election-year
Congress.

It is also a priority for many black and Hispanic lawmakers, who say their constituents fear the
tax would threaten businesses they are now trying to build.

"You do have a number of small-business people, ranchers, farmers, who are trying to pass
their farm or their business to the next generation without paying a high tax. I sympathize with
them," said House Minority Leader Dick Gephardt, D-Mo.

Many Democrats say the Republican bill goes too far, giving huge tax breaks to the wealthiest
people in America in the name of the little guys. They are proposing an alternative that would
cost far less - about $22 billion over 10 years - and would gear tax relief more directly to
family farms and small businesses. It would also cut estate tax rates by 20 percent in 2001.

"Our bill does much more for family farms and small businesses," said Rep. Charles
Stenholm, D-Texas.

But supporters of complete repeal say the Democratic version would only provide modest
relief from a tax that a wide majority of Americans oppose, according to public opinion polls.

"We want to do much more than just take the steam out of repealing the death tax," said Rep.
Jennifer Dunn, R-Wash., a prime sponsor along with Rep. John Tanner, D-Tenn. "We want to
get rid of it."

The bill is the latest example of this year's House Republican strategy to carve up last year's
$792 billion tax cut that Clinton vetoed and pass the more popular items individually. The
House has already passed relief from the "marriage penalty" paid by millions of two-income
couples and more bills are planned.

There is support for estate tax repeal in the Senate, but GOP leaders say the measure would
likely have to be combined with several other tax measures and brought up under special
rules that prevent unrelated amendments from being attached.

The bill is H.R. 8.

(Fair Use For Educational/Research Purposes Only.)
Farfel
(06/09/2000; 13:47:45 MDT - Msg ID: 32088)
Something is going to happen
There is still so much complacency in the gold market and the stock market and the stock market bulls seem to reign supreme again. For many bulls, they appear certain that the bullish trend is somehow re-established, as if the old status quo can be revived.

And yet something has changed, something is going to happen.
Don't you feel it in your bones? Don't you notice a difference in the tone and manner of the usual stock market bulls/acquaintances in your life? Do you notice that even as they declare their certainty about the bullish times awaiting America, those declarations smack more of a performance than real convictions.

There will be no summer rally IMHO. I think there are too many "hurting" investors whose investments are severely decimated, who are fighting the after-effects of margin calls, direct and mostly indirect (house mortgages invested in the stock market, credit card advances invested in the SM, etc).

It is a multiplier process and the devastation of the early Spring market takes time to filter through the economy.

It is a psychological devastation, a realization that the Clinton government is losing control.

My own theory is this: no matter how much wealth (real or phony) this government created for people this past decade, nevertheless it is a government without one scintilla of respect. The people do not respect the President, they do not respect the people who maneuvered on his behalf, they do not respect the institutions of this country. Mass contagion of disrespect and recklessness.

The walls of this "Don't worry, be Happy!" mass euphoria, one in which all negatives were conveniently denied or rejected, are crumbling before our eyes.

Trend shift, plain and simple, and all one can do is prepare for the storm. How ironic that someday historians may look back at Y2k and observe that the boogey man (y2k computer bug) never arrived although reality finally did.

Thanks

F*
Leland
(06/09/2000; 14:09:59 MDT - Msg ID: 32089)
Completely Off-Topic...But IMPORTANT
By H. JOSEF HEBERT, Associated Press
First published: Friday, June 9, 2000


Global warming to change
lifestyles

Study predicts hotter cities, more diseases,
disappearing wetlands in late 21st century

WASHINGTON -- Alpine meadows will disappear,
along with many coastal wetlands and barrier islands.
Cities will be hotter and more humid. Ski runs will be
scarcer, the demand for air conditioners will increase,
and scientists will have to combat a likely resurgence in
insect-borne diseases such as malaria.

This is the weather forecast for the late 21st century,
when average U.S. temperatures will have risen by 5
degrees to 10 degrees.

Assailed by some critics as too pessimistic and little
more than guess work, that assessment is of a country
coping with global warming.

Four years in the making, the report reflects the most
ambitious attempt to gauge the impact of climate change
on America.

A dozen government agencies and hundreds of
scientists, in and out of government, worked on "Climate
Change in America.'' It will be released next week and
later presented to Congress, which asked for the
assessment a decade ago.

The Associated Press obtained a late draft of the
report's overview summary.

"Based on the best available information, most
Americans will experience significant impacts'' from
Earth's warming, the report concludes. Among the
findings:

For the Northeast, warming will ease winter weather
extremes, but bring more rain and possible flooding.

Hotter summers likely with more frequent and intense
heat waves especially affecting cities. Forest species shift
northward and maple trees may disappear. Some
coastal urban centers may have to rework sewer, water
and transportation systems because of sea level rise.
Mountain regions see decline in skiing and increase in
other activities such as hiking.

Among the effects elsewhere:

The Alpine meadows of the Rocky Mountains could
disappear.

Ocean levels will rise, causing wetlands, marshes and
barrier islands to disappear or -- when the geography
allows -- be force inland.

The Great Lakes are predicted to decline because of
increased evaporation causing yet different problems.

Some coastal cities, faced with sea level rise and more
frequent storm surges, may have to redesign and adapt
water, sewer and transportation systems. The study
does not attempt to put a cost to such improvements.

Some critics have charged it paints too dismal a picture
and plays down potential benefits of warming --
increased crop yields and warmer winters that may
make life more pleasant in some areas.

(Fair Use For Educational/Research Purposes Only.)
TownCrier
(06/09/2000; 14:59:14 MDT - Msg ID: 32090)
Comment on Sir Leland's (usagold.com msg#: 32087)
From the article----"Many Democrats say the Republican bill goes too far, giving huge tax breaks to the wealthiest
people in America in the name of the little guys."

What kind of bunk logic is that?? Abolishing the federal estate tax appears as a "huge tax break" only because those wayward gentlemen on Capitol Hill established such a bogus tax in the first place. Had it never found its way on the books, they wouldn't currently be arguing like idiots about the "unfair benefit" that would result to those currently subject to taxation by this ludicrous example of government-sanctioned grave robbing.

That's the view from The Tower.
Leland
(06/09/2000; 15:32:35 MDT - Msg ID: 32091)
Town Crier
One reason I posted, it is always sad to see numismatics
being sold at estate auctions...ESPECIALLY if it is caused
by ESTATE TAXES!
SHIFTY
(06/09/2000; 15:46:59 MDT - Msg ID: 32092)
NY Ponzi
Nasdaq 3,876.55 + Dow 10,627.72 = 14,504.27 divide by 2 = 7,252.13 Ponzi

Up 4.99
Hill Billy Mitchell
(06/09/2000; 16:02:19 MDT - Msg ID: 32093)
Official release
http://www.bog.frb.fed.us/releases/H15/update/

Official: Federal Reserve Statistical Release

Release Date: June 9, 2000

Rates for Thursday, June 8, 2000

Federal funds 6.54

Treasury constant maturities:
3-month 5.91
10-year 6.13
20-year 6.29
30-year 5.89

upside-down spread FF vs long bond = (65.%)
ORO
(06/09/2000; 16:16:14 MDT - Msg ID: 32094)
Farfel - concurring
Completely agree with your observations, looking to rebuild short fund position in the tech sector, perhaps enlarging it with an SP short fund. Signs of weakness are there but no sense of a start is there. The high volatility and the lean volumes do not show strength, but have yet to signal an additional crash.

The EU actions are reminiscent of the German tightening of 1987 that immediately preceded the US crash.

The Eurodollar rate is showing signs of an expected ease in the dollar crunch on international markets. The TED spread, however, is still indicating a crunch.

The crunch dates back to the Fed rate hike in Apr 1997 at TED 20 a few months later, going up to 36 in Oct 98 - truly a sign of a crazy credit expansion. The Fed lowered rates in response to the credit crunch of Aug-Sep 98, but the spread continued falling and brought the TED back to -2 at end 99 with our banks spewing liquidity like there is no tomorrow, the credit crunch was still accelerating. Only now has the TED gone up some - to average 3 since end 99, indicating a bit of a relief (which prompts the Fed to tighten again).

The slow down in new Euro lending reported in March and April should start activation of the debt trap as the dearth of fresh Euro creation joins with the ECB rate hike to the point where a Euro deficit maight start. Euro carry trades are beginning to deteriorate, and barring a spurt of new Euro borrowing, this process should accelerate and start the Euro moving up steeply.

The reserves that are added by the Fed are constantly moving abroad and erasing the foreign dollar debt base. So is much of the fresh money created by new lending.

Turnaround
(06/09/2000; 17:13:46 MDT - Msg ID: 32095)
global hot air

Leland (06/09/00; 14:09:59MT - usagold.com msg#: 32089)
Completely Off-Topic...But IMPORTANT
By H. JOSEF HEBERT, Associated Press
First published: Friday, June 9, 2000

Global warming to change
lifestyles

"�This is the weather forecast for the late 21st century,
when average U.S. temperatures will have risen by 5
degrees to 10 degrees.

Assailed by some critics as too pessimistic and little
more than guess work, that assessment is of a country
coping with global warming.

Four years in the making, the report reflects the most
ambitious attempt to gauge the impact of climate change
on America.

A dozen government agencies and hundreds of
scientists, in and out of government, worked on "Climate
Change in America.'' It will be released next week and
later presented to Congress, which asked for the
assessment a decade ago�."

This is yet another example of the grotesque corruption
of intellect that results rather directly from the systemic moral
rot of a fiat currency system.
A conclusion is reached first by the TPTB. Then, data that
supports that scenario is presented. Other options are not
allowed to be considered.

Let's have a look at few of the things a pre-schooler could
point out (just off the top of my head):
1) Oxidation of fossil fuels is not going to be a primary
global energy source for much longer, a few decades at best.
Manmade CO2 emissions will therefore be decreasing.
2) Sequestering CO2, if need be, is simple and fairly cheap,
for example by Fe seeding the ocean.
3) Most CO2 comes from natural sources- volcanoes, the ocean
surface, decay of organic material. Our contribution is miniscule.
4) CO2 increases plant growth, which absorbs CO2, a negative
feedback loop.
5) We are in a period of unprecedented technological advances,
our knowledge, real wealth, and engineering capabilities have doubling
periods of 2-15 years, depending on category. What business is it of
ours to even THINK we can affect the quality of life
ONE HUNDRED YEARS FROM NOW!?!!
Hello, McFly??
Anybody in there???



Bonedaddy
(06/09/2000; 17:27:23 MDT - Msg ID: 32096)
Something IS going to happen
Farfel, ditto baby!
Leland
(06/09/2000; 17:28:22 MDT - Msg ID: 32097)
@Turnaround
A "pre-scooler" am I. Lots to learn, so little time.
Turnaround
(06/09/2000; 17:38:48 MDT - Msg ID: 32098)
oops
Sir Leland,

I did not mean to refer to you! Sometimes I get a little
too forceful, sorry...eheh.
Leland
(06/09/2000; 17:44:22 MDT - Msg ID: 32099)
@Turnaround
Hey! I knewd that, just havin some relasizin for a very
nice weekend. Enjoy!
R Powell
(06/09/2000; 17:44:56 MDT - Msg ID: 32100)
For Jason Happy
Discussion educates. Don't feel bad. As many of us in the construction trades sometimes say, "The only guy who never screws up is the guy standing in the unemployment line."
Taurus
(06/09/2000; 19:17:13 MDT - Msg ID: 32101)
Get out of the stock market now!
http://www.pronetisp.net/~rbrownI'm no doubt preaching to the choir here, but there are some very good reasons you should be OUT of the stock market right now.

Historically (over the past 100 years) when the P/E ratio of the stock market is above 18 it is considered a "high risk" zone. The S&P 500 (which represents 70% of the entire stock market) currently has a P/E over 30. It has been in this high-risk zone for a decade.

It's been in the high-risk zone so long that the attitude of investors has become very blas�. "Show me something else I don't know."

Even the pessimists amongst us, even those who realize that trees don't grow to the sky, even those who realize that the stock market over the past 100 years represents a geometric progression which is approaching plumb vertical, even those folks say, "Show me a SIGN. Show me a sign so the meaning is clear. Show me a sign so that I can be SURE."

OK. These are the signs. I didn't invent these, mind you. They were invented by stock market analysts far smarter than I. (Can you imagine, in this election year, the pressure that's on the Fed to hold things together? To hold things together in the face of these phenomenal signs, signals, and portents?)

1. Inverted yield curve. Usually long-term U.S. government bonds pay higher interest than short-term U.S. government notes. If a 30-year bond pays 7%, say, then a 2-year note pays less � 6% say. It's a very strange situation when 2-year notes pay MORE than 30-year bonds. But that's what we have today. Two-year notes are currently yielding half a percent higher than 30-year bonds. This is called an "inverted yield curve".

An inverted yield curve has occurred 8 times since 1956. On 7 of the 8 occurrences, the inverted yield curve was followed by a steep drop in the stock market. Of course your financial advisor warned you about this.

2. High oil price. In the past 12 months, the price of crude oil has gone from $12 to $34 a barrel. This has happened only twice in the past century (1973 and 1979). Both times it put the U.S. economy in the toilet. So here we are again. Gee, I wonder what will happen this time?

3. T-bill versus discount rate. Here's a quote from "Blood in the Streets" by James Dale Davidson and Sir William Rees-Mogg, page 414: "Buy the stock market when the Treasury bill rate goes below the discount rate; sell the stock market when T-bills go above the discount rate. This relationship has worked for so long that it is a matter of conviction among most professional investors."

At the moment, the discount rate is 5.25% and the T-bill rates range from 5.55% to 6.29%, depending on maturity. T-bills of all maturities are ABOVE the discount rate. This is a heavenly portent that doesn't occur very often but when it does, look out! Surely your broker alerted you to this.

These signals all exist NOW, as we speak. Pick a copy of Barron's and check it out. The planets have lined up and we have three unambiguous, simultaneous signals saying, "Get out of the stock market." It is really strange to me that so few people seem able to hear the message.
Leland
(06/09/2000; 19:17:25 MDT - Msg ID: 32102)
(Tongue-in-Cheek), NOW for a REAL Exciting Weekend..
FORBESTOWN - Gold Trader Flat (the life-sized replica of a Gold Rush town located in Forbestown)
and its neighbor the Yuba Feather Museum are getting ready for their opening day for the year 2000
season.

The town and museum will open on May 27 with new exhibits, costumed characters to entertain, food
and music. The day of living history (10 a.m. to 4 p.m.) will feature the Sierra Outlaws performing old
west skits, the Sierra Muzzleloaders firing their muskets, a cobbler making shoes, pottery making, a
blacksmith forging tools, pa printer working the old, clanking press, and a candle maker. Visitors may
stroll the boardwalks and look into the post office, Miss Millie's Hat Shop, the Wells Fargo Office,
Mercantile, Barber Shop, saloon, leather shop, miner's cabin, jail and schoolhouse.

New this year are a pioneer homestead, a Victorian parlor and exhibits of antique shoes and carpentry
tools. There is also a room with information for those who wish to do research on their ancestors from
the foothill area. Hands-on activities will include quilting, walking on stilts, churning butter, scrubbing
clothes on an old washboard, ringing the school house bell, grating cabbage, peeling apples, cutting a log
with a cross cut saw, and panning for gold.

Admission is free. Photos, a map and other information may be found on the museum website at
www.yfhmuseum.org.

The Yuba Feather Museum and Gold Trader Flat will be open on Saturdays, Sundays and holidays
from Memorial Day through Labor Day, noon to 4 p.m.

(From the RABBIT CREEK JOURNAL, Fair Use For Educational/Research Purposes Only.)
Leland
(06/09/2000; 20:10:49 MDT - Msg ID: 32103)
No, I'm Proud of Out Ancestors...They Went Throuth a Lot
One of my grandfathers had three graves on his land. They
were outlaws. Of course, he wouldn't talk about it.
elevator guy
(06/09/2000; 20:26:12 MDT - Msg ID: 32104)
Simple thoughts
Here is a simple little thought, that you may or may not find very enlightening, depending on where your head is at.

It is not so important that we predict what will happen with the POG tomorrow, because the movement that is coming is not about a shift in the twinkle of an eye.

Rather, the issue is a big shift, that will take months to ripple through the mechanisms of our financial landscape, and with most certainty it is coming. (See Tarus' post below, among others) What we need to do is not to try and squint through the mist so we can see tomorrow, but open our eyes wide, so we can plot a course into the years ahead.
elevator guy
(06/09/2000; 21:20:32 MDT - Msg ID: 32105)
@R Powel, msg 32100
Sometimes I'm tempted to say- "The next guy who screws up will be standing in the unemployment line!" :^)

I know that sounds sort of harsh, but you have to understand the kind of knuckle-draggers the union hall sends me. Some of their awesome qualifications include-

1. Can get wet in the shower.
2. Can cast a shadow at noon, in direct sunlight.
3. They fit in the bed of a pick-up.

(There is too many to list here)

They are more fun than a barrel of monkeys.

Lest I come off as mean spirited, let me also say that I have had some great success lately being a leader, training the troops, and requiring more of people than they thought they were capable of, or were willing to perform on their own. I am learning how to be a leader and manager, while on the job, and it is really a new direction for me, who just four years ago was a wrench-slinger in the field.

What kind of construction are you involved in? Are you a GC, or sub? Sometimes we are prime, sometimes sub.

elevator guy
(06/09/2000; 21:28:11 MDT - Msg ID: 32106)
@Jason Happy, msg 32058
Its a big man who has the humility and grace to apologize.

I hope those offended will find real comfort in your words of reconciliation, and we can put it behind us.

Have a nice weekend.
Hill Billy Mitchell
(06/09/2000; 21:30:01 MDT - Msg ID: 32107)
@ Taurus and elevator guy
elevator guy(06/09/00; 20:26:12MT - usagold.com msg#: 32104)

Taurus (06/09/00; 19:17:13MT - usagold.com msg#: 32101)

I agree with both of you

HBM

Solomon Weaver
(06/09/2000; 22:23:16 MDT - Msg ID: 32108)
Earl
Things which existed as seeds in 1990 but didn't become middle class until late 1990s:

Personal Computers
Home modems
CD Rom libraries
Personal E-mail
High Speed Internet
Vast numbers of internet sites
Web job hunting and web shopping
Online chats and forums

Things which exist as seeds today in 2000...but may take much less than 10 years to come into the mainstream.

universal encryption technologies
worldwide digital gold money network
2 billion people on web
information by "narrowcasting"
massive global data bandwidth
total global wireless access
instant document language translation
digital intellegent agents (bots)
genetic algorithms, neural networks, pattern recognition
virtually gated communities, cyberincarceration

It is very certain that humanity is entering a century of dramatic global developments driven by technology evolutions which stress the ability of human enterprises to continue adapting. And yet, we are together those enterprises. I do not believe that gold will be the beacon leading us into the future, so much as it may provide an "anchor" as we build new ways to create our world together. Money in the past dozen decades has primarily been a tool of political control. In the future, we will see a combination of global scale money and local scale government. The "dollarization" camp is right that the world will move towards a global unit of trade (perhaps called a dollar), but is wrong in thinking that any single "government" will continue to exist which can control it unilaterally.

This is a natural evolution....and gold will be one of the elements of the story because it is a physical manifestation of a forgotten aspect of trust...a time which has been found in every culture when a man's (woman's) word was worth more than gold....so gold stays around for those times and places when that word's value is not worth as much as gold.

Is it not odd, that the guardians of today's bullion banks, once the most honest of all the bankers, are now so overtly abusive of their place in the order of things? Is it not a sign of the times? Is it not strange that in the very year that we will decipher the genetic code of humans, we experience the worst of the goldbashing? Is it not odd that a time comes when a man like Clinton can schmooze the entire free world into believing a fairy tale reality, when at the same time the gold mining companies can hardly afford life insurance coverage for their mine hands?

That we live in interesting times is true today...and will be the theme for the next century.

Poor old Solomon
Black Blade
(06/09/2000; 22:55:58 MDT - Msg ID: 32109)
Leland Re: graves!
In the west we have a simple rule. It's the SSS-rule (shoot-shovel-and shutup rule). It works quite well. There are alot of criminals that have simply disappeared from the face of the earth as far as anyone knows. The desert is full of unmarked graves. It also works for endangered critters as well. If one finds an endangered critter dwelling on his land, then kill that sucker before the gubmit finds out, or else they well effectively steal your land to protect the endanger specie and preserve the eco-system, or some such drivel! This renders ones land useless and without value. OK, it's late but since we are headed into the weekend:

There was a man pulled over in his pickup truck by the game game warden. When the game warden approached the vehicle he saw that the bed of the pickup was full of dead seagulls. On further inspection he saw that they were shot. He then approached the driver and proceeded to cite him for the offense of shooting protected birds. After he gave the driver his citation. He asked "why did you shoot and kill these seagulls?" The driver responded that he intended to eat them. The Game warden was surprised by this response and obviously didn't believe him. The Warden then asked "OK, so what does a seagull taste like?" The driver responded "Oh somewhere between a Bald Eagle and a Spotted Owl!"
Hill Billy Mitchell
(06/10/2000; 01:30:29 MDT - Msg ID: 32110)
Test
TestView Yesterday's Discussion.

Hill Billy Mitchell
(06/10/2000; 01:50:32 MDT - Msg ID: 32111)
Subsidies @ Journeyman

Sir Journeyman

Yes a periodic exchange on how to avoid subsidies is in order.

This subject is not by any stretch of my imagination "off topic"; however we are dealing with imaginations other than my own. For that reason I feel a need to offer an apologetic in defense of my contention that it is not off topic.

First of all my interest in gold is primarily stimulated by my desire to exercise as much freedom as is possible in this not so free world. Gold not only offers a safety valve to exercise my rights in an economic sense but also presents itself as a possible bargaining chip to be used to protect me and my family from those who would deprive me of my freedom.

Now since the root of gold ownership for many on this forum is uniquely tied to an insatiable desire to be free, I take the position that a large percentage of those who hold physical gold are also those who would very much desire to discover more truths as to what other factors might influence that freedom which they desire to retain.

HE WHO SUBSIDISES CONTROLS ergo HE WHO IS SUBSIDIZED IS CONTROLLED BY THE ONE WHO SUBSIDISES. Sorry, I cannot give the source of the above paraphrase as it is not within the grasp of my memory; however there is nothing new under the sun, no one needs credit for the common sense of this premise and I am certainly not claiming originality. If my subsidizer controls me then it follows that my freedom is subject to the subsidizer.

This is such an important and I might add critical tool to the Fabians that I am going to try to be very careful not to offend those who would disagree with my contention that this subject is not off topic. First of all I promise to try to keep posts in this area fairly short and to the point. Secondly I will try to spread these posts out over time in order that they not unduly detract from the "physical subject". This response to Journeyman's post # 32059 dated 06-08-00 is being typed on 06-09-00 but I will defer posting it until 6-10-00 in order to avoid excessive exposure to those who would object.

Journeyman, I am glad that you used the word "nearly" in reference to having reached your conclusion as to the only two ways to reform the system. Yes, it is a bit lonely, however the end result of this dialog might possibly result in warding off of some of the loneliness.

God forbid that we would allow the end to justify the means. I will specifically address your suggestion of seeking out every subsidy possible, in a future post. I do see where you are coming from and do not deny that this is war and that turning the enemy's weapons upon him is certainly fair. The problem would be not only to disarm the enemy but also to discover a method of destroying the enemy without destroying ourselves.

It is my desire that, through these exchanges, we along with others might expose some of the most subtle of the subsidies, which lurk behind the curtains of "apparent goodness" and "redeeming value".

Enough for now as this has become too lengthy and boring I am sure.

Regards,

HBM
Turnaround
(06/10/2000; 03:08:20 MDT - Msg ID: 32112)
bank run prevention


It seems to me (I can certainly be mistaken though) that J.P. Morgan bugged out
of New York in order to avoid potential trouble with traders "going postal".

If gold were to limit up, or "go to da Moon" as they say, it would trigger a
worldwide financial and economic collapse. So *what if* extraordinary measures
are being put into place to effect a more controlled burn?

Using the bank run analogy, what if traders that cannot receive
physical are instead given an offer they can't refuse? The consolidation of
short positions in gun-confiscation zones might be to facilitate this option.

Or, what if Morgan and Deusch were to simply close their doors?

Can anyone field these questions?
HI - HAT
(06/10/2000; 03:35:01 MDT - Msg ID: 32113)
Hill Billy Mitchell............Journeyman
SUBSIDIES : A Mental Health IssueGentleman, this is an important topic to delve into and I think very relevant to gold-money.

Free range individualists, in colaboration for PROFIT, are what built this Country. Not re-distributist Altruists.

By all means shine a light on, "subtle of the subsidies", so that we all may be given a reality check.

Compromising JEFFERSONS vision of a land of free-holders, who were self sufficient, has resulted in class warfare and SLAVERY.

Here is a big subsidy : The giant altruistic priveledge of seigniority and money creation out of thin air given to the BIG Bank Institutions.

Free banking exchange mediums need to be a adjudicated neutral public utility, not a for profit endeavor of the priveledged few.
Leland
(06/10/2000; 03:37:06 MDT - Msg ID: 32114)
Folks, This is Serious..

Commissioners prohibit open flames,
fireworks

By Chris George
Wyoming Tribune-Eagle

CHEYENNE � Imagine you are a big piece of prairie.

It's been hot lately, have you noticed?

Feel like you could use some water? Hot enough to just burst into
flame?

Yes, it is. Fire danger in southeast Wyoming is as high as it was in
Los Alamos, N.M. during last month's devastating fire.

Because of the local fire danger, Laramie County commissioners
voted during a special meeting Thursday to prohibit using fireworks
and ban all outdoor fires as of 5 p.m. Thursday.

William T. Parker, meteorologist in charge of the National Weather
Service Forecast Office in Cheyenne, said his office instituted a red
flag watch for fire Wednesday and upgraded it to a warning on
Thursday. It would likely drop back to a watch by Thursday evening,
he said.

Unusually high temperatures, combined with lower than expected
rainfall, have dried fire fuel to a tinder, Parker said. The forecast is
for those conditions to continue through August.

"The Western half of the United States is under very high fire
danger," Parker said. "We don't see a whole lot of rain on the
horizon."

The commissioners voted 2-0, with commissioner Diane Humphrey
absent, to ban the use � but not the sale � of fireworks in Laramie
County and to ban open fires.

The prohibition only impacts unimproved areas, including cropland,
agricultural land and undeveloped land, which is predominantly
forest or range.

The temporary restrictions also state:

Trash fires are allowed between 6 p.m. and 8 a.m. if some
other law doesn't ban them.

Campfires are allowed in established campfire rings at an
established campground.

Charcoal fires within enclosed grills are permitted.

Acetylene cutting torches and electric arc welders in cleared
areas 20 feet in diameter are allowed.

Propane or open fire branding in cleared areas 20 feet in
diameter are also allowed.

A representative from the fireworks dealers in Wyoming asked that
the commissioners make restrictions on fireworks a prohibition on
use and not on sales.

He also asked that the commissioners not use the word "ban" in
the resolution.

"The word ban, whether it's use or sales, just kills our business," he
said.

The commissioners agreed to remove the word from the resolution.

(Fair Use For Educational/Research Purposes Only.)










�2000 W
HI - HAT
(06/10/2000; 03:55:58 MDT - Msg ID: 32115)
Turnaround msg. 32112.........CRISES
That the Ruling Establishments has contingency plans at the ready for any and all known "emergency", scenarios is as safe a bet as night will follow day.

They have had many past role-models to study To wit : Brazil, Argentina, Mexico, Turkey, etc etc etc ....
Leland
(06/10/2000; 04:22:41 MDT - Msg ID: 32116)
Back to Financial Links, I Think Bill "Fleck" Made a Memorable Comment
http://www.siliconvestor.com/insight/contrarian/"June 9, 2000
Gravitational forces apparently stronger than
expected in May as PPI falls

ROFLMAO. . . Yes, that's right.
What other possible reaction
could one have to this morning's
PPI. After all, the energy price
component was deemed to have
fallen 1/2 percent, led by a drop
in liquefied natural gas.
Yesterday, I listed what gains
other comparable indices had for
May so folks could compare
those numbers to this silly PPI. I
guess the good thing is that it is
so preposterous, you can easily
see exactly how worthless the
BLS statistics happen to be."
Leland
(06/10/2000; 04:28:06 MDT - Msg ID: 32117)
I Are Not a Typist..Let's Cut 'n Paste
http://www.siliconinvestor.com/insight/contrarian/Excuse, please.
Leland
(06/10/2000; 05:07:39 MDT - Msg ID: 32118)
Latest From Doug Noland..
http://www.prudentbear.com/credit.htm The Credit Bubble Bulletin - by Doug Noland

Trapped

June 9, 2000



It was another unusual week in the stock market, with extraordinary divergences
between stocks and groups. For example, the AMEX Biotech index gained 15%, while
the S&P Bank index dropped 9%. Many stocks with short positions made significant
moves higher, propelling the Russell 2000 and the NASDAQ Composite to about 2%
gains for the week. The Semiconductors advanced 1%, increasing year-to-date gains
to 66%, while the NASDAQ Telecommunications index also added 1%. The Dow
posted a slight decline, while the S&P500 dropped about 1%. The Morgan Stanley
Cyclical index sank 3%, the Transports edged 1% lower, and the Morgan Stanley
Consumer index was unchanged. The Utilities rose 1%. The NASDAQ100 and The
Street.com Internet index were slightly positive, and the Morgan Stanley High Tech index
marginally negative. After last week's huge rally, the Bloomberg Wall Street index
declined about 4%.

Action in the credit market remains quite unsettled. Treasuries were mixed with 2-year
yields rising 3 basis points, and 10-year yields declining 2 basis points. Credit spreads
were volatile. After ending Monday at 119, the key 10-year dollar swap spread ended
the week at 128. Mortgage-back securities performed poorly this week, with spreads
widening almost 5 basis points to 189. Agency spreads generally widened about 2
basis points, while corporate spreads narrowed slightly. The dollar index ended the
week on stronger footing, but still dropped about 1% for the week. Gold ended the
week with a gain of about $2.

(Click For More.)
DaveC
(06/10/2000; 05:20:55 MDT - Msg ID: 32119)
Leland (06/09/00; 14:09:59MT - usagold.com msg#: 32089)
www.sepp.orgThe Truth About Global Warming

Junk Science! Get the facts from REAL scientists.

Check out the bio of the guy who runs this project.
S. Fred Singer is internationally known for his work on energy and environmental issues. A pioneer in the development of rocket and satellite technology, he devised the basic instrument for measuring stratospheric ozone and was principal investigator on a satellite experiment retrieved by the space shuttle in 1990. He was the first scientist to predict that population growth would increase atmospheric methane--an important greenhouse gas.

It's all a ruse to get you to give up more freedoms. If the government endorses it and AP prints it, IT MUST BE WRONG!
DaveC
(06/10/2000; 05:25:04 MDT - Msg ID: 32120)
What real scientists think about global warming
http://www.sepp.org/pressrel/petition.htmlSEPP News Release: More Than 15,000 Scientists Protest Kyoto Accord; Speak Out Against Global Warming Myth

FAIRFAX, VIRGINIA, APRIL 21, 1998---More than 15,000 scientists, [8/4/98: now about 17,000] two-thirds with advanced academic degrees, have now signed a Petition against the climate accord concluded in Kyoto (Japan) in December 1997. The Petition (see text below) urges the US government to reject the Accord, which would force drastic cuts in energy use on the United States. This is in line with the Senate Resolution, approved by a 95-to-0 vote last July, which turns down any international agreement that damages the economy of the United States while exempting most of the world's nations, including such major emerging economic powers as China, India, and Brazil.

Read the rest for yourself and GET THE FACTS!
DaveC
(06/10/2000; 05:30:53 MDT - Msg ID: 32121)
Kyoto Junk
http://www.sepp.org/pressrel/petition.htmlThe covering letter enclosed with the Petition, signed by Dr. Frederick Seitz, president emeritus of Rockefeller University and a past president of the U.S. National Academy of Sciences, states it well:

"The treaty is, in our opinion, based upon flawed ideas. Research data on climate change do not show that human use of hydrocarbons is harmful. To the contrary, there is good evidence that increased atmospheric carbon dioxide is environmentally helpful."

Black Blade
(06/10/2000; 06:36:51 MDT - Msg ID: 32122)
DaveC and Global Warming.
I agree. It is junk science based a statistical probabilities. NASA's own data actually shows a mild global cooling trend based on atmospheric measurements from satellite and weather balloons. The fact is that the Global Warming fad is politically inspired junk science. In my own research on more regional conditions in N. America from the Eocene to Holocene, I have learned that there were several climatic changes. Most of which was prior to the arrival of man on this planet. There are several factors that can account for this. Some examples are 1) volcanism; 2) bolide impact; 3) coronal mass ejection (solar flares); and 4) the ~23,000 year Melankovich cycle (changes in earth's orbit caused by variances in apogee, perigee, and even precession). Some of my colleagues are involved in these global warming studies. It is an open secret that that's where the government and Nation Science Foundation money is. Just follow the money trail. The original proclamation of Global Warming is a conglomeration of several studies compiled into a large package (I refuse to call it a study or report). The so-called signatories include such great scientific minds as Ted and Jane Turner, Robert Redford, and Al Gore (Gimme a Break!). Many of those with academic degrees that are counted as signatories did not sign on to the Global Warming issue but only to limited reseach contained therein. Some were quite surprised to find that they were counted as signatories (including a couple of former colleagues), and some are even signatories to the proclamation opposing the Kyoto treaty. This week several scientists will be testifying before congress and will be giving testimony that the Global Warming issue is nothing more than bogus junk science.BTW, I am one of those signatories opposing the Kyoto treaty as junk science, the evidence against man-caused Global Warming is overwhelming.
Black Blade
(06/10/2000; 06:44:08 MDT - Msg ID: 32123)
Global Warming.
Some claim that the ice sheets would melt and sea levels would rise, the resulting floods would inundate the large population centers on the east and left coasts. OK, so what's the downside? ;-)

Actually, it has been shown that CO2 balance has always been obtained. If anything, plant life would substantially increase and promote increased animal life. Again, where's the downside?
DaveC
(06/10/2000; 07:34:52 MDT - Msg ID: 32124)
Black Blade (6/10/2000; 6:36:51MT - usagold.com msg#: 32122)
Congratulations. It's nice to know your one of the good guys.

This topic, like so many others, just grinds me sometimes. Just because AP prints it IT MUST BE TRUE.

Keep up the good work.
Mr Gresham
(06/10/2000; 07:35:21 MDT - Msg ID: 32125)
Junk Science?
I started to take the lawnmower apart to do its spring conditioning and soon realized "I don't know a thing about this expensive machine and will probably end up leaving its parts spread around for weeks or put it back together wrong." So I took it into the shop and paid for the service.

There is propaganda all around us, on both sides of an issue (one of them usually the money-making side), and the lay person is always hard-pressed to arrive at a final "right" answer, but the principle which applies in Applied Environmental Science is: Don't change something, probably irreversibly, that you can't put back the way it was. Until you sufficiently understand human impact, minimize it.
Black Blade
(06/10/2000; 08:11:26 MDT - Msg ID: 32126)
"A modern modest proposal" to to cure Global Warming
We could begin to minimize human impact on the earth as some suggest. Many of these "new-age chicken littles" would claim that man is not a part of the "eco-system". They veiw man as a parasite that sould be exterminated for the sake of the planet (absurd of course, but actually believed by some eco-extremists). I would proposed a couple of solutions to the inferred "Global Warming" problem:

1) A wonderful job creation plan would be to build a giant space platform that coul;d be opened as a large umbrella with huge panels. This platform could be in a geostationary orbit or moved about, providing much needed shade from the big bad sun. This would help cool down the planet. It is very expensive of couse, but after all, it's for the children.

2) Another possible solution would be to depopulate the planet. I'm sure that the liberal elitists would be very good at this task. They can begin by plotting a diverse sequence where a proportionate number of human beings from, various races, ethnicity, gender, gender-preference, etc. could be euthanized, provided of course that only the most conservative humans are rounded up (ala Khmer Rouge-style). Then the demolition of cities could begin since these are paved over hell-holes that reflect and absorb heat (aka heat-sinks). Of course we wouldn't want to use machinery, so obviously only the poor will provide this manual labor. The wealthy will be needed to be the great thinkers ya know, and besides will keep the AFL-CIO unions happy as they can still collect union dues. In the end, all can end it all ala Jim Jones of Peoples Temple fame by a final salute with cyanide laced kool-aid, all while plunging into a large fire-pit since decaying corpses give off methane. Personally, I think that I'll pass on this one, however, if any of these "new-age chicken littles" want to pursue this type of solution - be my guest, no objection from me.
PH in LA
(06/10/2000; 08:28:03 MDT - Msg ID: 32127)
Translation Request
...In this regard, the notion of level of grammaticalness presents extremely interesting challenges
to any communicatively-programmed computer techniques. It would not, however, be safe to
assume that the appearance of parasitic gaps in domains relatively inaccessible to ordinary
extraction must utilize and be functionally interwoven with the total configurational rationale.
Further, the independent functional principle recognizes the importance of other disciplines,
while taking into account possible bidirectional relationship approaches. It may be, then, that
the speaker-hearer's linguistic intuition does not readily tolerate any
communicatively-programmed computer techniques. In respect to essential departmental
goals, any associated supporting element necessitates that coagulative measures be applied to
the overall negative profitability. I suggested that these results would follow from the
assumption that a constant flow of field-collected input ordinates delimits the sophisticated
hardware. In the discussion of resumptive pronouns following (81), the theory of syntactic
features developed earlier presents a valuable challenge showing the necessity for the ultimate
standard that determines the accuracy of any proposed grammar...
Mr Gresham
(06/10/2000; 08:31:19 MDT - Msg ID: 32128)
Apology
Sorry to previous posters. I had to come back after that post and admit doing three things I don't think are responsible to a forum I appreciate so much:

1) Posted a sideways reply to you without reading yours entirely.

2) Didn't admit having very little knowledge of the specific political document you were commenting on.

3) Didn't admit that I just felt like mouthing off my opinions this morning without the work of thinking much. Maybe just a pissy mood? (Cat woke me up...)

Just to let you know, we come to gold from all different paths. The ideological jungle is all around us. Getting my eyes opened so radically about "Money" over the past year makes me wonder what other thinking habits are due for overhaul.

ORO
(06/10/2000; 09:05:52 MDT - Msg ID: 32129)
PhinLA - gobledygook
This is probably from a discussion of a computer program for extracting meaning from a stream of audio or voice recognition output sources (microphones?) and translating it into another language. Need a context though.

It is about as badly written as anything I have ever seen. There are only "terms of the art" and connective words. Ick.
Journeyman
(06/10/2000; 11:52:44 MDT - Msg ID: 32130)
Subsidies & slippery slopes @Hill Billy Mitchell, Hi - Hat, ALL

I'm looking forward to discovering the direction you've chosen for the "Subsidies" thread. I see why you can argue subsidies aren't terminally off-topic to a gold forum -- of course, I probably tolerate "off topic" a bit better than some anyway, so my judgement may be considered biased on the matter.

A small contribution, perhaps:

Once you pay in to a fund of any kind, be it a life insurance fund, so-called social security, or even income tax, you tend to feel you have something comming in return. At that point, you've almost certainly been sucked into the system, and to some degree yielded at least a smidgen to the control of the subsidizer. That's the beginning of your own personal slippery slope.

To put this in a bit of context, personal slippery slopes abound. Suppose you started out in "law enforcement" but now you find yourself as a concentration camp guard. You know what you're doing isn't quite kosher, but what else could you do? How would you pay your family's bills if you quit or were fired? You've got to "go along to get along." Besides, you've been threatened by superiors and co-workers into doing definitely bad things - - if you tried to quit, would they kill you because you're a potential witness?

For an example a little closer to home and more subtle: If you have somehow allowed yourself to become dependent on a so-called "Social Security" check, or even addicted to the extra ice cream and candy you can buy with one, you're well down a personal slippery slope. You may even know and realize its true statutory nature as welfare, and that the 82% tax rate it's causing is costing your kids and grand kids any chance of happiness they have. But will you send your current SS welfare check back and stop accepting them from now on? After all, you do have SOMETHING comming. Don't you?

Whether that something you eventually get back is "fair" or not (relative to what you put in) becomes a matter of fine print and careful accounting, and often subjective evaluation. Such a determination is unavoidably slippery by nature, especially without an express, detailed stable contract of some sort. You don't get such things from governments - - which at base might explain why it seems so many slippery, slimey people are so successful as politicians. "Slick" Willy, remember?

To avoid slipp'n and a slid'n on down, you must, at the deepest psychological levels, COMPLETELY write-off EVERYTHING you think you have comming. This isn't easy.

The safest way to avoid getting on that slippery slope is to stop contributing to such funds and organizations before you develop a psychological addiction to the perceived pay-back. Use the money saved to provide your own subsidy to yourself and those around you.

At least, that's my read.

Regards,
Journeyman
Hipplebeck
(06/10/2000; 12:38:32 MDT - Msg ID: 32131)
translation for PH in LA
Discussing need to write a program that translates every possible slang used by everyone into a language program, and how much it expands the program and thus the costs
Turnaround
(06/10/2000; 12:39:01 MDT - Msg ID: 32132)
subsidies
Journeyman (6/10/2000; 11:52:44MT - usagold.com msg#: 32130)
Subsidies & slippery slopes @Hill Billy Mitchell, Hi - Hat, ALL

�" I see why you can argue subsidies aren't
terminally off-topic to a gold forum -- of course, I probably tolerate
"off topic" a bit better than some anyway, so my judgement may be
considered biased on the matter�"

Um, I don't think it's off-topic at all, however at some point it's
up to the host to say what's what.

"To avoid slipp'n and a slid'n on down, you must, at the deepest
psychological levels, COMPLETELY write-off EVERYTHING you
think you have [coming]. This isn't easy. "

I think a nice fat dose of pension-fund implosions (e.g. Cal. Teacher's
Union), economic reversals decreasing the tax base, and finally the
cr�me de la cr�me- (hyper) inflation, will provide a most salutary
reassessment of attitudes.

It appears (and I've conducted an informal poll on this myself) that most
Americans under 40 have already made that psychological shift, to one
degree on another, at least for SSI.

Bottom line: I think the welfare statists are going to lose in the long run,
that we are coming into a period of massive government service rollbacks.
Leland
(06/10/2000; 13:11:26 MDT - Msg ID: 32133)
"Slippery Slopes" Reminded me of This Article
Opinion: Oil market volatility - what can or should be
done?
By Robert Priddle, executive director, International Energy Agency
Published: June 6 2000 11:04GMT | Last Updated: June 6 2000 13:57GMT

Enormous price swings over the past three years have focused
attention on the issue of volatile oil prices. There have been
strident calls from both producers and consumers for more
stability. The most recent effort is a gentleman's agreement
among nine Opec members to establish a 'price band', with
trigger points to raise or lower production targets when prices
move out of the range.

Other suggestions include the outlawing of futures trading,
expanding and contracting taxes on oil products to compensate
for crude oil price changes and setting up a 'World Energy Organisation' to fix prices and
volumes and manage buffer stocks.

All of these ideas miss a major point: that oil markets are unstable by nature and that the
instability derives both from internal and external factors, such as weather, economic
events unrelated to the oil market and non-oil geopolitics.

Producers and consumers need to recognise this fundamental volatility and work to
encourage a flexible and efficient response, rather than impose rigid rules that have limited
chances of success.

Petroleum is a highly concentrated, exhaustible, chemically-heterogeneous resource, which
dominates the economies of the major resource holders. Most demand centres are located
geographically far away from the production areas, and the supply cannot be
instantaneously increased or diminished.

Moreover, crude oil cannot be used in most applications until it is converted into oil products
like gasoline, heating oil, jet fuel, diesel or petrochemical feedstock. Because of the higher
cost of transporting refined oil products compared with transporting crude, refining tends to
take place close to the point of use.

Refiners must also match the heterogeneous mix of crude qualities with a variable slate of oil
products needed in a particular region at a particular time. One of the reasons the mix of
products changes is weather, since in many areas heating and air conditioning uses still
account for a significant portion of oil demand. This not only creates seasonal cycles in
product demand, but also introduces volatility when the weather is milder or more severe
than usual.

Oil remains the largest single internationally-traded good in terms of volume and value, and oil
market events have a very high profile. Global diplomacy clearly affects oil supply security:
there is a marked vulnerability to external political or economic events. The Arab oil embargo
in the early 1970s, the Iranian Revolution and the Iran-Iraq War in the late 1970s and early
1980s, the Gulf War in 1990-1991 and the Asian financial crisis of 1997-1998 are all
examples of external factors which can swing oil prices up and down.

Although there were obvious oil market components to the first four of these events, non-oil
factors were certainly at work as well. The Asian financial crisis of two years ago did not
stem from the oil market. It serves as a prime example of those external factors, like
weather, that can cause oil price volatility.

Oil prices fell from over $25 per barrel in early October 1997 to under $10 per barrel in
February 1999, with the Asian financial crisis and two very mild winters in the Northern
Hemisphere as primary causes. Internal market factors were also at work; prices had risen
artificially high in late 1997 due to uncertainties surrounding Iraqi exports and the rebuilding
of low inventories.

The Asian economic situation, mild weather and higher output in Middle East producers were
sufficient to break the 'backwardation vortex' that had been shaping forward price curves in
1996 and 1997. In this effect, downward-sloping forward price curves continue to shift up
and to the right as low stocks inflate spot prices and increasingly negative forward
differentials further depress stockholding. This counter-intuitive feedback recurred in 1999.

The opposite effect, the 'contango vortex' dominated in 1998 and added significantly to the
price decline.

The upward cycle in prices that began in February 1999 also responded to a mix of internal
and external components. The recovery in the Asian economies has played a major role, but
the dominant feature has been the production restraints achieved by Opec and a few
non-Opec countries in March 1999 following the 'Hague Agreement' in February.

The re-appearance of backwardation in forward crude oil and product markets has also
been important. Now prices have reached levels that are uncomfortably high for consumers
and are also seen by many oil producers as threatening longer-term markets. Could any
mechanism have been put in place in 1997 to avoid the huge swing in oil prices? My answer
is no.

The decision made by Opec countries in Jakarta in November 1997 suggests why this is
case. The producers' collective action at that point was based on information about the state
of the market through the first half of the year and preliminary data about the third quarter.
Those data did not adequately reflect the impact of the Asian situation. Opec also did not
take seriously the large El Nino weather effect at work in the Pacific Ocean since the
summer and its implications for a mild winter. Quota increases approved in Jakarta were
also intended to increase credibility by legitimising 'cheating' by some of the members, who
were involved in a market share battle in the US Gulf Coast market.

Late and incomplete data, changing weather and the inherent conflict between maintaining
both market share and price are chronic features of the oil market. We can certainly work to
improve market data. Producers could conceivably strike a balance between market share
and price objectives, but the other factors would remain to buffet oil markets. So what is
wrong with the current Opec price band proposal?

First, the range is too high. A $22-$28 per barrel basket price is above the range of the last
15 years. If it remained in force, backwardation would tend to become a systemic feature of
the market. With backwardation come low crude inventories, while backwardation in product
markets is a disincentive for refiners to process more crude, since they are penalised for
hedging forward. This in turn produces considerable additional vulnerability to technical
problems on production platforms, in refineries or in pipelines.

Second, there are widely varying opinions about what the band should be and there is no
formal mechanism at hand for altering it. The Saudi Oil Minister has expressed a 'personal
preference' for a $20-$25 per barrel band for Brent crude, while some others in Opec - Iran,
Libya, Indonesia and Algeria - want a band $5 higher.

Even the Opec basket price is not transparent. Although it is a simple arithmetic average,
several of the seven component crudes in the basket do not trade in open spot markets;
others sell for different prices to different regions. The text of the 'gentleman's agreement'
has never been formally released. So it is unclear whether the trigger for adjusting targets is
20 days of the daily average price or a 20-day average (or even 20 days of the 20-day
average). The daily average came close to $22 in April and exceeded $28 in late May, as yet
without prompting any action.

Whatever the trigger may be, doubt has been expressed about whether all parties would or
could go along with a production increase. Some simply have no unused production
capacity.

This asymmetry in the ability to institute pro-rata production changes could be a major
stumbling block for Opec in implementing the price band.

So if price bands are not the answer to volatility, what is?

The first response is that some degree of price volatility is inevitable and must be accepted.
Some external factors simply cannot be controlled. But better stock provision and the
availability of alternative energy supplies can soften the impacts of price spikes. Better data
contribute to quicker responses to evolving market conditions, on an individual rather than a
collective basis - the best way to provide for a timely response to unforeseen and
unforeseeable circumstances.

(From THE FINANCIAL TIMES (London), And Fair Use For Educational/Research Purposes Only.)

ORO
(06/10/2000; 14:23:05 MDT - Msg ID: 32134)
Barron's interviews Dow Theory Guru Richard Russell
"...
"Up to now, the Fed has been playing it cute. They've been raising rates, but at the same time they've allowed the money supply to expand. Thus, the Fed has tried to put a ceiling on the market with rising rates while at the same time putting a floor under the market with copious cash. In the end, we may get the worst of both worlds -- a slowing economy and rising inflation.

"The net result of all this is that the Fed's manipulations are extending the stock market's lengthy topping-out process, dragging it on and on and on. The Fed objects to the "irrational exuberance" of the stock market, but at the same time is afraid to let the stock market go into the tank."

He sees the result as stagflation.

I think it will be substantially worse than the 70s because the imports that have displaced local manufacturing will not be replaced by it because the facillities are just plain gone.

A good read, get yourself a copy off the news stand or subscribe to WSJ online.

Gandalf the White
(06/10/2000; 14:41:02 MDT - Msg ID: 32135)
ROFL
Announcement from Gandalf the White, Wizard of the Galactic Energy Administration. Published: Here and now !
Some things must be said to appease the need to feel that everything is under control and that the Sheeple do not panic. One must read all official "Opinions" on OIL with only one eye and many grains of salt. Knowledge is the balancing of believing or not believing. One must makeup ones own mind. The Hobbits believe the only ones that know these answers are the GREAT ones that live in the sandy areas of the Earth. Hello Prince Baddar, come on in and sit a while.
<;-)

Opinion: Oil market volatility - what can or should be
done? By Robert Priddle, executive director, International Energy Agency Published: June 6 2000 11:04GMT | Last Updated: June 6 2000 13:57GMT
TownCrier
(06/10/2000; 15:12:04 MDT - Msg ID: 32136)
Plenty of new reading material has been added to the Gilded Opinion lately
http://www.usagold.com/THEGILDEDOPINION.htmlYou might want to review the Index of available commentary at the link above, and select for your reading enjoyment whichever topic suits your interests.
TownCrier
(06/10/2000; 15:33:38 MDT - Msg ID: 32137)
An eye-opener from Sir Leland's (usagold.com msg#: 32133)
Oil market volatility - what can or should be done?

"...suggestions include the outlawing of futures trading..."

The very presence of this comment in mainstream media speaks volumes. Now consider this in relation to specific issues discussed here as pertains to the gold market.

Enough said.
RossL
(06/10/2000; 15:39:07 MDT - Msg ID: 32138)
Inflation Alert !!!
http://users.erinet.com/3354/gold2400.htm
Premium gasoline is $2.12 in Ohio!! Wow what a jump! I wonder what the papers will say if gold jumped 15% in a day?
Dollar Bill
(06/10/2000; 15:52:31 MDT - Msg ID: 32139)
Turnaround
Hello Turnaround.
I think Gold has lost it's chance to cause the global and financial collapse.
Other factors are already well on thier way toward doing that job. You are right of course, but derivitive boys and central bankers will keep gold tied up while they set us up for credit trap dynamics and a collapse. Gold will of course be an excellent investment.
It is depressing as hell. The fearful Y2K refugees that came here from the Yourdon forum left one imminent disaster only to be educated about the real one. Caused by leadership not educated enough about the financial game to properly do their job. The vast staff of the banking, financial and FED communitys should have been up to this task but..........well, Doug Nolan says it well. You might consider reading his latest. Available in a link below.
HI - HAT
(06/10/2000; 15:57:47 MDT - Msg ID: 32140)
Town Crier.................EYE OPENER
Point well made in regards to gold futures market in the event of a sustained up-move in gold price.

In a slightly different context, consider how the "Regulators", came down with both feet on AT&T when that company announced a price increase.

It would seem the Federal Government is going to "DECREE" that there be no infationary price rises wherever they can.

Taken with Government actions against Tobacco, Guns, Microsoft, Credit Card Companies, AT&T, etc. ,We have a Federal Control Power Grab coming on real strong.
HI - HAT
(06/10/2000; 17:27:19 MDT - Msg ID: 32141)
Town Crier....Leland Virtual Reality Propaganda
I should also have added PPT manipulation of Stock Market, Gold manipulation.

Also the complete fiction of Government statistics.

How long or to what lengths powers will go to maintain a virtual reality type confidence, is anybody's guess.
HI - HAT
(06/10/2000; 17:50:22 MDT - Msg ID: 32142)
Turnaround..msg 32132........subsidies
Welfare Man.........Bites...........Statist DogTurnaround : "economic reversals-- (hyper) inflation, will provide a most salutary reassessment of attitudes.

Yes, and at that time we will all be treated to the not so rare barnyard phenomenae of the pigs at the empty trough eating each other.
TownCrier
(06/10/2000; 19:43:34 MDT - Msg ID: 32143)
Sir HI-HAT...
You said, "Point well made in regards to gold futures market in the event of a sustained up-move in gold price."

Actually, I hadn't even thought of that aspect at the time of my post. All I was really getting at was the incontovertible notion that futures markets are price-setting mechanism for the real commodity...no matter the direction be down or up. To see that the idea to actually outlaw these futures markets has been floated in official and public channels speaks volumes.
Peter Asher
(06/10/2000; 20:00:28 MDT - Msg ID: 32144)
About this prediction business
Subject:
Fw: 05-23-00 Y2K Homework - Just for fun -
Date:
Sat, 10 Jun 2000 18:59:35 -0700
From:
"Peter Asher Designs"
To:






From:
Subject: 05-23-00 Y2K Homework - Just for fun -

> "If the same science, research and development had been invested in the
> automobile that has been invested in the computer, a Rolls-Royce would
cost
> upwards of twenty-five cents. Each Rolls-Royce would have enough power
to
> move the QE2 across the Atlantic ocean and you could fit SIX of them on
the
> head of a a pin"
>
> -R. Buckminster Fuller ca 1983
> -----------
>
> "Computers in the future may weigh no more than 1.5 tons."
> - Popular Mechanics, forecasting the relentless march of science,
> 1949
> ------------------
> "I think there is a world market for maybe five computers."
> - Thomas Watson, chairman of IBM, 1943
> ---------------
> "I have traveled the length and breadth of this country and talked
> with the best people, and I can assure you that data processing is
> a fad that won't last out the year."
> - Editor in charge of business books for Prentice Hall, 1957
> -----------------
> "But what... is it good for?"
> - Engineer at the Advanced Computing Systems Division of IBM,
> 1968, commenting on the microchip.
> ----------------
> "There is no reason anyone would want a computer in their home."
> - Ken Olson, president, chairman and founder of Digital Equipment
> Corp., 1977
> ---------------
> "This 'telephone' has too many shortcomings to be seriously
> considered as a means of communication. The device is inherently
> of no value to us."
> - Western Union internal memo, 1876


Peter Asher
(06/10/2000; 20:08:54 MDT - Msg ID: 32145)
RossL msg#: 32138)
You asked "I wonder what the papers will say if
gold jumped 15% in a day?"

Answer ---- As little as possible on the most obscure page.
tedw
(06/10/2000; 20:51:46 MDT - Msg ID: 32146)
The cost to mine an ounce of Gold
http://www.usagold.com
I realize that mines vary in the amount it costs to pull an
ounce of gold out of the ground.

However, is there reliable information somewhere on an average or median to mine an ounce?Any responses appreciated.
rsjacksr
(06/10/2000; 21:03:25 MDT - Msg ID: 32147)
Re:tedw (06/10/00; 20:51:46MT - usagold.com msg#: 32146)
http://www.gold-eagle.com/editorials_00/doran052900.htmlArticle written by Doran on gold mines and evaluating in ground gold over at Gold-eagle. Go read
rsjacksr
(06/10/2000; 21:06:34 MDT - Msg ID: 32148)
Re:tedw (06/10/00; 20:51:46MT - usagold.com msg#: 32146)
Poor literary structureRe-read my message and somehow it sounded awfully curt. I apologize
Solomon Weaver
(06/10/2000; 21:12:18 MDT - Msg ID: 32149)
cost of production
hey tedw

there was a link here a few weeks ago...I believe an article by John Hathaway and the topic was about the danger of hedging...I do not archive links but perhaps someone else can provide our forum a refreshed link.

Anyway, what was pointed out there was that if one really considers the cost of building and maintaining a strong and profitable gold mining company, which continues to develop new ore bodies (i.e. what the world needs longer term) and at the same time provide a return on investment which continues to attract investor capital and bank lending, then the real cost of new gold is about $360 per ounce. Important to consider is that this price does not include any increase in dollar costs associated with future dollar risk (inflation).

So, if you take in the whole picture, it would appear that the spot price of gold today is around 75-80% of the real cost of new mining....can you think of a better deal? (Perhaps only that the situation in silver might be better).

Perhaps I will take this moment to propose a thought...hoping for some critical discussion:

THE WORLD COULD CLOSE ALL GOLD MINES.

Is it not absurd in some way that most of the world's gold sits in bars underground???? Mine it....vault it!!!

If we stopped all new production of gold, there would still be plenty for industrial needs. The dramatic rise in value would shift gold out into the open markets and use markets would shift towards using less gold or finding substitutes (like banana peels - inside joke for old hands here at the forum).

I believe that what makes gold so valuable today is

1. The eminent return of gold to full fledged monetary/wealth asset.

2. Complete protection against any form of counterfeiting.

3. Follows laws of nature (chemical periodical table...not laws of man.

Poor old Solomon
ORO
(06/10/2000; 21:32:16 MDT - Msg ID: 32150)
Hi Hat and Turnaround - of pigs eating each other
I should point out that it is exactly what is happening today. Just that the pigs here are eating pigs they don't see slaughtered because of the great distance. When we are reminded of the evidence that we pigs are eating other pigs, we ignore it. Do we really want to know that?

Nearly any food we buy has pig ingredients from abroad. What should one do? Not eat?

Will it really be different once the slaughterhouses move into our vicinity on site at our national pig sty? Will we pigs actually care? Will we come up with new justifications for eating each other?

Perhaps some remember "Soylent Green".
ORO
(06/10/2000; 22:18:09 MDT - Msg ID: 32151)
Rothschild forms North American Arm
Baron's informs us of Rothchild's newly formed North American investment bank. The bank's focus: Selling US Aerospace and Denfense firms to European firms. They have recruited Clinton Defense team members for this purpose.
Among them (former positions):
Defense Secretary William Perry
CIA Director John Deutsch
Defense Department official Jeffery Roncka
Members of bank firm Global Technology Partners

This team competes with The Carlyle Group merchant bank headed by X Defense Secretary Frank Carlucci.


The expectation of EU Defense firms snapping up US counterparts must be based on an expectation of increased defense spending in the EU, without such spending being built up in parallel in the US.

This means that the defense contract with the US is in the past tense, and the US is not to continue the post WWII deal: defend Europe, get to print the world's money.

This may eventually turn into war, probably over who controlls Europe's oil supply. Obviously it is Europe who wants it now that the US must import oil right along with Europe, and from the same sources. Watch out.
Farfel
(06/11/2000; 03:36:27 MDT - Msg ID: 32152)
@ORO: Richard Russell and Stagflation
Yes, interesting read in Barrons concerning Russell's prognostications concerning stagflation. Very astute and smart analysis. Also interesting to see how many more economists are getting on the stagflation bandwagon now.

As many of you know who read my stuff these past few years, I have been predicting the "Mother of Stagflationary" economies in America. I did so several years ago at a time when there were few to no economists predicting such an event.

At one point, I backtracked from that prediction when I saw the gold price collapsing and no apparent move on the part of any government to halt the collapse. I knew that given that certain sectors of the world hold significant asset values in the form of gold and silver, then any collapse in those prices would be thoroughly deflationary and lead to a complete global depression far worse than the Thirties. Moreover the multiplier effect from a precious metals collapse would snowball and wreak havoc in a variety of industrial sectors.

However then the Europeans intervened with the Washington Agreement and stopped the gold collapse from becoming a global deflationary nightmare.

Thereafter Mr. Greenspan ramped up liquidity infusions into the markets and still keeps injecting liquidity.

The net result can only be STAGFLATION and it still will be the mother of stagflations as I long ago predicted.

The last time America went through a stagflation during the Carter years, gold soared to some 800 dollars an ounce. This time the likelihood is that gold will overreach its natural equilibrium and, pulled upward by a mass psychological shift, might easily see 2000 an ounce.

Of course, the question remains: When?

Nobody can pinpoint a date but the conditions are now established firmly and it could start as early as tomorrow.
The only thing missing is the left field event that will trigger foreigners to recognize that the US Dollar is not what it used to be.

Thanks

F*View Yesterday's Discussion.

Farfel
(06/11/2000; 03:36:36 MDT - Msg ID: 32153)
@ORO: Richard Russell and Stagflation
Yes, interesting read in Barrons concerning Russell's prognostications concerning stagflation. Very astute and smart analysis. Also interesting to see how many more economists are getting on the stagflation bandwagon now.

As many of you know who read my stuff these past few years, I have been predicting the "Mother of Stagflationary" economies in America. I did so several years ago at a time when there were few to no economists predicting such an event.

At one point, I backtracked from that prediction when I saw the gold price collapsing and no apparent move on the part of any government to halt the collapse. I knew that given that certain sectors of the world hold significant asset values in the form of gold and silver, then any collapse in those prices would be thoroughly deflationary and lead to a complete global depression far worse than the Thirties. Moreover the multiplier effect from a precious metals collapse would snowball and wreak havoc in a variety of industrial sectors.

However then the Europeans intervened with the Washington Agreement and stopped the gold collapse from becoming a global deflationary nightmare.

Thereafter Mr. Greenspan ramped up liquidity infusions into the markets and still keeps injecting liquidity.

The net result can only be STAGFLATION and it still will be the mother of stagflations as I long ago predicted.

The last time America went through a stagflation during the Carter years, gold soared to some 800 dollars an ounce. This time the likelihood is that gold will overreach its natural equilibrium and, pulled upward by a mass psychological shift, might easily see 2000 an ounce.

Of course, the question remains: When?

Nobody can pinpoint a date but the conditions are now established firmly and it could start as early as tomorrow.
The only thing missing is the left field event that will trigger foreigners to recognize that the US Dollar is not what it used to be.

Thanks

F*
Farfel
(06/11/2000; 03:36:56 MDT - Msg ID: 32154)
@ORO: Richard Russell and Stagflation
Yes, interesting read in Barrons concerning Russell's prognostications concerning stagflation. Very astute and smart analysis. Also interesting to see how many more economists are getting on the stagflation bandwagon now.

As many of you know who read my stuff these past few years, I have been predicting the "Mother of Stagflationary" economies in America. I did so several years ago at a time when there were few to no economists predicting such an event.

At one point, I backtracked from that prediction when I saw the gold price collapsing and no apparent move on the part of any government to halt the collapse. I knew that given that certain sectors of the world hold significant asset values in the form of gold and silver, then any collapse in those prices would be thoroughly deflationary and lead to a complete global depression far worse than the Thirties. Moreover the multiplier effect from a precious metals collapse would snowball and wreak havoc in a variety of industrial sectors.

However then the Europeans intervened with the Washington Agreement and stopped the gold collapse from becoming a global deflationary nightmare.

Thereafter Mr. Greenspan ramped up liquidity infusions into the markets and still keeps injecting liquidity.

The net result can only be STAGFLATION and it still will be the mother of stagflations as I long ago predicted.

The last time America went through a stagflation during the Carter years, gold soared to some 800 dollars an ounce. This time the likelihood is that gold will overreach its natural equilibrium and, pulled upward by a mass psychological shift, might easily see 2000 an ounce.

Of course, the question remains: When?

Nobody can pinpoint a date but the conditions are now established firmly and it could start as early as tomorrow.
The only thing missing is the left field event that will trigger foreigners to recognize that the US Dollar is not what it used to be.

Thanks

F*
Farfel
(06/11/2000; 03:37:12 MDT - Msg ID: 32155)
@ORO: Richard Russell and Stagflation
Yes, interesting read in Barrons concerning Russell's prognostications concerning stagflation. Very astute and smart analysis. Also interesting to see how many more economists are getting on the stagflation bandwagon now.

As many of you know who read my stuff these past few years, I have been predicting the "Mother of Stagflationary" economies in America. I did so several years ago at a time when there were few to no economists predicting such an event.

At one point, I backtracked from that prediction when I saw the gold price collapsing and no apparent move on the part of any government to halt the collapse. I knew that given that certain sectors of the world hold significant asset values in the form of gold and silver, then any collapse in those prices would be thoroughly deflationary and lead to a complete global depression far worse than the Thirties. Moreover the multiplier effect from a precious metals collapse would snowball and wreak havoc in a variety of industrial sectors.

However then the Europeans intervened with the Washington Agreement and stopped the gold collapse from becoming a global deflationary nightmare.

Thereafter Mr. Greenspan ramped up liquidity infusions into the markets and still keeps injecting liquidity.

The net result can only be STAGFLATION and it still will be the mother of stagflations as I long ago predicted.

The last time America went through a stagflation during the Carter years, gold soared to some 800 dollars an ounce. This time the likelihood is that gold will overreach its natural equilibrium and, pulled upward by a mass psychological shift, might easily see 2000 an ounce.

Of course, the question remains: When?

Nobody can pinpoint a date but the conditions are now established firmly and it could start as early as tomorrow.
The only thing missing is the left field event that will trigger foreigners to recognize that the US Dollar is not what it used to be.

Thanks

F*
Farfel
(06/11/2000; 03:38:51 MDT - Msg ID: 32156)
@Apologies for duplicate posts, MORE problems posting here
EOM
DaveC
(06/11/2000; 07:59:03 MDT - Msg ID: 32157)
Summers - What is he really saying?
http://dailynews.yahoo.com/h/nm/20000608/bs/economy_summers_dc_1.htmlThe headline reads

Summers: Economy Needs Savings, Not Cuts

but the article says

``We must increase the level of public saving, thereby sustaining and even accelerating our current course of paying down the national debt,'' Summers said.

Public savings? Did anyone here sign up for this? Without that gun pointed at your head?

In 1965 Ayn Rand wrote "The New Fascism: Rule By Consensus"

She immediately gave three definitions:

Socialism - a theory or system of social organization which advocates the vesting of the ownership and control of the means of production, capital, land, etc., in the community as a while

Fascism - a governmental system with strong, centralized power, permitting no oppostition or criticism, controlling all affairs of the nation (industrial, commercial, etc.)

Statism - the principle or policy of concentrating extensive economic, political, and related controls in the state at the cost of individual liberty.

It is my belief that America is headed for Democratic Fascism (if not already there).

Forums like this need to keep spreading the word.
Cassius
(06/11/2000; 08:01:37 MDT - Msg ID: 32158)
@Soloman Weaver re: Your post #32149 Hathaway's Article
http://www.tocqueville.com/index.shtmlThe article you're looking for can be found at the link provided, along with a few other pertinent articles by Hathaway and others at Tocqueville. Cassius
canamami
(06/11/2000; 08:44:47 MDT - Msg ID: 32159)
Reply to Dave C
Dave C,

I too am an admirer of Rand. That being said, the national debt exists in both Canada and the U.S. Something - paying it down (through surpluses or through inflationary monetization), adding to it, pay just the interest, or repudiate it - must be done. Among these options, paying it down through surpluses seems to make a lot of sense.

I should be clear: It is a scandal that the debt arose in the first place, and primarily for funding socially destructive "social" programs. However, now that it exists, what to do about it?
Bonedaddy
(06/11/2000; 09:04:35 MDT - Msg ID: 32160)
(No Subject)
I just finished reading the GILDED OPINION interview with Dr. Parks. One of my first thoughts was about how fortunate I am to have access to this caliber of information while travelling in social circles where such knowledege is not commonplace. How could a man such as myself, commonly refered to as "oil field trash", ever aspire to converse with some one as erudite as Dr. Parks? Then I realized that I DO have social contacts with incredible insight on our current monetary debacle. None other than the gallant knights and ladies posting here at USA Gold. Again, I thank you each and all for your contributions to my education.
I have a couple of observations on the interview with Dr. Parks. First, he uses the Bible as a reference much like one would a history book. While it is true that some people can twist a scripture to back up almost any position, studying scripture in the historical context is the best way I've seen to discover where you wandered away from the truth. The Bible is the history of the world. If any method has ever been used to cheat, swindle, lie, or decieve the citizens of the world, the defense against the treachery can be found by carefully studing the Bible. Our founding fathers knew this. When I was in the second grade, we began the school day, assembled in the cafeteria. We pledged our allegiance to the flag of one nation, under God. The Principal would lead us in a prayer. We learned to view our lives in the context of someone in subjection to a higher authority that loved us and promised to guide us. Today, how often do we admonish young people to "control or create their own destiny" ? The kids who to take guns to school to wreak havoc are doing just as they have been instructed. They are creating their own destiny. Isn't it much better to discover your destiny? Seek and ye shall find? Ask and it shall be opened to you? Where is a sixteen year old going to get the insight to create his own life apart from being guided by family and social institutions? By seeking after pleasure, we have distroyed fully half of our "original" family groups and nearly all of our social instutions. Yet no one seems to care because the economy is strong. I'm afraid that returning prayer to schools won't help much in the short run. We are a full generation removed from anyone who knows how to pray, or even why. This generation is all but lost and only by severe trial will they be able to discover the true destiny of which they have been deprived. It will take years to overcome the brokeness. There is no quick and easy fix. No self-help programs will suffice.
Second, Dr. Parks' political answers. The FAME organization, like GATA and others seeks to bring out the truth and lay it before the eyes of our congressional leaders. This effort is to be admired. But both GATA and FAME are way too early to get much accomplished. Why listen to a bunch of cranks? The economy is going so well! The fact that the economy is on the verge of collapse goes totally unnoticed by almost everyone. Yes, it gets discussed, hypothetically, from time to time in the public venue. This is only allowed so our leaders can claim later that they tried to warn of the dangers, but no one would listen. Alan Greenspans' warnings couldn't be much more grave, yet he is dismissed and made the butt of tongue in cheek humor in the financial press. ONE OF THE BIGGEST MISCONCEPTIONS THAT WE AS GOLD INVESTORS OPERATE UNDER IS THAT PEOPLE WILL JUST WAKE UP ONE DAY AND SEE THAT GOLD OWNERSHIP IS PRUDENT AND START INVESTING IN GOLD. Examine your logic, please. Do you believe this will be true? I fear that many of the posters here do. I will attempt to prove to you that it is simply impossible for this "gentle awakening" to happen. If you hold this view, you assume that people who have acted very imprudently, very recently, will gradually realize that they are nearly fully invested in assets that have absolutely no real value. You assume that they will, en masse, thoughtfully consider asset realocation to something a little safer. That these people will collectively sigh " oh gold, why that looks interesting! I think I'll try a little. " Please understand this: When the public finally does wake up, the first thing they will notice is the smell of their life savings are in flames. All these poor fools can talk about at work or play is their damned "investments". They are obsessed with their "investments". They might as well be, their families and relationships are in a state of ruin. The masses will get to a state of hysteria at some point. These people didn't get where they were by prudent investing. THEY STAMPEDED IN AND THEY WILL STAMPEDE OUT! This is what herds do. It is all they know how to do. They will eventually demand political action. All the ususal suspects will be rounded up. But, as Dr. Parks points out, it is the very same institutions who started the problem in the first place that will be called upon to "help us out". Once again the flock will be sheared. In the coming man-made maelstrom, there will be no winners. Only survivors.
So, what is the answer to the present conundrum? The answer is this my friends. If you desire to see clearly, you must never fall in with the crowd. You must never render your God given individuality to be manipulated along with public opinion. You must never become comfortable. Comfort comes at too high a price. Don't sell your birthright for a stinking bowl of soup! Be prepared to fight. Our forefathers understood this. It takes courage to stand apart and not abandon your position. But, we must, for truth is the realm of God alone and He deals very generously, but ONLY with individuals. We must again become a nation comprised of free individuals.
jinx44
(06/11/2000; 09:20:33 MDT - Msg ID: 32161)
Debt Reduction and Swaps
http://www.economist.com/editorial/freeforall/current/index_fn2628.htmlI believe that the USG's ferver to "pay down the debt" is a b*llsh*t smokescreen for short term political gain. Paying off public debt is duplitious in that it will balloon the off-balance-sheet debt by a greater margin in the future. Net result=another shell game that will saddle the future taxpayer with it. Face it, the debt the USG has foisted on the taxpayer and his children's children will NEVER be paid back through ordinary means and methods. Real GNP is growing slower than the rate of interest on the debt, so how are we to pay for it? Buying up 30 yr. govt's with SS and FICA cash flow will only delay the reckoning. It means that we will have to borrow more in the future to pay the baby-boomers retirement. It is a wicked game that we as citizens have acquiesced to with our handlers in DC. The sooner we crash the system, the sooner we can work to rebuild this country through honest money and real industry.

This is a good article from the Economist Magazine;

The swaps market is behaving very oddly. Why?

AN UNUSUAL thing happened this week in America. The prices of corporate bonds rose. Of late they have proved a dreadful investment�"worse by far than government bonds. How much farther their prices will rise depends largely on what happens in the market in which they are priced: the swaps market. That market is in turmoil.

Swaps are the glue that binds together the world’s financial system. First developed in the early 1980s, they now dwarf other financial instruments. At the end of last year there were some $46 trillion of swaps outstanding, compared with $5.4 trillion in, for example, international bond markets.

Broadly, swaps come in two forms: interest-rate swaps and currency swaps. Simply put, both allow two parties to exchange cashflows. In a currency swap, the two exchange currencies and re-exchange them at maturity at the same rate. In the meantime they exchange interest payments. In a typical interest-rate swap, one side exchanges a floating-rate obligation (generally based on Libor, the rate at which the best banks lend to each other) for a fixed one.

This simplicity has made swaps, and interest-rate swaps in particular, a very useful tool. They allow banks, for example, to match their assets and liabilities much more closely. If they have lots of short-term floating-rate liabilities (such as savings accounts) but long-term fixed-rate assets (such as loans) they can “swap” long-term assets into short-term ones. Likewise, companies can use swaps to convert fixed-rate debt (which investors might prefer) into floating-rate debt, or vice versa.

The level of the fixed rate in the swap reflects, among other things, the willingness of the market to accept corporate debt rather than government debt, which means that the swap rate is calculated at a spread over government bonds. Euro swap-spreads have risen in recent weeks, but dollar swap-spreads have widened dramatically. Ten-year spreads peaked at the end of May at 140 basis points (hundredths of a percentage point)�"a higher spread than ever before (see chart). They have since narrowed, but are still wider than at the height of the financial crisis that followed Russia’s default. At times in recent weeks, the swaps market has shut down completely; nobody was willing to receive a fixed rate.

What on earth is going on? There are, broadly, two sets of explanations, one relatively benign, the other emphatically not. The benign view is that the rise in swap spreads is explicable by rising interest rates, greater default risk, and the relative sizes of government- and corporate-bond markets.

Governments are issuing fewer bonds. On optimistic assumptions, America’s government could buy back all its debt by 2010. American companies, in contrast, are borrowing hugely. That makes government bonds more valuable, compared with corporate debt. It reflects what Stephen Compton, head of bonds at Schroder Salomon Smith Barney in Europe, calls “the privatisation of the bond markets”.

Rising interest rates, too, are partly to blame for widening swap spreads. When the market thinks that interest rates will rise, there is more of an incentive to pay, rather than receive, a fixed rate. That incentive is greater at times when, as now, long-term rates are lower than short-term ones (an “inverted yield curve”). This means that anybody receiving a fixed (long-term) rate and paying a floating one loses money.

Then there is the increase in corporate debt. Credit Suisse First Boston (CSFB) expects American companies to issue as many bonds this year as they did last, when they sold record amounts. Importantly for swap spreads, one reason that firms are borrowing so much is to buy back their shares. So American companies are becoming ever more highly geared, and hence less creditworthy. Share buy-backs are running at double last year’s level and, reckons David Goldman, a strategist at CSFB, will remain in vogue as long as debt is relatively cheap, and firms’ managers think that more leverage is good for shareholder value.

If this were not enough, swapmarket folk also point accusing fingers at Gary Gensler, under-secretary at the American Treasury. In March, he said that federally sponsored agencies, such as Fannie Mae and Freddie Mac, which everybody assumed were guaranteed by the government, were not. The yield on their debt rose sharply. Since they are the biggest actors in the swaps market, so did swap spreads.

Swap knot

Taken together, these factors might seem enough to explain what has happened. But James Bianco, who runs an eponymous research firm, thinks they are not. Swap spreads, he points out, have been widening for the past three-and-a-half years�"before any of these other factors cropped up. And they do not explain why swap spreads have risen so fast this year.
Mr Bianco argues that two things dominate the pricing of interest-rate swaps: interest rates and credit concerns. For most of the 1990s swap rates went up and down with interest rates. That relationship has now largely broken down, suggests Mr Bianco, because markets have become more concerned over risks to the financial system, as a result of the crises of recent years. If Mr Bianco is right, this has important ramifications: it suggests there are growing worries about the riskiness of the swaps market, based on fears about the health of financial firms�"by far the biggest participants.

Pshaw, say critics: there is no credit risk in the swaps market. Forget about those telephone-number figures: no principal amount is exchanged in a swap, so what matters is not the “notional” amount at risk but the cost of replacing the swaps�"a far lower number. Moreover, big banks post collateral if they are on the losing side of a swap, thus eliminating even any residual risk.

Really? “Swaps are perceived as riskless. That must be wrong,” says a treasurer at a big bank. Unlike futures exchanges, the swaps market looks only at current exposures, not potential ones (futures exchanges demand a dollop of cash up front to cover the second). And the market has grown so much that these potential risks are becoming huge.

So it is at least plausible that people are starting to fret about the banking system. But why might this be a problem in America, of all places? Because it is taking ever more risk to generate the returns demanded by shareholders. Bank lending is growing by 10% at an annual rate, and property lending by 13.5%, its highest rate since 1989. If anything, these rates are accelerating because, after nine years of growth and few defaults, banks’ backward-looking risk models tell them that lending is a fine business.

And not just in America. In Europe, too, banks are taking more risk to generate higher returns. At best, the swap market is merely reflecting this increase in risk. At worst, it might be signalling that the world’s financial system is in danger of becoming unglued.



SHIFTY
(06/11/2000; 10:14:43 MDT - Msg ID: 32162)
Goldfields Ltd
Gabriel Resources announces effective date of corporate reorganization


CDNX Trading Symbol: GBU

TORONTO, June 9 /CNW-PRN/ - GABRIEL RESOURCES LTD. (``Gabriel'') is
pleased to provide the following update on Gabriel's corporate activities.

Corporate Reorganization
------------------------

Further to Gabriel's previous announcement on May 29, 2000 regarding its
proposed corporate reorganization, Gabriel is pleased to report that the
corporate reorganization will be completed and will become effective on June
13, 2000. European Goldfields Ltd. will be called for trading on the Canadian
Venture Exchange (``CDNX'') at the opening of the market on June 13, 2000
under the symbol ``EGU''. Gabriel will continue to trade on the CDNX under
the symbol ``GBU''.
Every shareholder of Gabriel of record at the close of business on May
25, 2000 will receive one European Goldfields Ltd. common share for every ten
Gabriel common shares held on such date. As of May 25, 2000 an aggregate of
74,305,661 common shares of Gabriel were issued and outstanding. Accordingly,
an aggregate of 7,430,566 common shares of European Goldfields Ltd. will be
issued on June 13, 2000. Shareholders of Gabriel will receive the same
percentage interest in European Goldfields Ltd. as they held in Gabriel on May
25, 2000.
Certificates for shares of European Goldfields Ltd. will be mailed to the
new shareholders of European Goldfields Ltd. within seven days of the
effective date of the reorganization. No new share certificates will be
issued for Gabriel common shares and shareholders of Gabriel must retain their
existing share certificates.
Gabriel is a Canadian based resource company involved in the exploration
and development of mineral properties in Central Europe, primarily in Romania.

On Behalf of the Board:

signed by ``Frank D. Wheatley''

-------------------------------------
Frank D. Wheatley
President and Chief Operating Officer

The Canadian Venture Exchange has not reviewed and does not accept
responsibility for the adequacy of this release and the information contained
herein.



beesting
(06/11/2000; 11:06:58 MDT - Msg ID: 32163)
@ ORO #32151 Rothschild forms North American arm.

Some Satire aimed at the U.S. Government and Department of Defense:
Does Rothschild have a Top Secret Clearance???
Or is a Top Secret Clearance now obsolete in the USA??
....beesting.
YGM
(06/11/2000; 11:43:24 MDT - Msg ID: 32164)
Home for A Day!
http://www.goldensextant.com***Found This....Latest Reg Howe.
CURRENT MPEG COMMENTARY


(Excerpt)



June 11, 2000. Central Banks vs. Gold: Winning Battles but Losing the War?

Many in the gold community, including myself, have assumed that the European Central Bank and the Bank for International Settlements are operating with a definite strategy for restoring gold to the center of the international monetary system, and in the process making the euro the preferred currency for international transactions. But evidence is now accumulating to shed doubt on this assumption, or at least to suggest that whatever their strategy, it is rapidly being overtaken by events and by their own short gold positions or those of the bullion banks for which they are responsible.

YGM
(06/11/2000; 11:56:40 MDT - Msg ID: 32165)
Gotta Love The Last Sentence....
http;//www.bis.org/press/index.htmBANK FOR INTERNATIONAL SETTLEMENTS
CH-4002 BASLE, SWITZERLAND
Press release Press enquiries: +41 61 / 280 81 88
Ref. No.: 16/2000E
5 June 2000

Annual General Meeting: Decisions Approved
The seventieth Annual General Meeting of the Bank for International Settlements was held in Basel today, 5 June 2000, under the chairmanship of Urban B�ckstr�m, Chairman of the Board of Directors. The Meeting was attended by the Governors and other representatives of member central banks and other central banks associated with the BIS as well as representatives of many international institutions.

The Meeting received the Annual Report of the Bank, which had been distributed in the four official languages (English, French, German and Italian). It approved the audited Balance Sheet at 31 March 2000, totalling 74,835,665,711 gold francs, one gold franc being equivalent to 0.29032258... grammes of fine gold (or US$ 1.94149..., converted at US$ 208 per ounce of fine gold). The Meeting also approved the Profit and Loss Account for the financial year to that date, which showed a net profit of 307,824,257 gold francs after deduction of costs of administration.

On the recommendation of the Board of Directors, the Meeting decided to distribute a dividend of 340 Swiss francs per share in respect of the financial year ended 31 March 2000. The dividend will be payable on 1 July 2000 to shareholders whose names are registered in the books of the Bank on 20 June 2000. As shown in the Balance Sheet and the Profit and Loss Account, an amount of 54,658,243 gold francs has been set aside out of the net profit for this purpose.

The Meeting also decided to transfer 50,633,203 gold francs to the General Reserve Fund, 3,000,000 gold francs to the Special Dividend Reserve Fund and 199,532,811 gold francs to the Free Reserve Fund.

The members of the Board were discharged from all personal responsibility in respect of the past financial year. End.

GO PHYSICAL (right here @ USA GOLD)& GO GATA....YGM
beesting
(06/11/2000; 12:01:37 MDT - Msg ID: 32166)
"""BOOOOOMMM""" U.S. Mint selling Gold for $700.00 an Ounce!!!
www.USMINT.gov
To Gandalf the White and any other coin collectors.
I sincerely hope this is not an inappropriate post.
From the top of this page:

<understanding about the ownership of gold and gold bullion coins through the free exchange of ideas,opinions and information by like-minded individuals. We welcome your participation either as an observer or poster.>>

My post:
Just received by regular mail an information packet solicitation price list concerning Gold & Silver "NEW" mintage American Eagle coins:
From:
Department of the Treasury
United States Mint
Customer Care Center
Lanham, MD 20706

One Tenth Ounce American Eagles $70.00 a peice(one ounce of Gold $700.00) Limited Editions.

Folks thats a retail price of finished Gold set by a U.S. Government Agency!

Disclaimer:
This post is meant for educational purposes only!

But, what a bargain Gold purchases from USAGOLD have been and still are today and this NOT meant as an advertisement as I am not affiliated with USAGOLD.

Comment:
Included in this letter was a flier on the U.S.State Quarter Series, according to Coin Prices magazine, an extremely popular way of getting people in the U.S. to collect coins.
Could this be a prelude to a new generation of knowledgeable collectors in the Gold and P M field?
Has anyone else received a letter from the U.S. Mint concerning the sale of Bullion coins in the mail?

Thanks for reading.....beesting.
YGM
(06/11/2000; 12:02:47 MDT - Msg ID: 32167)
BIS Link....(again)
http://www.bis.org/press/index.htmSorry.....BTW...Thanks to all of you who expressed good wishes for my mining season....1st equipment parts run to town already underway....YGM
ORO
(06/11/2000; 12:09:43 MDT - Msg ID: 32168)
Beesting - money is clearance enough
The item was no joke. It is an actual news item reported by Dow Jones and written up in Barron's.

beesting
(06/11/2000; 12:19:07 MDT - Msg ID: 32169)
Correction on # 32166 URL.
http://www.usmint.gov/The link should get to the main homepage of the U.S.Mint....beesting.
Turnaround
(06/11/2000; 13:35:02 MDT - Msg ID: 32170)
(No Subject)
US and Germany gold reservesYGM (06/11/00; 11:43:24MT - usagold.com msg#: 32164)
Home for A Day!
http://www.goldensextant.com
***Found This....Latest Reg Howe.
CURRENT MPEG COMMENTARY

From the same most cool essay:

"...So far, the only apparent strategy for dealing with this desperately short gold market is to throw ever larger amounts of gold derivatives at
it. Since these derivatives are coming in huge volumes from the largest and best-connected American and German bullion banks, all under
the direct supervisory jurisdiction of the Fed or the Bundesbank, it is very hard to believe that this explosion in paper gold does not have
some type of official imprimatur. Still, it is even more difficult to think that this approach can lead to anything but a very bad end.

Nor does it appear coincidental under the circumstances that the banks writing these gold derivatives are based in the two countries -- the
U.S. and Germany -- having the largest official gold reserves. Ultimately, if there is significant physical gold backing this deluge of paper, it
resides in an implicit promise of access to these countries' gold reserves.

But neither country has yet done anything to prepare its citizens
for the possibility that their national gold reserves may be called upon to bail out the bullion banks,

many of whom got into trouble initially
by trying to profit from inside knowledge of official efforts to manipulate gold prices..."

Um, wouldn't this cause a bit of a stir (it probably already is, thanks to GATA) in high circles? Hmmm?
Maybe it would be better to let the paper burn as AG alludes to, since we're going to need that gold later for oil.
Topaz
(06/11/2000; 14:55:07 MDT - Msg ID: 32171)
beesting (06/11/00; 12:01:37MT - usagold.com msg#: 32166)

The prices you refer to are PROOF prices (as opposed to Bullion coin) and as such are roughly double Au price.
The Numismatic future value generally relates to the "Limited Edition" part of the deal and- depending on the Mintage, will generally sell out pretty quickly.
Depends entirely upon where your interests lie. On one hand, if you are $ minded, you'd buy the Numismatic; on the other,ie: Gold minded, you'd go with the Bullion.
Personally, I've had a $ each way!
Cavan Man
(06/11/2000; 15:12:57 MDT - Msg ID: 32172)
Pardon my French but........
........I am beginning to wonder if there are leaders of any stripe in Europe that have any balls!
Peter Asher
(06/11/2000; 17:26:36 MDT - Msg ID: 32173)
Urban Legend or ??? (Sure hope so!)
Just got This E-nail from a close family member.


> Interesting quote attributed to Janet Reno. Hmmmm.
>
> "A cultist is one who has a strong belief in the Bible and the Second
> Coming of Christ; who frequently attends Bible studies; who has a high
> level of financial giving to a Christian cause; who home schools for
> their children; who has accumulated survival foods and has strong
> belief
> in the Second Amendment; and who distrusts big government. Any of these
> may
> qualify a person as a cultist but certainly more than one of these would
>
> cause us to look at this person as a threat and his family as being in a
>
> risk situation that qualifies for government interference."
> -Janet Reno, Attny. General of the United States during an Interview
> on CBS "60 Minutes" on June 26, 1999.
>

Peter Asher
(06/11/2000; 17:33:32 MDT - Msg ID: 32174)
Movie Review for Steve H and all
XXXXX DRUDGE REPORT XXXXX SUNDAY JUNE 10 2000 18:22:41 ET XXXXX

'PATRIOT' SCENE STUNS AUDIENCE; PRODUCER, GIBSON DEFEND CHILDREN SHOOTING
GUNS IN FILM

A screening of SONY's PATRIOT in Los Angeles on Thursday night left the
audience jumping about scenes in the Revolutionary War film that depict
young children carrying guns -- and using them!

The controversial scene begins when Gibson's character reaches into a chest
and gives his sons rifles.

"They go into woods and ambush the Redcoats, killing around 15 men. One son
is around 13 years old, the other is 10," says an insider.

A loud "gasp" was heard in the screening room as the camera zoomed in for a
closeup of the kids. Shots are fired. Blood splatters on Redcoats.

Mel Gibson defended the scene over the weekend, declaring that he would let
his own kids take up weapons in self-defense. Gibson says he's taken his
children to shooting ranges.

In the movie, Gibson goes to war only after one of his son's is killed.

Screenwriter Robert Rodat attempts to portray the complexities of war, as he
did with SAVING PRIVATE RYAN.

"This war will be fought not on the frontier nor on distant battlefields,
but among our homes. Our children will learn of it from their own eyes..."
says Mel Gibson's Benjamin Martin in PATRIOT [opening last week in June].

The movie's theme -- take arms up against those who would take your arms --
is bound to stir the national debate over gun control.

Producer/Director Roland Emmerich conceded that the film may become a
rallying call for pro-gun advocates and militias.
YGM
(06/11/2000; 17:42:39 MDT - Msg ID: 32175)
Peter Asher...
Stop The Planet, I Want To Get Off!!That is an absolutely mind blowing statement by Reno...Sounds like she moonlights for the Anti-Christ in her spare time....Statements like that give alot of credence to those folks whom the majority feel are NWO paranoids....Maybe we should all kiss our asses good-bye....
....Or get ready for slavery of mind, spirit AND body...YGM
Journeyman
(06/11/2000; 18:03:56 MDT - Msg ID: 32176)
Some unkind comments about GOVERNMENT debts. @canamami, ALL

Hi canamami,

Nice to read you again!

". . . the national debt exists in both Canada and the
U.S. Something - paying it down (through surpluses or
through inflationary monetization), adding to it, pay
just the interest, or repudiate it - must be done."
-canamami msg#: 32159

Here here! Repudiate it!

First and foremost, there is NOT a "national" debt in either
Canada or the U.S.A. It is NOT your debt. It is NOT your
family's debt. And it most certainly is NOT the debt of the yet
unborn. It is a GOVERNEMNT debt. If you understand this, you're
90% of the way to at least understanding why I'm making this
post.

"Among these options, paying it down through surpluses
seems to make a lot of sense." -canamami msg#: 32159

The word "surpluses" though, when used by governments is just a
euphemism for "we extorted more money this year than even we
could spend." Do we really want to encourage this? If we do,
this "extorting more money this year" will become
institutionalized, and then THEY will gradually find something
else to spend the excess on. Since USA Corp. traditionally
spends as much as $3.20 cents for each EXPECTED extra $1.00 of
"income" - - in advance of actually receiving it of course - - as
a result, you can expect the government debt to rise.

"It is a scandal that the debt arose in the first
place, and primarily for funding socially destructive
'social' programs. However, now that it exists, what to
do about it?" -canamami msg#: 32159

Indeed it is a scandal. And so I repeat myself: Repudiate it!

Suppose your neighborhood grocery ran up, oh say, $5.6 trillion
or so official debt and had taken on an apparent moral
obligation, upon which people were counting, for another $18
trillion or so they didn't want to talk about? Should you, your
family, and your as yet unborn kids and grand kids pay this bill
for them?

Of course they could raise their prices enough to attempt to pay
off this humongous amount - - - but it wouldn't work because
competing groceries not saddled with such debt could chronically
undersell them.

Your grocery might claim they went into debt for the sake of the
community and that the projects they spent all that money on
benefited "everyone." They might even be partially correct. But
ultimately your neighborhood grocery, because it spent way beyond
it's means, would default on what it owes and be forced into
involuntary bankruptcy.

What's different? What makes governments different than your
neighborhood grocery? The answer is simple. Taxes. The
question becomes, "Why should organizations, merely because they
call themselves 'governments' (run by exactly the same kinds of
people that run other organizations), have the right to literally
extort money for their operations, whether their taxpayer-
'customers' are satisfied or not, enabling them to pass on the
costs of their excesses and mistakes to all inhabitants of a
particular geographical area in perpetuity when other
organizations like your neighborhood grocery can't?"

It is NOT your responsibility, in my opinion, to pay off this
debt, even if you cast a vote for one of the SOBs who ran up the
bills. You wouldn't be responsible to pay your neighborhood
grocery's debts out of your own pocket, even if you voted as one
of the board of directors. And certainly, neither would be your
unborn progeny.

FED chief Alan Greenspan has lamented on occasion that there is
no proceedure for nations to declare bankruptcy. Why, do you
think?

GOVERNMENT should pay the government debt, or at least as much of
it as it can raise by selling it's assets. Those idividual
flesh-and-blood people who feel responsible for helping pay off
the Government Debt can continue to volunteer to pay the
corporate excise tax AKA "income tax," as if they were priviliged
corporations. I would, however, suggest at least a Chapter 11
before donating anything to these bozos. Probably, though,
especially as these voluntary contributions fall off, full scale
liquidation will obviously be called for.

The Feds "own" 87% of the state of Nevada, and comparable amounts
of Arizona and Alaska. They also "own" lesser percentages of
other, particularly western, states. I say "own" but only because
posession is 9/10 ths of the law -- according to the treaties,
etc. forming these former territories, once they became states,
the Feds were supposed to sell or otherwise transfer this
property into various other hands. The Feds broke these
agreements wholesale, but, hey, as long as the sky is blue and
the rivers shall flow --- aw, shucks, just ask the Indians.

The point here is, this land is an asset, and in a bankruptcy,
assets are liquidated to pay off creditors. Similarly, there are
other government assets which should be sold off. The Russian
government sold off old submarines and a Soyuze or two if my
memory serves. A libertarian think-tank (Reason Foundation?
CATO?) awhile back did a study which determined that sales of all
these assets still wouldn't be enough to discharge U.S.
Government debt.

One of the major features of a bankruptcy is who recovers how
much and in what order. I certainly wouldn't like to be involved
in trying to untangle that mess - - - even the GAO (General
Accounting Office) doesn't know where something like a third of
the "money" goes.

But I will make one completely unfair suggestion: The bankruptcy
court should rule that no government bonds will be honored. A
lot of people will be hurt, many of them relatively innocent
foreigners. But unfortunately people always get hurt in a
bankruptcy. The reason I propose this has nothing to do with
these people, and I would feel very sorry for them indeed.

The reason I propose this is that it would completely destroy
U.S.A. Corp. credit for awhile. Future generations would get
some protection from being indebted to pay for things reputed
representatives of their long-dead ancestors ingenuously claimed
these ancestors wanted. Better that the relatively innocent bond
holders should be hurt than that the yet unborn should be
enslaved.

Emergencies? Napoleon, confronted with the ruined credit of the
French state following the 1798 culmination of the paper money
"assignat" debacle that brought him to power, fought all his wars
and conducted all the operations of his government for cash.
Napoleon fought Marengo, Austerlitz, Jena, Eylau, Friedland -- in
fact all campaigns right down to the peace of Tilsit for cash.
Well, OK, there was one suspension of specie (hard money) payment
that lasted for a few days.

Regards,
Journeyman
HI - HAT
(06/11/2000; 18:12:14 MDT - Msg ID: 32177)
jinx44......msg. 32161................Reduction
Dress Rehearsal DragThe where from and ways heart conviction, of the CONG, not their Truth, but their path is what will give shelter and impetus to the way of the Ancient Truth.

A soft parade of bare feet that silently owns the night. The light has illuminated an EVIL of Primordial Darkness.
Leigh
(06/11/2000; 18:26:42 MDT - Msg ID: 32178)
"The Ten Commandments" (movie version)
Who was that wonderful poster a couple of weeks ago who mentioned the scene from "The Ten Commandments" where Moses is speaking with the dying slave? It intrigued me to the point that I checked the video out of the library, and I've watched it a couple of times.

There is a GREAT scene before the movie starts where a narrator comes out on a stage and speaks. Here is (some of) what he says: "Ladies and gentlemen, this may seem an unusual procedure, speaking to you before the picture begins, but we have an unusual subject -- the story of the birth of freedom. (blah, blah) The theme of this picture is whether men ought to be ruled by God's law or whether they are to be ruled by the whims of a dictator like Rameses. Are men the property of the state or are they free souls under God? This same battle continues throughout the world today. Our intention is not to create a story, but to be worthy of the divinely inspired story created 3,000 years ago -- the five books of Moses."

I'm amazed that this message hasn't been censored out of the video version of "Ten Commandments." Because our government already has decided the answer to the narrator's question.
-------------
Peter, I read that Reno quote somewhere, but the person who posted it added that it was just an Internet rumor. That doesn't mean she doesn't think that way in her heart!
wolavka
(06/11/2000; 18:35:28 MDT - Msg ID: 32179)
hello
gold sideways to down for monday
Leigh
(06/11/2000; 18:47:04 MDT - Msg ID: 32180)
"Patriot" (movie version)
Dear Peter: I'm taking my son to see "Patriot" as soon as it gets out this way! I want him to see some good REAL BOY role models!
Solomon Weaver
(06/11/2000; 19:30:34 MDT - Msg ID: 32181)
The cost of production for gold
http://www.tocqueville.com/brainstorms/brainstorm0067.shtmlGoldfields Mineral Services (GFMS) in its Gold Survey 2000 concludes that industry costs declined 5% to $197/oz and total costs to $257. In light of the average spot price of $280, before enhancement by hedging profits, a $23 margin of 8% after all costs might imply that mining gold is a profitable, if not thriving industry these days.......

. We think that the industry is gutting its productive capacity by high grading, getting behind on development, squandering financial resources by keeping marginal properties afloat, and drastically reducing exploration expenditures..........

The total cost figure used by GFMS is not intended to be reconciled to producer income statements as it does not include corporate SG&A, interest and financial items, exploration costs, or taxes. If one adds these items, the cost per ounce figure would increase by $25-$30 for the typical producer, or approximately the current price for gold and the average at which it traded in 1999. Adding in some allowance for even a feeble return on capital would boost the per ounce requirement to well over $300/oz. The reality to which cash cost and total cost analysis are blind is that the gold industry is barely breaking even in the current market environment. It cannot attract new capital except on a very project specific basis. Not only is the industry as a whole incapable of expansion, it is hard put to replace its reserve base.......

In our view, that cost is well above the market price, probably in the range of $350-$360/oz on an industry wide basis.......

More than 80% of new mine projects, some of which are represented in this table, require a gold price on average of $333/oz, well above today's trading range. These figures do not include discovery costs, either the exploration or acquisition cost of the property. A very conservative across the board estimate would be $25/oz, resulting in a total replacement cost for new ounces approaching $360/oz. Numerous corporate acquisitions in recent years would place this figure far higher......

-------

Solomon notes....based on this analysis, the current spot gold price is well below the cost of replacement....even the highs reached in Sept 99 hardly reach the real cost...and as the dollar inflation drives the cost of everything up...these REAL costs will also rise.

Thanks to Cassius for the link.

Poor old Solomon
HI - HAT
(06/11/2000; 19:33:20 MDT - Msg ID: 32182)
One Bullet Clapping
The greatest Triumph of the Art Of War, is to have the enemy kill itself, with Its own hand.
Al Fulchino
(06/11/2000; 20:12:25 MDT - Msg ID: 32183)
Peter
Thanks for those two recent posts. I am gonna forward them to some folks.
SteveH
(06/11/2000; 20:13:49 MDT - Msg ID: 32184)
Peter
Noted with enthusiasm. Thanks.
ORO
(06/11/2000; 20:39:16 MDT - Msg ID: 32185)
Journeyman - Repaying government debt
The negative point of repudiation is that many are harmed in the US and abroad because of having put trust in government. Despite the foolishness of such trust, the harm should still not be visited on these holders in an inequitable manner.

The way to do it has historically been inflation: Fed buys back those bonds with freshly printed or wired dollars which produce bogus capital gains, which the Government taxes and recycles back to the Fed. The price inflation eliminates the debt into negligible proportions. In the meantime, it assists most debtors and most owners of property (who are also owners of US and other debt assets).

Ever since the 70s, Americans have been predisposed to spend their funds before they come in so that they have minimal exposure to price inflation taking away their savings. Modern savings are called "credit lines" and reside in credit cards and home-eq. loans.

There was a description of the deathly palor of the swap markets that indicates both a current tightness in dollars (hence the big spread between government and non-government debt), and an unwillingness on the part of anyone to make a commitment to long term fixed interest debt. Thus the markets are discounting a very high future interest rate (due to expectations of price inflation) and difficulty on the part of private debtors to pay their debts (due to expectations of a deflationary monetary environment).

These are precisely the stagflationary conditions. And they show a true expectation of government defaulting on its debt through inflation.

In the history of this country in the 20th century there has never been a government debt not paid in bulk by the generation that incurred it. Payment was made by means of monetary and price inflation - which deprives the CURRENT holders of debt assets and of cash and accounts of purchasing power. These are the people that voted for the infantile unworkable programs that backfired and are paying for them.

ET
(06/11/2000; 21:32:12 MDT - Msg ID: 32186)
Journeyman

Hey J-man, you da man!

"You wouldn't be responsible to pay your neighborhood
grocery's debts out of your own pocket, even if you voted as one
of the board of directors. And certainly, neither would be your
unborn progeny."

Well, you gotta hope everybody figures this out, eh? It's pretty much the key to the future.
Journeyman
(06/11/2000; 22:20:06 MDT - Msg ID: 32187)
Repudiation? Inflation? The winner is . . . @ORO, ALL

Hi ORO!

As far as I know there is no good or "fair" way out of the mess. Inflation hurts anyone holding dollar denominated anything, while bond default hurts mostly those specifically investing in the bonds with some expectation of return.

Investments traditionally carry risk of loss (albeit unknowingly in the case of USA Corp. bonds since they are regularly touted as "riskless") while dollars themselves are not supposed to be investments, and those holding them have no upside potential at all. Quite the contrary. Therefore, if you're going to screw someone, it seems less unfair to screw the bond holders who at least had the possibility of making a profit.

An ancilliary advantage, again, is that it would make clear that loaning money to USA Corp. has a down side, which would ham-string future borrowing by that paragon of irresponsibility. This could be a good thing ;>

Finally, as you suggested, and as recent historical precedent confirms, it's just about a sure bet that monetary inflation is the path that will be followed -- which makes my repudiation post no more than fantasy anyway. Oh well.

Regards,
Journeyman
Journeyman
(06/11/2000; 22:34:05 MDT - Msg ID: 32188)
Radical @ET msg#: 32186, ALL



"You wouldn't be responsible to pay your neighborhood
grocery's debts out of your own pocket, even if you voted as one
of the board of directors. And certainly, neither would be your
unborn progeny." -Journeyman

"Well, you gotta hope everybody figures this out, eh? It's pretty much the key to the future." -ET

Yes, but the implications are so, well, radical! I suspect few current Americans can seriously entertain such a notion.

Hope I'm way wrong.

High Regards,
Journeyman
Chris Powell
(06/11/2000; 22:57:56 MDT - Msg ID: 32189)
Bullion bank shill cons Mining Web
http://www.egroups.com/message/gata/482?How www.MiningWeb.com was conned
by a bullion bank shill about gold
derivatives. A reply by GATA
Chairman Bill Murphy.


To subscribe to GATA's dispatches
by email and get them immediately so
you don't have to go look for them,
send an email to:

gata-subscribe@eGroups.com
Chris Powell
(06/11/2000; 22:59:46 MDT - Msg ID: 32190)
Gold suppression summarized, documented by Howe
http://www.egroups.com/message/gata/483?Reg Howe summarizes and documents
the worldwide gold suppression scheme.
An understanding of the gold market
starts here.


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
TEX
(06/11/2000; 23:25:36 MDT - Msg ID: 32191)
Peter Asher - Patriot
As soon as it hits the screen in my hometown....I'm taking my 13 year old and 16 year old.
Peter Asher
(06/11/2000; 23:53:30 MDT - Msg ID: 32192)
Reno Story
YGM -- It's OK Ken! -- Enjoy the diggingAnd good hunting!

The Reno story made the rounds of Robin's clan today and we just got this from the family member emeritus on her side.


> Here is some advice from the Urban Myths site on how to identify
hoaxes.
> You might also look carefully at where you got the Janet Reno story. My
> first check was to discover that June 26, 1999, the date of the alleged
"60
> Minutes" broadcast, is not a Sunday. Immediate suspicion. Next, the
"quote"
> seemed completely unlikely just reading it. Then, I couldn't find it in
the
> "60 Minute" archives. It took awhile to track down the Urban Myth site,
but
> taking the time is better than spreading inflammatory stuff which might
be
> false. The Internet is a cauldron--a heady mix of truth and lies.
>
> ***
>
> The Sniff Test
>
> After receiving way numerous pieces of urban mythology masquerading as
> truth, I started to develop what I call "The Sniff Test". I'll keep
updating
> this test as I discover new principles....
>
> The primary principle is:
> Treat stuff like the mythology in this section the way you would week-old
> leftovers in your refrigerator -- "sniff" it before eating it. If it
smells
> funny, there's probably a reason for it. Before you replicate such
"thought
> contagions", track down the source and confirm it for yourself.
>
> The secondary principle is:
> Don't believe everything you read on the Internet, especially if it
> satisfies several of the following conditions:
>
> 1) It is highly inflammatory.
>
> 2) It asks that you send a copy on to everyone you know.
>
> 3) It does not mention any names. References to a "friend of a friend",
or
> an unnamed relative, such as "my cousin", or "some girl/boy/man/woman"
are
> highly suspicious.
>
> 4) It does not cite any specific sources ("the NY Times" is not a
> citation -- "the January 22, 1996 edition of the NY Times" is, though).
>
> 5) It does cite sources, but the sources cannot be found. Anyone can tag
> onto a piece of e-mail a bogus source to make it sound more
authoritative.
>
> 6) It does not say exactly when this event occured. "Last month" is a
> relative term that means "the month before the one that I, the reader, am
> currently in". If the story has been circulting on the Internet for three
> years (not unusual for urban legends), then "last month" becomes
completely
> meaningless unless there is a specific date mentioned.
>
> 7) It says, "THIS IS A TRUE STORY!" That's an automatic warning flag.
>
elevator guy
(06/12/2000; 00:46:21 MDT - Msg ID: 32193)
@Stranger
Howdy, Stranger! Couldn't resist that Western classic greeting. :^)

Do you think the economy will start a recession in the last half of this year?

We are looking for some business space now, and were wondering if there might come a glut of commercial real estate, if the economy turns sour over the next six months, and small businesses fail.

We dont want to buy property at todays high prices, only to find the values dropping later this year, if things turn.

Do you have any thoughts on this issue? Any input would be much appreciated. Thanks!View Yesterday's Discussion.

YGM
(06/12/2000; 01:30:44 MDT - Msg ID: 32194)
Barrons Article......
Positive Comments for the BEAR Camp.......(G'nite ..YGM)The Oracle of Dow..........
Interpreter of a venerable theory sees markets at a pivotal point
Barrons June 12 By Peter C. Du Bois

Below is the full article, which while long is quite interesting. Barrons site is not linkable unless you subscribe. If you are a subscriber and would prefer to read the full text with chart the link is: http://interactive.wsj.com/articles/SB960590715890332776.htm

An Interview With Richard Russell ~ A long-time student of stock-market history and an accomplished technician, Dick is a particularly strong believer in and proponent of the Dow Theory, whose main function is to identify the primary trend of the market. Just how important is the primary trend? "Without understanding that concept, you're lost," he says. "It would be like trying to drive a car without an engine." Now 76 and a longtime resident of San Diego, Dick is no stranger to Barron's. Beginning in 1958, his comments on what the Dow Theory is saying have frequently graced our pages. He has penned his newsletter, Dow Theory Letters, since July 1958, and last year began offering daily comments to subscribers on his Website, www.dowtheoryletters.com. For his perspective and views on today's market, and why he believes we're in the first phase of a bear market, read on.

-Peter C. Du Bois

Barron's: When did you first become interested in the stock market and start investing in equities?
Russell: I have a very strange family history. My grandfather committed suicide in the Panic of 1907, and my uncle was undone in the 1929 Crash. For all the talk about many people committing suicide then, he was one of few who actually did.

I was born in 1924. In 1946, when I got out of the Army Air Force, I read an article in Time magazine about the great future of Kaiser Frasier cars. I bought a few shares in the 20s, and they promptly fell to 10. That's what got me really interested in how markets work.

Q: When did you decide to focus on the Dow Theory?
A: In the mid-1940s, there wasn't an awful lot of material available to help one understand the stock market. I went to the New York Public Library, which had a great section on economics. I pored through every book I could find about stocks and happened upon a collection of articles by Robert Rhea. From 1932 until he died in 1939, he wrote a newsletter called Dow Theory Comment that came out irregularly every 10 days to two weeks. It was successful from the start. Rhea had a big following in Barron's, which at that time was quite technically oriented. Prior to starting his newsletter, on July 7, 1929, Rhea had called the 1929-1932 bear market, based on Dow Theory principles. He also called the exact bottom on July 8, 1932, a feat which I consider one of the most remarkable in the history of stock-market analyses. He also called the turn to the downside in the bear market of 1937. I was totally fascinated by what he wrote. The material really made a lot of sense to me. It was the first time I really got a feel for the market. I studied every word and sentence Rhea ever wrote until I couldn't see straight.

Q: Let's back up a minute. Can Dow Theory be summed up in a sentence or two?
A: Unfortunately, no. It's more of an art form than anything specific. It requires a lot of interpretation, which is probably why its value has lasted so long.

Q: Is it fair to say that Dow Theory tracks the primary trend of the market by insisting that the Dow Jones Industrial Average and the Dow Jones Transportation Average must move in the same direction and must confirm each other's new highs or lows?
A: Yes, the theory helps to identify the primary trend. Without understanding that concept, you're lost. It's like driving a car without an engine. However, value, dividend yield and other factors also play important roles.

Q: What do you consider your best and worst market calls?
A: I started my newsletter in July 1958, telling people to be fully invested at a time when most observers were very gloomy. We had a huge up-move that lasted into 1960. However, I think the best call I ever made was in December 1974, when I said the 23-month bear market that began in January 1973 had hit bottom.

Probably my worst call was not turning bullish in October 1962. I caught the top in the spring of 1962, but stayed bearish too long. I missed the entire bull market that ran until 1966. However, I restated my bearish case in 1966, and the market fell.

Q: Back in 1962, did you let your own opinion override your data?
A: I think so. Around that time, I realized I needed something else to keep me on the right track. That's when I started thinking about what became my proprietary Primary Trend Index. I began publishing the PTI in 1971. It's a compilation of eight components that measure only market action. There's no subjective interpretation involved. I prefer not to name the components. If everybody followed the same ones in the same way, the PTI would lose its usefulness. The key here is that no matter what I think, the PTI keeps me on the correct side of the market.

Q: What are your indicators telling you now?
A: As measured by Dow Theory and the PTI, we're in the first phase of a bear market that could be long, tedious, grinding and very painful. Before it's over, I believe we'll see big pools of money moving out of stocks and into cash. I also believe we'll see absolute slaughter in that dinosaur industry, mutual funds. There now are an absolutely ridiculous number of equity funds. In time they'll be decimated, with literally hundreds of them closing down as investors bid them good-bye.

Q: When did the bull market end?
A: On May 12, 1999, when the DJIA and the Transports both hit peaks. The Industrials subsequently hit several new highs, but Transports didn't. That's called a non-confirmation, and it's still in effect.

But that's not the only bad news here. In what I call a Top-Out Parade, a total of 12 key indicators are below their peaks. I doubt that any of them will see new highs in this market cycle. Sequentially, the Parade goes like this:

Daily new highs on the NYSE topped out at 631 on October 3, 1997.

The advance-decline ratio topped out on April 3, 1998, at 13.00.

The DJ Transportation Average topped out on May 12, 1999, at 3783.50.

The NYSE Financial Average topped out May 13, 1999, at 584.21.

The DJ Utility Average topped out on June 16, 1999, at 333.45.

The Value Line (geometric basic) topped out on July 6, 1999, at 472.95.

The NYSE Composite topped out on July 16, 1999, at 663.12.

The DJ Industrial Average topped out on January 14, 2000, at 11,722.98.

The Russell 2000 topped out on March 9, 2000, at 606.05.

The Nasdaq Composite topped out on March 10, 2000, at 5048.62.

The Amex Index topped out on March 23, 2000, at 1036.40.

The S&P 500 topped out on March 24, 2000, at 1527.46.

Q: You said we're in the first phase of a bear market. Typically, what happens here?
A: Market action is very deceptive. Individual stocks and sectors decline, some froth and excitement from the bull market top are erased, the market fluctuates below its highs, sometimes wildly, but the economy remains okay. In some ways, the current first phase is different from any other I've ever seen.

Q: Why?
A: Because it has lasted longer, because many more individuals and institutions are involved, because it's happening in an election year and because a new phenomenon, the Internet, has emerged and obviously is changing the world.

Then there's volatility. I've never seen anything like what we have now. Among the reasons for it are day-traders moving in and out of stocks, and the divisor on the DJIA, which is a price-weighted index. To adjust it for stock dividends and splits, a divisor, which really is a multiplier, is used. Following Intel's recent split, every point up or down in a Dow stock moves the index by 5.48 points. A six-point pop in IBM would add 32.8 points to the index. So it's not that hard to manipulate the Industrials these days. But perhaps most important, this first phase is occurring at a time of the first generation of investors in U.S. stock market history to never have gone through hard times. This big difference allows them to disregard risk.

Q: How else do you categorize this bear market?
A: So far, it is one of attrition, a deadening process that goes on and on. Stock after stock falls victim to the bear, but the action is subtle, and nobody seems particularly worried. The averages rally a bit, often on lower volume. They decline, they wander about aimlessly, but meanwhile, selected stocks get hurt, and many get hurt badly. As this bear market moves along, attrition will give way to nasty selling, big breaks in stocks and rising volume on the downside. We're not there yet. Meanwhile, is the bear playing with us? Is he trying to lull us into a false sense of security? Is he trying to bore us to death? Damned if I know, but I do know this: The bear has time on his hands. He's in no hurry. The bull certainly was in no hurry, and the bear is perhaps just getting even.

Q: A whole generation on Wall Street never has experienced a real bear market like the one that began in January 1973 and ran 23 months until December 1974. What are the most important things to remember about one like that?
A: Here are some critical axioms. In a primary bear market, values deteriorate over time. Everyone loses, but the person who loses the least is the winner. The one thing you should not take in this business is a big hit. You can avoid taking a big hit in a bear market by being low on stocks or out of stocks entirely.

Q: Why do you suppose most investors either don't see or won't admit that we're in a bear market?
A: In a recent issue of Dow Theory Letters, I quoted something Charles Dow wrote around 1902. He was the father of the theory, but he never called it the Dow Theory. Even though his admirers begged him to write a book explaining his theories, he stubbornly refused. However, his good friend, S.A. Nelson, published 15 of his editorials that had appeared in The Wall Street Journal between 1899 and 1902. The little volume was entitled The ABC of Stock Speculation. A footnote at the end of each chapter refers to each editorial as "Dow's Theory." Dow himself never once used the term.

To answer your question, here's one thing Dow had to say about the sheer human and economic drama the stock market represents, and why most people are slow to recognize change:

"There is always a disposition in people's minds to think that existing conditions will be permanent. When the market is down and dull, it is hard to make people believe this is the prelude to a period of activity and advance. When prices are up and the country is prosperous, it is always said that while preceding booms have not lasted, there are circumstances connected with this one which [are] unlike its predecessors and give assurance of permanency. The one fact pertaining to all conditions is that they will change."

Q: What are the other two stages of a bear market?
A: In the second stage, business conditions really start to deteriorate. Stocks go down further as they discount this climate. Corporate profits decline, and the effects of the battering stocks have taken so far is reflected in corporate earnings. For this reason, the public relates much more to what's happening in the second phase, and optimism begins to turn to questioning and even gloom. This usually is the longest phase. It's when the public finally really realizes that something is wrong. Stage Three is the "give up" phase. Rhea said that's when people who are saving for a rainy day find that it's raining.

Q: So they want out at any price?
A: Correct. People dump stocks just to be out of the market. Extreme fear is prevalent.

Q: Where do rising interest rates fit into your bearish scenario? Is the stock market declining because the Federal Reserve is tightening?
A: That isn't the way I see it. Early signs of trouble were seen back in 1997-98, when new highs and the advance/decline ratio topped out. By May 12, '99, when the Transports topped out, it certainly was clear, at least to Dow Theorists, that "something was wrong." That "something" was unknown at the time and, frankly, I don't think it is known today. To cite inflation is too easy. Everybody knows the Fed is worried about inflation. What everybody knows is fully discounted by the market 99% of the time.

I'd say that something else is bothering the stock market. If I had to guess, I'd say the dollar could be topping out, or consumer spending, which accounts for a big percentage of gross domestic product, could continue to slow down. Obviously, I agree that rising interest rates are a negative for the stock market and the economy. But more than that, I believe the great primary trend of the market has turned down. This implies that there are a lot more troubles out there waiting to express themselves.

Q: Will the Fed raise interest rates again on June 28?
A: The Fed is in a bind. At this point, it easily can justify pushing rates up another 0.25% on June 28, in an effort to offset what the bond market has been doing. Yields on long bonds have been sinking, and I believe the stock market has been reacting to this trend, not to slowing business conditions. So, here's the way I see it: If the stock market is looking strong in late June, the Fed will raise rates 0.25%. If stocks are struggling and economic growth is slowing, the Fed will stand pat.

Up to now, the Fed has been playing it cute. They've been raising rates, but at the same time they've allowed the money supply to expand. Thus, the Fed has tried to put a ceiling on the market with rising rates while at the same time putting a floor under the market with copious cash. In the end, we may get the worst of both worlds -- a slowing economy and rising inflation.

The net result of all this is that the Fed's manipulations are extending the stock market's lengthy topping-out process, dragging it on and on and on. The Fed objects to the "irrational exuberance" of the stock market, but at the same time is afraid to let the stock market go into the tank.

Q: By Dow Theory precepts, what index levels now are critical?
A: I need to discuss Charles Dow's "50% Principle." He noted that what the averages do at the halfway level of a major rise or decline is important. The greater the move, the more important the 50% Principle. For example, I wouldn't apply it to a move of a week or so covering maybe 100 points in the DJIA. However, for larger moves, this analysis is often helpful.

The record high for the Industrials was 11,722.98 on January 14, 2000. From there it fell to 9796.03 on March 7, a decline of 1926.95 points. The halfway point of the decline was 10,759.50. You have to envision 10,759 as a fulcrum, the center of a see-saw. According to the 50% Principle, if the Dow, after all its fluctuations, can settle and hold above the halfway level, there's a good chance that this end of the see-saw will rise, allowing the index to test its prior high. But if the index, after all its fluctuations, can't settle above 10,759, then the odds are that this end of the see-saw will sink, taking the Dow down to test or even break below its March 7 low. In this event, I believe the second and longest phase of the bear market would be triggered.

Recently, the Dow has been both a little below and a little above 10,759. Even if this battle is resolved on the upside, and the Dow heads for its prior peak, I recently had a terrifying thought. The next 10 years could be much like 19661974, with the market marching up and down in a wide trading range, never giving clear signals. Then the bear finally takes over and knocks the market to its knees. That's about what happened during 1966 to '74. It was a very difficult and confusing period, with mini-bull and -bear markets, and in the end, nobody made a lot of money. In fact, if they rode out the '73-74 collapse, they took the beating of their lives.

Q: Does it bother you that many people consider technical analysis to be voodoo that doesn't make any sense?
A: Yes. These people haven't done their homework. To me, that's one of the most incredible phenomena about investing. Here's an industry involving trillions of dollars, and guys haven't bothered to study it carefully. They haven't read Dow Theory, the basis of all technical analysis. They haven't really studied bull and bear cycles. They're amateurs. They haven't learned the lessons of history.

Q: Okay, what's the downside from 9796?
A: It's unknown. One of the basics of Dow Theory is that neither the duration nor extent of a move can be predicted in advance. The inference I draw is that in all history, periods of extreme enthusiasm eventually end in a period of abject pessimism. I consider the latest bull market as having started in December 1974. Some people say August 1982. Either way, it's been the longest bull market in history. To me this suggests that it probably will be followed by one of the worst-ever bear markets.

Another thing, the speculation that we've seen in this bull market dwarfs what we saw in the early 1970s. This adds to my belief that we'll see a huge bear market, one beyond anything we now are thinking about.

Q: Are there any checkpoints on the way down?
A: Not since 1982 has the Dow closed on any day below its low of the prior year. The 1999 low was 9120.67 in January. If that's broken this year, it would be another milestone on the downside, and you'd see more chaos than we've seen so far.

Fortunately, I'm not in the business of selling stocks, so I can say what I want. I say your best position now is on the sidelines. Remember, the current tax setup, with a maximum 20% federal levy on long-term capital gains, means that if you make money, the government is only a minority partner. But if you lose money, Uncle Sam doesn't know you.

In this business, you never stop learning. Let me put it another way. If you stop learning, you're on your way to going out of business. Wall Street is a tough teacher but also a good teacher. If you have any weakness -- arrogance, laziness, stinginess, cowardice, procrastination -- the market will zero in on that weakness and make you pay dearly. In this business, you listen, you think, you ponder, you struggle, you wrestle with the gods of the market, and if you're me, you put yourself on the line. When you do that, you take a chance of looking like a damn fool. And if the stock market has the opportunity, believe me, it will make you look like a damn fool, at least for a while.

Everybody in this business is wrong at times. The fatal error is to stay wrong. I think we're in a major bear market. If it turns out I'm wrong, I'll confess. Right now I believe I'm correct.

Q: What's the most interesting facet of any serious study of the stock market?
A: The market's uncanny way of looking ahead, of discounting the future. And the incredible part of great primary swings from extreme optimism at the top of a bull market to black pessimism at the bottom of a bear market is the public's and the investment community's inability to recognize and accept change.

Q: If you can't or won't predict a specific bottom, please categorize it.
A: I think this bear market probably will end vastly lower. What series of incidents will turn investors stone bearish? I don't know how it will happen. But my answer is that 5,000 years of human nature indicate that this market will end in the cellar. All human history tells us that there are, and will be, swings from pessimism to optimism and back to pessimism, then back to optimism.

Q: Is there any historic connection between a strong bull market and the bear market that follows?
A: The bigger the bull market, the more speculative a bull market, the more flagrant the price markups in a bull market, the more there is to correct when a bear market finally takes over. If that's the case, then I can't discount the possibility of this bear market becoming a whopper. After all, it will be correcting the biggest and longest bull market in U.S. history.

Q: Why can't the market just level off and stay relatively high? What law says it must head down into the depths?
A: Obviously, no law states that. But all my studies suggest it. Bull markets normally don't just fade out and level off. When the bull dies, the bear takes over, and the correction process begins. In this process, things go wrong, sentiment changes and dirty water begins to seep out from under the closet door. Secrets are exposed, corruption shows itself, fantasies turn to nightmares, and bull-market dreams become bear-market horrors.

Don't ask how or why. It's simply the way bear markets work. The sad part of it is that bear markets work just the opposite of bull markets. Just as bull markets climb a wall of worry, bear markets descend on a ladder of misplaced optimism.

Q: You've written that in major declines, big industrial blue chips, the Dow-30-type stocks, usually are the last to really crack. Why is that?
A: First, investors just hate to part with them. They don't believe big blue chips also can collapse. Second, these are the most liquid stocks. At the bottom of a bear market, when you really can't get a decent price quote on anything else, these are the stocks that still can be sold.

Copyright � 2000 Dow Jones & Company, Inc. All Rights Reserved.

Aragorn III
(06/12/2000; 02:38:19 MDT - Msg ID: 32195)
As seen by a simple engineer
The fundamental "design flaws" of the international monetary system have been thoroughly obscured by the superficial design flaws. Use the wisdom widely found here to an advantage. As you see beneath the surface you may act with a firm footing on the level that matters.

I received this and shall pass it along. It contains a kernel of truth applicable to the role to which only gold may rightly aspire, alone among all "currencies"...so says "the sage" as you will see.

(Quote from Tao Te Ching, Chapter Seventy-Eight)
"Under heaven nothing is more soft and yielding than water.
Yet for attacking the solid and strong, nothing is better;
It has no equal.
The weak can overcome the strong;
Under heaven everyone knows this,
Yet no one puts it into practice.
Therefore the sage says:
He who takes on the humiliation of the people
is fit to rule them.
He who takes upon himself the country's disasters
deserves to be a king of the universe.
The truth often sounds paradoxical."

Consider now, the world's poor and downtrodden pay their way with "cash" on the barrel-head. Not as a concerted demonstration of a shared class virtue or integrity, but because no one will extend to them credit. Truly, the wheels of the world are turned by these humble billions, even as you may for a time enjoy the ride.

Where great populations of penniless millionaires can but ill-afford the cruel lesson of currency destruction taught in their "classroom" more persistently than in others, it has been gold as nothing else that offers steadfast comfort--never too "sophisticated" to faithfully represent the past labors of these "overlooked and unwashed multitudes".

Where the smaller numbers of rich "wheel riders" may be exposed one day to a disaster upon their own currency, rendering the use of their credit next to null and void, it will be gold as nothing else that may rise up in this time of need to offer its assistance without prejudice for their past neglect or disdain. At such a time, gold will further lift the humble billions to a higher level of existence, as the open-eyed developed nations bring their services and technologies to compete for the golden savings of the little man.

I say again, the Foundation is in place. With that behind, I shall take my leave, offering this final guidance as you contemplate the time ahead. There are two rules for success: 1) Never reveal all that you know.

;-)
got gold?
Hill Billy Mitchell
(06/12/2000; 03:35:51 MDT - Msg ID: 32196)
Subsidies
@ turnaround # 31795�The maintenance of culture requires of its members a certain 'complicity', or agreeability, if you will�

My response:

This "complicity" thing is at the very heart of the whole matter. They have lead this old pig to the trough but they cannot make him eat!


@Journeyman # 31803�"I think only a very small proportion of Americans are actually 'complicit'�in the sense they are knowing accomplices anymore than most Germans were omplicit in the Third Reich."

My response:

You are correct to use the Third Reich by comparison as without a doubt it is our best example in modern history as to the success of totalitarian rule depending on complicity. Ignorant accomplices (non-knowing accomplices) are still accomplices. There is a fine line between ignorance and stupidity, as there is a fine line between cowardice and fear. Whatever one would call it the problem is the same today in the U.S., one of complicity.

@ Journeyman # 31818�"subsidies�the indirect variety that are nearly impossible to avoid�

My response:

I would be pleased if you would elaborate, ie. could you give some specific examples of indirect subsidies, which are nearly impossible to avoid. Also anyone else who cares to contribute please do so. As we become aware of the "indirect variety" together we could find ways to avoid them. I greatly desire to avoid even the indirect subsidies, as I prefer not to leave my children and grand children with the idea that I was an accomplice unknowingly or otherwise.

@ Journeyman # 32059�"reform the system�If everyone sought out every subsidy he/she could get their hands on---well what do you think?"

My response:

I think it stinks! The system cannot be reformed nor destroyed; however, I believe it may self-destruct. Truly it is too big and too powerful to overcome. The point is not so much to reform or destroy the system as to make sure that we are not accomplices, knowingly or otherwise. I'll wager that there were a few individuals living under the authority of the Third Reich who refused to comply and willingly suffered the consequences. We don't hear much about those few individuals. God knows who they are and I'll venture that their children call them blessed. If I gain no other praise than from my children and grand children I shall be satisfied.

@HI-HAT #32113�"compromising�has resulted in class warfare and SLAVERY"

My response:

Yes, I quite agree. As for me and my house, I will not compromise.

@ Journeyman # 32130�"At that point, you've almost certainly been sucked into the system�and�yielded�to the control of the subsidizer�To avoid slipp'n and a slid'n on down, you must, at the deepest psychological levels, COMPLETELY write-off EVERYTHING you think you have coming. This isn't easy."

My response:

That's the ticket. No matter what others may do, to completely write off any desire to be compensated for past contributions to the system is the way best way to unsuck one's self out of the system. It logically follows that one must stop "voluntarily" contributing to the system to remain in unsucked safety.

@Turnaround # 32132�"It appears (and I've conducted an informal poll on this myself) that most Americans under 40 have already made that psychological shift, for one reason or another�"

My response:

I too have conducted an informal poll on this. You're polling results agree with mine. Why only those under 40 (give or take a few years)? Sir Journeyman has touched upon this. Those who are getting close to retirement age see more hope of benefit from the system. The present real cost vs. the improbable future benefit to the young working population is appalling. They may have been dumbed down a bit but they can add and subtract. When they do the math the psychological shift is automatic. If any group can be reached in great numbers this would be the group because they have so much to lose and so little to gain in the long haul.

@ HI-HAT # 32142�"the not so rare barnyard phenomena of the pigs at the empty trough eating each other�

My response:

I am reminded of weapons training (M-14) in boot camp. A weapon without the proper ammo will not do. Good vision is imperative. You see the target clearly enough. Adjusting the windage and elevation of the sights on your fine weapon would be in order. Perhaps a couple of clicks to the right will do the trick. Now we are a little closer to having the sights of the weaponzeroed in. Sir Oro has touched upon this minor adjustment in his MSG # 32150 as I paraphrase him; "not in the future but already today the pigs are eating each other"

@ Oro # 32150�"pigs are eating pigs they don't see�when we are reminded of the evidence we ignore it. Do we really want to know that? � Will it really be different once the slaughterhouses move into our vicinity on site at our national pigsty? Will we pigs actually care? Will we come up with other justifications for eating each other?"

My response:

Sir Oro, IMO you have helped to adjust the windage. I would suggest an adjustment also in the elevation of the sights. Let us lower the sights by a couple of clicks. The pigs that the U.S. pigs are eating are not "foreign" pigs from China or Zimbabwe. We are not even feeding upon fattened hogs. We are feeding upon our baby pigs (children and grand children).

This subject is a rather nasty one. I am nauseated from the stench. I wish that I could 'ignore it', but when I try to close my eyes I see little cakes of 'Soylent Green' and dry heaves set in. I cannot come up with a justification for this.

To eat or not to eat, that is the question!

God help us.

HBM
Topaz
(06/12/2000; 03:38:04 MDT - Msg ID: 32197)
Aragorn III:
Sir,
From here in Au (the country), may I express my gratitude for the time and effort you spent recently in
Hill Billy Mitchell
(06/12/2000; 03:41:21 MDT - Msg ID: 32198)
On subsidies
"naked falsehood is only repulsive. What we know to be a lie cannot command our respect�There is in the very framework of the soul an impossibility of feeling toward known falsehood the same as if it were truth. The structure of our being revolts against it. Untruth can only gain credence and acceptance by being so disguised as to appear to be the truth. Falsehood can have no power over us until we are led to believe and conclude that it is the truth�Falsities and treacheries confront us unblushingly at every point. People not only make falsehoods, speak falsehoods, print falsehoods, and believe falsehoods; but they EAT THEM and drink them, and wear them and act them and live them, and make them one of the great elements of their being�A man cannot move, or open his eyes without encountering falsehood and lies. In business in politics, in social life, in professions, and even in what passes for religion, such untruthfulness reigns, that he who would be true scarcely knows any more whom to trust, what to believe, how to move, or by what means to keep his footing, amid the ever-increasing flood of unreality and deception". (emphasis in caps added)

The above quote issued exactly 100 years ago. (The Apocalypse, by Joseph Augustus Seiss, originally published in 1900 by C. C. Cook, and reprinted and copyrighted in 1987 by Kregel Publications, Inc., pp. 451-452)

In light of the "pigs eating each other" concept which has been introduced by Sir HI-HAT, this observation made 100 years ago by the gifted Mr. Seiss, cuts to the quick. Let us call this 'THE EMPTY TROUGH SYNDROM', and give tribute Sir HI-HAT for his depth of perception.

HBM
Topaz
(06/12/2000; 03:42:37 MDT - Msg ID: 32199)
Previous post to A III
.... Theres many a slip twix the Cup and the Lip.....
Sir A III,

You get the message! Most noble effort.

Thank You.
Hill Billy Mitchell
(06/12/2000; 03:51:05 MDT - Msg ID: 32200)
(No Subject)
@Peter Asher(6/11/2000; 23:53:30MT - usagold.com msg#:32192)

THE SNIFF TEST: - The primary principle:

"sniff" it before eating it. If it smells funny, there's probably a reason for it."

I would suggest that your "sniff test" be appropriately applied to "Soylent Green" also. I hope you do not mind. You have here the solution (on an individual basis) to the "EMPTY TROUGH SYNDROM.

HBM
HI - HAT
(06/12/2000; 04:21:12 MDT - Msg ID: 32201)
Hill Billy Mitchell...msg. 32198.........Virtual Apocalypse
The quote by Joseph Augustus Seiss, is most visionary and apropos for our time.

As we discuss here all the implications of subsidies and what is proper for what anyone can expect in a fair System, we will of course grapple about in the Empty Trough.

However I think above all to give the proper perspective from atop Gold Mountain, and in keeping with, "The Apocalypse",....

We must observe, over all, ORO'S..........


..........."There is no Trough" .............
Peter Asher
(06/12/2000; 04:28:06 MDT - Msg ID: 32202)
Aragorn III
>>>> With that behind, I shall take my leave, offering this final guidance as you contemplate the time ahead. <<<<<

For the night? Or do you mean leave? I know the Hobbits like riddles but please clarify.

AND, it's sailing season again. Still need crew??
Peter Asher
(06/12/2000; 04:30:35 MDT - Msg ID: 32203)
Hi Hat HBM and other insomniacs
Spiritualy speaking:

There are no pigs!
Sancho
(06/12/2000; 05:08:00 MDT - Msg ID: 32204)
YGM
Your posting on Barron's article with DuBois at #32194 was excellent material. Enough so that I am ordering some more gold coins today....
Hill Billy Mitchell
(06/12/2000; 05:09:40 MDT - Msg ID: 32205)
Pigs
@Peter Asher(6/12/2000; 4:30:35MT - usagold.com msg#: 32203)

You say,"Spiritualy speaking:There are no pigs!"

I say, "Hypothetically speaking, if there be pigs, the pigs be evil spirits should they become cognizant of what they are eating and choose to continue to feed at the trough, a trough which HI-HAT purports not to exist"

HBM





wolavka
(06/12/2000; 07:30:14 MDT - Msg ID: 32206)
Strength
Exercise discipline, patience is very difficult for most traders and investors.


Leigh
(06/12/2000; 07:51:20 MDT - Msg ID: 32207)
Marines Hit Beach in Kentucky
http://www.worldnetdaily.com/bluesky_bresnahan/20000612_xnbre_marines_hi.shtmlThis is disgusting! Hasn't anyone thought to prepare citizens to deal with emergencies? What ever happened to storing food and water, keeping potassium iodide around, learning survival skills from a civil defense handbook? I for one will not be demanding that the government take "draconian measures" in an emergency.
wolavka
(06/12/2000; 08:13:54 MDT - Msg ID: 32208)
good-bye dollar
hello europe.
SHIFTY
(06/12/2000; 08:56:03 MDT - Msg ID: 32209)
CRUDE OIL
http://www.crbindex.com/$31.25 WOW!
USAGOLD
(06/12/2000; 09:17:16 MDT - Msg ID: 32210)
Today's Report: Gold Jumps on Inflationary Expectations
http://www.usagold.com/Order_Form.html FOR AN INFO PACKET ON GOLD OWNERSHIP6/12/00 Indications
�Current
�Change
Gold August Comex
287.80
+1.30
Silver July Comex
5.04
-0.02
30 Yr TBond Sept CBOT
97~13
+0~03
Dollar Index June NYBOT
106.74
-0.18


Market Report 6/12/00): Gold broke from the gate in early New York trading pushed by
inflationary expectations. Overseas, London was quiet with the London Bullion Market
Association reporting higher monthly turnover numbers for May. Asia reports light physical. The
short-covering which fueled the recent rally appears to have dried up for the time being, but we
would be hesitant to say that hedge books have been permanently shelved. Once a consolidation
level is achieved, we could see more short-covering and gold's rally extended. Though
summertime typically marks the low water mark for worldwide gold demand, strong physical gold
buying this summer, driven by rising energy costs and the overall increase in the cost of living it
implies, has run counter to the seasonal trend.

An AP wire story over the weekend reported gas prices up 26� at the wholesale level in the
Midwest a result of a rising per barrel oil price and the implementation of a higher cost anti-smog
gasoline formulation. Nationally, AP reports gas prices up nearly 9� per gallon. These gas price
numbers cropping across the country will work their way into the government inflation numbers in
the coming months. The last PPI numbers dubbed "benign" by some analysts -- though still .2%
higher -- might have been the last good news for the Clinton administration on the inflation front
for awhile. Wednesday's CPI number could be a mixed bag, but we might also have a surprise or
two in store. Besides Wednesday's CPI numbers we have Retail Sales on Tuesday, Beige Book
on Wednesday and Housing Starts on Friday.

It could make for an interesting week. That's it for today. We'll see you back here tomorrow.
Have a good day, fellow goldmeisters.
YGM
(06/12/2000; 09:35:56 MDT - Msg ID: 32211)
GATA Supporters.....
Meant to post this last nite....Hi All...I only have limited time in town now as the Mining season is underway, but I did spend the day (yesterday)again sending the report wherever I could think of for a few hrs. I wanted to send it to every site contact listed at Drudge Report (and there's alot) but it's now 12:00 midnite and I have to quit and return to work in the am. My thought is this, that each web page (Links)listed at Drudge site has an email contact and the number of sites is very comprehensive. So if you have the energy & time, I hoped maybe you could stir up some enthusiasim for the task. The BIS site also lists all the CBs' of the world and they also have contact points. I've sent it to some but not all the CBs'. Even at the risk of duplication it would show them we are serious and once again it is also an extensive number of important sites. It may make somebody squirm a little and others may think twice about their OWN involvement as well as they may pass it along the chain of command, IF it doesn't go to delete file when rec'd. BTW...Goldman Sucks has a new web page and they have removed ALL the email contacts for their directors....I guess last winters email campaign got to them (smile).....GO GATA & Go PHYSICAL...
(Right Here At USA GOLD).....Back to the hills now....YGM.

Sancho....Good plan re: coins

Peter....That's good, we aren't ready to live in that abandoned mine shaft yet :-))

Aragorn....Happy sailing, wishing you fair winds and still waters...(I'd rather be sailing)..have a great summer
"O Sage One"....YGM
Cavan Man
(06/12/2000; 09:43:22 MDT - Msg ID: 32212)
Gasoline in the Midwest
6-10-99

St. Louis, MO

Regular-$1.58

Kenosha, WI

Regular-$2.08

Perhaps the cost of "cleaner burning fuel" is a factor. Does anyone even suspect that state taxes might be a factor?

.50 cents per gallon difference for cleaner fuel is a big bump for all that "value added". I'll bet the refineries love making that cleaner fuel and the state legislatures love taxing it. Wake up America!
Henri
(06/12/2000; 11:33:48 MDT - Msg ID: 32213)
Aragorn III
Like Peter, I also volunteer myself for crew
Farfel
(06/12/2000; 13:43:47 MDT - Msg ID: 32214)
Something explosive about to occur in gold market...
How do I know?

Self-proclaimed gold guru and gold trader, Lenny Kaplan, is posting all over Kitco, setting a record number of posts today, declaring the usual "gold is just another commodity" polemic.

Also he is posting his usual rant about the value of gold loans...the safety of gold collateral behind those gold loans...the absence of manipulation in the gold market....etc., etc.

When the gold price surges WITHOUT reversal someday, let's hope we hear the last of these misinformation manipulators, these fellows who view those unfortunate victims of Clinton economics as little more "than the cheese between their toes."

Thanks

F*

TownCrier
(06/12/2000; 14:37:10 MDT - Msg ID: 32215)
"And now for something completely different..."
http://www.usagold.com/onlinestore/special.htmlStrange, but true, there was a time 70 years ago when a simple decision either preserved your wealth, or ruined your fortune.

The setting: The Oriental Republic of Uruguay, tiny neighbor of Brazil and Argentina. (Click the link to learn more about this "Oriental" business.)

Imagine that you were an average citizen, with 20 pesos in the bank. Imagine also that you had a very wealthy cousin with 3.4 billion pesos in the bank.

If, in 1930, you had withdrawn your 20 pesos in the form of four of these very special Uruguayan 5 pesos gold coins and put them under your pillow, whereas your cousin had withdrawn his 3.4 BILLION pesos in paper form in order to stuff his mattress (maybe you both feared a bank failure??), today, your bedside wealth would be....EQUIVALENT to each other. Behold the power of gold...and the weakness of paper currency.

Click the link to get better aquainted with this latest on-line offering by Centennial Precious Metals...the very first time they have secured a cache of these uncirculated gold coins from Uruguay. (Yeah, yeah, I know we hinted that maybe some gold Argentinos would accompany this offer, but *WOOF*, the premiums on those babies were REALLY high, all things considered. So for the time being, we couldn't pass up the opportunity to feature these low mintage coins with modest premiums for those of you with a mind to add some new faces to your growing pile of pre-33's. These coins weigh in at 0.2501 troy ounces fine gold...bigger than the German 20 marks, bigger even than the British sovereigns. You can be sure those of us here in The Tower will be sending a rider over to the Castle (Centennial) to lay a claim to a princely share. They tell us that they have only 1,300 available.

Run, little pony, run...
Hill Billy Mitchell
(06/12/2000; 14:45:57 MDT - Msg ID: 32216)
Official release
http://www.bog.frb.fed.us/releases/H15/update/
Official: Federal Reserve Statistical Release

Release Date: June 12, 2000

Rates for Friday, June 9, 2000

Federal funds 6.47

Treasury constant maturities:
3-month 5.92
10-year 6.13
20-year 6.26
30-year 5.89

upside-down spread FF vs long bond = (58.%)
TownCrier
(06/12/2000; 14:59:53 MDT - Msg ID: 32217)
Comatose COMEX
Estimated total gold futures trading volume today was only 12,000 contracts, down considerably from Friday's miserable total volume of 19,535 contracts.

Following Friday's trade, total COMEX open interest in gold futures had dropped to 136,376, with 72,711 of those contracts being the August futures. On the June futures, there were still 174 unsettled positions, each apparently holding on to hope for a brighter tomorrow, either up or down according to their wager.

If this tading volume continues to drop off, look for volatile price swings that have no bearing on the underlying stability and fundamentals of the physical gold market. One day soon will we be hearing a soft *PLOP* as the market-making and price-setting function of COMEX paper completely craps out from the lack of a two-way market? I mean, seriously, who's buying?? (the paper, that is.)
SHIFTY
(06/12/2000; 15:20:23 MDT - Msg ID: 32218)
NY Ponzi
Nasdaq 3,767.91 + Dow 10,564.21 = 14,332.12 divide by 2 = 7,166.06 Ponzi

Down 86.07 Ponzi points ! !


Turnaround
(06/12/2000; 16:08:56 MDT - Msg ID: 32219)
@ORO gilding the pig

ORO (06/10/00; 21:32:16MT - usagold.com msg#: 32150)
Hi Hat and Turnaround - of pigs eating each other

" I should point out that it is exactly what is happening today. Just that the pigs here are eating pigs they don't see slaughtered because of the great distance.
When we are reminded of the evidence that we pigs are eating other pigs, we ignore it. Do we really want to know that?

Nearly any food we buy has pig ingredients from abroad. What should one do? Not eat?"

I really love my erzatz oriental rug, made in China, probably by tiny
young fingers. Only $450.00 for a 9' x12'- sucha deal! The fibers seem
to be a curious mixture of ingredients though, everything from
yak mane to pig hair to recycled windbreakers.

" Will it really be different once the slaughterhouses move into our vicinity on site at our national pig sty? Will we pigs actually care? Will we come up with new
justifications for eating each other?"

Well, we did ship them a lot of swell factories and stuff, gave 'em the internet,
GPS, pictures of the Solar System, sort of the "teach a man to fish" school (yes,
I'm leaving out Hollywood et. al.). I just can't see these issues as being so one-sided,
sure, we (all mankind) have a 'pig' ingredient, sure, that thin veneer of civilization
wears awfully thin in spots (yes, yes- immense spots), but there are also mediating
qualities (call it 'goodness' if you must, or 'enlightened self-interest' or 'social
consciousness').
In this particular era of "greed is good", it's hard to remember
those qualities, but like Gold, they never really went away.
canamami
(06/12/2000; 16:53:56 MDT - Msg ID: 32220)
Offhand Musings - Deutsche Bank & Reginald Howe Article
One of the gurus I follow points to how the failure of the Deutsche Bank/Dresdner Bank merger (apparently over the colour of the merged bank's logo) aborted a Euro rally (Europe lost credibility in investors' eyes), thereby saving the dollar and the SP500, at least on that occasion.

I recommend that all Forum affinciandos read the recent article by Reginald Howe, in which he speculates that the possible plan to back the Euro with gold may have been abandoned, or at least derailed by events. Howe also points to Deutsche Bank's role in suppressing the gold price. Did Deutsche Bank's gold position lead to scuttling the merger with Dresdner, or at least play a role in its failure? Did this tie in with the scuttling of any alleged or possible plan to back the Euro with gold?
HI - HAT
(06/12/2000; 17:01:00 MDT - Msg ID: 32221)
Hill Billy Mitchell....;..Peter Asher msg. 32205
Change Pig To ParasiteSpiritualy, maybe no human Pigs. On material plane, that's a whole different story.

The material human pigs are LOOTERS. From the lowest free hand out to the giant subsidised Corporations. They all have in common the attachment of a parsitical feeding tube, politicaly attached to all levels of the National Productive Body.

Some people here may pooh-pooh railing against the vast welfare transfer system, that subsidises many many non-productive entities. all I can say is keep on paying sports, but I have a real problem having my hard earned money extracted at the point of a gun to pay for this abuse and theft.

HBM : Of course the Trough exists, and has been a veritable ever growing Cornocopia since WW2.

The "there is no trough", is just to put the chain of welfare in the same context of the FIAT money medium.

The trough as well as the non-wealth fiat being sustained by an illusion and debt. They both command wealth but give in return......NOTHING.

TheStranger
(06/12/2000; 17:59:59 MDT - Msg ID: 32222)
elevator guy
I am not an expert on real estate, but I do have some thoughts that might help. If you have confidence in the other elements of your plan (location, nature of business, financing, etc.), then I say go for it. Nobody knows for sure what it will require for the Fed to lead us into recession, but I think it will take them awhile even if they do. Meanwhile, inflation beneficiaries, such as real estate, should attract plenty of capital. You may have noticed, in fact, that, after a two year slump, real estate investment trusts are among the very best performing assets this year. Good luck, and thanks for flattering me with your question.
Henri
(06/12/2000; 18:08:06 MDT - Msg ID: 32223)
Alternative to repudiation?/ Town Crier
It seems to me that the USA could just declare it would no longer pay interest on its notes and bonds and then will repay the principle on an extended time basis. Then the investors would get their capital back at least. Of course, the dollar wouldn't be worth a ruble then. Play and pay. "Investment" is where you had someone else your money so they can lose it for you.

Town Crier-so are the quarter oz. coins from Uruguay called Uro's?

Clink, clink

HI - HAT
(06/12/2000; 18:36:22 MDT - Msg ID: 32224)
BIG SUBSIDY
My look on subsidy does not fall on the 18 year old clueless waif with 2 illigitimate children who needs help.

Rather it is for instance with Goldman Sachs and Chase Bank, who are members of the Federal Reserve System, and as both Judge and Jury so to speak, are given official imprimator and inside tracks for making money.

They know in advance how the race will turn out, and then bet.

............Now That's Subsidy........
Galearis
(06/12/2000; 18:46:57 MDT - Msg ID: 32225)
@ Cavan Man:gas prices in the Mid West
Last week from Wednesday to Sunday gas prices ran between $1.58 (usually independents) to $1.61 from N.Y., through Pennsylvania, W. Virginia and Ohio. (I was at the Imperial Glass convention.) It cost me the same to drive around there in a SUV as it did back home in Ontario. The difference was negigible, and except for the exchange hit not a lot different from Ontario.

I have to say also that in talking with many people at the convention and even at yard sales (pretty good for collectibles in fact) many seemed quite aware that there was a financial crisis pending. One individual at a yard sale was even aware of the coming currency crisis. They seemed quite receptive to the idea of buying gold.

In Ontario one does not get the same level of awareness and it quite surprised me.

FWIW and best regards.
R Powell
(06/12/2000; 18:52:47 MDT - Msg ID: 32226)
T.C.'s comatose COMEX
Town Crier reports (32217) that COMEX gold contracts as of last Friday stand at 136,376. Fiqures from the Commodity Futures Trading Commission released June 2 as reported in "Consensus" list total open interest at 159,156. This equates to a decrease of 22,780 contracts in a week. Lost, I would quess, to the short covering repeatedly mentioned in Michael's daily reports.
As a general rule, those markets with little open interest are the most likely to see very large moves both up and down. Lumber and orange juice are two of these and do experience "limit" days every now and then. I once held a long position on orange juice as a hurricane was approaching Florida from the Gulf. It missed, I exited my position and almost immediately thereafter orange juice went limit up for three days! The lower the open interest, the more unstable the market.
Also as of June 2, the large speculators held 19861 gold contracts and were short 60485 contracts. I don't believe the total decline in open interest has been large fund short covering only. Others have offset, perhaps even long positions closed (sold) for a small profit as gold rallied. This, too, would lower open interest. There will be more short covering if POG rises. This should not be confused with the multi-year world production of gold supplies that the bullion banks have hammered POG with for so many years. The POG will have to go (as they say at Kitco) "to da moon" to even attempt covering those shorts.
Thanks T.C. for the numbers. Maybe someone with the power to move markets will notice. Wouldn't that be fun!
SHIFTY
(06/12/2000; 18:55:53 MDT - Msg ID: 32227)
Kitco Chart
Could this be Rock & Roll time!! ???

Look's good so far!

Go GOLD!

Galearis
(06/12/2000; 19:04:34 MDT - Msg ID: 32228)
a gold nugget.....
I really can't resist... a good gold storyI would think that a number at this forum would also enjoy collecting gold in a more natural form - visible gold in specimens or nuggets being the usual form. These beauties can be had from various sources, collectible and estate jewellry dealers, coin and bullion shops, eBay, and even at flea markets. The going rate is approximately $12 per gram on eBay, but in actual fact the nugget market worth should be approximately 3 times POG - about the same as used or estate jewellry prices. (Normal retail is around 10 times gold content of the jewellry piece.)

At any rate, to get to the chase, Rhody and I were perusing the wares of a bullion dealer in the local city where I acquired an old plated pin with a nugget affixed to one end. Even before I paid for it I noticed an oddity about it, and after the transaction was complete looked at the piece with great concentration. Here sticking out of the base of the nugget where the pin was attached (soldered) was a gold crystal (octahedron - diamond shaped) that measured just under 1/4 inch on one edge. The diameter measurement, of course, was larger.

This was an astonishing find! Here was a museum quality specimen of gold that was found in a totally phillistine environment. Gold crystals are very, very, very rare. It was to my additional good fortune that the nugget had not "travelled" far along the stream bed and was unbattered by the trip. Most gold nuggets become gradually flattened by this rolling in the gravels along the stream bed.

My little $40 nugget is now worth (being recognized and cherished) several hundreds of dollars.

Keep your eyes peeled for more of these. They are out there.
Leigh
(06/12/2000; 19:12:11 MDT - Msg ID: 32229)
Aragorn and Aristotle
Aragorn, I do hope that your post last night wasn't a good-bye to the Forum! Don't leave us sadly wondering if we'll ever see your wise messages again. I was thinking the other day about you and Aristotle, and how I used to avoid reading your posts because I couldn't understand them! So I made myself go back and read your messages in the Hall of Fame, and guess what? I understand them now! It only took 13 months of hanging out here!

Please let us hear from you -- even if you're just saying hi from the laptop on your sailboat. Please don't forget those of us still on the Titanic America, as we head toward the iceberg.

By the way, where is dear Aristotle?
bp1
(06/12/2000; 19:17:05 MDT - Msg ID: 32230)
gold is rising furiously!!!
usagoldlook at kitco.com chart!!!
Gold Trail Update
(06/12/2000; 19:48:26 MDT - Msg ID: 32231)
The Gold Trail Discussion has been Updated
The Gold Trail Discussion has been updated. Click on the link to read the latest updates.
USAGOLD
(06/12/2000; 19:55:54 MDT - Msg ID: 32232)
Richard 640, per your post at Gold Eagle. . .
You, good sir, take the responsible position in making people aware of the risk. Others are not as kind and try to pass off option and futures' contracts as a proxy for gold ownership.

They are not.

On options and futures plays, I say, invest only what you can afford to lose. When you buy gold, do it with money you cannot afford to lose. Do it with serious money because you believe the monetary/financial system is seriously flawed and you need protection. I have no problem with gambling -- as long as the investor fully knows the difference between owning a gamble and owning a real asset detached from the paper money game.

I can remember as a very young man making an excursion down Denver's legendary Colfax Avenue. Every hustle and con known in the book has been perpetrated there at one time or another. That day, I watched a shell man at his table with the three bent cards taking bets on where the Queen of Hearts found herself. "Follow the Queen," he implored. "Follow the Queen!" A crowd had gathered around the table -- and this man was good.............very good.

One after another felt he could "follow the queen" and one after another failed. Even as each hopeful winner saw one after another pass a $20 bill to the dealer and walk away with perplexed smile on their faces -- the money gone. What was incredible is that one after another stepped forward certain he could beat this man at his own game, even after each of his predecessors ate humble pie instead.

("By God, I can follow the queen. This is child's play.")

Not so!

That's not to say that at some point, one would not have been more clever. But what are the odds when you are playing another man's game? That is the question isn't it, Richard? What are the odds? And. . .are you playing another man's game?

I learned a lesson there. That's why I say what I do. Sure the leverage is there but you have to admit:

You are playing their game, are you not?

To take it one step further: Please remember, that when the Washington Agreement was made, when the option owner went to sell that option after a big run-up, he or she was commanded (yes, I mean commanded), to make it available at "market price,"in other words "their price" -- and, by the way, in "their game" -- and "they" were losing.

I have great respect for you, my friend. And I greatly respect the responsible approach you've taken both here and at Gold Eagle. My concerns -- registered herein -- are that of a friend. I am sure that it's gambling money you've got on the line. Good luck. The hell of it is that you could be right on the price direction, but wrong on the vehicle.

Make it your game. Own the yellow.
SALMON
(06/12/2000; 19:56:23 MDT - Msg ID: 32233)
@Farfel RE: Something explosive about to occur in gold market...
Just checked your afternoon post - good call!!
wolavka
(06/12/2000; 19:58:50 MDT - Msg ID: 32234)
no resistance now
nothing to stop gold from moving higher for next several days.
Cavan Man
(06/12/2000; 20:06:52 MDT - Msg ID: 32235)
POG
Bidding $292 @MRCI
Cavan Man
(06/12/2000; 20:08:05 MDT - Msg ID: 32236)
FOA......
.......and what of Howe's latest commentary? He is very close to the mark yes?
wolavka
(06/12/2000; 20:14:03 MDT - Msg ID: 32237)
20+ pop to upside
It's about time for a globex 20.00 pop.
The Scot
(06/12/2000; 20:15:32 MDT - Msg ID: 32238)
Leigh & Aristotle
It seams as though I don't recognize anyone anymore. Leigh, when I saw your post I was overjoyed. Aristotle, where have you been? I still lurk here on occasion, however most of the post go over my head. Still have my Gold and I'm still patiently waiting. Good to hear your voices again.
The Scot
SteveH
(06/12/2000; 20:21:20 MDT - Msg ID: 32239)
Gold up...ho...hum
Who believes this one is for real? Not I.

(good)
Farfel
(06/12/2000; 20:59:51 MDT - Msg ID: 32240)
Gold performance somewhat encouraging tonight
OVER-hedged Aussie golds not doing well.

No surprise, considering they are hedged up to their necks.

Buy North American or South African golds, buy ONLY unhedged miners if you think gold is going up.

Thanks

F*
Cavan Man
(06/12/2000; 21:06:08 MDT - Msg ID: 32241)
Gold Stocks
They are very volatile and if not for the condition of this new gold market I would never play them. NEM, GOLD and HGMCY are the best plays I believe. Buy and trade 'em. There's no risk in owning "the yellow".
schippi
(06/12/2000; 21:23:11 MDT - Msg ID: 32242)
120 Select Gold Chart
http://www.SelectSectors.com/fsagx.gif My read of this chart is that we have a GOOD chance to
breakthrough the local overhead resistance.
elevator guy
(06/12/2000; 22:37:54 MDT - Msg ID: 32243)
Overseas action
My net sites show a bid of 293-294, and an ask of 298. Thats quite a spread, like everyones digging in their trenches.

But there doesn't seem to be much volume, so maybe the paper markets are of no consequence at all?
Ulysses
(06/12/2000; 23:32:50 MDT - Msg ID: 32244)
Leigh re#3220
http://www.usagold.com Thanks for the post.Don't you just love their b#llsh#t reasons for doing these things? Peace.
Journeyman
(06/12/2000; 23:53:16 MDT - Msg ID: 32245)
Posse Comitatus: Marines to hit more than the beach @Leigh, Ulyses, ALL
http://www.webleyweb.com/tle/le961009.html
The Posse Comitatus laws prohibit use of U.S. Armed forces to enforce civil law. TPTB don't like this restriction and have been chipping away at these protections for at least a decade. For an article putting posse comitatus and why it exists in historical and world-wide perspective, check out the link above.

Then recheck the link given earlier by Leigh and look for the weasel words from the honchos in charge of "Gunslinger 2000."

Regards, J.
Gandalf the White
(06/13/2000; 00:07:21 MDT - Msg ID: 32246)
Jump SPOT, Jump
Looks as if Spot is on the highs at $291+ as the Hobbits trim the wicks on the lamps and settle in for the night! --
TOMORROW -- may be the real thing ! Awaken early SteveH and behold the golden dawning!
<;-) View Yesterday's Discussion.

Black Blade
(06/13/2000; 00:28:04 MDT - Msg ID: 32247)
Gold getting a little frisky tonight! Will it last?
Au up +$5.00 at $291.40. And still no sign of Aussie producer forward sales. What gives? a change of heart? No, I don't think so. I will sit back, wait and see what transpires. If the Aussies have stopped cutting their own throats, then maybe, just maybe this rally will break out. Then again, like an unwelcome guest that breaks wind in a large gathering, the UK Barbarians just might spoil the party.
Topaz
(06/13/2000; 00:49:14 MDT - Msg ID: 32248)
BB
'evenin BB,
Ol Aggie looks a bit bullish too!- jump-hold....jump-hold.
Reminds me of kids climbing those fake mountains at the Adventure Playgrounds- shimmying up licketty-split and knowing full well if you slip, the rope will save you!
NOT the same in the real world though.
Topaz
(06/13/2000; 01:18:33 MDT - Msg ID: 32249)
All re:OPEC

Can someone pls advise on the date of the June Opec meeting?
I'm thinking perhaps this Bolt out-of-the-blue is related to the upsurge in Oil, ie: "You pump more oil and we'll unshackle the PPoG".
TIA
ps:-
The old $290.......again!
Peter Asher
(06/13/2000; 01:19:23 MDT - Msg ID: 32250)
$2.00 spike on the Londen opening!

We're not in Kansas anymore.
Black Blade
(06/13/2000; 01:40:31 MDT - Msg ID: 32251)
Re: Topaz and OPEC date.
The date for the next OPEC meeting is the 21st of June. The latest word is that the Saudi members are claiming that the Price of Oil is not due to production levels. This would suggest that they may not be inclined to pump more oil. However, the ME oil producers are running close to capacity now, since most of the lead in surplus oil storage has been drawn down. Could be that we are headed for $40/bbl oil minimum before the summer is out. BTW, Au is now up +$5.70 and a nice upward trend it is too.
Topaz
(06/13/2000; 01:52:16 MDT - Msg ID: 32252)
BB- Aussie forward sales
BB
Musta missed ya- never mind..
"I have it on good authority" that the Bullion Bank Automitron that heads up the Oz Foreign Investment Review Board,* has just become a Great Grandfather!
On hearing that the little Tyke was going to be named after him, the old coot broke down and swore he'd never sanction another Gold forward sale again!
"Isn't it enough that my Children and their Children have been committed to a life of abject poverty due to my past actions.... isn't it?" he was heard to scream into the telephone.
Last I heard M/soft techs were working on the problem so he may be "repaired" by Sun-up.
*
The FIRB are req'd to sanction all Au forward sales from Oz- a good target for GATA hey?
Black Blade
(06/13/2000; 02:54:21 MDT - Msg ID: 32253)
Beware Auction Sites!
http://www.msnbc.com/news/419472.asp?cp1=1The link details some Fraudulent and unsavory practices on e-bay. Bloomberg TV had some info on this yesterday as well. The story featured shill bids and fake items for sale on coins and bullion! Your who you're dealing with. Of course you can't go wrong by visiting MK and friends at the castle. Interesting article, and it sure lays out the pitfalls.
Black Blade
(06/13/2000; 02:56:13 MDT - Msg ID: 32254)
Correction
Should read..."Know who you're dealing with"
ORO
(06/13/2000; 04:06:55 MDT - Msg ID: 32255)
Things that pop up when gold hits $290
http://messages.yahoo.com/bbs?.mm=FN∾tion=m&board=7078933&tid=abx&sid=7078933∣=8124The above was posted on a Yahoo message board for ABX.
The message is likely a fake:
Bloomberg does not have the article on file for the 13th (date on article). Needless to say, 11:38 AM ET on the 13th has yet to occur at the time of posting.

The collumnist is not listed under the collumnist index on Bloomberg.

Henderson, though, is very much the one to voice such an opinion, since he was lead author of the infamous 1997 Fed study that we call here the "lease then sell" paper.

http://www.bog.frb.fed.us/pubs/ifdp/1997/582/ifdp582.pdf

THIS NOTE IS A NON-TECHNICAL SUMMARY
OF
INTERNATIONAL FINANCE DISCUSSION PAPER NUMBER 582
WHICH FOLLOWS
A Note on Government Gold Policies
by
Dale Henderson
Federal Reserve Board
and
Stephen Salant
University of Michigan
First Version: 4/22/97
Latest Revision: June 4, 1997

Government gold policies are under active discussion. Recently there have been significant
sales of gold by Belgium and the Netherlands, proposed future sales by Switzerland, and rumors of
additional sales. This note is an analysis of several government gold policies, including the immediate
sale of government gold stocks.
In Chart 1, the left-hand pie chart shows that governments own about one-fifth of the
estimated total world gold stock of about 5900 million troy ounces, which is the sum of government
stocks and estimates of private aboveground stocks and gold yet to be mined. The right-hand pie
chart shows that the United States owns about one quarter of government gold stocks of about 1100
million ounces.
As shown in the middle panel, governments have been net sellers of gold over the period
1974-96. Cumulated net sales, the last number in the last column, have been 72 million ounces. Most
recently, in the 1989-96 period, total net sales were 64 million ounces, including the sale by the
Netherlands of about 10 million ounces, one third of its holdings, in late 1996.
The bottom panel shows the real gold price, that is the dollar price deflated by the U.S. CPI,
over the period since 1968 when governments ended their defense of the official dollar price. Over
the period as a whole, the price has varied widely. Since 1992, however, it has fluctuated within a
range of about $50. Actual, proposed, and rumored government sales have no doubt put downward
pressure on the price during this later period, especially over the last year.
As shown in the top panel of Chart 2, gold has both government uses and private uses.
Governments use gold as a monetary asset, as part of a "war chest", and as a strategic material.
Private uses can be divided into two categories: depletion uses that reduce the stock and service uses
that do not. Depletion uses include electronics, other industrial uses, and dentistry. Service uses
include jewelry, bars, coins, and medals.
The bottom panel lists two important considerations that underlie the analysis in this note.
First, total economic welfare increases if